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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant ☒ | | |
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oPreliminary Proxy Statement
oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
xDefinitive Proxy Statement
oDefinitive Additional Materials
oSoliciting Material Pursuant to §240.14a-12 ☐ | | | 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 §240.14a-12 |
URBAN EDGE PROPERTIES
(Exact nameName of Registrant as specifiedSpecified in its charter)Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than Theother than the Registrant)
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(1) | Title of each class of securities to which transaction applies: |
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(2) | Aggregate number of securities to which transaction applies: |
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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2024
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
May 1, 2024
New York, NY
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March 29, 201822, 2024
Dear Shareholder:
The Board of Trustees and officers of Urban Edge Properties join me in extending to you a cordial invitation to attend the 20182024 annual meeting of our shareholders. This meetingshareholders (the “Annual Meeting”). The Annual Meeting will be held on Wednesday, May 9, 2018,1, 2024, at 9:00 a.m. Eastern Time, atTime. The Annual Meeting will be held entirely online. You can attend the officesAnnual Meeting online by visiting www.virtualshareholdermeeting.com/UE2024, where you will be able to participate in the Annual Meeting live, submit questions and vote. Please see the “Questions and Answers” section of Goodwin Procter LLP, The New York Times Building, 620 Eighth Avenue, New York, NY 10018.this proxy statement for more details regarding the logistics of the virtual Annual Meeting, including the ability of shareholders to submit questions during the Annual Meeting, and technical details and support related to accessing the virtual platform for the Annual Meeting.
As permitted by the rules of the Securities and Exchange Commission (the “SEC”), we have provided access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, or E-proxy notice, to our shareholders of record as of the close of business on March 12, 2018.4, 2024. The E-proxy notice contains instructions for your use of this process, includingregarding, among others, how to access our proxy statement and annual report and how to authorize your proxy to vote online. In addition, the E-proxy notice contains instructions on how you may receive a paper copy of the proxy statement and annual report or elect to receive your proxy statement and annual report over the Internet.
If you are unable to attend the annual meeting in person,Annual Meeting, it is very important that your shares be represented and voted at the meeting.Annual Meeting. You may authorize your proxy to vote your shares over the Internet as described in the E-proxy notice. Alternatively, if you received a paper copy of the proxy card by mail, please complete, date, sign and promptly return the proxy card in the self-addressed stamped envelope provided. You may also authorize your proxy to vote your shares by telephone as described in your proxy card. If you authorize your proxy to vote your shares over the Internet, return your proxy card by mail or vote by telephone prior to the annual meeting,Annual Meeting, you may nevertheless revoke your proxy and cast your vote personally at the meeting.Annual Meeting.
We look forward to seeing you on May 9, 2018.appreciate your participation in our Annual Meeting.
Sincerely,
Jeffrey S. Olson
Chairman of the Board and Chief Executive Officer
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Urban Edge Properties
888 Seventh Avenue
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 20181, 2024
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders (the “Annual Meeting”) of Urban Edge Properties, a Maryland real estate investment trust (“we”, or the “Company” or “UE”), to be held on Wednesday, May 9, 2018,1, 2024, at 9:00 a.m. Eastern Time, atTime. The Annual Meeting will be held entirely online. You can attend and participate in the officesAnnual Meeting online by visiting www.virtualshareholdermeeting.com/UE2024, where you will be able to listen to the Annual Meeting live, submit questions and vote. To join the Annual Meeting, you will need to have your 16-digit control number, which is included in the Notice (as defined below) and the proxy card sent to you or, if you are a beneficial owner who did not receive such number, may be obtained upon request to the broker, bank, or other nominee that holds your shares. Please see the “Questions and Answers” section of Goodwin Procter LLP, our definitive proxy statement in connection with the Annual Meeting, filed with the Securities and Exchange Commission on March 22, 2024 (the “Proxy Statement”), for more details regarding the logistics of the virtual Annual Meeting, including the ability of shareholders to submit questions, and technical details and support related to accessing the virtual platform for the Annual Meeting.
The New York Times Building, 620 Eighth Avenue, New York, NY 10018,Annual Meeting will be held for the following purposes:
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| To elect the seveneight trustees named in the Proxy Statement, each to serve until our annual meeting of shareholders held in 20192025 and until their successors are duly elected and qualify; |
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| To consider and vote on a proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2018;the fiscal year ending December 31, 2024; |
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| To consider and vote, on a non-binding advisory basis, on a resolution to approve the compensation of our named executive officers as described in the Proxy Statement; and |
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| To consider and vote on a proposal to approve the Urban Edge Properties 2024 Omnibus Share Plan; |
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| To transact such other business as may properly come before the Annual Meeting, including any adjournmentspostponements or postponementsadjournments thereof. |
We are furnishing proxy materials to you electronically, via the Internet, instead of mailing printed copies of those materials to each shareholder. We believe that this process expedites receipt of our proxy materials by shareholders, while lowering the costs and reducing the environmental impact of our Annual Meeting. We have provided a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders of record on March 12, 2018.4, 2024. The Notice contains instructions on how to access our Proxy Statement and annual report over the Internet and how to vote online. The Notice also includes instructions on how you can request and receive a paper copy of the Proxy Statement and annual report for thisthe Annual Meeting and future meetings of shareholders.
The Board of Trustees has fixed the close of business on March 12, 20184, 2024 as the record date for determining the shareholders entitled to notice of and to vote at our Annual Meeting. Only holders of record of our common shares of beneficial interest, par value $.01 per share (the “Common Shares”), as of the close of business on March 12, 20184, 2024 are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.
The Board of Trustees appreciates and encourages your participation in the Annual Meeting. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented. You may authorize your proxy to vote your shares over the Internet as described in the Notice. Alternatively, if you requested and received a paper copy of the proxy card by mail, please complete, date, sign and promptly return the proxy card in the self-addressed stamped envelope provided. You also may vote by telephone as described in your proxy card. If you vote your shares over the Internet, by mail or by telephone prior to the Annual Meeting, you may nevertheless revoke your proxy and cast your vote personally at the meeting, as described in the Proxy Statement. If you intend to attend
By Order of the meeting in person, you must bring with you appropriate identification, as further described in the Proxy Statement.Board of Trustees,
ROBERT C. MILTON III
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
New York, New York
March 22, 2024
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| | ROBERT C. MILTON III | |
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| | EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY |
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New York, New York | | | | |
March 29, 2018 | | | | |
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QUESTIONS AND ANSWERS
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Communication with the Board of Trustees | | | |
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COMPENSATION OF TRUSTEES | |
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EXECUTIVE OFFICERS | |
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | |
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EXECUTIVE OFFICER | | | |
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Grants of Plan-Based Awards in 20172023 | | | |
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2017 Outstanding Equity Awards at 2023 Fiscal Year End | | | |
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COMPENSATION COMMITTEE REPORT | |
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FINANCIAL STATEMENTS | | | |
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Urban Edge Properties
888 Seventh Avenue
New York, New York 10019
Why did I receive a Notice of Internet Availability of Proxy Materials?
As permitted by the rules of the Securities and Exchange Commission (the “SEC”), we are making this Proxy Statement and our annual report available to our shareholders electronically via the Internet.Internet in connection with the solicitation of proxies by our Board of Trustees (the “Board”) for use at our Annual Meeting of Shareholders (the “Annual Meeting”) to be held online on Wednesday, May 1, 2024, at 9:00 a.m. Eastern Time. We provided a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders of record on March 12, 2018.4, 2024. If you received the Notice electronically, you will not receive a printed copy of the proxy materials in the mail. If you would like to receive a printed copy of our proxy materials, please follow the instructions for requesting printed materials contained in the Notice.
Urban Edge Properties (“we”, Our shareholders are invited to attend the “Company” or “UE”) has furnishedAnnual Meeting online and are requested to vote on the proposals described in this Proxy Statement. The approximate date on which this Proxy Statement and accompanying materials will be first sent and made available to you in connection withshareholders is March 22, 2024.
How do I attend the solicitation of proxies by our Board of Trustees (“Board”) for use at the 2018virtual Annual Meeting?
The Annual Meeting of Shareholders (the “Annual Meeting”) towill be held atentirely online. Shareholders of record as of March 4, 2024, will be able to attend and participate online by accessing www.virtualshareholdermeeting.com/UE2024 using the officeslog in instructions below. Even if you plan to attend the Annual Meeting online, we recommend that you also vote by proxy as described herein so that your vote will be counted if you decide not to attend the Annual Meeting.
Access to the Audio Webcast of Goodwin Procter LLP,the Annual Meeting. The New York Times Building, 620 Eighth Avenue, New York, NY 10018, on Wednesday, May 9, 2018,live audio webcast of the Annual Meeting will begin promptly at 9:00 a.m. Eastern Time. TheOnline access to the audio webcast will open approximately thirty minutes prior to the start of the Annual Meeting to allow time for you to log in and test the computer audio system. We encourage our shareholders to access the Annual Meeting prior to the start time.
Log in Instructions. To attend the Annual Meeting, log in at www.virtualshareholdermeeting.com/UE2024. Shareholders will need their unique 16-digit control number, which appears on the Notice and this Proxy Statement provide the informationproxy card sent to them. In the event that you needdo not have a control number, please contact your broker, bank, or other nominee as soon as possible and no later than April 30, 2024, so that you can be provided with a control number and gain access to know to vote by proxy or in person at the Annual Meeting. WeIf, for any reason, you are first sending this Proxy Statementunable to locate your control number, you will still be able to join the virtual Annual Meeting as a guest by accessing www.virtualshareholdermeeting.com/UE2024 and following the guest log-in instructions; you will not, however, be able to vote or ask questions.
Submitting Questions at the virtual Annual Meeting. As part of the Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions submitted during the Annual Meeting that are pertinent to the Company and the accompanying materialsmeeting matters, as time permits. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.
Technical Assistance. Beginning 30 minutes prior to the start of and during the Annual Meeting, we will have support team ready to assist shareholders with any technical difficulties they may have accessing or hearing the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, call our support team which will be posted on www.virtualshareholdermeeting.com/UE2024.
Availability of live webcast to team members and other constituents. The live audio webcast will be available to not only our shareholders but also to other constituents. Such constituents will be able to attend the online platform for the Annual Meeting by accessing www.virtualshareholdermeeting.com/UE2024 and following the guest log-in instructions; they will not, however, be able to vote or about March 29, 2018.ask questions.
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What items will be voted on at the Annual Meeting?
Shareholders will vote on the following items at the Annual Meeting:
Proposal 1: the election of the seveneight trustees named in this Proxy Statement, each to serve until our annual meeting of shareholders held in 20192025 and until their successors are duly elected and qualify;
Proposal 2: the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2018; and2024;
Proposal 3: the approval, on a non-binding advisory basis, of the compensation of our named executive officers as described in this Proxy Statement.Statement; and
Proposal 4: the approval of the Urban Edge Properties 2024 Omnibus Share Plan.
In addition, shareholders will vote on such other business as may properly come before the Annual Meeting, including any adjournments or postponements thereof.
What is the Board’s voting recommendation for each item to be considered at the Annual Meeting?
The Board recommends that you vote your shares as follows:
Proposal 1: “FOR” the election of the seveneight trustee nominees named in this Proxy Statement;
Proposal 2: “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2018; and2024;
Proposal 3: “FOR” the approval, on a non-binding, advisory basis, of the compensation of our named executive officers as described in this Proxy Statement.Statement; and
Proposal 4: “FOR” the approval of the Urban Edge Properties 2024 Omnibus Share Plan.
What vote is required to approve the proposals?
Once a quorum is present, the following vote is required to approve each proposal:
Proposals 1, 2 and 3: The electionProposal 1: Each trustee nominee shall be elected by the affirmative vote of a majority of the votes cast with respect to that trustee nominee, thenominee’s election.
Proposals 2, 3 and 4: The ratification of the appointment of Deloitte & Touche LLP, and the non-binding advisory approval of the compensation of our named executive officers, and the approval of the Urban Edge Properties 2024 Omnibus Share Plan must each be approved by the affirmative vote of a majority of the votes cast on theeach proposal.
Other Items: A majority of the votes cast will be sufficient to approve any other matter which may properly come before the Annual Meeting. The Board does not currently know of any other matters that may properly be brought before the Annual Meeting.
What is the quorum for the meeting?Annual Meeting?
The presence in persononline or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting will constitute a quorum to transact business at the Annual Meeting. At the close of business on the record date, March 4, 2024, there were 118,787,400 common shares of beneficial interest (the “Common Shares”) issued and outstanding. Your shares will be counted for purposes of determining if there is a quorum, whether representing votes for, against or abstained, if you:
Are present and vote in person online at the Annual Meeting; or
Have authorized a proxy on the Internet, by telephone or by properly submitting a proxy card or vote instruction form by mail.
If a quorum is not present at the Annual Meeting, the chairman of the meeting may adjourn the Annual Meeting sine die or from time to time to a date not more than 120 days after the original record date of March 12, 20184, 2024 without notice other than announcement at the meeting.Annual Meeting.
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Who is entitled to attend and vote at the Annual Meeting?
All shareholders of record as of the close of business on March 12, 2018, the record date for the Annual Meeting are entitled to receive notice of, attend and vote at the Annual Meeting. You may authorize a proxy to vote your shares without attending the Annual Meeting. You are entitled to cast one vote for each whole common share of beneficial interest, par value $.01 per share (a “Common Share”),Common Share you held of record as of the record date. As of the record date, there were 113,920,633 shares of our Common Shares issued and outstanding.
AttendanceVoting at the Annual Meeting is limited to shareholders. In ordershareholders of record and beneficial owners of our Common Shares (see the following question for the relevant distinction). Beneficial owners are invited to attend the Annual Meeting in person, each shareholderonline at www.virtualshareholdermeeting.com/UE2024 and may use their 16-digit control number to vote their shares. Non-shareholder constituents will be required to present valid U.S. federal or state government issued picture identification, such as a driver’s license or passport, to confirm share ownership as of the record date. Beneficial owners will also be required to present proof of beneficial ownership, such as a vote instruction form or brokerage statement, to be admitted to the meeting. The use of cell phones, smartphones, pagers, recording and photographic equipment and/or computers is not permitted in the meeting room at the Annual Meeting.
Directionsable to attend the online platform for the Annual Meeting by accessing www.virtualshareholdermeeting.com/UE2024 and following the guest log-in instructions; they will not, however, be able to vote in person are available at our website at www.uedge.com.or ask questions.
What is the difference between a shareholder of record and a beneficial owner?
Shareholder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), you are considered the shareholder of record with respect to those shares, andshares. In such case, the Notice, and if requested, the proxy materials, were sent directly to you by AST.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,name.” andIn such case, the Notice, and if requested, the proxy materials, will be forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Those instructions are contained in a “vote instruction form” provided to you by the organization that holds your shares. As a beneficial owner, you are also invited to attend the Annual Meeting online at www.virtualshareholdermeeting.com/UE2024 and you may use your 16-digit control number to vote your shares.
If I am a shareholder of record, how do I vote?
Whether or not you plan to attend the Annual Meeting, we urge you to authorize your proxy to vote your shares. As described in the Notice, there are four ways to vote:
Via the Internet. You may authorize a proxy via the Internet by visiting www.proxyvote.com and entering the control number found on the Notice.
By Telephone. If you received your proxy materials by mail, you may authorize a proxy by calling the toll free number found on the proxy card.
By Mail. If you received your proxy materials by mail, you may authorize a proxy by filling out the proxy card and sending it back in the envelope provided.
In Person. You may vote in person at the Annual Meeting. We will give you a ballot when you arrive at the Annual Meeting.
| • | Via the Internet. You may authorize a proxy to vote your shares via the Internet by visiting www.proxyvote.com and entering the control number found on the Notice and the proxy card; |
| • | By Telephone. If you received your proxy materials by mail, you may authorize a proxy to vote your shares by calling the toll free number found on the proxy card; |
| • | By Mail. If you received your proxy materials by mail, you may authorize a proxy to vote your shares by filling out the proxy card and sending it back in the envelope provided; or |
| • | Online. You may vote online by attending the Annual Meeting online and following the instructions posted at www.virtualshareholdermeeting.com/UE2024. |
Telephone and internetInternet authorization methods for shareholders of record will be available until 11:59 p.m. (Eastern Time) on May 8, 2018.April 30, 2024. If you voteauthorize a proxy by mail to vote your shares, you must ensure proper completion and receipt of the proxy no later than May 8, 2018.April 30, 2024.
If I am a beneficial owner of shares held in street name, how do I vote?
If you own shares held by a broker, bank or other nominee organization you may instruct your broker to vote your shares in the manner that you direct by following the instructions that the broker provides to you. IfAs a beneficial owner, you are also invited to attend the beneficial owner of sharesAnnual Meeting online at www.virtualshareholdermeeting.com/UE2024 and you may use your 16-digit control number to vote your shares. If your Common Shares are held in streetthe name of your broker, bank or other nominee organization, and you wishwant to vote in person, at the Annual Meeting, you mustwill need to obtain a legal proxy from the organizationinstitution that holds your shares prior to the Annual Meeting. Please contact that organization for instructions on how to obtain a legal proxy.Common Shares.
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Can I change or revoke my proxy?
Yes. If you are a shareholder of record, you may revoke your proxy at any time prior to its exercise by filing with our Secretary a duly executed revocation of proxy, by properly submitting, either by Internet, mail or telephone, a proxy bearing a later date or by appearingattending the Annual Meeting and voting online. Attendance online at the meeting and voting in person. Attendance at the meetingAnnual Meeting will not by itself constitute revocation of a proxy. If you are the beneficial owner of shares held in street name, you must contact the organization that holds your shares to receive instructions as to how you may revoke your voting instructions.
How are proxies voted?
Proxies properly submitted via the Internet, mail or telephone will be voted at the Annual Meeting in accordance with your directions. If your properly-submitted proxy does not provide voting instructions on a proposal, then the proxy holders will vote your shares (i) in the manner recommended by the Board on all matters presented in this Proxy Statement and (ii) as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting. Mark J. Langer, Robert C. Milton III and Alexandra FerroneGenevieve Kelly have been designated as proxy holders for the Annual Meeting.
How are abstentions and broker non-votes treated?
If you are a beneficial owner whose shares are held of record by a bank, broker, or other similar nominee organization in street name, you must instruct the broker how to vote your shares. A “broker non-vote” occurs whenat a meeting at which there is at least one “routine” proposal on which brokers are permitted to vote, and a bank, broker or other holder of recordnominee organization holding shares for a beneficial owner does not vote on a particular proposal because thatit is a non-routine proposal and the holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Under the rules of the New York Stock Exchange (the “NYSE”), the only routine item to be acted upon at the Annual Meeting with respect to which a broker or nominee will be permitted to exercise voting discretion is the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Therefore, if you hold your Common Shares in street name and you do not give the broker or nominee specific voting instructions on the election of the trustees, the advisory resolution to approve the compensation of our named executive officers or the approval of the Urban Edge Properties 2024 Omnibus Share Plan, your shares will not be voted on those items, and a broker non-vote will occur.
You may choose to abstain or refrain from voting your shares on one or more issues presented for a vote at the Annual Meeting. However, both abstentionsAbstentions and broker non-votes are counted as present for purposes of determining the presence of a quorum. Abstentions and broker non-votes are not considered votes cast and therefore will not affect the outcome of the vote on any of the proposals.
Who has paid for this proxy solicitation?
We have paid the entire expense of preparing, printing and mailing the Notice and, to the extent requested by our shareholders, the proxy materials and any additional materials furnished to shareholders. We have requested banks, brokers or other nominees and fiduciaries to forward the proxy materials to beneficial owners of our Common Shares and to obtain authorization for the execution of proxies. We will reimburse such parties for their reasonable expenses in forwarding proxy materials to beneficial owners upon request.
Proxies may be solicited by our trustees, officers or employees personally or by telephone without additional compensation for such activities. No arrangements or contracts have been made with any solicitors as of the date of this Proxy Statement, although we reserve the right to engage solicitors if we deem them necessary. Such solicitations may be made by mail, telephone, facsimile, e-mail or personal interviews.
Where can I find additional information?
OurPlease refer to our website, which is located at www.uedge.com. Although the information contained on or connected toavailable through our website is not part of this Proxy Statement, you can view additional information on the website, such as the charters of our Audit Committee, Compensation Committeecorporate governance materials and Corporate Governance and Nominating Committee, our Corporate Governance Guidelines, our Code of Business Conduct and Ethics, and reports that we file with the SEC.SEC filings. Copies of these documents may be obtained free of charge by writing to Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, Attention: Robert C. Milton III, Executive Vice President, General Counsel and Secretary.
PROPOSAL 1
CONTENTSCurrent Board of Trustees
Our Board of Trustees (“Board”) currently consists of sevennine trustees (“Trustees”(together the “Trustees”, and each a “Trustee”). Commencing this year, eachEach Trustee will beis elected annually for a term of one year and shall holdholds office until the next succeeding annual meeting and until a successor is duly elected and qualifies. Under our Bylaws, at a shareholder meeting to elect Trustees, the affirmative vote of a majority of the votes cast with respect to a nominee's election is sufficient to elect a Trustee (as long as a quorum is present), unless the election is contested, in which case a plurality of all votes cast will be sufficient.
The following table sets forth the name, age, starting year and position for each of our current Trustees as of the date of this Proxy Statement, including the eight Trustee nominees for election at the Annual Meeting:
Jeffrey S. Olson | | | 56 | | | 2014 | | | Trustee (Chairman) and Chief Executive Officer |
Mary L. Baglivo | | | 66 | | | 2022 | | | Independent Trustee |
Steven H. Grapstein | | | 66 | | | 2015 | | | Independent Trustee |
Steven J. Guttman(1) | | | 77 | | | 2015 | | | Independent Trustee |
Norman K. Jenkins | | | 61 | | | 2021 | | | Lead Independent Trustee |
Kevin P. O'Shea | | | 58 | | | 2014 | | | Independent Trustee |
Catherine D. Rice | | | 64 | | | 2023 | | | Independent Trustee |
Katherine M. Sandstrom | | | 55 | | | 2022 | | | Independent Trustee |
Douglas W. Sesler | | | 62 | | | 2020 | | | Independent Trustee |
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PROPOSAL 1 ELECTION OF TRUSTEES
In evaluating the suitability of individual Board members,trustee nominees, our Corporate Governance and Nominating Committee takes into account many factors such as general understanding of various business disciplines (e.g., marketing or finance), understanding of the Company’s business environment, educational and professional background, judgment, integrity, diversity, ability to make independent analytical inquiries and willingness to devote adequate time to Board duties. The Board evaluates each individual in the context of the Board as a whole with the objective of retaining a group with diverse and relevant experience that can best perpetuate the Company’s success and represent shareholder interests through sound judgment.
The following table sets forth the name, age, starting year and position for each of our current Trustees as of March 12, 2018.
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| Jeffrey S. Olson | | 50 | | 2014 | | Trustee (Chairman) and Chief Executive Officer |
| Michael A. Gould | | 75 | | 2015 | | Trustee (Lead Trustee) |
| Steven H. Grapstein | | 60 | | 2015 | | Trustee |
| Steven J. Guttman | | 71 | | 2015 | | Trustee |
| Amy B. Lane | | 65 | | 2015 | | Trustee |
| Kevin P. O'Shea | | 52 | | 2014 | | Trustee |
| Steven Roth | | 76 | | 2015 | | Trustee |
Nominees for Election to Term Expiring 2019
2025
Jeffrey S. Olson, Michael A. Gould,Mary L. Baglivo, Steven H. Grapstein, Steven J. Guttman, Amy B. Lane,Norman K. Jenkins, Kevin P. O'Shea, Catherine D. Rice, Katherine M. Sandstrom and Steven RothDouglas W. Sesler have been nominated to serve on the Board until our 20192025 annual meeting of shareholders and until their respective successors are duly elected and qualify. The Board has no reason to believe that Messrs. Olson, Gould, Grapstein, Guttman, O'Shea or Roth or Mdme. Laneany such nominees will be unable, or will decline, to serve if elected. TrusteesEach Trustee nominee will be elected by the affirmative vote of a majority of the votes cast with respect to that Trustee’s election.
Below is an overview of some key attributes of our eight nominees to the Board. Further information on each nominee’s qualifications and relevant experience is provided in the election of Trustees.individual biographies included in this Proxy Statement.
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The biographical descriptions below set forth certain information with respect to each nominee for election as a Trustee at the Annual Meeting as of March 12, 2018.Meeting. The Board has identified specific attributes of each nominee that the Board has determined qualify that person for service on the Board.
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Jeffrey S. Olson
Chairman and Chief Executive Officer
Trustee Since: 2014
Age: 56 | | | Jeffrey S. Olson has served as our Chairman and Chief Executive Officer since December 29, 2014 and has served as a Trustee since December 19, 2014. Mr. Olson served as chief executive officer and a member of the board of directors of Equity One, Inc. (“Equity One”) from 2006 until September 1, 2014, at which time Mr. Olson joined Vornado Realty Trust (NYSE: VNO) (“Vornado”) in order to work on the separation of the Company from Vornado. From 2006-2008, Mr. Olson also served as the president of Equity One. Prior to joining Equity One, he served as president of the Eastern and Western Regions of Kimco Realty Corporation (NYSE: KIM) from 2002 to 2006. Mr. Olson has areceived an M.S. in Real Estate from The Johns Hopkins University and a B.S. in Accounting from the University of Maryland, and was previously a Certified Public Accountant.certified public accountant.
Mr. Olson’s qualifications to serve on our Board include his role as our Chief Executive Officer, his experience as chief executive officer and a board member of Equity One and general expertise in real estate operations, as well as his knowledge of the REITreal estate investment trust (“REIT”) industry developed as an analyst covering many U.S. REITs. Mr. Olson currently serves as an Executivea Board Member of the National Association of Real Estate Investment Trusts ("NAREIT"(“Nareit”).
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Chairman and Chief Executive Officer | |
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Mary L. Baglivo
Trustee
Trustee Since: 20142022
Age: 66 | |
Age: 50 | |
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Michael A. Gould | | Michael A. GouldMary L. Baglivo has served as a Trustee since January 14, 2015. Mr. Gould served as ChairmanSeptember 1, 2022. Ms. Baglivo is a highly accomplished marketing and CEO of Bloomingdale’s, a division of Macy’s Inc., a major retailer operating department stores and specialty stores, from 1991 to 2014. Prior to joining Bloomingdale’s, Mr. Gould was the President and Chief Operating Officer of Giorgio Beverly Hills beginningcommunications executive, with extensive experience in 1986 and became its President andglobal marketing firm Chief Executive Officer in 1987. Mr. Gould also worked at J.W. Robinson’s Department Stores in Los Angeles from 1978 to 1986, servingroles, as its Chairman andwell as higher education Chief Marketing Officer positions. Ms. Baglivo currently serves as the Chief Executive Officer from 1981 to 1986. Since November 2015, Mr. Gould has servedof the Baglivo Group, a strategy consulting company. She is also currently a director at Host Hotels and Resorts (NASDAQ: HST), the largest hotel real estate investment trust, where she serves as Chair of the Culture and Compensation Committee and is a member of the Nominating, Governance and Corporate Responsibility Committee, and a director at Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI), where she also serves on the BoardNominating and Corporate Governance Committee. Ms. Baglivo's prior board experience includes PVH Corp. (NYSE: PVH) (Calvin Klein, Tommy Hilfiger), where she was actively engaged in the company's transformational growth via acquisitions and omni-channel innovation and Ruth’s Chris Hospitality Group (formerly, NASDAQ: RUTH) where she served as director from 2017 until its privatization in June of Directors2023. She is actively involved in environmental, social and governance (“ESG”) initiatives, as a member of David Yurman, a leading fine jewelryCorporate Responsibility Committees of Host Hotels and luxury timepiece retailer with over 360 locations worldwide. Mr. Gould received his B.A. from Columbia College in 1966Resorts and his M.B.A. from Columbia Business School in 1968.Ruth’s Hospitality Group.
Mr. Gould’sMs. Baglivo’s qualifications to serve on our Board include hisher extensive knowledge ofleadership and marketing experience and her director roles and committee involvement in both the hospitality and retail sector and management experience at multiple companies.industries.
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Steven H. GrapsteinTrustee | |
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Trustee Since: 2015
Age: 66 | |
Age: 75 | |
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Steven H. Grapstein | | Steven H. Grapstein has served as a Trustee since January 14, 2015. Mr. Grapstein has been Chief Executive Officer of Como Holdings USA, Inc., an international investment group, since January 1997. From September 1985 to January 1997, Mr. Grapstein was a Vice President of Como Holdings USA, Inc. Since November 2015, Mr. Grapstein has served on the Board of Directors of David Yurman, a leading fine jewelry and luxury timepiece retailer with over 360 locations worldwide. Since November 2003, Mr. Grapstein has served on the Board of Directors of Mulberry Plc, a UK listed company that wholesales and retails luxury leather goods in over 30 countries. Mr. Grapstein also held the position of Chairman of Presidio International dba A/X Armani Exchange, a fashion retail company from 1999 to June 2014. Mr. Grapstein served as Chairman of Tesoro Corporation (NYSE: TSO) from 2010 through 2014 and served on its board from 1992 through May 2015. Mr. Grapstein holdsreceived a B.S. in Accounting from Brooklyn College (1979) and is a Certified Public Accountantcertified public accountant (1981). He is also a director of several privately held hotel and real estate entities.
Mr. Grapstein’s qualifications to serve on our Board include his broad experience in the real estate and retail sectors across a variety of companies, as well as the knowledge of board responsibilities and mechanics he brings from his experience as a former Chairman of a Fortune 100 public company and service on multiple board committees.
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Norman K. Jenkins Trustee | |
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Trustee Since: 20152021
Age: 61 | |
Age: 60 | |
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Steven J. Guttman | | Steven J. GuttmanNorman K. Jenkins has served as a Trustee since January 14, 2015.November 22, 2021. Mr. Guttman isJenkins brings over 25 years of real estate and executive leadership experience. In 2009, he founded Capstone Development, LLC, a real estate industry veterancompany focused on the acquisition and development of institutional-quality lodging assets affiliated with over 40 years of experience. In January of 2013, Mr. Guttman founded UOVO Fine Art Storage, which is developing next generation, high-tech facilities for fine art storage, andtop-tier national lodging brands, where he currently serves as UOVO’s Chairman. Prior to founding UOVO, Mr. Guttman had a 30-year career with the Federal Realty Investment Trust, becoming managing Trustee in 1979, President, Chief Executive Officer and TrusteeManaging Partner. Prior to that, Mr. Jenkins spent 16 years with Marriot International, Inc. (NASDAQ: MAR), serving in 1980,several leadership positions before being named Senior Vice President of North American Lodging Development. Mr. Jenkins was the architect of Marriott’s industry-leading Diversity Ownership Initiative which was responsible for doubling the number of diverse-owned Marriott hotels over a three-year period to 500 hotels. Mr. Jenkins also serves on the board of directors of AutoNation, Inc. (NYSE: AN) and Chairman ofserved on the Board and Chief Executive Officerof Directors of Duke Realty (formerly NYSE: DRE) from August 2017 through its acquisition by Prologis, Inc. in February 2001, the position he held at the time of retirement in 2003. In 1998, Mr. Guttman founded Storage Deluxe Management Company, a Manhattan-based owner, developer and manager of self-storage facilities, of which heOctober 2022. He is the principal investor. In the last 15 years, Storage Deluxe has developed approximately 40 properties with in excess of 4 million square feet, primarily in the New York City metropolitan area. Mr. Guttman has been a member of the National Association of Real Estate Investment Trusts ("NAREIT") since 1973Washington, DC Developer Roundtable and served asis a former member of the Howard University Board of Governors and Executive Committee, including as Chairman of the Board of GovernorsTrustees. Mr. Jenkins earned a BA in Accounting from 1997-1998. He received a B.A. from theHoward University, of Pittsburgh in 1968, and received a J.D.an MBA from George Washington University in 1972.and is a certified public accountant.
Mr. Guttman’sJenkins' qualifications to serve on our Board include his extensive careersenior leadership experience at a large,premier national lodging brand and other institutions, his extensive public company board experience and entrepreneurial success in founding a successful retail REIT (culminating with his service as Chief Executive Officerreal estate company focused on the acquisition and Chairmandevelopment of the Board), and his experience in the REIT industry generally, including his participation in NAREIT.
lodging assets.
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Trustee | |
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Trustee Since: 2015 | |
Age: 71 | |
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Amy B. Lane | | Amy B. Lane has served as a Trustee since January 14, 2015. Ms. Lane was an investment banker for 26 years, primarily specializing in the retail and apparel industry during that time. From 1997 until her retirement in 2002, Ms. Lane served as a Managing Director and Group Leader of the Global Retailing Investment Banking Group at Merrill Lynch & Co., Inc. Before working at Merrill Lynch, Ms. Lane founded and led the retail industry investment banking unit at Salomon Brothers, Inc., having joined that firm in 1989. Ms. Lane began her investment banking career at Morgan Stanley & Co. in 1977. Ms. Lane is currently a director of The TJX Companies, Inc., GNC Holdings, Inc. and NextEra Energy, Inc. Ms. Lane received an M.B.A. in Finance from The Wharton School and a B.S. degree from the University of Pennsylvania.
Ms. Lane’s qualifications to serve on our Board include her extensive experience in the retail and apparel sectors, as well as her financial expertise from her many years in investment banking.
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Trustee | |
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Trustee Since: 2015 | |
Age: 65 | |
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Kevin P. O'Shea
Trustee
Trustee Since: 2014
Age: 58 | | | Kevin P. O’Shea has served as a Trustee since December 29, 2014. Mr. O’Shea has been the Chief Financial Officer of AvalonBay Communities, Inc. (NYSE: AVB), a multifamily real estate investment trust, since May 31, 2014.2014 (“AvalonBay”). Previously, he had served as Executive Vice President-Capital Markets and as Senior Vice President-Investment Management at AvalonBay. Mr. O’Shea joined AvalonBay in July 2003. Prior to that time, Mr. O’Shea was an Executive Director at UBS Investment Bank, where his experience included real estate investment banking. Earlier in his career, Mr. O’Shea practiced commercial real estate and banking law as an attorney. Mr. O’Shea received hisan M.B.A. from Harvard Business School, hisa J.D. from Southern Methodist University and his undergraduate degreea B.A. from Boston College.
Mr. O’Shea’s qualifications to serve on our Board include his education and experience in business and legal roles, his extensive experience in the REIT sector and his financial expertise stemming from his experience as the Chief Financial Officer of a major REIT, and his experience in the real estate investment banking sector.
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Catherine D. Rice Trustee | |
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Trustee Since: 20142023
Age: 64 | |
Age: 52 | |
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Steve Roth | | Steven RothCatherine D. Rice has served as a Trustee since March 15, 2023. Ms. Rice served as the Senior Managing Director and Chief Financial Officer from January 14, 2015. Mr. Roth2013 to February 2016 of W.P. Carey (NYSE: WPC). Before joining W.P. Carey in 2013, Ms. Rice was a partner at Parmenter Realty Partners from January 2010 until December 2012 and a Senior Advisor and Board Member for CTS Cement Manufacturing Co. from April 2009 to January 2019. Ms. Rice spent the first 16 years of her career as a professional in the real estate investment banking groups of Merrill Lynch, Lehman Brothers and Banc of America Securities. Ms. Rice has over 30 years of experience in the public and private capital markets and has been involved in over $50 billion of capital-raising and financial advisory transactions, including numerous REIT IPOs, public and private debt and equity offerings, mortgage financings, merger and acquisition assignments, leveraged buyouts, asset dispositions and debt restructurings. Ms. Rice serves on the Chairmanboards of BrightSpire Capital (NYSE: BRSP), a REIT, since 2018, and RMG Acquisition Corp III (NASQ: RMGCU) since 2021. At BrightSpire she also serves as a member of the Audit Committee. She served as an independent director of Store Capital (NYSE: STOR), a net-lease REIT, from 2017 until its privatization in early 2023.
Ms. Rice's qualifications to serve on our Board include her extensive experience in real estate investment banking, finance, as well as her extensive executive leadership experience. |
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Katherine M. Sandstrom Trustee
Trustee Since: 2022
Age: 55 | | | Katherine M. Sandstrom has served as a Trustee since October 1, 2022. Ms. Sandstrom brings deep experience in real estate investment including more than twenty years of service at Heitman, LLC, a real estate investment management firm, where she held a variety of senior leadership positions including her roles as Senior Managing Director and global head of Heitman’s Public Real Estate Securities business from 2013 to 2018. Ms. Sandstrom oversaw the growth of assets under management to more than $5 billion invested in domestic and global funds, as well as separately managed accounts. Additionally, Ms. Sandstrom served on Heitman’s Global Management Committee, the Board of TrusteesManagers and the Allocation Committee. Ms. Sandstrom has served on the Board of Vornado,EastGroup Properties, Inc. (NYSE: EGP), a real estate investment trust, since May 19892020, Healthpeak Properties, Inc. (NYSE: PEAK) since 2018, and ChairmanToll Brothers, Inc. (NYSE: TOL) since 2023. She serves as an Audit committee member and the Chair of the ExecutiveNominating and Corporate Governance Committee at EGP. At PEAK, she serves as Chair of the Board, Chair of Trusteesthe Nominating and Corporate Governance Committee and a member of Vornado since April 1980. From May 1989 until May 2009, Mr. Roththe Compensation & Human Capital Committees.
Ms. Sandstrom's qualifications to serve on our Board include her extensive experience in the real estate investment, capital markets, and executive leadership. |
Douglas W. Sesler Trustee
Trustee Since: 2020
Age: 62 | | | Douglas W. Sesler has served as Vornado’s Chief Executive Officer, and has been servinga Trustee since March 20, 2020. Most recently, Mr. Sesler served as Chief Executive Officer againthe Head of Real Estate for Macy's, Inc. (NYSE: M), a position he held from April 15, 2013 until the present. Since 1968,2016 to April 2021. From 2011 to 2016, Mr. Sesler was president of True Square Capital LLC, a real estate investment and advisory firm. From 2005 to 2011, he has beenwas employed at Bank of America Merrill Lynch International Ltd. in roles that included global head of principal real estate investments and global co-head of real estate investment banking. From 1989 to 2005, Mr. Sesler served in a general partnervariety of Interstate Propertiesroles at Citigroup and he currently servesits predecessors, including as its Managing General Partner. He is the Chairmanmanaging director of the Boardglobal real estate investment banking group and Chief Executive Officer of Alexander’s, Inc. and the Chairmanmanaging director of the BoardTravelers Realty Investment Company. He began his career in real estate roles at Chemical Bank. Mr. Sesler served on the board of JBG Smith Properties.directors of Gazit Globe Ltd., an international owner, developer and operator of shopping centers from January 2012 to November 2020. Mr. Roth wasSesler received a director of J.C. Penney Company, Inc. (a retailer)B.A. in Government from 2011 until September 13, 2013.Cornell University.
Mr. Roth’sSesler's qualifications to serve on our Board include his experience in leadership and board responsibilities for a major REIT (as well as with other significant real estate companies), his deep understanding of the class of assets held by the Company and his many years ofextensive experience in the real estate field generally.sector, including in an executive position with one of the largest U.S. department store companies, as well as his experience in the real estate investment banking sector. |
Trustee | |
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Trustee Since: 2015 | |
Age: 76 | |
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| THE BOARD OF TRUSTEES RECOMMENDS A VOTE “FOR”
EACH OF THE NOMINEES. |
THE BOARD
CONTENTS
CORPORATE GOVERNANCE AND RELATED MATTERS
Board Leadership Structure
Our Board is deeply focused on oureffective corporate governance practices. Our current leadership structure is comprised of a combined Chairman of the Board and Chief Executive Officer, a Lead Trustee who is independent and Board committees comprised solely of independent Trustees. The Board believes its current structure provides an effective balance between strong Company leadership and appropriate safeguards and oversight by independent Trustees. We value independent board oversight as an essential component of strong corporate performance to enhance shareholder value. All of our Trustees are independent, except Jeffrey S. Olson, our Chairman and Chief Executive Officer and Mr. Roth.Officer.
As Chairman and Chief Executive Officer, Mr. Olson uses the in-depth focus and perspective gained as a senior executive leadingthrough his leadership at the Company and at other real estate companies, and as an analyst covering many U.S. REITs to effectively and efficiently guide our Board. He fulfills his responsibilities through close interaction with our Lead Trustee Michael A. Gould, who wasis elected annually to serve in that capacity by the independent Trustees of our Board.
The Board concluded that Mr. Olson, as a well-seasoned leader with a track record of running and analyzing real estate companies over a long period of time, is the best person to lead the Board. The Board also considered current Board relationships and determined that there is actual and effective independent oversight of management with Mr. Gould serving as independenta result of, among other factors, (i) the appointment of a Lead Trustee, providingwho provides significant independent oversight of the Board, and with(ii) all members of the Board, as a whole,other than Mr. Olson, being primarily comprised of members independent of management, also serving as an actual and effective independent voice.independent.
Trustee Independence
Our Corporate Governance Guidelines and the NYSE listing standards require that at least a majority of our Trustees, and all of the members of the Audit, Compensation and Corporate Governance and Nominating Committees, be “independent.” The“independent”. NYSE listing standards provide that, to qualify as an “independent”, a Trustee, in addition to satisfying certain bright-line criteria, must be affirmatively determined by the Board must affirmatively determine that a Trustee has nonot to have any material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company).
In addition, our Board has adopted categorical standards to assist it in making determinations of independence. These categorical standards specify certain relationships that our Board has determined not to be material relationships that would categorically impair a Trustee’s ability to qualify as independent, including, among others, (i) a Trustee’s or his or her immediate family member’s status as an employee of an organization that has made payments to the Company, or that has received payments from the Company, not in excess of certain specified amounts; (ii) beneficial ownership by a Trustee or his or her immediate family member of not more than 10% of the Company’s equity securities or where a Trustee or his or her immediate family member holds certain positions with an organization that beneficially owns not more than 10% of the Company’s equity securities; (iii) relationships with organizations with which the Company conducts business, in each case, which owe money to the Company or to which the Company owes money not in excess of certain specified amounts; (iii)(iv) personal relationships between a Trustee (or a member of the Trustee’s immediate family) with a member of the Company’s management; and (iv)(v) any other relationship or transaction that is not covered by any of the categorical standards that does not involve the payment of more than $100,000 in the most recently completed fiscal year of the Company. The Board of Trustees’ categorical standards are set forth in our Corporate Governance Guidelines on the Company’s website located at www.uedge.com. The information contained on or available through our website is not part of this Proxy Statement.
In accordance with these categorical standards and the NYSE listing standards, the Board
undertook its annual review of the independence of our Trustees at the meetings of the Corporate Governance and Nominating Committee on February 22, 2018 and of the Board of Trustees on February 23, 2018. During these reviews, the Board considered relationships between each Trustee or members of his or her immediate family and the Company, and whether there were transactions between the Trustees or members of their immediate families and the Company. The Board affirmatively determined that each of our Trustees, other than
Messrs.Mr. Olson,
and Roth, satisfies the bright-line independence criteria of the NYSE and that none has a relationship with us that would interfere with such person’s ability to exercise independent judgment as a member of the Board. In
determining that Ms. Lane qualified as an independent director for purposes of her service on the Board and the committees on which she serves,making this determination, the Board considered
her membership on the
board of directors of The TJX Companies, Inc., which is one of our largest tenants. The Board’s conclusion that this relationship did not impair Ms. Lane’s independence for purposes of her service on the Compensation Committee was primarily based on the fact that Ms. Lane serves as an independent, non-employee director of The TJX Companies, Inc., which is a relationship that is deemed immaterial pursuant to the categorical standards adopted by the Board. Therefore, we believe that all of these Trustees, who constitute a majority of the Board, are independentrelationships described under the
NYSE rules.caption “Certain Relationships and Related Transactions” beginning on page 69.TABLE OF CONTENTS
Our Corporate Governance Guidelines provide that a Lead Trustee shall annuallymust be elected by a majority of the independent Trustees. Mr. Michael A. Gould has servedTrustees annually (typically, in May of each year). Norman K. Jenkins was elected by our independent Trustees to serve as our Lead Trustee since 2015.effective September 1, 2022. The responsibilities and goals of our Lead Trustee are described in our Corporate Governance Guidelines and include the following:
Serving as a resource to the Chairman/CEO and to the other independent Trustees, coordinating the activities of the independent Trustees;
Chairing all Board meetings at which the Chairman is not present, including executive sessions and meetings of the independent Trustees;
Consulting with the Chairman to suggest the schedule of Board meetings and annual or special meetings of shareholders;
Providing input to the Chairman to determine agendas for Board meetings;
Chairing all executive sessions of the Board and meetings of the independent Trustees;
Serving as a liaison between the Chairman/Chief Executive Officer and the independent Trustees;
Coordinating with the independent Trustees to evaluate the Chairman/Chief Executive Officer's performance in relation to annual goals and objectives;
Helping to develop a high-performing Board, by assisting Trustees in reaching consensus, keeping the Board focused on strategic decisions, managing information flow between the Trustees and management and coordinating activities across various committees; and
Supporting effective shareholder communication by the Chairman/Chief Executive Officer and the Board.
Corporate Governance Guidelines
Our Board has adopted a set of Corporate Governance Guidelines to assist it in guiding our governance practices. The Corporate Governance Guidelines are re-evaluated at least annually by the Corporate Governance and Nominating Committee in light of changing circumstances in order to continue serving our best interests and the best interests of our shareholders.the Company. Our Corporate Governance Guidelines are available on our websiteat www.uedge.com under “About Us - Governance - Corporate Governance Guidelines” at www.uedge.com,, or by requesting a copy in print, without charge, by contacting our Secretary at 888 Seventh Avenue, New York, New York 10019. The information contained on or available through our website is not part of this Proxy Statement.
Our Trustees stay informed about our business by attending meetings of the Board and its committees and through supplemental reports and communications.
Board Committees
Our Board has established standing committees to assist it in the discharge of its responsibilities. The principal responsibilities of each committee are described below. Actions taken by any committee of our Board are reported to the Board, usually at the meeting following such action. MembershipEach of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee is each composed of three Trustees who are each "independent"“independent” as defined under theSEC rules and regulations and listing standards of the NYSE. Our Board may from time to time establish other committees to facilitate the management of our company. Copies of the charters of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee are posted on our websiteavailable at www.uedge.com under "About“About Us - Governance."” The information contained on or available through our website is not part of this Proxy Statement.
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The table below sets forth a summary of our committee structure and membership information.
Trustee | | | | | | | |
| Trustee | | Audit Committee | | Compensation Committee | Compensation
Committee | | | Corporate Governance and
Nomination Committee |
Norman K. Jenkins(1) | Michael A. Gould* | | | | l | • | l | | Chair |
Mary L. Baglivo | | | | | | • | | | • |
Steven H. Grapstein | | l | | | | Chair | | | |
Kevin P. O'Shea† | Steven J. Guttman | | Chair | | l | • | | | |
Catherine D. Rice†(2) | Amy B. Lane | | l• | | Chair | | | | • |
Katherine M. Sandstrom† | Kevin P. O'Shea† | | Chair• | | | | l | | • |
Douglas W. Sesler | | | • | | | | | | |
*(1)
| Mr. Jenkins is the Company’s current Lead Trustee and is expected to continue in that role for the May 2024 to May 2025 Board term. |
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| | | | | | Ms. Rice has been elected Chair of the Audit Committee, effective April 1, 2024. Mr. O’Shea will remain a member of the Audit Committee thereafter. |
†
| Audit Committee Financial Expert | | | | |
Audit Committee
The Audit Committee’s purposesmain responsibilities are (i) to (i) assist the Board in its oversight of (a) the integrity of our financial statements, (b) our compliance with legal and regulatory requirements, (c) the independent registered public accounting firm’s qualifications and independence, and (d) the performance of the independent registered public accounting firm and the company’s internal audit function; and (ii) to prepare an Audit Committee report as required by the SEC for inclusion in our annual proxy statement. The function of the Audit Committee is oversight. Management is responsible for the preparation, presentation and integrity of our financial statements and for the effectiveness of internal control over financial reporting. Management is also responsible for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. AnOur independent registered public accounting firm is responsible for planning and carrying out a proper audit of our annual financial statements, reviewing our quarterly financial statements prior to the filing of each Quarterly Report on Form 10-Q and annually auditing the effectiveness of internal control over financial reporting and other procedures. Additional information regarding the Audit Committee's duties and responsibilities may be found on our websiteis available at www.uedge.com under "About“About Us - Governance - Audit Committee Charter."
” The information contained on or available through our website is not part of this Proxy Statement.
Each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements, and is
"independent"“independent” as defined under
theSEC rules
and regulations and listing standards of the NYSE. The Board determined that
each of Mr. O'Shea
the Chair of the Audit Committee, qualifiesand Mses. Sandstrom and Rice qualify as an
"Audit“Audit Committee Financial Expert,
"” as defined in Item 401(h) of Regulation S-K.
AThe report of the Audit Committee may be found on page
22.30 of this Proxy Statement.
Compensation Committee
The Compensation Committee is responsible for establishing and approving the terms of the compensation of theour executive officers and the granting and administration of awards under the Company’s 2015 Omnibus Share Plan.incentive plan. Compensation decisions for our executive officers are madereviewed and approved by the Compensation Committee. Decisions regarding compensation of other employees are made by our Chief Executive Officer and arewith equity awards to employees subject to the review and approval of the Compensation Committee. The Compensation Committee has authority under its charter to select, retain and approve fees for, and to terminate the engagement of, independent compensation consultants, outside legal counsel or other advisors as it deems appropriate without seeking approval of the Board or management. Additional information regarding the Compensation Committee's duties and responsibilities may be found on our websiteis available at www.uedge.com under "About“About Us - Governance - Compensation Committee Charter."” The information contained on or available through our website is not part of this Proxy Statement.
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Each member of the Compensation Committee is
"independent"“independent” as defined under
theSEC rules
and regulations and listing standards of the NYSE.
AThe report of the Compensation Committee may be found on page
47.58 of this Proxy Statement.Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee’s responsibilities include, among others, the selection of potential candidates for the Board, review of our corporate governance framework, oversight of the Company’s cybersecurity and the developmentother information security risks and related policies and procedures, and review of our Governance Guidelines.the Company’s ESG strategy, practices and policies and reporting to the Board thereon. It also reviews Trustee compensation and benefits, and oversees annual self-evaluations of the Board and its committees. The committeeCorporate Governance and Nominating Committee also makes recommendations to the Board concerning the structure and membership of the other Board committees, as well as management succession plans. The committeeCorporate Governance and Nominating Committee selects and evaluates candidates for membership to the Board in accordance with the criteria set out in the Company’sCorporate Governance Guidelines, a summary of which is provided below. The committeeCorporate Governance and Nominating Committee is then responsible for recommending to the Board a slate of candidates for Trustee positions for the Board’s approval. Additional information regarding the Corporate Governance and Nominating
Committee's duties and responsibilities may be found on our websiteis available at www.uedge.com under "About“About Us - Governance - Corporate Governance and Nominating Committee Charter."
” The information contained on or available through our website is not part of this Proxy Statement.
Each member of the Corporate Governance and Nominating Committee is "independent"“independent” as defined under theSEC rules and regulations and listing standards of the NYSE.
Role of the Board and its Committees in Risk Oversight
One of the key functions of the Board is informed oversight of our risk management process. The Board administers this oversight function directly, with support from the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee, each of which addresses risks specific to their respective areas of oversight. In addition to receiving information from its committees, the Board receives updates directly from members of management. In particular, Mr. Olson, due to his management position, is able to frequently communicate with other members of our management team and update the Board on the important aspects of our day-to-day operations. The full Board also oversees strategic and operational risks.
Financial and Accounting
The Board and the Audit Committee oversees ourmonitor the Company's financial and regulatory risk policiesthrough regular reviews with management and processes relating to our financial statementsinternal and financial reporting processes, as well as key credit risks, liquidity risks, market risksexternal auditors and compliance, and the guidelines, policies and processes for monitoring and mitigating those risks. The Audit Committee also monitors risks arising from related person transactions. The Audit Committee meetsother advisors. In its periodic meetings with the audit partner of ourinternal auditors and the independent registered public accounting firm, that conducts the Audit Committee discusses the scope and plan for the internal audit and the audit conducted by the independent registered accounting firm, and includes management in its review of internalaccounting and financial controls over financial reporting to discuss the annual audit plan and any issues that such partner believes warrant attention.assessment of business risks.
Governance and Succession
The Compensation Committee oversees risk management as it relates to our compensation plans, policiesBoard and practices in connection with structuring our executive compensation programs and reviewing our incentive compensation programs for other employees and has reviewed with management whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on us.
Thethe Corporate Governance and Nominating Committee overseesmonitor the Company's corporate governance policies and procedures by regular review with management and outside advisors. The Board and the Corporate Governance and Nominating Committee monitor CEO and management succession, and the Compensation Committee monitors the Company's compensation policies as applied to executive officers and related risks by regular reviews with management and the Committee's outside advisors.
Cybersecurity
Cybersecurity is an integral part of the Board of Trustees’, Audit Committee’s and the Corporate Governance and Nominating Committee’s risk analysis and discussions with management. In February 2023, the Board assigned cybersecurity oversight responsibility to the Corporate Governance and Nominating Committee via
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an amendment to the Committee’s Charter (which is available at www.uedge.com under “About Us - Governance”). As we see increased reliance on information technology in the workplace and our business operations, and an ongoing shift to remote and hybrid work schedules, Urban Edge has employed several measures to mitigate cyber risks.
In addition to a dedicated information technology and cybersecurity team monitoring our daily operations, the Company engages an independent third-party cybersecurity audit firm to periodically review cybersecurity risks and our Incident Response Program. We also have a Cyber Steering Committee which works in conjunction with the Computer Incident Response Team (“CIRT”) to develop strategies to mitigate risks and to address any cyber issues that may arise. The Cyber Steering Committee meets (i) at least quarterly to review emerging threats, controls, and procedures, (ii) at least annually with the Corporate Governance and Nominating Committee to discuss trends in cyber risks and our strategy to defend our information against cybersecurity incidents, and (iii) promptly following the occurrence of a material cyber incident.
We utilize a risk-based approach that aligns with the National Institute of Standards and Technology Cybersecurity Framework, and Microsoft best practices. Our policies and procedures are reviewed and updated annually by the Cyber Steering Committee and incorporate third-party assessments to benchmark ourselves against industry standards. The Company utilizes advanced endpoint protection, firewalls, intrusion detection and prevention, threat intelligence, security event logging and correlation, and backup and redundancy systems.
We have formal policies and procedures addressing data retention, incident response, asset and device management and have a Disaster Recovery and Business Continuity Committee that meets biannually to review and update our plan, policies, and procedures to align with changes in risk assessment and emerging technologies. In addition, our Information Technology team conducts disaster recovery tests annually and reports results to the Cyber Steering Committee. Cyber threats identified are communicated to all members of the Company via email to promote awareness and assist with protecting us from potential risks or breaches. All employees are required to undergo quarterly security awareness trainings and we routinely conduct internal phishing and other exercises to gauge the effectiveness of the trainings and assess the need for continued education and/or areas where improvement may be needed.
The Company also maintains a cyber liability insurance policy, at levels that we believe are market and appropriate to our industry, intended to respond to breaches of network security, loss of sensitive and personal information, ransom attacks and other cybersecurity incidents. In the past three years, we have not experienced a material information security breach. As such, we have not incurred any material expenses from cybersecurity breaches or any expenses from penalties or settlements related to among other matters, our governance structure and processes, succession planning, potential conflicta cybersecurity breach during that time.
Compensation
As part of interest, and violationsits oversight of the Company's Codeexecutive compensation program, the Compensation Committee considers the impact of Business Conductthe Company's executive compensation program, and Ethics.
the incentives created by the compensation awards that it administers, on the Company's risk profile. In addition, the Company reviews all of its compensation policies and procedures, including the incentives that they create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company.
Compensation Committee Interlocks and Insider Participation
During 2017,2023, the following trustees,Trustees, all of whom are "independent"“independent” as defined under theSEC rules and regulations and listing standards of the NYSE, served on our Compensation Committee: Michael A. Gould, Steven J. GuttmanH. Grapstein (Chair), Mary L. Baglivo, Norman K. Jenkins and Amy B. Lane.Kevin P. O'Shea. None of our executive officers serve as either a member of the Board of Directorsboard or the compensation committee of any other company that has any executive officers serving as a member of our Board or Compensation Committee.
Board and Committee Meetings
In 2017,2023, the Board held tenfive meetings, the Audit Committee held six meetings, the Compensation Committee held six meetings and the Corporate Governance and Nominating Committee held sixfour meetings. EachIn 2023, each incumbent Trustee attended allat least 75% of (i) the total number of meetings of the Board held during the
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period for which he or she was a Trustee (except for Mr. Guttman, who is not re-running as Trustee for the 2024-2025 board term) and (ii) the total number of meetings and their respective committeeof all committees of the Board on which the Trustee served during the periods that he or she served.
The Board does not have a formal policy regarding the attendance of Trustees at our annual meetings in 2017. We held ourof shareholders but encourages all Trustees to make attendance a priority. Our 2023 annual meeting of shareholders on May 10, 2017, which was attended by all Trustees.Trustees except Mr. Guttman.
The independent Trustees of our Board have the opportunity to meet in executive session, without management present, at each Board and committee meeting. The Lead Trustee presides over independent, non-management sessions of the Board.
Nomination of Trustees
Before each annual meeting of shareholders, the Corporate Governance and Nominating Committee considers the nomination of each Trustee whose term expires at the annual meeting of shareholders and will also consider new candidates whenever there is a vacancy on the Board or whenever a vacancy is anticipated due to a change in the size or composition of the Board, a retirement of a Trustee or for any other reason.
The process that this committee will useused to identify a nominee to serve as a member of the Board will depend on the qualities being sought, but the Board should,will generally, based on the recommendation of the Corporate Governance and Nominating Committee, select new nominees considering the following, among other, criteria: (i) personal qualities and characteristics, accomplishments and reputation in the business community; (ii) current knowledge and contacts in the communities in which UEthe Company does business and in UE’sthe Company’s industry or other industries relevant to UE’sthe Company’s business; (iii) ability and willingness to commit adequate time to board and
committee matters; (iv) the fit of the individual’s skills and personality with those of other Trustees and potential Trustees in building a board that is effective, collegial and responsive to the needs of the Company; and (v) diversity of viewpoints, experience and other demographics.
The Corporate Governance and Nominating Committee will consider the criteria described above in the context of an assessment of the perceived needs of the Board as a whole and seek to achieve diversity of occupational and personal backgrounds on the Board. The Board will be responsible for selecting candidates for election as Trustees based on the recommendation of the Corporate Governance and Nominating Committee.
In addition to considering incumbent Trustees, the Corporate Governance and Nominating Committee may identify Trustee candidates based on recommendations from management and shareholders. Shareholder recommendations must be submitted in writing to Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, Attention: Robert C. Milton III, Executive Vice President, General Counsel and Secretary, indicating the nominee’s qualifications and other relevant biographical information and providing confirmation of the nominee’s consent to serve as Trustee, if elected.
See “Shareholder Proposals for the 2025 Annual Meeting” on page 75 of this Proxy Statement. The Corporate Governance and Nominating Committee may request additional information in order to evaluate the nominee.
Under our current Bylaws, at a shareholder meeting to elect Trustees, the affirmative vote of a majority of allthe votes cast with respect to a Trustee at the meeting will be sufficient to elect a Trustee (as long as a quorum is present), unless the election is contested, in which case a plurality of all votes cast will be sufficient.
In nominating Steven RothOver the last few years, our Corporate Governance and Nominating Committee sought to refresh the Board. Four of our current Trustees, Mr. Jenkins and Mses. Baglivo, Sandstrom and Rice, joined the Board during that time. Two of the Company’s original trustees, who have served as Trustees since 2015 when the Company first traded as an independent public company, were not up for re-election for the 2022 – 2023 Board term, one was not up for re-election for the 2023 – 2024 Board term, and Mr. Guttman is not up for re-election at the 2018Annual Meeting for the 2024 – 2025 Board term.
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Environmental, Social and Governance (“ESG”) and Other Highlights We are committed to sound corporate governance, which strengthens the accountability of our Board and promotes the long-term interests of our shareholders. We believe that our corporate governance standards and policies yield honest, transparent and accountable Trustees and executive officers. The summary below highlights our board and leadership practices and notable shareholder rights, as further discussed below.
✔ | | | Majority of Trustees are independent (7 out of 8 Trustee nominees) |
✔ | | | Board leadership structure where the Lead Trustee has well-defined responsibilities separate from the Chairman of the Board |
✔ | | | All Board committees are composed of independent Trustees |
✔ | | | Independent Trustees conduct regular executive sessions |
✔ | | | Trustees maintain open communication and strong working relationships among themselves and regular access to management |
✔ | | | Trustees conduct robust annual Board and committee self-assessment process |
✔ | | | Trustees and executives adhere to minimum share ownership guidelines |
✔ | | | Executives are prohibited from pledging, hedging or engaging in short sales involving our securities |
✔ | | | Executives are subject to a clawback policy |
| | | |
SHAREHOLDER RIGHTS |
✔ | | | All Trustees elected annually (declassified Board) |
✔ | | | Trustees are elected by a majority of the votes cast |
✔ | | | Trustee resignation policy in uncontested elections for failure to receive majority support |
✔ | | | Market standard proxy access |
✔ | | | Unqualified shareholder right to amend Bylaws |
✔ | | | Opted out of the Maryland Business Combination and Control Share Acquisition Acts |
✔ | | | No poison pill |
✔ | | | Annual say-on-pay voting |
✔ | | | Shareholder engagement efforts |
ESG Oversight Responsibility
The company’s Board of Trustees oversees the company’s ESG program overall and, in June 2022, delegated certain ESG oversight responsibilities to the Board’s Corporate Governance and Nominating Committee. In order to further our ESG goals, we established a management committee, the Environmental, Social and Governance Steering Committee (the “ESG Steering Committee”), that is comprised of members of cross-functional management. The ESG Steering Committee meets periodically and is focused on setting, implementing, tracking, measuring, and communicating our progress related to ESG initiatives. The ESG Steering Committee has developed a comprehensive suite of ESG policies that inform and guide our ESG approach and drive our ESG goals forward.
ESG Achievements, Initiatives, and Objectives
We seek to drive financial performance while engaging in environmentally and socially responsible business practices grounded in sound corporate governance. We believe that disclosure of our ESG practices allows our stakeholders to see our company holistically and understand its trajectory beyond fundamentals and financial metrics. We have aligned our sustainability practices in accordance with the Global Reporting Initiative (GRI) standards as well as the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD) frameworks, which we believe enables us to provide stakeholders with consistent and comparable ESG information. On an annual meetingbasis, we publish an ESG Report and assuming Mr. Roth werecomplete a Global Real Estate Sustainability Benchmarks (GRESB) submission to continue to measure our progress against peers. The recast of our unsecured revolving credit facility includes an ESG pricing clause, which provides that an improvement in our GRESB score that meets certain levels entitles us to reduce the applicable interest margin. Additionally, we incorporated five United Nations Sustainable
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Development Goals into our ESG program, namely: Zero Hunger, Good Health and Well-Being, Gender Equality, Decent Work and Economic Growth and Climate Action. Through collaborative efforts with our stakeholders, our initiatives have contributed toward effecting positive change in all five areas.
We routinely reassess our plans and policies to evaluate compliance with regional and national requirements as well as industry best practices.
Environmental
We are dedicated to ensuring a sustainable and responsible approach to our operations. We prioritize the measurement, benchmarking, and reporting of our ESG activities, which have become an integral part of our overall business operations. We have implemented and plan to continue to implement policies and practices with the goal of supporting the continued reduction of energy (thereby reducing greenhouse gas emissions), water usage, and waste production across the portfolio. Initiatives we have taken include the installation of energy-efficient roofing, LED lighting retrofits, high efficiency HVAC systems, electric vehicle charging stations and waste recycling and management. Additionally, we continue to explore solar and alternative energy opportunities to further reduce our consumption and carbon footprint. Lastly, we use native landscaping at our properties because it creates a lasting, beneficial impact on the ecosystem.
We have implemented green lease language in all new leases, including several clauses designed to promote sustainability measures. Due to these efforts, Urban Edge received a Green Lease Leader award and recognition from the Green Lease Leaders program developed by the Institute for Market Transformation (IMT) and the U.S. Department of Energy’s Better Buildings Alliance.
We are committed to maintaining sustainable operations and believe that our long-term sustainability goals will provide positive financial and environmental outcomes for shareholders, tenants, employees and the communities in which we invest.
Social
Our community involvement includes donations to various charitable organizations, hospitals, and relief funds as well as hosting community focused events at our properties that often include food and clothing drives. Many of these organizations and drives directly benefit the people and neighborhoods in which our properties are located. During 2023, the Company launched UE Cares, our volunteer initiative, which has partnered with local organizations to give back to our communities. Some of these local organizations include Helping Hands Food Pantry, Hackensack River Keeper, and St. John’s Soup Kitchen. Additionally, this year the Company hosted a blood drive, partnering with Vitalant Blood Donation of Paramus, at Bergen Town Center, open to both employees and the general public. We continue to partner with Relief Access Program for the Bronx (“RAP4Bronx”) and Grassroots Grocery, two non-profit organizations focused on delivering meals to those affected by food insecurity in the five boroughs of NYC, by donating vacant space that serves as a warehouse and distribution hub for both organizations.
We believe that through our business, we are able to provide the communities in which we operate a welcoming and safe environment for our tenants and customers to connect and engage with one another. We are committed to providing a better shopping experience for our customers by spending capital to redevelop our centers, which also results in the creation of new jobs in construction and retail. Additionally, we are deliberate in our leasing approach by adding necessary retailers to neighborhoods lacking vital resources and those that appeal to the respective communities where the properties are located.
Human Capital / Diversity, Equity and Inclusion Initiatives
At December 31, 2023, we had 109 employees. We believe that our people are our most valuable asset. Our future success will depend, in part, on our ability to continue to attract, hire, and retain qualified personnel. Accordingly, we strive to offer competitive salaries and employee benefits to all employees and monitor salaries in our market areas. We provide professional training and development workshops and aim to provide a workplace environment where employees are informed, engaged, feel empowered, and can succeed. Additionally, the Company launched a mentorship program designed to provide members of the team an opportunity to expand their knowledge and experience through one-on-one mentorship with an employee from another department. The goal of this initiative is to promote a culture of learning while providing opportunities for professional and personal growth.
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Our employees enjoy subsidized health and wellness benefits, professional training and development workshops, ergonomic office equipment, telecommuting opportunities and policies encouraging work/life balance. We have created an employee wellness program which spans the entire year and focuses on five pillars of health and wellness, both inside and outside of the office. The areas of focus for this program include financial, emotional, physical, social and community wellness. Each month there is a theme with associated activities and employee incentives including the ability to earn additional money for health savings accounts.
We allow employees the flexibility to maintain a hybrid in-office and remote working schedule to promote a healthy work-life balance while continuing to maximize engagement, collaboration, and efficiency.
Diversity, equity and inclusion (“DE&I”) initiatives are an integral part of our culture. We believe that a diverse workforce and an inclusive culture promotes growth, both personally and professionally, and is an important aspect in our ability to attract and retain talented employees. All employees are required to complete trainings on DE&I which cover a range of topics including best practices and education on unconscious bias. We aim to create an equitable workplace for all, and our CEO has signed the CEO Diversity and Inclusion Action Pledge on behalf of our Company, joining thousands of other CEOs and peers across the country to cultivate a trusting environment where our employees feel comfortable and are empowered to have discussions about diversity and inclusion. As a part of this pledge, the Company has created a Days of Understanding initiative which provides different platforms such as a book club or a movie screening as a way to encourage our team to have open discussions on issues of diversity, equity and inclusion. This program is designed to allow employees to not only gain a better understanding of culture issues tied to race, gender, and sexual orientation, but also drive engagement, build camaraderie, and learn from different perspectives.
Our efforts, like those mentioned above, are some of the many reasons Urban Edge Properties was named one of the best places to work in New Jersey by NJBIZ Magazine in 2022 and 2023, an annual program that identifies and recognizes the best employers in the state of New Jersey. We also received the Cigna Healthcare 2023 Gold Level Healthy WorkForce Designation which evaluates organizations on the core components of their wellness programs including their leadership, culture, policies and other areas.
Through our wellness and DE&I programs and town hall meetings with all employees, among other initiatives, we continually strive to provide a workplace environment where employees are informed, engaged, feel empowered and can succeed.
Governance Highlights
Our corporate governance standards and policies aim to promote ethical conduct, fair dealing, transparency and accountability. The summary below highlights certain of our Board and leadership practices and notable shareholder rights.
Independent Board
We are currently governed by a nine-member Board, which following the Annual Meeting, will be
re-electedreduced to eight members. All Trustees are independent, other than Jeffrey S. Olson, our chief executive officer and chair of the Board. To enhance oversight, our governance structure includes designation of a Lead Trustee, who is elected annually by the independent Trustees, with well-defined responsibilities separate from those of the chair of the board (see “Lead Trustee” on page 12). All committees of the Board are comprised of independent Trustees, and independent Trustees conduct regular executive sessions. Trustees conduct a robust Board and committee self-assessment process annually. Trustee Election; Declassified Board
Our Board consists of a single class of trustees who stand for election at alleach annual meeting. Our Bylaws include a majority voting standard for the boards on which he currently serves,election of Trustees in uncontested elections. Additionally, our Board adopted a policy requiring that any incumbent Trustee who does not receive a greater number of “for” votes than “against” votes in an uncontested election must promptly tender to the Board of Trustees his or her offer to resign from our Board of Trustees following certification of the vote.
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Risk Oversight by Full Board and Committees
One of the key functions of the Board is to provide informed oversight of our risk-management process. The Board performs this oversight directly with support from its three committees – the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee
considered that Mr. Roth would serve on boards– each of
three public companies inwhich addresses risks specific to their respective functional responsibilities. In addition to
Vornado Realty Trust, where he serves as Chairmanreceiving information from its committees, the Board receives updates directly from members of management at both regularly scheduled Board and committee meetings and on ad hoc business updates. See “Role of the Board and
Chief Executive Officer. However, the Committee noted that Mr. Roth’s two most recently added Board seats resulted from spinning business units out of Vornado. In the case of Urban Edge’s business, Mr. Roth acquired, developed and redeveloped and managed a substantial portion of our assets over a period of almost 40 years. The Committee also noted that Mr. Roth is a highly-engaged board member, didits Committees in Risk Oversight” on page 14. No Poison Pill
We do not miss a board meeting in 2017 and possesses significant real estate and management experience.
Lastly, our Corporate Governance and Nominating Committee and Board of Trustees as a whole considered an amendment to our Bylaws to provide our shareholders with the right to amend our Bylaws without the concurrence of our Board. In connection with this, management undertookhave a shareholder outreach effort and received input from shareholders representing approximately one-half of the outstanding shares of the Company. In light of the input received directly from shareholders, the proxy voting guidelines of certain of our shareholders and the evolving landscaperights plan in this area, particularly among Maryland REITs, we concluded not to make a change at this time to our Bylaws. Our Board intends to continue to evaluate this issue.
Availability of Corporate Governance Materials
Shareholders may view our corporate governance materials, including the charters of our Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee,place. Under our Corporate Governance Guidelines, our Board may not adopt, extend or renew a shareholder rights plan without prior approval of our shareholders, unless the Board determines that, under the circumstances existing at the time, it is in the best interests of the company to adopt, extend or renew such plan without delay. In that case, the shareholder rights plan will expire within 12 months of adoption unless ratified by our shareholders.
Stock Ownership Requirements and Restrictions
Trustees and executive officers are required to adhere to minimum share ownership guidelines. Additionally, our executive officers are prohibited from pledging, hedging or engaging in short sales involving our securities.
Clawback Policy
Executive officers are subject to a clawback policy, which provides that in certain circumstances, they are required to reimburse the company for excess compensation paid to them following a restatement of our financial statements.
Annual Say-on-Pay
We submit “say-on-pay” advisory votes for shareholder consideration and vote annually.
Shareholder Right to Amend Bylaws
Our shareholders may alter or repeal any provision of our Bylaws, or adopt new bylaw provisions, by the affirmative vote of a majority of all the votes entitled to be cast.
Proxy Access
Our Bylaws permit a shareholder or group of no more than 20 shareholders meeting specified eligibility requirements to include trustee nominees in our proxy materials for the annual meeting of shareholders. The maximum number of trustee nominees that may be submitted pursuant to the proxy access provisions may not exceed the greater of (i) two or (ii) 20% of the number of trustees in office as of the last day on which a notice requesting the inclusion of trustee nominees in our proxy materials may be timely delivered.
Opt-Out of Maryland Business Combination Act
Our Bylaws provide that the Company may not elect to be subject to Title 3, Subtitle 6 of the Maryland General Corporation Law (“MGCL”), commonly known as the Maryland Business Combination Act, and that this prohibition may not be repealed without prior shareholder approval.
Opt-Out of Maryland Control Share Acquisition Act
Our Bylaws provide that Title 3, Subtitle 8 of the MGCL, commonly known as the Maryland Control Share Acquisition Act, will not apply to any acquisition by any person of shares of beneficial interest of the Company.
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Governance Policies
Our governance policies are heavily focused on ethics and people-first protections and guidelines. Our Code of Business ConductEthics, Conflict of Interest Policy, Corporate Governance Guidelines, Whistleblower Policy, and Ethics,executive compensation policies form the backbone of our governance infrastructure. Most of these policies are available on our website at www.uedge.com, and these documents are available in print to any shareholder upon request by writing to Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, Attention: Robert C. Milton III, Executive Vice President, General Counsel and Secretary. Informationhttps://uedge.com. The information included on or connected toaccessible through our website is not incorporated by reference into this proxy statement.
Shareholder Outreach
Our Board and should not be consideredsenior management believe that engaging in shareholder outreach is an essential element of strong corporate governance. We strive for a partcollaborative approach on issues of this Proxy Statement.
importance to investors and continually seek to understand better the views of our investors. Our senior management team engages with our shareholders throughout the year in a variety of forums and discusses, among other things, our business strategy and overall performance, executive compensation programs and corporate governance.
Communication with the Board of Trustees
Our Board believes that shareholders and other constituents should have the ability to send written communications to the Board. Therefore, our policy is that all written communications to the Board as a whole should be addressed to the Chairman at Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, c/o Board Secretary. The Chairman will review all relevant written communications with the other members of the Board. Written communications to our independent and/or non-management members of the Board should be addressed to the Lead Trustee at Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, c/o Board Secretary.
Code of Business Conduct and Ethics
The Board adopted a Code of Business Conduct and Ethics, which governs business decisions made, and actions taken by, our Trustees, officers and employees. A copy of the Code of Business Conduct and Ethics is available at www.uedge.com under the heading “About Us” and subheading “Governance”. The information contained on or available through our website is not part of this Proxy Statement. We intend to disclose on our website any amendment to, or waiver of, any provision of the Code of Business Conduct and Ethics applicable to our Trustees and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE.
Availability of Corporate Governance Materials Shareholders may view our corporate governance materials, including the charters of our Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics, at www.uedge.com, and these documents are available in print to any shareholder upon request by writing to Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, Attention: Robert C. Milton III, Executive Vice President, General Counsel and Secretary. Information contained on or available through our website is not part of this Proxy Statement.
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Non-employee members of the Board are compensated as follows:
| |
(1)
| each receives an annual cash retainer equal to $65,000;$75,000; |
| |
(2)
| each receives an annual grant of restricted Common Shares or deferred share units (“DSUs”) or restricted LTIP Unitsunits (“LTIP Units”) in Urban Edge Properties LP, (“UELP”), our operating partnership (“UELP”), with a grant date fair value equal to $100,000of approximately $120,000 that will vest on the one-year anniversary of the date of grant; |
| |
(3)
| the Lead Trustee receives an additional annual cash retainer of $40,000;$60,000; |
| |
(4)
| the ChairmanChair of the Audit Committee receives an additional annual cash retainer of $25,000; |
| |
(5)
| the ChairmanChair of the Compensation Committee receives an additional annual cash retainer of $20,000; |
| |
(6)
| the ChairmanChair of the Corporate Governance and Nominating Committee receives an additional annual cash retainer of $15,000; and |
(7) members of the Audit, Compensation and Corporate Governance and Nominating Committees receive additional annual cash retainers of $12,500, $10,000 and $7,500, respectively.
(7)
| members of the Audit, Compensation and Corporate Governance and Nominating Committees receive additional annual cash retainers of $12,500, $10,000 and $7,500, respectively. |
Our Board and the Corporate Governance and Nominating Committee review our Trustee compensation at least annually. Our Board has the authority to approve all compensation payable to our Trustees, although the Corporate Governance and Nominating Committee is responsible for making recommendations to our Board regarding this compensation. For 2017, FTI2023, Ferguson Partners Consulting Inc. (“FTI Consulting”) was hired to evaluate the structure and competitiveness of our Trustee compensation and recommend changes, as appropriate. Based on this review, the Corporate Governance and Nominating Committee recommended changes to our 2017 Trustee compensation to the full Board and the full Board followed this recommendation.to make no changes to Trustee compensation.
20172023 Trustee Compensation
The following table summarizes the compensation earned by and/or paid to our non-employee Trustees in respect of their 20172023 Board and Committeecommittee service. Mr. Olson, our Chairman and Chief Executive Officer, does not receive compensation for his services as Trustee. Information regarding compensation for Mr. Olson can be found in the “Executive Officer Compensation”“Compensation Discussion and Analysis” section of this Proxy Statement.
|
| | | | | | |
| Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1)(2) | | Total ($) |
| Michael A. Gould | | $115,000 | | $100,000 | | $215,000 |
| Steven H. Grapstein | | $90,000 | | $100,000 | | $190,000 |
| Steven J. Guttman | | $72,500 | | $100,000 | | $172,500 |
| Amy B. Lane | | $95,000 | | $100,000 | | $195,000 |
| Kevin P. O'Shea | | $95,000 | | $100,000 | | $195,000 |
| Steven Roth | | $62,500 | | $100,000 | | $162,500 |
______________________
(1)The amounts disclosed in the “Stock Awards” column represent the aggregate grant date fair value of restricted common shares granted during 2017 as determined pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (FASB ASC Topic 718). See Note 16 to the Consolidated and Combined Financial Statements included in our Annual Report on Form 10‑K (the “Form 10-K) for the year ended December 31, 2017 for a discussion of the relevant assumptions used in calculating the amounts reported.
(2) As of December 31, 2017, each individual who served as a non-employee Trustee during 2017 had outstanding the following number of unvested Common Shares and LTIP Units:
Mary Baglivo | | | 92,500 | | | 119,993 | | | 212,493 |
Steven H. Grapstein | | | 99,267 | | | 119,993 | | | 219,260 |
Steven J. Guttman(3) | | | 75,000 | | | 119,993 | | | 194,993 |
Norman K. Jenkins | | | 160,000 | | | 119,993 | | | 279,993 |
Kevin P. O'Shea | | | 110,000 | | | 119,993 | | | 229,993 |
Catherine D. Rice | | | 72,648 | | | 236,427 | | | 309,075 |
Steven Roth(4) | | | 25,605 | | | — | | | 25,605 |
Katherine M. Sandstrom | | | 95,000 | | | 119,997 | | | 214,997 |
Douglas W. Sesler | | | 90,060 | | | 119,993 | | | 210,053 |
(1)
| The amounts disclosed in the “Stock Awards” column represent the aggregate grant date fair value of restricted Common Shares, LTIP Units or DSUs granted at each Trustee's election during 2023 as determined pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (FASB ASC Topic 718). Ms. Sandstrom elected to receive DSUs and Messrs. Grapstein, Guttman, O’Shea, Sesler, Roth, Jenkins, as well as Ms. Baglivo elected to receive LTIP Units. Ms. Rice elected to receive restricted Common Shares. In addition, Ms. Rice received an additional grant of 8,352 restricted Common Shares in connection with joining the board. The grant date fair value of the DSUs, was estimated using the following assumptions: an expected holding period of four years, an expected volatility of 43.0% and a risk-free interest rate of 3.54%. The grant date fair value of the LTIP Units was estimated using the following assumptions: an expected holding period of one year, an expected volatility of 30.0% and a risk-free interest rate of 4.6%. The grant date fair value of the restricted Common Shares was determined by taking the product of the average of the high and low stock prices on the grant date and the total restricted common stock granted. |
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(2)
| As of December 31, 2023, each individual who served as a non-employee Trustee during 2023 had outstanding the following number of unvested Common Shares, LTIP Units and DSUs: |
Baglivo | | | 9,426 |
NameGrapstein | | Shares/LTIP Units | 9,426 |
Michael A. GouldGuttman | | 3,937 | 9,426 |
Steven H. GrapsteinJenkins | | 3,937 | 9,426 |
Steven J. GuttmanO'Shea | | 3,937 | 9,426 |
Amy B. LaneRice | | 3,937 | 8,293 |
Kevin P. O'SheaSandstrom | | 3,937 | 10,050 |
Steven RothSesler | | 3,937 | 9,426 |
(3)
| Not up for re-election at the 2024 Annual Meeting. |
(4)
| Board service of Mr. Roth ended May 3, 2023. Mr. Roth held no unvested Common Shares, LTIP Units or DSUs as of December 31, 2023. |
Stock Ownership Guidelines
We have adopted equity ownership guidelines for our Board. Under our guidelines, all non-employee Trustees are required to maintain a minimum ownership level of Common Shares (or certain securities convertible into or redeemable for Common Shares) equal to at least three times their annual cash retainer of $65,000.$75,000. Our non-employee Trustees have until the end of the fifth full calendar year after becoming a Trustee to satisfy the ownership requirement. All non-employee Trustees currently satisfy these guidelines.
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Set forth below are the names, ages and positions of our current executive officers and key employees.further below are their biographical summaries. These officers are appointed annually by the Board and serve at the Board’s discretion.
| | | | |
Name | | Age | | Position |
Jeffrey S. Olson | | 50 | 56 | | | Chairman and Chief Executive Officer |
Robert MinutoliJeffrey S. Mooallem | | 67 | 54 | | | Executive Vice President and Chief Operating Officer |
Mark J. Langer | | 51 | 57 | | | Executive Vice President and Chief Financial Officer |
Michael Zucker | | 36 | | Executive Vice President - Leasing |
Herbert Eilberg | | 41 | | Chief Investment Officer |
Bernard I. Schachter | | 58 | | Executive Vice President - Asset Management |
Jennifer Holmes | | 37 | | Chief Accounting Officer |
Robert C. Milton III | | 46 | 52 | | | Executive Vice President, General Counsel and Secretary |
The following areMr. Olson's biographical summaries of the experience of our executive officers and key employees. For information on Mr. Olson, please see his biographical summary is provided above under the caption “Proposal 1: Election of Trustees.”
Robert Minutoli. Jeffrey S. Mooallem.Mr. Minutoli hasMooallem joined Urban Edge in January 2023 as EVP and Chief Operating Officer. He previously served from 2017-2023 as our Executive Vice President and Chief OperatingExecutive Officer since December 29, 2014. Prior toof Gazit Horizons, Inc., a New York based subsidiary of publicly traded G-City Ltd. During his tenure at Gazit, the spin-off,company developed and acquired over $1 billion of urban, mixed-use assets. Jeff also served as Managing Director at Federal Realty Investment Trust, as Regional President at Equity One, Inc. and as Senior Vice President at Miami-based Turnberry Associates. Jeff has over 20 years’ experience in the operation, development, acquisition and leasing of large scale, retail properties throughout the United States, and is a licensed attorney in both Florida and New York. Mr. Minutoli was at Vornado, where, since 2009, he was responsible for Vornado’s mallsMooallem graduated from Boston University and since 2012, he was responsible for its malls and strip centers. Prior to joining Vornado, he was Executive Vice President-New Business andreceived his law degree from Fordham University School of Law. He is a member of ICSC and the Executive Committee at The Rouse Company, where he spent 27 years. At Rouse, he held various construction, development, acquisitions/dispositionsUrban Land Institute and business development positions. From 1972-1977 he was a commissioned officer in the U.S. Army Corps of Engineers. Mr. Minutoli has a B.S. degree from the United States Military Academy and an M.B.A. from Golden Gate University.frequent speaker on issues impacting retail real estate.
Mark J. Langer. Mr. Langer has served as our Executive Vice President and Chief Financial Officer since April 20, 2015. Mr. Langer was previously the Chief Financial Officer of Equity One, Inc., a position he held since April 2009. Mr. Langer also served as the Chief Administrative Officer of Equity One from January 2008 until January 2011. From January 2000 to December 2007, Mr. Langer served as Chief Operating Officer of Johnson Capital Management, Inc., an investment advisor. From 1988 to 2000, Mr. Langer was a certified public accountant at KPMG, LLP, where he was elected a partner in 1998. Mr. Langer has a B.B.A. in Accounting from James Madison University.
Michael Zucker. Mr. Zucker has served as our Executive Vice President - Leasing since March 7, 2016. Mr. Zucker previously served as our Senior Vice President - Leasing. Prior to the spin-off, Mr. Zucker was at Vornado, where he was responsible for overseeing Vornado’s owned and managed mall portfolio, including leasing, specialty retail, and marketing. Since 2004, he held positions at Vornado including Senior Vice President - Malls, Vice President - Mall Leasing, Leasing Director and Leasing Representative. Mr. Zucker has worked on numerous redevelopment projects including the transformation of The Outlets at Bergen Town Center (Paramus, NJ) and most recently Springfield Town Center (Springfield, VA). Mr. Zucker has broad and deep relationships with retailers and with leasing executives at our peers. Mr. Zucker holds a Bachelor’s of Business Administration from George Washington University.
Herbert Eilberg. Mr. Eilberg has served as our Chief Investment Officer since April 20, 2015. Mr. Eilberg was previously Senior Vice President - Acquisitions at Acadia Realty Trust from 2011 to 2015, where he served as a key member of the acquisitions team and was responsible for sourcing, underwriting and closing core and value-add investments. Before joining Acadia, Mr. Eilberg worked in the real estate acquisition departments of The Milestone Group, Perry Capital and Soros Real Estate Partners. Mr. Eilberg has a B.A. in Architectural Studies from Brown University.
Bernard I. Schachter. Mr. Schachter joined Urban Edge Properties as Executive Vice President - Asset Management in May 2016. Previously he was at Staples, Inc. for 22 years, serving as Senior Vice President - Real Estate from 2000 to 2016 where he had oversight responsibility for retail site selection, store design, construction, facilities and energy management and non-store real estate functions. Mr. Schachter earned a BS in Economics from The Wharton School, University of Pennsylvania and an MS in Real Estate from MIT.
Jennifer Holmes. Ms. Holmes has served as our Chief Accounting Officer since December 29, 2014. Ms. Holmes previously spent over eleven years in the audit practice at Deloitte & Touche LLP, specializing in real estate, before joining Vornado in
December of 2014. Ms. Holmes earned a Bachelor’s degree in Business Administration from the University of Wisconsin-Madison. She is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.
Robert C. Milton III. Mr. Milton joined Urban Edge Properties as Executive Vice President, General Counsel and Secretary in January 2016. Mr. Milton was previously General Counsel, Chief Compliance Officer, Secretary of the Board and a Managing Director of CIFC Corp. (and its predecessor) from August 2008 to August 2015. From 1999 to 2008, he was an attorney with Milbank, Tweed, Hadley & McCloy LLP in its Global Finance department. Mr. Milton has a B.A. in Mathematics from Vassar College, a J.D. from Vanderbilt Law School and an M.B.A. from the Owen Graduate School of Management at Vanderbilt University.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists the number of Common Shares and Units (as defined below)units in UELP beneficially owned, as of March 12, 2018,4, 2024, by: (i) each person who holdsknown to us to be the beneficial owner of more than a 5% interest in the Company orof our operating partnership, UELP;outstanding Common Shares, (ii) Trusteeseach of the Company;our Trustees, (iii) each of our named executive officer;officers who is not a Trustee, and (iv) theour Trustees and all executive officers of the Company as a group. Unless otherwise specified, “Units” are common limited partnership units
The SEC has defined “beneficial ownership” of UELP and other classesa security to mean the possession, directly or indirectly, of units convertible intovoting power and/or investment power over such common limited partnership units (including LTIP Units). Percentagesecurity. A shareholder is also deemed to be, as of totalany date, the beneficial ownership is calculated based on 113,920,633 Common Shares and 12,458,402 Units as described in footnotes (1)owner of all securities that such shareholder has the right to acquire within 60 days after that date through (4)(i) the exercise of any option, warrant or right, (ii) the table below.
Beneficial ownershipconversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the automatic termination of a trust, discretionary account or similar arrangement. In computing the number of Common Shares is determined under the rules of the SEC and generally includes any Common Shares over whichbeneficially owned by a person exercises sole or shared voting or investment power.and the percentage ownership of that person, Common Shares subject to options currentlyor other rights (as set forth above) held by that person that are exercisable as of March 4, 2024 or will become exercisable within 60 days of March 12, 2018thereafter, are deemed to be outstanding and beneficially owned by the person and any group of which that person is a member, butoutstanding; however, such Common Shares are not deemed outstanding for the purposepurposes of computing the percentage of beneficial ownership forof any other person. In the case of persons other than our executive officers and Trustees or where we have received additional information from the beneficial owner, the information presented in this table is based on filings with the SEC as of March 12, 2018. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the individuals and entitiesEach person named in the table below havehas sole voting andand/or investment power with respect to all of the Common Shares shown as beneficially owned by such person, except as otherwise set forth in the notes to the table.
As of March 4, 2024, the following Common Shares and units were issued and outstanding: (i) 118,787,400 Common Shares, (ii) 2,638,724 common units of limited partnership interests in UELP (“Common Units”) (other than Common Units below. Theheld by the Company) and (iii) 3,467,852 LTIP Units (excluding unearned performance-based LTIP Units, which may be earned based on the achievement of performance-based vesting hurdles).
Unless otherwise indicated, the address of each Trustee and executive officer shown in the table belownamed person is c/o Urban Edge Properties, 888 Seventh Avenue, New York, NY 10019.
5% Holders
| | | | | | | | | | | | |
BlackRock, Inc.(3) | | | 21,490,424 | | | 18.1% | | | 21,490,424 | | | 17.2% |
The Vanguard Group(4) | | | 18,355,495 | | | 15.5% | | | 18,355,495 | | | 14.7% |
FMR LLC(5) | | | 13,089,420 | | | 11.0% | | | 13,089,420 | | | 10.5% |
State Street Corporation(6) | | | 7,422,379 | | | 6.2% | | | 7,422,379 | | | 5.9% |
Trustees, Nominees for Trustee and Named Executive Officers
| | | | | | | | | | | | |
Jeffrey S. Olson, Chairman and Chief Executive Officer(7) | | | 2,596,660 | | | 2.1% | | | 4,035,736 | | | 3.2% |
Mary L. Baglivo, Trustee(8) | | | — | | | * | | | 23,620 | | | * |
Steven H. Grapstein, Trustee(9) | | | 8,595 | | | * | | | 68,007 | | | * |
Steven J. Guttman, Trustee(10) | | | 13,147 | | | * | | | 67,945 | | | * |
Norman K. Jenkins, Trustee(11) | | | — | | | * | | | 28,217 | | | * |
Kevin P. O'Shea, Trustee(12) | | | 13,147 | | | * | | | 67,945 | | | * |
Catherine D. Rice, Trustee | | | 16,645 | | | * | | | 16,645 | | | * |
Katherine M. Sandstrom, Trustee(13) | | | — | | | * | | | 25,616 | | | * |
Douglas W. Sesler, Trustee(14) | | | — | | | * | | | 49,797 | | | * |
Mark J. Langer, Executive Vice President and Chief Financial Officer(15) | | | 353,192 | | | * | | | 787,930 | | | * |
|
| | | | | | |
| Name of Beneficial Owner | | Number of Common Shares and Units(1)(2) | | Percent of All Shares(1)(2)(3) | | Percent of All Shares and Units(1)(2)(4) |
The Vanguard Group, Inc.(5) | | 17,382,025 | | 15.26% | | 13.75% |
Blackrock, Inc.(6) | | 13,842,208 | | 12.15% | | 10.95% |
T.Rowe Price Associates, Inc.(7) | | 10,358,709 | | 9.09% | | 8.20% |
FMR LLC (8) | | 9,289,943 | | 8.15% | | 7.35% |
Cohen & Steers, Inc./ Cohen & Steers Capital Management, Inc. (9) | | 8,935,385 | | 7.84% | | 7.07% |
Vanguard Specialized Funds (10) | | 7,659,766 | | 6.72% | | 6.06% |
T. Rowe Price Real Estate Fund, Inc. (11) | | 5,711,850 | | 5.01% | | 4.52% |
Steven Roth, Trustee (12)(13) | | 4,120,426 | | 3.62% | | 3.26% |
Michael A. Gould, Trustee (12) | | 16,822 | | * | | * |
Steven H. Grapstein, Trustee (12) | | 16,822 | | * | | * |
Steven J. Guttman, Trustee (12) | | 16,822 | | * | | * |
Amy B. Lane, Trustee (12) | | 16,822 | | * | | * |
Kevin P. O'Shea, Trustee (12) | | 16,822 | | * | | * |
Jeffrey S. Olson, Chairman and Chief Executive Officer (12) | | 857,915 | | * | | * |
Robert Minutoli, Executive Vice President and Chief Operating Officer (12) | | 183,625 | | * | | * |
Mark J. Langer, Executive Vice President and Chief Financial Officer (12) | | 175,079 | | * | | * |
Michael Zucker, Executive Vice President - Leasing (12) | | 47,283 | | * | | * |
Herbert Eilberg, Executive Vice President and Chief Investment Officer (12) | | 43,914 | | * | | * |
| All Trustees and Executive Officers as a Group | | 5,512,352 | | 4.84% | | 4.36% |
25
__________________
* Represents beneficial ownership of less than 1% of our outstanding Common Shares
(1) Numbers and percentages in the table are based on 113,920,633 Common Shares and 12,458,402 Units (other than Units held by the Company) outstanding as of March 12, 2018.
(2) The Company conducts its business through, and substantially all of its interests in properties are held by, UELP. The Company is the sole general partner of, and owns approximately 89.9% of the Units of, UELP as of March 12, 2018 (one Unit for each Common Share outstanding). Generally, any time after one year from the date of issuance (or two years in the case of certain holders), holders of Units (other than the Company) have the right to have their Units redeemed in whole or in part by UELP for cash equal to the fair market value
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at the time of redemption of one Common Share for each Unit redeemed or, at the option of the Company, one Common Share, subject to customary anti-dilution provisions (the "Unit Redemption Right").
(3) The total number of Shares outstanding used in calculating this percentage assumes that all Shares that each person has the right to acquire within 60 days of the record date (pursuant to the exercise of options or upon the redemption or conversion of other Company or UELP securities for or into Shares) are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person.
(4) The total number of Shares and Units outstanding used in calculating this percentage assumes that all Shares and Units that each person has the right to acquire within 60 days of the record date (pursuant to the exercise of options or upon the redemption or conversion of Company or UELP securities for or into Shares or Units) are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person.
Jeffrey S. Mooallem, Executive Vice President and Chief Operating Officer(16) | | | 415 | | | * | | | 215,016 | | | * |
Robert Milton, Executive Vice President, General Counsel & Secretary(17) | | | — | | | * | | | 147,180 | | | * |
All Trustees and Executive Officers as a Group (12 Persons)(18) | | | 3,001,801 | | | 2.5% | | | 5,533,654 | | | 4.3% |
*
| Represents beneficial ownership of less than 1% of outstanding Common Shares. |
(1)
| “Number of Shares Beneficially Owned” includes Common Shares that may be acquired upon the exercise of options exercisable on or within 60 days after March 4, 2024. The address“Number of The Vanguard Group, Inc. is 100 Vanguard Blvd, Malvern, PA 19355. Ownership information based on Vanguard’s Schedule 13G filed February 7, 2018. TheShares and Units Beneficially Owned” includes all Common Shares included in the “Number of Shares Beneficially Owned” column plus (i) the number of Common Shares beneficially ownedfor which Common Units and LTIP Units may be redeemed (assuming, in the case of LTIP Units, that they have first been converted into Common Units) regardless of whether such Common Units and LTIP Units are currently redeemable, but excluding unearned performance-based LTIP Units, and (ii) the number of Common Shares issuable upon settlement of outstanding DSUs. Common Units are generally redeemable by the holder for cash or, at our election, on a one-for-one basis, for Common Shares. LTIP Units, subject to the satisfaction of certain conditions, may be converted on a one-for-one basis into Common Units. Holders of Common Units and LTIP Units are not entitled to vote such units on any of the matters presented at the Annual Meeting. |
(2)
| The total number of Common Shares outstanding used in calculating the percentage of Common Shares held by each reporting person assumes the exercise of all options to acquire Common Shares that are exercisable on or within 60 days after March 4, 2024 held by the beneficial owner and that no options held by other beneficial owners are exercised. The total number of Common Shares and units outstanding used in calculating the percentage of Common Shares and units held by each person (i) assumes that all Common Units and LTIP Units (other than unearned performance-based LTIP Units) are vested in full and presented (assuming conversion in full into Common Units, if applicable) to UELP for redemption and are acquired by us for Common Shares, (ii) does not separately include Common Units held by us, as these Common Units are already reflected in the denominator by the inclusion of all outstanding Common Shares and (iii) assumes the exercise of all options to acquire Common Shares that are exercisable on or within 60 days after March 4, 2024 and settlement for an equal number of Common Shares of all DSUs held by the beneficial owner and that no options or DSUs held by other beneficial owners are exercised or settled. |
(3)
| Based on information provided on a Schedule 13G/A filed with the SEC on January 19, 2024, as of December 31, 2023, by BlackRock, Inc (“BlackRock”). BlackRock reported sole dispositive power with respect to 21,490,424 Common Shares, sole voting power with respect to 20,885,997 Common Shares and shared dispositive and voting power with respect to none of the Common Shares. The business address for BlackRock. is 322,944.50 Hudson Yards, New York, NY 10001. |
(6) The address of Blackrock, Inc. is 55 East 52nd Street, New York, NY 10022. Ownership information based on Blackrock’s Schedule 13G/A filed January 17, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 13,596,511.(4)
| Based on information provided on a Schedule 13G/A filed with the SEC on February 13, 2024, as of December 29, 2023, by The Vanguard Group (“Vanguard”). Vanguard reported sole dispositive power with respect to 18,060,695 Common Shares, shared dispositive power with respect to 294,800 Common Shares, sole voting power with respect to none of the Common Shares and shared voting power with respect to 169,368 Common Shares. The business address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355. |
(5)
| Based on information provided on a Schedule 13G/A filed with the SEC on February 9, 2024, as of December 29, 2023, by FMR LLC (“FMR”) and Abigail P. Johnson. FMR and Abigail P. Johnson reported sole dispositive power with respect to 13,089,420 Common Shares and shared dispositive and voting power with respect to none of the Common Shares. FMR also reported sole voting power with respect to 12,673,436 Common Shares. The business address for FMR and Abigail P. Johnson is 245 Summer Street, Boston, Massachusetts 02210. |
(6)
| Based on information provided on a Schedule 13G/A filed with the SEC on January 30, 2024, as of December 31, 2023, by State Street Corporation (“State Street”). State Street reported shared dispositive power with respect to 7,411,279 Common Shares, shared voting power with respect to 5,943,122 Common Shares and sole dispositive and voting power with respect to none of the Common. The business address for State Street is State Street Financial Center, 1 Congress Street, Suite 1, Boston, MA 02114. |
(7)
| Includes (i) 33,675 Common Shares together with 2,562,985 options, and (ii) only under “Number of Shares and Units Beneficially Owned” column, 1,439,076 LTIP Units. See “Outstanding Equity Awards at 2023 Fiscal Year End” on page 46 for additional detail regarding the options. |
(8)
| Includes only under “Number of Shares and Units Beneficially Owned” column, 23,620 LTIP Units. |
(9)
| Includes (i) 8,595 Common Shares, and (ii) only under “Number of Shares and Units Beneficially Owned” column, 50,767 LTIP Units and 8,645 DSUs. |
(10)
| Includes (i) 13,147 Common Shares, and (ii) only under “Number of Shares and Units Beneficially Owned” column, 54,798 LTIP Units. |
(11)
| Includes only under “Number of Shares and Units Beneficially Owned” column, 28,217 LTIP Units. |
(12)
| Includes (i) 13,147 Common Shares, and (ii) only under “Number of Shares and Units Beneficially Owned” column, 54,798 LTIP Units. |
(13)
| Includes, only under “Number of Shares and Units Beneficially Owned” column 15,566 LTIP Units and 10,050 DSUs. |
(14)
| Includes, only under “Number of Shares and Units Beneficially Owned” column, 49,797 LTIP Units. |
(7) The address of T.Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. Ownership information based on T.Rowe Price’s Schedule 13G/A filed February 14, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 1,163,265.26
(8) The address of FMR LLC is 245 Summer Street, Boston, MA 02210. Ownership information based on FMR’s Schedule 13G/A filed February 13, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 3,423,694.
(9) The address of Cohen & Steers, Inc. is 2280 Park Avenue, 10th Fl., New York, NY 10017. Ownership information based on Cohen & Steers, Inc.’s Schedule 13G filed February 14, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 8,034,444.
(10) The address of Vanguard Specialized Funds is 100 Vanguard Blvd, Malvern, PA 19355. Ownership information based on Vanguard Specialized Funds’ Schedule 13G filed February 1, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 7,659,766.
(11) The address of T.Rowe Price Real Estate Fund, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. Ownership information based on T.Rowe Price’s Schedule 13G/A filed February 14, 2018. The number of Common Shares beneficially owned by each reporting person with sole voting power is 5,711,850.
(12) The number of Common Shares and Units (but not the number of Common Shares alone) beneficially owned by the following persons does not include the number of unvested and nonredeemable restricted LTIP Units as indicated: Herbert Eilberg - 47,683 LTIP Units; Mark J. Langer - 187,916 LTIP Units; Robert Minutoli - 203,753 LTIP Units; Jeffrey S. Olson - 339,902 LTIP Units; and Michael Zucker - 95,365 LTIP Units. The number of Common Shares or Units beneficially owned by the following persons includes the number of unvested or unredeemable Common Shares as indicated: Herbert Eilberg - 25,222; Michael A. Gould - 3,937; Steven H. Grapstein - 3,937; Steven J. Guttman - 3,937; Amy B. Lane - 3,937; Mark J. Langer - 31,725; Robert Minutoli - 29,292; Jeffrey S. Olson - 10,632; Kevin P. O’Shea - 3,937; Steven Roth - 3,937; and Michael Zucker - 22,553.
(13) 1,297,315 of these Common Shares were acquired in the pro rata distributions made by each of Vornado and VRLP in connection with the spinoff of the Company from Vornado. Mr. Roth’s total beneficial ownership amount includes 1,936 shares held by the Daryl and Steven Roth Foundation, 2,802,526 shares held by Interstate Properties (a New Jersey general partnership of which Mr. Roth is the managing general partner), and 18,649 shares held by Mr. Roth’s spouse. Mr. Roth does not deem the holding of these shares as an admission of beneficial ownership.TABLE OF CONTENTS
(15)
| Includes (i) 35,419 Common Shares and 317,773 options and (ii) only under “Number of Shares and Units Beneficially Owned” column, 434,738 LTIP Units. See “Outstanding Equity Awards at 2023 Fiscal Year End” on page 46 for additional detail regarding the options. |
(16)
| Includes (i) 415 Common Shares, and (ii) only under “Number of Shares and Units Beneficially Owned” column, 214,601 LTIP Units. |
(17)
| Includes, only under “Number of Shares and Units Beneficially Owned” column, 147,180 LTIP Units. |
(18)
| Includes (i) an aggregate of 120,743 Common Shares together with 2,880,758 options, and (ii) only under the “Number of Shares and Units Beneficially Owned” column, 2,531,229 LTIP Units. See also Notes (7) - (17) above. |
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers, Trustees, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. These persons are also required by SEC rules and regulations to furnish us with copies of these reports. To our knowledge, based solely on review of the copies of such reports furnished to us, or written representations from reporting persons that all reportable transactions were reported, we believe that during the fiscal year ended December 31, 2017 these persons timely filed all reports they were required to file under Section 16(a), except that due to an administrative oversight, the grant of Common Shares to Mr. Roth on May 6, 2016 was reported late on a Form 4 filed on March 28, 2017.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected the accounting firm of Deloitte & Touche LLP to serve as our independent registered public accounting firm for the year ending December 31, 2018,2024, and the Board is asking shareholders to ratify this appointment. Deloitte & Touche LLP has served as our independent registered public accounting firm since 2014 and is considered by our management to be well qualified. Although current law, rules and regulations, as well as the Audit Committee charter, require our independent auditor to be engaged, retained and supervised by the Audit Committee, the Board considers the selection of the independent auditor to be an important matter of shareholder concern and is submitting the selection of Deloitte & Touche LLP for ratification by shareholders asto be a matter of good corporate practice. Deloitte & Touche LLP has served as ourEven if the selection is ratified, the Audit Committee in its discretion, may select a different independent registered public accounting firm since 2014at any time if the Audit Committee believes that such a change would be in the best interests of the Trust and its shareholders. If the selection is considered by our management to be well qualified.not ratified, the Audit Committee will take that act into consideration, together with such other factors it deems relevant, in determining its next selection of an independent registered public accounting firm. A representative of Deloitte & Touche LLP willis expected to be present at the Annual Meeting, will be given the opportunity to make a statement if he or she so desires and willis expected to be available to respond to appropriate questions.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE “FOR” THE
RATIFICATION OF THE APPOINTMENT OF OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
RELATIONSHIP WITH INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Principal Accountant Fees and Services
The following table summarizes the aggregate fees for professional services rendered to us by Deloitte & Touche LLP (“Deloitte”) for the years ended December 31, 20172023 and 2016:2022:
Audit Fees(1) | | | $1,196,000 | | | $1,145,000 |
Audit-Related Fees(2) | | | 284,000 | | | 357,000 |
Tax Fees(3) | | | 172,000 | | | 158,000 |
All Other Fees | | | — | | | — |
Total Fees | | | $1,652,000 | | | $1,660,000 |
|
| | | | | | | |
| | 2017 | | 2016 |
Audit fees(1) | $ | 895,000 |
| | $ | 862,000 |
|
Audit-related fees(2) | 898,000 |
| | 311,000 |
|
Tax fees(3) | 358,000 |
| | 265,000 |
|
| Total Fees | $ | 2,151,000 |
| | $ | 1,438,000 |
|
___________________
| |
(1)
| Represents the aggregate fees billed by Deloitte for the years ended December 31, 20172023 and 2016,2022, respectively, for professional services rendered for the audits of the Company’s annual consolidated and combined financial statements included in the Company’s Annual Reports on Form 10-K, and for the reviews of the consolidated and combined interim financial statements included in the Company’s Quarterly Reports on Form 10-Q.10-Q and for comfort letters in connection with the Company’s at-the-market equity program. |
| |
(2)
| Represents the aggregate fees billed by Deloitte for the years ended December 31, 20172023 and 20162022, respectively, for professional services rendered that are related to the performance of the audits or reviews of the Company’s consolidated and combined financial statements whichthat are not reported under “Audit Fees,”Fees”, and generally includes fees for stand-alone audits of subsidiaries and accounting consultations. The increase in audit-relates |
(3)
| Represents the aggregate fees billed by Deloitte for the years ended December 31, 2023 and 2022, respectively, for professional services rendered for tax compliance, tax advice and tax planning. Tax fees generally include fees for 2017 primarily relates to work performed on the acquisition of approximately $450 million of propertiestax consultations regarding return preparation and audit procedures performed during the implementation of a new enterprise resource planning system.REIT tax law compliance. |
(3) Represents the aggregate fees billed by Deloitte for the years ended December 31, 2017 and 2016 for professional services rendered for tax compliance, tax advice and tax planning. Tax fees generally include fees for tax consultations regarding return preparation and REIT tax law compliance.
Pre-Approval Policies and Procedures
The Audit Committee established a policy of reviewing and approving engagement letters with our independent registered public accounting firm for the services described under “Audit Fees” before the provision of those services, and has pre-approved the use of our independent registered public accountaccounting firm by the Company for additional audit-related and other services of up to $50,000 in each case.$150,000. Any services not specified that exceed those amounts must be approved by the Audit Committee before the provision of such services commences. Requests to provide services requiring pre-approval by the Audit Committee are submitted to the Audit Committee with a description of the services to be provided and an estimate of the fees to be charged in connection with such services. The Audit Committee approved all
All of the services to be performed by our independent registered public accounting firm during 2017.2023 were either expressly pre-approved by the Audit Committee or were pre-approved in accordance with the pre-approval policy.
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In performing its oversight role, the Audit Committee has reviewed and discussed the audited consolidated and combined financial statements of the Company with management and Deloitte & Touche LLP. The Audit Committee has also discussed with Deloitte & Touche LLP the matters required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees.the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firmDeloitte & Touche LLP required by applicable requirements of the PCAOB Ethics and Independence Rules 3526, Communication with Audit Committees Concerning Independence.regarding Deloitte & Touche LLP’s independence. The Audit Committee has also discussed with the independent registered public accounting firmDeloitte & Touche LLP its independence. The independent registered public accounting firm has free access to the Audit Committee to discuss any matters the firm deems appropriate.
Based on the reportsreview and discussions described in the preceding paragraph, and subject to the limitations on the role and responsibilities of the Audit Committee referred to below and in the Audit Committee Charter in effect during 2017, the Audit Committee recommended to the Board of Trustees that the audited consolidated and combinedfinancial statements of the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.2023.
Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent registered public accounting firm.Deloitte & Touche LLP. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s consolidated and combinedfinancial statements has been carried out in accordance with the auditing standards of the PCAOB, that the consolidated and combinedfinancial statements are presented in accordance with accounting principles generally accepted in the United States of America or that Deloitte & Touche LLP is in fact “independent” or the effectiveness of the Company’s internal controls.
| | | Kevin P. O’Shea (Chair) |
| | | Catherine D. Rice |
| | | Katherine M. Sandstrom |
| | | Douglas W. Sesler |
Kevin P. O’Shea (Chair)
Steven H. Grapstein
EXECUTIVE OFFICER COMPENSATION
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COMPENSATION DISCUSSION AND ANALYSIS
NEOs and Executive Compensation Philosophy
The “Compensation Discussion and Analysis
Overview
The “Executive Officer Compensation”Analysis” section of this Proxy Statement presentsdiscusses the detailedprinciples underlying the material components of our compensation arrangements for our named executive officers (“NEOs”) for fiscal year 2017. For the fiscal year ended December 31, 2017,2023. During 2023, our NEOs and their titles were as follows:
Jeffrey S. Olson - Chairman and Chief Executive Officer (“CEO”)
Jeffrey S. Mooallem – Executive Vice President and Chief Operating Officer (“COO”)
Mark J. Langer - Executive Vice President and Chief Financial Officer (“CFO”)
Robert Minutoli -C. Milton III – Executive Vice President, Secretary and Chief Operating OfficerGeneral Counsel (“COO”GC”)
Michael Zucker - Executive Vice President - Leasing
Herbert Eilberg - Chief Investment Officer ("CIO")
Executive SummaryCompensation Philosophy
Our executive compensation philosophy emphasizes performance-based compensation over guaranteed pay. To better align our pay practices with thisOur pay-for-performance philosophy in 2016 we shiftedis evidenced by a significant portion of theour NEOs’ total compensation of executive officers to compensationbeing based on quantifiable performance metrics and role specific objectives determined by a formulaic(i) an annual short-term incentive compensation program (the "STI Program" or "STI"that aligns with our objectives for that year and (ii) performance-based long-term incentives based on absolute and relative total shareholder return (“TSR”), FFO as adjusted per share growth and same-property NOI growth, all measured over a practice we continued in 2017.cumulative three-year period. As shown below, our CEO’s compensation is 86% performance-based/at-risk and the average performance-based/at-risk compensation amount for our other NEOs is 77%.
20172023 Business Highlights
In 2017, we achieved numerous financial and operating goals, including that we:
Achieved total shareholder returnHighlights of 18.7% since our spin from Vornado in January 15, 2015 and -4.06% for year-end 2017, which, on a relative basis, significantly exceeded2023 include the returnsfollowing:
| • | Total shareholder return for the year of 35%, outperforming our peer average by 2500 basis points(1) |
Generated net income attributable to common shareholders of the SNL Retail Shopping Center Index of -8.93% and -11.08%, respectively;
Generated Funds From Operations (“FFO”) as Adjusted of $1.34$248.5 million, or $2.11 per diluted share, a 5.5%for the year ended December 31, 2023, compared to $46.2 million, or $0.39 per diluted share, for the year ended December 31, 2022;
| • | Generated FFO as Adjusted(1) of $153.1 million, or $1.25 per diluted share, for the year ended December 31, 2023 compared to $148.5 million, or $1.21 per diluted share, for the year ended December 31, 2022; |
| • | Increased same-property Net Operating Income (“NOI”)(2), including properties in redevelopment, by 2.5% compared to the year ended December 31, 2022; |
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Reported same-property portfolio leased occupancy of 96.0%, an increase over 2016;
Increased same-property cash Net Operating Income (“NOI”) by 4.7% (5.4% including properties in redevelopment) over the prior year;
Increased same-property retail portfolio occupancy by 10of 100 basis points to 98.3% as compared to December 31, 2016;2022; and
Completed $53.6Acquired Shoppers World and Gateway Center, two of the highest quality shopping centers in the greater Boston area, for $309 million in development, redevelopment and anchor repositioning projects, endingat a blended 7% cap rate, partially funded through the year with approximately $195 million in active projects;
Added $72.5sale of $318 million of projects to our pipeline;
Significantly strengthened our balance sheet, raising $1.5 billion in capital, ending the year with $500 million in cash,non-core assets at a net debt to total capitalization ratioweighted average cap rate of 22% and net debt to adjusted EBITDA ratio to 4.6x; and
Acquired approximately $450 million in properties.
For reconciliations of FFO as Adjusted, same-property cash NOI and net debt to adjusted EBITDA to the most directly comparable GAAP financial measures and why we view these measures to be useful supplemental performance measures, see “Non-GAAP Financial Measures” below.
2017 Total Return to Shareholders Performance
The following performance graph compares the cumulative total shareholder return of our Common Shares with the SNL U.S. REIT Retail Shopping Center Index from January 1, 2017 to December 31, 2017, assuming the reinvestment of all dividends into additional common shares during the holding period. Past performance is not necessarily indicative of future results.
2017 Short-Term Incentive Compensation Program
In 2017, we implemented our 2017 STI Program, which provides annual bonuses to executives based on performance criteria established by the Compensation Committee at the beginning of 2017. NEOs earn bonuses based on the level of achievement of pre-established Company and individual-specific performance metrics. Awards earned are paid 50% in cash and 50% in time-based equity (except for Mr. Minutoli whose bonus was paid 100% in cash)5.2%.
In accordance with the foregoing and based on their performance in 2017, the Compensation Committee awarded the following amounts under the 2017 STI Program, expressed both as an absolute and as a percentage of their base salary:
|
| | | | | | |
| Name | | Target 2017 STI Opportunity (as a % of Salary) | | Actual 2017 STI Award (as % of Salary) | | Actual 2017 STI Award ($)(1) |
| Mr. Olson | | 100% | | 160% | | $1,601,268 |
| Mr. Langer | | 100% | | 153% | | $803,502 |
| Mr. Minutoli | | 100% | | 137% | | $684,384 |
| Mr. Zucker | | 100% | | 127% | | $537,649 |
| Mr. Eilberg | | 115% | | 138% | | $483,908 |
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(1) Equity awards are reflected in this column at their grant date fair value. 2017 STI awards were paid 50% in equity and 50% in cash, except for Mr. Minutoli who was paid 100% in cash.
Say on Pay Voting Results
At our 20172023 annual meeting of shareholders, we received approximately 97.47%96.3% approval for our annual advisory “say on pay”“say-on-pay” vote to approve the compensation of our NEOs, was approved. The Compensation Committee believes that the voting results demonstrate significantwhich we believe affirms our shareholders’ support forof our approach to our NEO compensation program and we therefore did not make any significant changes to the structure of the program.
Summary of
Employment AgreementNEO Target Compensation
TermsOur 2023 compensation program includes three principal components. Below is a summary of target compensation for each NEO under them:
Jeffrey S. Olson
(CEO) | | | $1,100,000 | | | 110% of base salary | | | $4,190,000 |
| | | | | | | | | |
Jeffrey S. Mooallem
(COO) | | | $625,000 | | | 100% of base salary | | | $1,250,000 |
| | | | | | | | | |
Mark J. Langer
(CFO) | | | $622,000 | | | 100% of base salary | | | $1,000,000 |
| | | | | | | | | |
Robert C. Milton III
(GC) | | | $433,000 | | | 100% of base salary | | | $350,000 |
Target compensation for our NEOs was established, in part, in reference to our obligations pursuant to the compensation-relatedemployment agreements, retention agreements and offer letters that we have entered into with each of our NEOs. The terms includedof these employment agreements, retention agreements and offer letters are described under “Employment Agreements and Potential Payments Upon Termination of Employment or a Corporate Transaction/Change in each NEO’s respective employment agreement or offer letter applicable to 2017 compensation:Control.”
|
| | | | | | | | |
| Executive | | Base Salary | | Bonus | | Annual Equity Grants |
Jeffrey S. Olson (Chairman and Chief Executive Officer) | | $ | 1,000,000 |
| | Annual target bonus of no less than 100% of base salary payable 50% in cash and 50% in equity awards that vest ratably over four years.
| | Annual grants of stock options with a grant date Black Scholes value equal to $500,000 and vesting ratably over four years, subject to continued employment through each vesting date. |
Mark J. Langer (Executive Vice President and Chief Financial Officer) | | $525,000 | | Annual target bonus of no less than 100% of base salary payable 50% in cash and 50% in equity awards that vest ratably over three years. | | Annual grants of stock options with a grant date Black Scholes value equal to $200,000 and vesting ratably over three years, subject to continued employment through each vesting date. |
Robert Minutoli (Executive Vice President and Chief Operating Officer) | | $500,000* | | Annual target bonus of no less than 100% of base salary payable 100% in cash. | | Annual target grants of a number of LTIP Units equal to $350,000 divided by the FMV of one Common Share on grant date and vesting ratably over three years, subject to continued employment through each vesting date. |
Michael Zucker (Executive Vice President - Leasing) | | $425,000 | | No employment agreement or offer letter |
Herbert Eilberg (Chief Investment Officer) | | $350,000 | | N/A | | N/A |
* Effective January 1, 2018, Mr. Minutoli's base salary increased
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Executive Compensation Process
The Compensation Committee typically meets multiple times each year in connection with the consideration and determination of executive compensation, and is responsible for determining and approving the compensation of all of our executive officers. Historically, most actions of the Compensation Committee have occurred at regular meetings scheduled well in advance by the Compensation Committee; however, the Compensation Committee may hold special meetings or take actions by written consent as they deem appropriate. Specific meeting agendas are prepared by the chair of the Compensation Committee, in consultation with the other members of the committee or the CEO as the chair may deem appropriate. Matters to $600,000.
be acted on by written consent may relate to matters that have been previously discussed and/or are summarized by a member of the Compensation Review ProcessCommittee, our CEO, a consultant engaged by the Compensation Committee or other advisor to us or the Compensation Committee.
Compensation Program Objectives
UE’sThe Compensation Committee has established executive compensation objectives and a philosophy to attract, retain and appropriately reward a “best-in-class” executive management team. We believe that the quality, skills and dedication of our NEOs are critical factors that affect the long-term value of the Company. Accordingly, the objectives of our executive compensation program are to:
Attract and retain a highly-skilled, “best-in-class” team of executives.
Motivate our executives to contribute to the achievement of company-wide, business-unit and individual goals.
Emphasize equity-based incentives with long-term performance measurement periods and vesting conditions.
Align the interests of executives with shareholders by linking payouts under annual incentives to performance measures that promote the creation of long-term shareholder value.
Achieve an appropriate balance between risk and reward in our compensation program that does not encourage excessive or inappropriate risk-taking.
Encourage equity ownership by our executives over the course of their employment, aligning executive interests with those of our shareholders.
Maintain a best-in-class“best-in-class” compensation program that incorporates best practice policies from the perspective of shareholders, peers and other relevant sources.
Our executive compensation program is intended to reward the achievement of annual, long-term and strategic goals of both the Company and the individual executive. To achieve these objectives, our executive compensation program includes fixed,
variable, annual and long-term components as described below. In particular, for our Chairman and CEO, a majority of his compensation is in the form of equity compensation subject to multi-year, time-based vesting and/or total return to shareholders (TSR)TSR, FFO as adjusted per share and same-property NOI performance designed to ensure that the value of the compensation that he ultimately realizes is based on our share price performance and profitability, further aligning his interests with those of the Company and our shareholders.
Role of the Compensation Committee and our Chief Executive Officer
The purposes and responsibilities of the Compensation Committee in making compensation decisions include:
Review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate the CEO’s performance and determine and approve the CEO’s compensation level based on this evaluation;
Review and approve the total compensation package for the Company's officers at the level of executive vice-president and above, and all equity awards under the Company's 2015 Omnibus Share Plan;
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Make recommendations to the Board with respect to incentive compensation plans and equity-based plans that are subject to Board approval and approve any new or materially amended equity compensation plan where shareholder approval has not been obtained; and
Oversee, with management, regulatory compliance with respect to compensation matters, including the Company’s compensation policies.
The Compensation Committee also may retain, at our expense, and terminate independent counsel and other advisors and experts as it deems necessary or appropriate to carry out its duties. In setting the 20172023 compensation for our NEOs (other than the CEO), the Compensation Committee also considered the recommendations of theour CEO.
Role of the Independent Compensation Consultant and Use of Peer Group Data
The Compensation Committee selected FTIand directly engaged Ferguson Partners Consulting Inc. (“FTI Consulting”FPC”) as its compensation consultant for 2017. FTI Consulting providesthrough June 2023. FPC provided the Compensation Committee with peer executive compensation data and expertise and advice on various matters brought before the Compensation Committee. The Compensation Committee hashad the sole authority to retain and terminate FTI ConsultingFPC as its compensation consultant, and approve fees and other engagement terms. The Compensation Committee has determined that FTI ConsultingFPC is independent from management based upon the consideration of relevant factors, including the following:
FTI Consulting doesFPC did not provide any services to us except advisory services to the Compensation Committee;
The amount of fees received from us by FTI Consulting isFPC was not material as a percentage of FTI Consulting’sFPC’s total revenue;
FTI Consulting hasFPC had policies and procedures that are designed to prevent conflicts of interest;
FTI ConsultingFPC and its employees that provideprovided services to the Compensation Committee dodid not have any business or personal relationship with any member of the Compensation Committee or any of our executive officers; and
FTI ConsultingFPC and its employees that provideprovided services to the Compensation Committee dodid not own any of our Common Shares.
Based on the data and analysis provided by FTI Consulting,FPC, the Compensation Committee has developed a compensation plan that seeks to maintain the link between corporate performance and shareholder returns while being generally competitive within our industry. The Compensation Committee considered FTI Consulting’sFPC’s peer group analysis when considering base salaries and bonuses paid to our executives for 2017.2023.
In July 2023 the Compensation Committee engaged Farient Advisors (“Farient”), a compensation consulting firm, as a result of a senior compensation consultant leaving FPC and joining Farient. The Compensation Committee has determined that Farient is independent from management based upon the consideration of factors similar to those listed above in the determination of the independence of FPC.
In selecting the targeted peer group, the Compensation Committee considers REITs that have at least two of the following characteristics:
Retail property focus (shopping centers, freestanding retail and regional malls);
REITs with a geographicGeographic focus similar to that of the Company and with which the Company directly competes for talent; and
Market capitalization no less than approximately one half (½) and no more than approximately two and a half (2 ½)three times the market capitalization of UE.the Company.
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The following table provides the names and key information for each peer company at the time at whichwhen the Compensation Committee reviewed the peer group market data at year end 2017:2023:
Acadia Realty Trust | | | 1,669 | | | 3,906 | | | Rye, NY | | | Shopping Centers |
Brixmor Property Group Inc. | | | 6,995 | | | 11,937 | | | New York, NY | | | Shopping Centers |
Empire State Realty Trust, Inc. | | | 2,627 | | | 4,237 | | | New York, NY | | | Office |
Kite Realty Group Trust | | | 5,094 | | | 7,946 | | | Indianapolis, IN | | | Shopping Centers |
LXP Industrial Trust | | | 2,911 | | | 4,488 | | | New York, NY | | | Industrial |
Paramount Group, Inc. | | | 1,224 | | | 5,384 | | | New York, NY | | | Office |
Phillips Edison & Company, Inc. | | | 4,873 | | | 6,579 | | | Cincinnati, OH | | | Shopping Centers |
Retail Opportunity Investments Corp. | | | 1,872 | | | 3,207 | | | San Diego, CA | | | Shopping Centers |
SITE Centers Corp. | | | 2,853 | | | 4,742 | | | Beachwood, OH | | | Shopping Centers |
Spirit Realty Capital, Inc. (2) | | | N/A | | | N/A | | | Dallas, TX | | | Free Standing |
Tanger Factory Outlet Centers, Inc. | | | 3,116 | | | 4,302 | | | Greensboro, NC | | | Shopping Centers |
Veris Residential, Inc. | | | 1,586 | | | 3,537 | | | Jersey City, NJ | | | Apartments |
Urban Edge Properties | | | 2,248 | | | 3,859 | | | New York, NY | | | Shopping Centers |
|
| | | | | | | | |
| Company | | Implied Equity Market Cap ($)(1) | | Total Enterprise Value ($)(1) | | Headquarters | | REIT Sector |
| Acadia Realty Trust | | 2,419.6 | | 4,561.9 | | Rye, NY | | Shopping Centers |
| Empire State Realty Trust, Inc. | | 6,159.0 | | 7,312.1 | | New York, NY | | Office |
| Kite Realty Group Trust | | 1,677.4 | | 3,359.8 | | Indianapolis, IN | | Shopping Centers |
| Lexington Realty Trust | | 2,357.3 | | 4,419.5 | | New York, NY | | Diversified |
| Mack-Cali Realty Corp. | | 2,163.6 | | 4,933.0 | | Jersey City, NJ | | Specialty |
| Paramount Group, Inc. | | 4,201.1 | | 8,005.4 | | New York, NY | | Office |
| Pennsylvania Real Estate Investment Trust | | 929.8 | | 2,955.4 | | Philadelphia, PA | | Regional Malls |
| Retail Opportunity Investments Corp. | | 2,473.7 | | 3,829.4 | | San Diego, CA | | Shopping Centers |
| Retail Properties of America, Inc. | | 3,050.6 | | 4,881.2 | | Oak Brook, IL | | Shopping Centers |
| Seritage Growth Properties | | 2,315.1 | | 3,495.6 | | New York, NY | | Regional Malls |
| Spirit Realty Capital, Inc. | | 39,911.6 | | 7,762.8 | | Dallas, TX | | Free Standing |
| Tanger Factory Outlet Centers, Inc. | | 2,639.2 | | 4,404.4 | | Greensboro, NC | | Shopping Centers |
| Washington Prime Group Inc. | | 157.5 | | 4,720.5 | | Columbus, OH | | Shopping Centers |
| Weingarten Realty Investors | | 4,268.5 | | 6,620.6 | | Houston, TX | | Regional Malls |
| Urban Edge Properties | | 3,225.7 | | 4,253.7 | | New York, NY | | Shopping Centers |
_________________
(1)As of December 31, 2017.
(1)
| Source: S&P Global Market Intelligence data as of December 31, 2023 (in $ millions). |
(2)
| Spirit Realty Capital, Inc. completed its merger with Realty Income (surviving entity) on January 23, 2024. |
Analysis of Risk Associated with our Executive Compensation Program
Our Compensation Committee has considered the concept of risk as it relates to our executive compensation program and theThe Compensation Committee does not believe that our executive compensation program encourages excessive or inappropriate risk taking for the reasons stated below.
We structure our pay to consist of both fixed and variable compensation. The fixed portion (base salary) of compensation is designed to provide a base level of income regardless of our financial or share price performance.
The variable portions of compensation (cash incentive and equity) are designed to encourage and reward both short- and long-term corporate performance. We believe that these variable elements of compensation are a sufficient percentage of total compensation to provide incentives to executives to produce superior short- and long-term corporate results, while the fixed element is also sufficiently high that the executives are not encouraged to take unnecessary or excessive risks in doing so. The Company and the Compensation Committee also believe that the mix of quantifiable performance metrics used in our long-term equity-based compensation plans and the STIshort-term incentive program and the subjective, role specific objectives included in the STI Program providesshort-term incentive program provide an incentive for our executives to produce superior performance without the distorting effects of providing a pre-determinable compensation award based on the performance of only one division or business unit or upon other results that may not reflect the long- or short-term results of the Company as a whole.
As demonstrated above, our executive compensation program is structured to achieve its objectives by (i) providing incentives to our NEOs to manage the Company for the creation of long-term shareholder value, (ii) avoiding the type of disproportionately
large short-term incentives that could encourage our NEOs to take risks that may not be in the Company’s long-term interests, (iii) requiring our NEOs to maintain a significant investment in the Company and (iv) evaluating annually an array of performance criteria in determining executive compensation rather than focusing on a singular metric that may encourage unnecessary risk taking. We believe this combination of factors encourages our NEOs to manage the Company prudently.
Elements of Compensation
Base Salary: Description and Analysis
Although the Compensation Committee does not set base salary levels equal to any specific percentage of base salaries paid to comparable officers in the targeted peer group, theour NEOs are paid an amount in the form of base pay within the range of base salaries paid in the targeted peer group and which we believe to be sufficient to attract executive talent and maintain a stable management team.
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Our NEOs’ base salaries were not increased, except for Mr. Zucker whose base salary was increased to $425,000 in recognition of his exceptional 2016 performance and to better align his base salary with that of market peers.are listed below:
| | | Name | | 2017 Annual Base Salary | | 2016 Annual Base Salary | | 2023 Annual Base Salary $ | | 2022 Annual Base Salary $ |
| Mr. Olson | | $1,000,000 | | $1,000,000 | | 1,100,000 | | 1,100,000 |
Mr. Mooallem | | | 625,000 | | N/A |
| Mr. Langer | | $525,000 | | $525,000 | | 622,000 | | 603,750 |
| Mr. Minutoli | | $500,000 | | $500,000 | |
| Mr. Zucker | | $425,000 | | $325,000 | |
| Mr. Eilberg | | $350,000 | | $350,000 | |
Mr. Milton | | | 433,000 | | 420,000 |
Annual base salaries of each NEO are reviewed each year by the Compensation Committee and, under the applicable employment agreementsagreement or offer letter with Messrs. Olson, Langer and Minutoli, may be increased by the Compensation Committee as needed. For 2018, our NEOs'In February 2023, the Compensation Committee elected to increase Messrs. Langer and Milton’s base salaries were not increased, except forby approximately 3% to maintain competitiveness with peers. Mr. Minutoli whoseMooallem commenced employment on January 9, 2023, and his base salary reflects the starting annual amount. Mr. Olson’s base salary was increasedmaintained at the same level as 2022 as it was deemed appropriately market competitive.
We utilized a predominantly formulaic short-term incentive compensation program in 2023 (the “2023 STI Program”), which provides annual bonuses to $600,000.executives based on performance criteria established by the Compensation Committee at the beginning of the year. Participants earn bonuses based on the level of achievement of pre-established Company and individual-specific performance metrics. In 2023, executives were provided with a one-time opportunity to elect to receive unvested LTIP Units in lieu of any earned cash bonus and receive a dollar-for-dollar match in the form of additional unvested LTIP Units (further detailed under “Alignment of Interest Award” below).
Annual Cash and Equity Incentives - 2017 Short-Term Incentive Compensation Plan
In 2017, the Company implemented the 2017The 2023 STI Program that sets forth threshold, target and maximum award levels under a formulaic award structure. The threshold, target and maximum award levelsfor each NEO as a percentage of each NEO'stheir base salary for 2017 weresalaries as follows:
Mr. Olson | | | 55% | | | 110% | | | 220% |
Messrs. Mooallem and Langer | | | 50% | | | 100% | | | 175% |
Mr. Milton | | | 50% | | | 100% | | | 150% |
|
| | | | | | |
| Executive | | Threshold | | Target | | Maximum |
| Mr. Olson | | 50% | | 100% | | 200% |
| Mr. Langer | | 50% | | 100% | | 175% |
| Mr. Minutoli | | 50% | | 100% | | 175% |
| Mr. Zucker | | 50% | | 100% | | 150% |
| Mr. Eilberg | | 50% | | 115% | | 150% |
In February 2018,The Company-wide and individual performance measures, the Compensation Committee approved 2017 STI payments to our NEOs with 80% determined based on objective company goals for Messrs. Olson and Minutoli and approximately 50% for Messrs. Eilberg, Langer and Zucker,weightings and the remainder forrelevant performance range applicable to each determinedNEO under the 2023 STI Program are set forth below:
FFO as Adjusted (per share)(1) | | | 35% | | | 35% | | | 35% | | | $1.10 - $1.22 |
Same Property NOI Growth(2) | | | 15% | | | 15% | | | 10% | | | 0.3% – 2.3% |
Pipeline to Active (in $ millions)(3) | | | 7.5% | | | 10% | | | 5% | | | $40 – $80 |
SNO Pipeline (in $ millions)(4) | | | 7.5% | | | 10% | | | 5% | | | $12 - $15 |
Balance Sheet Management(5) | | | 15% | | | 10% | | | 25% | | | 1 – 5 |
Compensation Committee’s Evaluation | | | 20% | | | 20% | | | 20% | | | 1 – 5 |
Total | | | 100% | | | 100% | | | 100% | | | |
(1)
| Encourages focus on profitability as measured by the most frequently used REIT earnings measurement on a per share basis. |
(2)
| A key internal performance metric that measures growth in our existing real estate portfolio as a result of increases in occupancy, cash rental income, and our ability to manage property operating expenses. Measurement includes redevelopment growth. |
(3)
| Measures amount of estimated gross cost that is moved from our development pipeline to active status. |
(4)
| Measures annualized gross rent of properties delivered to tenants. |
(5)
| Assessment of balance sheet activity, designed to ensure focus on the strategic financial positioning of the Company. |
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The 2023 STI Program is based in part on the achievement of role specific metrics asseveral objective Company performance criteria that incentivize management to focus on financial goals that are aligned with our annual operating budget and strategic goals for the year. The Compensation Committee determined based on evaluations bythat each goal was challenging and set at levels that would require the CEO (for NEOs other than the CEO)Company to work toward meaningful achievement of measures that would promote both short- and the Compensation Committee. For Messrs. Olson and Minutoli,long-term value.
The 2023 STI Program also contained a significant portion of their performance measures under the 2017 STI weresubjective element based on the achievementCompensation Committee’s assessment of company-wide operatingour Company’s performance and portfolio objectives. For Messrs. Eilberg, Langerthe executive’s individual performance, with input from our CEO (other than with respect to his own compensation), as applicable. In this subjective element, the Compensation Committee considered each NEO’s individual performance and Zucker,the Company’s overall 2023 accomplishments, including the performance measures included the company-wide goalsset forth under “2023 Business Highlights” and performance in, but also included measures more closely tailorednot limited to, the achievement of goals for which such executives were individually responsible.
The following tables identify the individual performance measures applicable to each NEO, the weighting of eachcategories: leadership, strategic planning and advancement of the performance measures to their overall score, and the performance range related to each such measure:
|
| | | | |
Performance Measures - Mr. Olson | | Weighting | | Performance Range |
FFO as Adjusted (per share) | | 30.00% | | $1.29 - $1.39 |
Same Property NOI Growth | | 20.00% | | 1.5% - 3.5% |
Development/Redevelopment: Active Project Completion (1)
| | 7.50% | | $84.4 - $93.9 |
Development/Redevelopment: Active Project Advancement (1)
| | 7.50% | | $193.3 - $213.7 |
Development/Redevelopment: Active Project Additions (2)
| | 7.50% | | $15 - $25 |
Development/Redevelopment: Pipeline Expansion (2)
| | 7.50% | | $60 - $90 |
Role Specific Objectives | | 20.00% | | 1 - 5 |
| | 100% | | |
|
| | | | |
Performance Measures - Mr. Langer | | Weighting | | Performance Range |
Accuracy, Quality and Timing of Reporting and Internal Controls | | 10.00% | | 1 - 5 |
IT Transition Implementation | | 10.00% | | 1 - 5 |
Capital Raising / Financing Activity | | 10.00% | | 1 - 5 |
FFO as Adjusted (per share) | | 18.75% | | $1.29 - $1.39 |
Same Property NOI Growth | | 12.50% | | 1.5% - 3.5% |
Development/Redevelopment: Active Project Completion (1)
| | 4.69% | | $84.4 - $93.9 |
Development/Redevelopment: Active Project Advancement (1)
| | 4.69% | | $193.3 - $213.7 |
Development/Redevelopment: Active Project Additions (2)
| | 4.69% | | $15 - $25 |
Development/Redevelopment: Pipeline Expansion (2)
| | 4.69% | | $60 - $90 |
Role Specific Objectives | | 20.00% | | 1 - 5 |
| | 100% | | |
|
| | | | |
Performance Measures - Mr. Minutoli | | Weighting | | Performance Range |
FFO as Adjusted (per share) | | 30.00% | | $1.29 - $1.39 |
Same Property NOI Growth | | 20.00% | | 1.5% - 3.5% |
Development/Redevelopment: Active Project Completion (1)
| | 7.50% | | $84.4 - $93.9 |
Development/Redevelopment: Active Project Advancement (1)
| | 7.50% | | $193.3 - $213.7 |
Development/Redevelopment: Active Project Additions (2)
| | 7.50% | | $15 - $25 |
Development/Redevelopment: Pipeline Expansion (2)
| | 7.50% | | $60 - $90 |
Role Specific Objectives | | 20.00% | | 1 - 5 |
| | 100% | | |
|
| | | | |
Performance Measures - Mr. Zucker | | Weighting | | Performance Range |
Same Property Occupancy | | 12.50% | | 97.6% - 98.6% |
Development Leasing | | 12.50% | | 1 - 5 |
FFO as Adjusted (per share) | | 18.00% | | $1.29 - $1.39 |
Same Property NOI Growth | | 12.00% | | 1.5% - 3.5% |
Development/Redevelopment: Active Project Completion (1)
| | 6.25% | | $84.4 - $93.9 |
Development/Redevelopment: Active Project Advancement (1)
| | 6.25% | | $193.3 - $213.7 |
Development/Redevelopment: Active Project Additions (2)
| | 6.25% | | $15 - $25 |
Development/Redevelopment: Pipeline Expansion (2)
| | 6.25% | | $60 - $90 |
Role Specific Objectives | | 20.00% | | 1 - 5 |
| | 100% | | |
|
| | | | |
Performance Measures - Mr. Eilberg | | Weighting | | Performance Range |
Acquisitions / Dispositions | | 30.00% | | 1 - 5 |
FFO as Adjusted (per share) | | 18.75% | | $1.29 - $1.39 |
Same Property NOI Growth | | 12.50% | | 1.5% - 3.5% |
Development/Redevelopment: Active Project Completion (1)
| | 4.69% | | $84.4 - $93.9 |
Development/Redevelopment: Active Project Advancement (1)
| | 4.69% | | $193.3 - $213.7 |
Development/Redevelopment: Active Project Additions (2)
| | 4.69% | | $15 - $25 |
Development/Redevelopment: Pipeline Expansion (2)
| | 4.69% | | $60 - $90 |
Role Specific Objectives | | 20.00% | | 1 - 5 |
| | 100% | | |
__________________
(1) Determined by reference to millions of dollars of value creation.
(2) Determined by reference to millions of dollars of estimated gross cost.
Company’s ESG program.
Based on actual performance in 20172023 and the weightings assigned to each performance measure, the Compensation Committee determined the 20172023 STI Program awards set forth below. Incentivebelow:
Mr. Olson | | | 212% | | | 2,333,788 |
Mr. Mooallem | | | 168% | | | 1,049,219 |
Mr. Langer | | | 171% | | | 1,066,341 |
Mr. Milton | | | 146% | | | 634,074 |
(1)
| Each executive elected to receive 100% of their earned bonus in unvested LTIP Units under the “Alignment of Interest Award”. |
Alignment of Interest Award
Consistent with the Company's objectives of (i) emphasizing equity-based compensation with long-term vesting conditions, (ii) encouraging equity ownership by our executives, (iii) aligning the interests of executives with shareholders, and (iv) promoting long-term retention, NEOs and 24 other officers were provided a one-time opportunity to elect to receive unvested LTIP Units in lieu of all or a portion of their earned 2023 STI cash bonuses and receive a matching grant of unvested LTIP units in the same amount as the bonus exchanged for LTIP Units. The LTIP Units granted in lieu of 2023 STI cash bonuses and the matching grants are both subject to a long-term four-year ratable vesting period. The Compensation Committee believes that this vesting feature reinforces a long-term focus, promotes the retention of our management team and is appropriately aligned with the Company’s long-term strategic plan.
Each of our four NEOs elected to receive 100% of their earned 2023 STI awards are paid 50% in cashunvested LTIP Units and 50%the other 24 participants elected to receive over half of their earned annual bonus amounts in equity that vests ratably over three years (four years for Mr. Olson), except for Mr. Minutoli whose incentive award is paid 100% in cash.LTIP Units.
For 2017,Based on the election of each of the NEOs, received the following incentive awards:2023 STI was paid as follows:
Mr. Olson | | | 2,333,788 | | | 100% | | | 143,265 |
Mr. Mooallem | | | 1,049,219 | | | 100% | | | 64,409 |
Mr. Langer | | | 1,066,341 | | | 100% | | | 65,460 |
Mr. Milton | | | 634,074 | | | 100% | | | 38,924 |
|
| | | | | | |
| Name | | Total STI Award (as % of Base Salary) | | Actual 2017 STI Cash Award | | Actual 2017 STI Equity Award(1) |
| Mr. Olson | | 160% | | $800,634 | | $800,615 |
| Mr. Langer | | 153% | | $401,751 | | $401,747 |
| Mr. Minutoli | | 137% | | $684,384 | | - |
| Mr. Zucker | | 127% | | $268,825 | | $268,812 |
| Mr. Eilberg | | 138% | | $241,951 | | $241,935 |
(1)
| Each NEO received a matching award of the same number of unvested LTIP Units as provided in this column pursuant to the Alignment of Interest Award. All LTIP Units vest ratably over a four-year period. |
(1)
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Long-Term Equity-Based Compensation — 2023 Awards 2023 Long-Term Incentive Awards
On February 10, 2023, the Compensation Committee granted long-term incentive compensation awards for 2023 (“2023 LTI Awards”). The stock bonus amounts2023 LTI Awards were granted on February 22, 2018 as restricted stock (LTIP Units for Mr. Olson) under thecomprised of both performance-based and time-based vesting equity awards. The 2023 LTI Awards were weighted, in terms of grant date fair value, approximately one-half performance-based and one-half time-based for each of the Urban Edge Properties 2015 Omnibus Share Plan (the "Omnibus Share Plan"). These awards vest ratably over three years (or four years inNEOs.
Overall, the caseCompensation Committee established the amounts of Mr. Olson) subjectthe 2023 LTI Awards to continued employment throughbe granted to each vesting date with the initial vesting occurring on February 22, 2019. 2017 STI Awards granted 50% in cash and 50% in equity, with the equity rounded down to the nearest whole share or unit, as applicable.
Long -Term Equity Based Compensation
In addition to the awards granted under the STI Program, UE granted restricted stock and option awards toof the NEOs based on their employment agreements or offer letters, other than Mr. Zucker and Mr. Eilberg who are not subject to such an agreement or letter. Pursuant to the employment agreement or offer letter, NEOs were awarded the long-term incentive equity awards in 2017 with the following approximateanticipated grant date fair values:
|
| | | | |
Name | | 2017 Restricted Stock(1)
| | 2017 Stock Options(2)
|
Mr. Olson | | - | | $500,000 |
Mr. Langer | | - | | $200,000 |
Mr. Minutoli | | $350,000 | | - |
Mr. Zucker | | - | | - |
Mr. Eilberg | | - | | - |
__________________
(1)The restricted stock was awarded on February 22, 2018 under the termsvalues of the Omnibus Share Plan. These shares vest ratably over three years subjectawards, its review of peer group data and its view of appropriate award amounts in light of each of our executive’s roles, responsibilities and experience, its desire to continued employment through each vesting date with the initial vesting occurring on February 24, 2018.
(2)The stock options were granted on February 22, 2018 pursuantoffer competitive compensation including an appropriate mix of cash and equity compensation, and our existing commitments to the Omnibus Share PlanNEOs in our agreements with 10-year contractual lives and vest ratably over three years (or four yearsthem.
The performance-based awards, which are granted in the case of Mr. Olson), subject to continued employment through each vesting date, with the initial vesting occurring on February 22, 2019.
Long-Term Equity-Based Compensation: 2015 & 2017 Outperformance Plan and 2018 LTI Plan
2015 Outperformance Plan
On November 3, 2015, the Compensation Committee approved the Company’s 2015 Outperformance Plan ("2015 OPP"), a multi-year performance-based equity compensation program. Under the 2015 OPP, participants may earn awards in the form of LTIP Units, are eligible to be earned based on (i) our absolute TSR (weighted 33.33%)(25% of the performance-based awards) and our TSR relative to a peer group (weighted 66.67%) over a three-year measurement period from November 6, 2015 through November 5, 2018.
Participants will not earn any awards under(25% of the 2015 OPP unless (i) under the absolute TSR weighting, the Company’s TSR during the measurement period is at least 21% or (ii) under the relative TSR weighting, the Company’s TSR during the measurement period is at least at the 50th percentile of our peer group. The maximum number of LTIP Units will be earned under the 2015 OPP if the Company both (a) achieves 50% or higher TSRperformance-based awards) over the three-year measurement period from February 10, 2023 through February 9, 2026, and (b) is in the 75th or higher percentile of(ii) our peer group for TSR over the three-year measurement period.
2017 Outperformance Plan
On February 24, 2017, the Compensation Committee approved the Company’s 2017 Outperformance Plan ("2017 OPP"same-property NOI (“SP NOI”), which is essentially the same as the 2015 OPP with the notable exception of the weighting of the absolute and relative TSR, which is 25% and 75%, respectively (as opposed to 33.33% and 66.67%, respectively, under the 2015 OPP). Under the 2017 OPP, awards are also granted in LTIP Units based on our absolute TSR and our TSR growth relative to a peer group over a three-year measurement period from February 24, 2017 through February 23, 2020.
Participants will not earn any awards under(25% of the 2017 OPP unless (i) underperformance-based award) and our FFO as Adjusted per share growth percentage (“FFO Growth %”) (25% of the absolute TSR weighting, the Company’s TSR during the measurement period is at least 21% or (ii) under the relative TSR weighting, the Company’s TSR during the measurement period is at least at the 50th percentile of our peer group. The maximum number of LTIP Units will be earned under the 2017 OPP if the Company both (a) achieves 50% or higher TSRperformance-based awards) over the three-year measurement period and (b) is in the 75th or greater percentile of our peer group for TSR over the three-year measurement period.from January 1, 2023 through December 31, 2025.
Listed below are the threshold, target and maximum numbers of LTIP Units that each NEO will beis eligible to earn upon achieving both goals discussed above at the conclusion of the performance period under the 2017 OPP:
|
| | | | | | | | |
| Executive | | Threshold Units(1) | | Target Units | | Maximum Potential Units(2) | | Grant Date Value(3) |
| Mr. Olson | | 15,272 | | 45,816 | | 76,361 | | $1,027,624 |
| Mr. Langer | | 10,690 | | 32,071 | | 53,452 | | $719,330 |
| Mr. Minutoli | | 12,217 | | 36,652 | | 61,088 | | $822,092 |
| Mr. Zucker | | 6,108 | | 18,326 | | 30,544 | | $411,046 |
| Mr. Eilberg | | 3,054 | | 9,163 | | 15,272 | | $205,523 |
__________________
(1) Represents the number of units earned if the minimum threshold is met under the 2017 OPP Plan.
(2) Represents the maximum number of units earned if the maximum performance thresholds under the 2017 OPP Plan are met.
(3) Representsand the grant date fair value of the awards computed in accordance with FASB ASC 718.performance-based 2023 LTI Awards that we granted to each NEO:
25% of the award is earned if the Company outperforms a predetermined absolute TSR and 75% is earned if the Company's TSR outperforms on a relative basis a select peer group of retail REITs as follows:
Mr. Olson | | | 60,764 | | | 121,531 | | | 243,065 | | | 2,094,339 |
Mr. Mooallem | | | 18,126 | | | 36,254 | | | 72,512 | | | 624,801 |
Mr. Langer | | | 14,501 | | | 29,003 | | | 58,009 | | | 499,831 |
Mr. Milton | | | 5,073 | | | 10,149 | | | 20,302 | | | 174,939 |
|
| | |
| Absolute TSR Component (25% of the Award) | | % of Maximum Award Earned |
| 21.0% | | 20.0% |
| 39.0% | | 60.0% |
| 50.0% | | 100.0% |
|
(1)
| | |
Relative TSR Component (75%Represents the number of units earned if the minimum threshold for the performance-based 2023 LTI Awards is met (50% of the Award) | | % of Maximum Award Earned |
50th Percentile | | 20.0% |
65th Percentile | | 60.0% |
75th Percentile | | 100.0%Target Units). |
(2)
| Represents the maximum number of units earned if the maximum performance thresholds are met (200% of the Target Units). |
(3)
| Represents the grant date fair value computed in accordance with FASB ASC 718. |
The following tables set forth the threshold, target and maximum performance levels, and the number of LTIP Units that are earned if performance is between two of the performance thresholds specified above, will be determined based on linear interpolation between the percentages earned at each of the performance thresholds. During the performance measurement period, participants will receive only one-tenth of the dividends otherwise payable to the Company’s shareholders with respect to their LTIP Units and the remaining dividends on their LTIP Units will accrue during the performance measurement period and will be paid to participants only if the LTIP Units are ultimately earned based on the achievement of the designated performance objectives.
If the designated performance objectives are achieved, awards earned under the 2017 OPP will also be subject to vesting based on continued employment with the Company through February 23, 2022, with 50% of each earned award vesting on the date the Compensation Committee determines the amount earned under the 2017 OPP following the conclusion of the performance period, and 25% vesting on each of February 23, 2021 and February 23, 2022.
2018 Long-Term Incentive Plan
In 2018 the Compensation Committee determined that a transition from the use of an outperformance plan was appropriate given peer and industry norms and the desire to improve attraction and retention of members of management. On February 22, 2018, the Compensation Committee approved the Company’s 2018 Long-Term Incentive Plan ("2018 LTI Plan"). The 2018 LTI Plan represents the evolution of the Company’s expected annual long-term incentive awards.
The 2018 LTI Plan is comprised of both performance-based and time-based vesting awards. Notwithstanding the equity awards made pursuant to certain NEO’s employment agreements or offer letters, equity awards made under the 2018 LTI Plan are weighted, in terms of grant date and fair value, 80% performance-based and 20% time-basedlevel, for each of the NEO’s, with the exception of Mr. Minutoli who received solely performance-based awards (as he separately received a time-based equity award).
The performance-based awards are structured similarly to those under the 2017 OPP with the notable exception that the absolute and relative TSR hurdles have been reduced to align more with REIT market practice, per our review of REIT industry performance plans with the assistance of FTI Consulting. Weighting of the absolute and relative TSR, which is 25% and 75%, respectively, is consistent with the 2017 OPP awards. Awards, which are granted in LTIP Units, are eligible to be earned based on our absolute TSR and our TSR relative to a peer group over a three-year measurement period from February 22, 2018 through February 21, 2021.
Participants will not earn any awards under the 2018 LTI Plan unless (i) under the absolute TSR, weighting, the Company’s TSR during the measurement period is at least 18% or (ii) under the relative TSR, weighting,relative SP NOI and FFO Growth % components of the Company’s TSR duringperformance-based 2023 LTI Awards. None of the measurement period is at least at the 35th percentile of our peer group. The maximum number of LTIP Units will be earned under the performance-based portion of the 2018 LTI Planfor a particular component if the Company achieves both (a) 36% or higher TSR over the three-year measurement period and (b)performance for that component is in the 75th or greater percentile of our peer group for TSR over the three-year measurement period. If our Absolute TSR for the performance period is negative, then no more than 100% (i.e., the number of Target Units) may be earned under the Relative TSR Component.
Listed below is the threshold, target and maximum number of performance-based LTIP Units that each NEO will be eligible to receive upon achieving both goals discussed above at the conclusion of the performance period:
|
| | | | | | | | |
| Executive | | Threshold Units(1) | | Target Units(2) | | Maximum Potential Units(3) | | Grant Date Value(4) |
| Mr. Olson | | 25,517 | | 63,793 | | 105,258 | | $1,167,292 |
| Mr. Langer | | 11,741 | | 29,353 | | 48,432 | | $537,100 |
| Mr. Minutoli | | 16,773 | | 41,932 | | 69,188 | | $767,286 |
| Mr. Zucker | | 6,709 | | 16,773 | | 27,675 | | $306,914 |
| Mr. Eilberg | | 3,355 | | 8,386 | | 13,838 | | $153,457 |
__________________
(1) Represents the number of units earned if the minimum threshold for the performance-based awards under the 2018 LTI Plan is met.
(2) Represents the midpoint between the Threshold Units and Maximum Potential Units.
(3) Represents the maximum number of units earned if the maximum performance thresholds are met.
(4) Represents the grant date fair value of the computed in accordance with FASB ASC 718.
|
| | |
Absolute TSR Component (25% of the Award)
| | % of Target Units Earned
|
| 18% | | 40% |
| 27% | | 100% |
| 36% | | 165% |
|
| | |
Relative TSR Component (75% of the Award)
| | % of Target Units Earned
|
35th Percentile | | 40% |
55th Percentile | | 100% |
75th Percentile | | 165% |
threshold. The number of LTIP Units that are earned if performance is between threshold and target or target and maximum will be determined based on linear interpolation between the percentages earned at the applicable levels. DuringIn addition, if our absolute TSR for the performance measurement period participants will receive only one-tenthis negative, then no more than 100% (i.e., the number of Target Units) may be earned under the relative TSR component. Further, if our Net Debt-to-EBITDA ratio exceeds 8x, then no more than 100% (i.e., the number of Target Units) may be earned under the FFO Growth % component.
Absolute TSR Component (25% of the dividends otherwise payable to the Company’s shareholders with respect to their LTIP Units and the remaining dividends on their LTIP Units will accrue during the performance measurement period and will be paid to participants only if the LTIP Units are ultimately earned based on the achievementperformance-based 2023 LTI Awards)
Threshold | | | 12% | | | 50% |
Target | | | 21% | | | 100% |
Maximum | | | 30% or higher | | | 200% |
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Relative TSR Component (25% of the designated performance objectives.performance-based 2023 LTI Awards)
Threshold | | | 35th Percentile | | | 50% |
Target | | | 55th Percentile | | | 100% |
Maximum | | | 75th Percentile or higher | | | 200% |
Relative SP NOI Growth Component (25% of the performance-based 2023 LTI Awards)
Threshold | | | 35th Percentile | | | 50% |
Target | | | 55th Percentile | | | 100% |
Maximum | | | 75th Percentile or higher | | | 200% |
FFO Growth % Component (25% of the performance-based 2023 LTI Awards)
Threshold | | | 1% | | | 50% |
Target | | | 3.5% | | | 100% |
Maximum | | | 6% or higher | | | 200% |
If the designated performance objectives are achieved, the performance-based awardsLTIP Units earned under the 2018 Performance Planperformance-based 2023 LTI Awards will also be subject to vesting based on continued employment with the Company through February 21, 2023,10, 2028, with 50% of eachthe LTIP Units earned award vesting on the date the Compensation Committee determines the amount earned following the conclusion of the performance period, and 25% vesting on each of February 21, 202210, 2027 and February 21, 2023.10, 2028.
In 2018 it was determinedDuring the performance measurement period, recipients of the performance-based 2023 LTI Awards will receive distributions on the maximum number of LTIP Units that could be earned at one-tenth of the dividend rate otherwise payable to strengthen the retentive aspectCompany’s shareholders. To the extent LTIP Units are earned, the recipients are entitled to receive the excess amount of our compensation program by including time-based awardsdistributions that would have been received, above the amount of distributions actually received on all of the LTIP Units subject to the recipient’s performance-based 2023 LTI Award, if the LTIP Units that were earned had been entitled to receive full distributions since the beginning of the performance period, which may be paid either in additional LTIP Units valued on the 2018 LTI Plan. ex-dividend date for each distribution as if such distributions had been reinvested contemporaneously or in cash.
The time-based awards,2023 LTI Awards, also granted in LTIP Units, vest ratablyin equal annual installments over three years (or four in the case of Mr. Olson). on February 10, 2024 and subsequent anniversaries thereof. Listed below are the number of LTIP Units and grant date fair value of the time-based 2023 LTI Awards that each NEO was granted on February 22, 2018:10, 2023:
Mr. Olson | | | 145,284 | | | 2,094,995 |
Mr. Mooallem | | | 43,859 | | | 624,991 |
Mr. Langer | | | 35,087 | | | 499,990 |
Mr. Milton | | | 12,280 | | | 174,990 |
(1)
| Represents the grant date fair value computed in accordance with FASB ASC 718. |
|
| | | | |
| Name | | Time-Based Vesting LTIP Units
| | Grant Date Value |
| Mr. Olson | | 13,485 | | $291,823 |
| Mr. Langer | | 6,182 | | $134,275 |
Mr. Minutoli (1) | | — | | — |
| Mr. Zucker | | 3,546 | | $76,729 |
| Mr. Eilberg | | 1,733 | | $38,364 |
__________________We have structured our prior year long-term equity-based compensation awards to include awards containing multi-year performance-based vesting criteria that continue to incentivize performance in years following the years in which they were granted. The following summarizes the terms of the performance-based equity awards that we had granted to the NEOs prior to 2023 that had performance periods that included all or part of 2023.
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2020 Performance-Based LTI Award – Measurement Period Ended February 17, 2023
On February 20, 2020, the Compensation Committee granted long-term incentive compensation awards for 2020 (“2020 LTI Awards”). The 2020 LTI Awards were comprised of both performance-based and time-based vesting equity awards. The performance-based awards, which are granted in LTIP Units, were eligible to be earned based on our absolute TSR (25% of the performance-based awards) and our TSR relative to a peer group (75% of the performance-based awards) over a three-year measurement period from February 20, 2020 through February 17, 2023.
Participants were not entitled to earn any of the 2020 LTI Awards unless (i) under the absolute TSR weighting, the Company’s TSR during the measurement period was separatelyat least 18% or (ii) under the relative TSR weighting, the Company’s TSR during the measurement period was at least at the 35th percentile of our peer group. The maximum number of LTIP Units would have been earned if the Company both (a) achieved 36% or higher TSR over the three-year measurement period and (b) was in the 75th or greater percentile of our peer group for TSR over the three-year measurement period.
The table below sets forth the Threshold, Target and Maximum number of LTIP Units that could have been earned from the 2020 LTI Awards and the units that were actually earned (unearned units were forfeited as of the end of the measurement period):
Mr. Olson | | | 64,382 | | | 160,954 | | | 265,574 | | | 0 |
Mr. Langer | | | 15,920 | | | 39,800 | | | 65,670 | | | 0 |
Mr. Milton | | | 3,504 | | | 8,760 | | | 14,454 | | | 0 |
2021 Long-Term Incentive Awards – Measurement Period Ended February 9, 2024
On February 10, 2021, the Compensation Committee granted restricted Common Shareslong-term incentive compensation awards for 2021 (“2021 LTI Awards”). The 2021 LTI Awards were comprised of both performance-based and time-based vesting equity awards. The performance-based awards, which are granted in LTIP Units, were eligible to be earned based on our absolute TSR (25% of the performance-based awards) and our TSR relative to a peer group (75% of the performance-based awards) over a three-year measurement period from February 10, 2021 through February 9, 2024.
Listed below are the threshold, target and maximum numbers of LTIP Units that vests over three years with amay be earned at the conclusion of the performance period and the grant date fair value of $350,005.the performance-based 2021 LTI Awards that we granted to each NEO:
Mr. Olson | | | 45,895 | | | 114,739 | | | 189,321 | | | 91,300 |
Mr. Langer | | | 11,348 | | | 28,373 | | | 46,815 | | | 22,577 |
Mr. Milton | | | 2,652 | | | 6,632 | | | 10,944 | | | 5,277 |
(1)
| 50% of these units vested on February 22, 2024, and 25% will vest on February 10, 2025 and February 10, 2026, respectively. |
2022 Long-Term Incentive Awards
On February 11, 2022, the Compensation Committee granted long-term incentive compensation awards for 2022 (“2022 LTI Awards”). The 2022 LTI Awards were comprised of both performance-based and time-based vesting equity awards. The 2022 LTI Awards were weighted, in terms of grant date fair value, approximately one-half performance-based and one-half time-based for each of the NEOs.
Overall, the Compensation Committee established the amounts of the 2022 LTI Awards to be granted to each of the NEOs based on the anticipated grant date fair values of the awards, its review of peer group data and its view of appropriate award amounts in light of each of our executive’s roles, responsibilities and experience, its desire to offer competitive compensation including an appropriate mix of cash and equity compensation, and our existing commitments to the NEOs in our agreements with them.
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The performance-based awards, which are granted in LTIP Units, are eligible to be earned based on (i) our absolute TSR (331∕3% of the performance-based awards) and our TSR relative to a peer group (331∕3% of the performance-based awards) over the three-year measurement period from February 11, 2022 through February 10, 2025, and (ii) our absolute FFO as Adjusted per share growth percentage (“FFO Growth %”) (331∕3% of the performance-based awards) over the three-year measurement period from January 1, 2022 through December 31, 2024.
Listed below are the threshold, target and maximum numbers of LTIP Units that may be earned at the conclusion of the performance period and the grant date fair value of the performance-based 2022 LTI Awards that we granted to each NEO:
Mr. Olson | | | 49,279 | | | 98,560 | | | 197,122 | | | 1,969,022 |
Mr. Langer | | | 11,443 | | | 22,887 | | | 45,777 | | | 457,252 |
Mr. Milton | | | 5,626 | | | 11,255 | | | 22,513 | | | 224,871 |
(1)
| Represents the number of units earned if the minimum threshold for the performance-based 2022 LTI Awards is met (50% of the Target Units). |
(2)
| Represents the maximum number of units earned if the maximum performance thresholds are met (200% of the Target Units). |
(3)
| Represents the grant date fair value computed in accordance with FASB ASC 718. |
The following tables set forth the threshold, target and maximum performance levels, and the number of LTIP Units earned at each level, for the absolute TSR, relative TSR, and FFO Growth % components of the performance-based 2022 LTI Awards. None of the LTIP Units will be earned for a particular component if performance for that component is below threshold. The number of LTIP Units that are earned if performance is between threshold and target or target and maximum will be determined based on linear interpolation between the percentages earned at the applicable levels. In addition, if our absolute TSR for the performance period is negative, then no more than 100% (i.e., the number of Target Units) may be earned under the relative TSR component. Further, if our Net Debt-to-EBITDA ratio exceeds 8x, then no more than 100% (i.e., the number of Target Units) may be earned under the FFO Growth % component.
Absolute TSR Component (331∕3% of the performance-based 2022 LTI Awards)
Threshold | | | 18% | | | 50% |
Target | | | 27% | | | 100% |
Maximum | | | 36% or higher | | | 200% |
Relative TSR Component (331∕3% of the performance-based 2022 LTI Awards)
Threshold | | | 35th Percentile | | | 50% |
Target | | | 55th Percentile | | | 100% |
Maximum | | | 75th Percentile or higher | | | 200% |
FFO Growth % Component (331∕3% of the performance-based 2022 LTI Awards)
Threshold | | | 3% | | | 50% |
Target | | | 5% | | | 100% |
Maximum | | | 7% or higher | | | 200% |
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If the designated performance objectives are achieved, the LTIP Units earned under the performance-based 2022 LTI Awards will also be subject to vesting based on continued employment with the Company through February 11, 2027, with 50% of the LTIP Units earned vesting on the date the Compensation Committee determines the amount earned following the conclusion of the performance period, and 25% vesting on each of February 11, 2026 and February 11, 2027.
During the performance measurement period, recipients of the performance-based 2022 LTI Awards will receive distributions on the maximum number of LTIP Units that could be earned at only one-tenth of the dividend rate otherwise payable to the Company’s shareholders. To the extent LTIP Units are earned, the recipients are entitled to receive the excess amount of distributions that would have been received, above the amount of distributions actually received on all of the LTIP Units subject to the recipient’s performance-based 2022 LTI Award, if the LTIP Units that were earned had been entitled to receive full distributions since the beginning of the performance period, which may be paid either in additional LTIP Units valued on the ex-dividend date for each distribution as if such distributions had been reinvested contemporaneously or in cash.
Benefits and Perquisites
We provide our NEOs with certain perquisites that we believe are reasonable and in line with the prevailing competitive market. In the case of Messrs.Mr. Langer, and Minutoli, these perquisites include supplemental life, disability and similar insurance premiums not to exceed $30,000 in any calendar year. Additionally, due to the location of our corporate offices in New York City and the extensive business-related travel requirements of our NEOs, we provide certain of our NEOs with the use of a Company car. Executives using a Company car and/reimburse the Company for any personal usage of it.
LTIP Units
For many of our equity-based compensation awards, in lieu of issuing restricted Common Shares or driverrestricted share units, we issue LTIP Units. LTIP Units are a separate class of units of limited partnership interest in UELP and are similar to Common Units, which generally are economically equivalent to Common Shares, except that LTIP Units are structured in a manner that is intended to enable them to qualify as “profits interests” for U.S. federal income tax purposes under current federal income tax law. LTIP Units generally only have value, other than with respect to the right to receive distributions, to the extent that they receive special allocations of book gain for tax purposes. An LTIP Unit generally is entitled to receive special allocations of book gain to the extent it represents an increase in the net value of the assets of UELP between the issuance of such LTIP Unit (or, to the extent specifically provided otherwise, one or more subsequent dates) and the date of a car allowance. Providingsubsequent book-up event for partnership tax purposes. If LTIP Units receive sufficient special allocations of this book gain, the LTIP Units will achieve full parity with Common Units. If such parity is achieved, the LTIP Units may be converted, subject to the satisfaction of applicable vesting conditions, on a carone-for-one basis into Common Units, which in turn are redeemable by the holder for cash or, at our election, on a one-for-one basis into Common Shares. Except for LTIP Units that remain subject to vesting based on the achievement of performance-based vesting hurdles, LTIP Units, whether vested or unvested, entitle the holder to receive distributions from UELP equal on a per unit basis to the per-share distributions paid to the holders of Common Shares.
LTIP Units are intended to offer recipients substantially the same long-term incentive as restricted Common Shares, with more favorable U.S. federal income tax treatment available for “profits interests” under current federal income tax law. More specifically, one key disadvantage of restricted Common Shares is that recipients are generally taxed on the full market value of a grant at the time of vesting, even if they choose to hold the Common Shares. Conversely, under current federal income tax law, a recipient of LTIP Units would generally not be subject to tax at the time of issuance or vesting of LTIP Units but only when he or she chooses to liquidate his or her LTIP Units. Therefore, a recipient who wishes to hold his or her equity awards for the long term can generally do so in a more tax-efficient manner with LTIP Units. In light of the trade-offs between increased tax efficiency and
driver allows these executive officersincremental economic risk relating to the structure of LTIP Units as profits interests due to their only having value upon a book-up event as described above as compared to restricted Common Shares, we have chosen to use
their travel time efficientlyLTIP Units for many of our grants of equity awards to the NEOs. We believe that the use of LTIP Units has (i) enhanced our equity-based compensation package overall, (ii) advanced the goal of promoting long-term equity ownership by the NEOs, (iii) not adversely TABLE OF CONTENTS
impacted dilution as compared to restricted Common Shares, and productively for business purposes. Accordingly, we believe providing these benefits serves(iv) further aligned the bestinterests of the NEOs with the interests of our shareholders as it allows our executives to continue to focus on Company matters while traveling. While providing a car and driver does provide incidental personal benefit toshareholders. We also believe that these benefits outweigh the executive, the cost of this personal benefit constitutes only a small percentageloss of the executive’s total compensation. Nevertheless,U.S. federal income tax business-expense deduction from the amounts disclosed in this Proxy Statement for car and driver costs include the entire valueissuance of the benefit, both business and personal.LTIP Units, as compared to restricted Common Shares.
Governance Policies Relating to Compensation
Equity Ownership Guidelines
To further foster the strong ownership culture among our senior executive management team, and to ensure the continued direct alignment of management and shareholder interests and to be consistentin line with emerging corporate governance trends, we have adopted executive equity ownership guidelines requiring that our Chairman and CEO, CFO and COO maintain a minimum ownership level of Common Shares or related Company equity. The equity ownership requirements (comprised of Common Shares and certain securities convertible into or redeemable for Common Shares) for our executives are as follows:
| | |
Title | | Multiple |
Chairman and CEO | | | 5x Base Salary |
CFO | | | 3x Base Salary |
COO | | | 3x Base Salary |
These executive officers have until the end of the fifth full calendar year after becoming an executive officer to satisfy the ownership requirement. All of thesethem currently satisfy the guidelines.
Clawback Policy
On October 19, 2023, we adopted a policy for recoupment of incentive compensation (the “Clawback Policy”) in compliance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules and applicable Nasdaq listing standards (the “final clawback rules”), which covers our current and former executive officers, satisfy these guidelines.including all of our named executive officers. Under the Clawback Policy, in the event that we are required to prepare a restatement of our previously issued financial statements due to our material noncompliance with any financial reporting requirement under securities laws, we are required to recover (subject to certain limited exceptions described in the Clawback Policy and permitted under the final clawback rules) any cash or equity incentive-based compensation received by any current or former executive officer after the effective date of the Clawback Policy and in the three years prior to the date we are required to restate our financial statements that is in excess of the amount that would have been received based on the restated financial statements. In addition, under our Clawback Policy, in the event that we are required to restate our financial statements due to material noncompliance with any financial reporting requirement under securities laws, we must use reasonable efforts to recover (i) any cash or equity incentive compensation received by any other current or former employee of the Company in the three years prior to the date we are required to restate our financial statements that is in excess of the amount that would have been received based on the restated financial statements if we determine that the employee committed certain acts or omissions that materially contributed to the circumstances requiring the restatement and (ii) up to 100% of the cash and equity incentive compensation received by any current or former employee in the three years prior to the date we are required to restate our financial statements if we determine that the employee committed certain acts or omissions that materially contributed to the circumstances requiring the restatement. The Compensation Recovery Policy has been filed as Exhibit 97.1 to Urban Edge Properties’ Annual Report on Form 10-K for the year ended December 31, 2023. At no time during or after the year ended December 31, 2023, was the Company required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the Compensation Recovery Policy, nor was there, on December 31, 2023, an outstanding balance of erroneously awarded compensation to be recovered from the application of the policy to a prior restatement.
Policy on Hedging and Pledging of Company Securities
Our NEOsemployees (including our NEOs) and Trustees are prohibited from purchasing our securities on margin, borrowing against our securities held in a margin account, or pledging our securities as collateral for any loan and from entering into hedging or derivative transactions based on the Company'sCompany’s securities.
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20172023 Summary Compensation Table
The following table sets forth the 2017, 20162023, 2022 and 20152021 compensation earned by, or granted to, each of our NEOs:
Jeffrey S. Olson
Chairman and Chief Executive Officer
| | | 2023 | | | 1,100,000 | | | — | | | 4,189,334 | | | 2,333,788 | | | 22,500 | | | 7,645,622 |
| | 2022 | | | 1,092,308 | | | — | | | 3,939,010 | | | 1,564,933 | | | 20,250 | | | 6,616,501 |
| | 2021 | | | 1,050,000 | | | — | | | 3,699,999 | | | 2,021,250 | | | 58,855 | | | 6,830,104 |
Jeffrey S. Mooallem
Executive Vice President and Chief Operating Officer
| | | 2023 | | | 588,942 | | | 50,000 | | | 1,249,792 | | | 1,049,219 | | | 22,258 | | | 2,960,211 |
| | 2022 | | | — | | | — | | | — | | | — | | | — | | | — |
| | 2021 | | | — | | | — | | | — | | | — | | | — | | | — |
Mark J. Langer
Executive Vice President and Chief Financial Officer
| | | 2023 | | | 619,192 | | | — | | | 999,821 | | | 1,066,341 | | | 55,000 | | | 2,740,354 |
| | 2022 | | | 603,750 | | | — | | | 914,738 | | | 645,006 | | | 52,750 | | | 2,216,244 |
| | 2021 | | | 603,750 | | | — | | | 914,618 | | | 943,359 | | | 52,000 | | | 2,513,727 |
Robert C. Milton III
Executive Vice President, General Counsel & Secretary
| | | 2023 | | | 431,000 | | | — | | | 349,929 | | | 634,074 | | | 25,000 | | | 1,440,003 |
| | 2022 | | | 416,923 | | | — | | | 449,860 | | | 417,200 | | | 22,750 | | | 1,306,733 |
| | 2021 | | | 399,039 | | | — | | | 213,826 | | | 550,000 | | | 22,000 | | | 1,184,865 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Non-Equity Incentive Plan Compensation ($)(3) | | All Other Compensation ($)(4) | | Total ($) |
| Jeffrey S. Olson | | 2017 | | $ | 1,000,000 |
| | $ | — |
| | $ | 1,927,600 |
| | $ | 499,999 |
| | $ | 800,634 |
| | $ | 154,581 |
| | $ | 4,382,814 |
|
Chairman and Chief Executive Officer
| | 2016 | | $ | 1,000,000 |
| | $ | — |
| | $ | 500,000 |
| | $ | 500,000 |
| | $ | 900,000 |
| | $ | 152,759 |
| | $ | 3,052,759 |
|
| | | 2015 | | $ | 1,000,000 |
| | $ | 500,000 |
| | $ | 5,294,484 |
| | $ | 8,305,784 |
| | $ | — |
| | $ | 151,798 |
| | $ | 15,252,066 |
|
| | | | | | | | | | | | | | | | | |
| Mark J. Langer | | 2017 | | $ | 525,000 |
| | $ | — |
| | $ | 1,120,851 |
| | $ | 199,995 |
| | $ | 342,192 |
| | $ | 108,202 |
| | $ | 2,355,799 |
|
Executive Vice President and Chief Financial Officer
| | 2016 | | $ | 525,000 |
| | $ | — |
| | $ | 262,500 |
| | $ | 200,000 |
| | $ | 401,543 |
| | $ | 105,917 |
| | $ | 1,494,960 |
|
| | | 2015 | | $ | 343,269 |
| | $ | 262,500 |
| | $ | 1,600,748 |
| | $ | 500,000 |
| | $ | — |
| | $ | 138,257 |
| | $ | 2,844,774 |
|
| | | | | | | | | | | | | | | | | |
| Robert Minutoli | | 2017 | | $ | 500,000 |
| | $ | 100,000 |
| | $ | 1,172,083 |
| | $ | — |
| | $ | 684,384 |
| | $ | 69,000 |
| | $ | 2,525,467 |
|
| Executive Vice President and Chief Operating Officer | | 2016 | | $ | 500,000 |
| | $ | — |
| | $ | 350,000 |
| | $ | — |
| | $ | 781,250 |
| | $ | 66,000 |
| | $ | 1,697,250 |
|
| | | 2015 | | $ | 500,000 |
| | $ | 500,000 |
| | $ | 3,079,049 |
| | $ | — |
| | $ | — |
| | $ | 51,116 |
| | $ | 4,130,165 |
|
| | | | | | | | | | | | | | | | | |
| Michael Zucker | | 2017 | | $ | 425,000 |
| | $ | — |
| 235,375 |
| $ | 721,418 |
| | $ | — |
| | $ | 268,825 |
| | $ | 34,000 |
| | $ | 1,449,243 |
|
| Executive Vice President - Leasing | | 2016 | | $ | 325,000 |
| | $ | 75,000 |
| | $ | 200,000 |
| | $ | — |
| | $ | 235,372 |
| | $ | 31,500 |
| | $ | 866,872 |
|
| | | 2015 | | $ | 325,000 |
| | $ | 200,000 |
| | $ | 427,891 |
| | $ | 49,996 |
| | $ | — |
| | $ | 31,500 |
| | $ | 1,034,387 |
|
| | | | | | | | | | | | | | | | | |
| Herbert Eilberg | | 2017 | | $ | 350,000 |
| | $ | — |
| | $ | 450,015 |
| | $ | — |
| | $ | 241,954 |
| | $ | 16,000 |
| | $ | 1,057,969 |
|
| Chief Investment Officer | | 2016 | | $ | 350,000 |
| | $ | — |
| | $ | 200,000 |
| | $ | — |
| | $ | 244,508 |
| | $ | 13,500 |
| | $ | 808,008 |
|
| | | 2015 | | $ | 228,846 |
| | $ | 200,000 |
| | $ | 648,944 |
| | $ | — |
| | $ | — |
| | $ | 209 |
| | $ | 1,077,999 |
|
______________________
(1)
| Represents a discretionary bonus amount paid to Mr. Mooallem in the first quarter of 2023 upon the successful completion of certain transition matters following his joining the Company in January 2023. |
(1)
(2)
| The amounts listed do not represent the actual amounts paid in cash to or value realized by the NEOs. The valuation is based on the grant date fair value computed in accordance with FASB ASC Topic 718. On February 24, 2017, the Company granted Mr. Olson 31,734 restricted LTIP Unit awards with ¼ vesting on each anniversary of the grant date, and Messrs. Minutoli, Langer, Eilberg and Zucker 12,341, 14,158, 10,944 and 8,621, respectively, restricted Common Shares with ⅓ vesting on each anniversary of the grant date. On February 24, 2017, the Company granted each of Messrs. Olson, Minutoli, Langer, Eilberg, and Zucker 76,361, 61,088, 53,452, 15,272 and 30,544, respectively, LTIP Units under the 2017 Outperformance Plan, respectively, with 50% vesting on the third anniversary of the grant date, 25% vesting on the fourth anniversary of the grant date and 25% vesting on the fifth anniversary of the grant date, subject to certain performance hurdles further described herein. Dividends are paid on both the vested and unvested portion of restricted Common Shares and restricted LTIP Unit awards, and 10% of the regular distribution amount is paid on the unearned portion of the LTIP Unit awards under the 2017 Outperformance Plan prior to the end of the performance period, with full distribution paid thereafter. InWhere applicable, in accordance with applicable SEC rules, amounts shown include the impact of bonuses paid in equity in the year actually granted. Assumptions usedThe grant date fair value of the performance-based 2023 LTI Awards was estimated using the following assumptions in additional to other inputs: an estimated dividend yield of 4.1%, an expected volatility of 53% for the calculationCompany and 45%-59% for peer companies and a risk-free interest rate of these amounts are included4.2%. The grant date fair values of the time-based LTIP Units were estimated using the following assumptions in footnote 16addition to our consolidatedother inputs: an expected volatility of 31% and combined financial statements included in our Form 10-K as filed with the SEC.a risk-free interest rate of 4.92%. If we assumed that maximum performance would be achieved under the performance-based restricted stock units granted in 2017,2023 LTI Awards, the grant fair value date of the LTIP Units we granted to the NEOs in 2017 under the Outperformance Planthese awards would have been as follows: (i) Mr. Olson - $2,165,598,$4,189,282, (ii) Mr. Minutoli - $1,732,456,Mooallem − $1,249,767, (iii) Mr. Langer - $1,515,899,$999,804, and (iv) Mr. ZuckerMilton - $866,228 and Mr. Eilberg - $433,134.$349,927. |
| |
(2)
(3)
| The amounts listed do notin the Non-Equity Incentive Plan Compensation column represent amounts earned under each STI Program for the actualapplicable year. The 2022 and 2021 STI Program amounts were paid 100% in cash. In 2023, officers of the Company were permitted to elect to receive all or a portion of their 2023 STI Program entitlements in unvested LTIP Units, with any LTIP Unit received matched on a one-for-one basis by the Company (see “Compensation Discussion and Analysis – Alignment of Interest Award”). Each NEO elected to receive 100% of their 2023 STI Program entitlement in LTIP Units. Had they elected to receive such amounts 100% in cash, to or value realizedthe cash amounts would have been as reported in the table above. The grant date of the LTIP Units, together with those matched by the NEOs. The valuation of Options is based onCompany, was February 9, 2024. Accordingly, the grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions usedof the matching grants of unvested LTIP Units will be reported in the calculationStock Awards column of these amounts are included in footnote 16our 2024 Summary Compensation Table to be filed next year. |
(4)
| The following table sets forth 2023 other compensation earned by or granted to each of our consolidated and combined financial statements included in our Form 10-K as filedNEOs: |
Mr. Olson(a) | | | — | | | 22,500 | | | — | | | 22,500 |
Mr. Mooallem | | | — | | | 22,258 | | | — | | | 22,258 |
Mr. Langer | | | 30,000 | | | 22,500 | | | 2,500 | | | 55,000 |
Mr. Milton | | | — | | | 22,500 | | | 2,500 | | | 25,000 |
(a)
| The Company provided Mr. Olson with the SEC. On February 24, 2017, the Company granted (i) Mr. Olson options to acquire 97,656 Common Shares with ¼ vesting on each anniversaryuse of the grant date, and (ii) Mr. Langer options to acquire 39,603 Common Shares with ⅓ vesting on each anniversary of the grant date. |
(3) The amounts listed for 2017 represent the cash portion of the 2017 STI Program awards paid in March 2018. For each of the NEOs, the 2017 STI amounts were paid 50% in cash and 50% in equity (except for Mr. Minutoli who was paid 100% in cash). On February 22, 2018, each of the NEOs other than Mr. Minutoli received a grant of equity (restricted Common Shares that vest over three years for each of Messrs. Langer, Zucker and Eilberg, and LTIP Units that vest over four year for Mr. Olson) with a grant date fair value approximately equal to these Non-Equity Incentive Plan Compensation Amounts.
(4) The following table sets forth 2017 other compensation earned by or granted to each of our NEOs:
|
| | | | | | | | | | | | | | | | | | | | | | |
| Name | | Year | | Car Allowance/Use of Car and Driver ($)(1) | | Reimbursement for Benefit Expenses Not Covered ($)(2) | | Matching 401(k) Contribution ($) | | HSA Contribution ($) | | Total ($) |
| Jeffrey S. Olson | | 2017 | | $ | 141,081 |
| | $ | — |
| | $ | 13,500 |
| | $ | — |
| | $ | 154,581 |
|
| Mark J. Langer | | 2017 | | $ | 62,202 |
| | $ | 30,000 |
| | $ | 13,500 |
| | $ | 2,500 |
| | $ | 108,202 |
|
| Robert Minutoli | | 2017 | | $ | 18,000 |
| | $ | 30,000 |
| | $ | 18,000 |
| | $ | 3,000 |
| | $ | 69,000 |
|
| Michael Zucker | | 2017 | | $ | 18,000 |
| | $ | — |
| | $ | 13,500 |
| | $ | 2,500 |
| | $ | 34,000 |
|
| Herbert Eilberg | | 2017 | | $ | — |
| | $ | — |
| | $ | 13,500 |
| | $ | 2,500 |
| | $ | 16,000 |
|
_______________
| |
(1)
| Mr. Olson was provided with a car and a driver andto conduct his duties as Chief Executive Officer of the Company. Mr. Langer was provided a car. Each such NEOOlson also used the car and driver as applicable for both business and personal purposes withfrom time to time, for which he reimbursed the amounts shown reflective of the aggregate incremental cost to the Company for the car, driver and related expenses without allocating between business and personal uses. Mr. Olson’s car was purchased in 2014 and Mr. Langer’s car was purchased in 2015. Each of Messrs. Minutoli and Zucker is provided with a car allowance which is paid to them in cash in equal installments on a bi-weekly basis.Company. |
| |
(2)
(b)
| The figuresfigure here representrepresents the sum of the cost of the NEOsMr. Langer’s reimbursement for medical premiums, supplemental group term life insurance, and supplemental long termlong-term disability above and beyond the Company'sCompany’s normal benefit programs that are generally available to all salaried employees of the Company. |
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Grants of Plan-Based Awards in
2017
2023
The following table lists all grants ofsets forth certain information with respect to each plan-based awardsaward to our NEOs made in 2017 and their grant date fair value:2023. All of the equity awards set forth in the table below were granted under the 2015 Omnibus Share Plan.
Mr. Olson | | | 2/10/23 | | | | | | | | | | | | | | | | | | | | | 145,284 | | | 2,094,995 |
| | 2/10/23 | | | | | | | | | | | | 60,763 | | | 121,531 | | | 243,065 | | | | | | 2,094,339 |
| | | | | 605,000 | | | 1,210,000 | | | 2,420,000 | | | | | | | | | | | | | | | |
Mr. Mooallem | | | 2/10/23 | | | | | | | | | | | | | | | | | | | | | 43,859 | | | 624,991 |
| | 2/10/23 | | | | | | | | | | | | 18,126 | | | 36,254 | | | 72,512 | | | | | | 624,801 |
| | | | | 312,500 | | | 625,000 | | | 1,093,750 | | | | | | | | | | | | | | | |
Mr. Langer | | | 2/10/23 | | | | | | | | | | | | | | | | | | | | | 35,087 | | | 499,990 |
| | 2/10/23 | | | | | | | | | | | | 14,501 | | | 29,003 | | | 58,009 | | | | | | 499,831 |
| | | | | 311,000 | | | 622,000 | | | 1,088,500 | | | | | | | | | | | | | | | |
Mr. Milton | | | 2/10/23 | | | | | | | | | | | | | | | | | | | | | 12,280 | | | 174,990 |
| | 2/10/23 | | | | | | | | | | | | 5,072 | | | 10,149 | | | 20,302 | | | | | | 174,939 |
| | | | | 216,500 | | | 433,000 | | | 649,500 | | | | | | | | | | | | | | | |
(1)
| The dollar amounts presented in these columns represent awards at threshold, target and maximum levels under the 2023 STI Program. The actual award amounts earned under the 2023 STI Program and additional detail are set forth under “Results under 2023 STI Program” on 37. |
(2)
| The unit amounts presented in these columns represent the performance-based 2023 LTI Awards at threshold, target and maximum levels. See “Long-Term Equity-Based Compensation – 2023 Awards” on page 38 for further information regarding these awards. |
(3)
| On February 10, 2023, as part of the 2023 LTI Awards, the Company granted Mr. Olson 145,284 time-based LTIP Units with 25% vesting annually on February 10th each year beginning with 2024, and Messrs. Mooallem, Langer and Milton 43,859; 35,087 and 12,280 LTIP Units, respectively, with 331∕3% vesting annually on February 10th each year beginning with 2024. All of these restricted LTIP Units, which are only subject to time-based vesting based on continued employment through a specified date, entitle the holders to receive cash distributions whether or not then vested. |
(4)
| The amounts presented in this column represents the full grant date fair value of equity awards (calculated pursuant to FASB ASC Topic 718). |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Award(2) | | | | | | | | |
| Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | All other Stock Awards: Number of Securities of stock or units (#) | | All other Option Awards: Number of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($)(3) |
| Jeffrey S. Olson | | 2/24/17 | | | | | | | | | | | | | | | | 97,656 |
| | $28.36 | |
| $499,999 |
|
| | | 2/24/17 | | | | | | | | | | | | | | 31,734 |
| | | | | |
| $899,976 |
|
| | | 2/24/17 | | | | | | | | 15,272 | | 45,817 | | 76,361 | | | | | | | |
| $1,027,624 |
|
| | | | | $ | 500,000 |
| | $ | 1,000,000 |
| | $ | 2,000,000 |
| | | | | | | | | | | | | | |
Mark J. Langer | | 2/24/17 | | | | | | | | | | | | | | | | 39,603 |
| | $28.36 | |
| $199,995 |
|
| | | 2/24/17 | | | | | | | | | | | | | | 14,158 |
| | | | | |
| $401,521 |
|
| | | 2/24/17 | | | | | | | | 10,690 | | 32,071 | | 53,452 | | | | | | | |
| $719,330 |
|
| | | | | $ | 262,500 |
| | $ | 525,000 |
| | $ | 918,750 |
| | | | | | | | | | | | | | |
| Robert Minutoli | | 2/24/17 | | | | | | | | | | | | | | 12,341 |
| | | | | |
| $349,991 |
|
| | | 2/24/17 | | | | | | | | 12,217 | | 36,653 | | 61,088 | | | | | | | |
| $822,092 |
|
| | | | | $ | 250,000 |
| | $ | 500,000 |
| | $ | 875,000 |
| | | | | | | | | | | | | | |
Michael Zucker | | 2/24/17 | | | | | | | | | | | | | | 10,944 |
| | | | | |
| $310,372 |
|
| | | 2/24/17 | | | | | | | | 6,108 | | 18,326 | | 30,544 | | | | | | | |
| $411,046 |
|
| | | | | $ | 212,500 |
| | $ | 425,000 |
| | $ | 637,500 |
| | | | | | | | | | | | | | |
Herbert Eilberg | | 2/24/17 | | | | | | | | | | | | | | 8,621 |
| | | | | |
| $244,492 |
|
| | | 2/24/17 | | | | | | | | 3,054 | | 9,163 | | 15,272 | | | | | | | |
| $205,523 |
|
| | | | | $ | 175,000 |
| | $ | 402,500 |
| | $ | 525,000 |
| | | | | | | | | | | | | | |
____________________
(1) The dollar amounts presented in these columns represent awards at threshold, target and maximum levels under the 2017 STI Program. The actual award amounts earned under the 2017 STI Program for 2017 are set forth on page 30.
(2) The unit amounts presented in these columns represent LTIP Unit awards at threshold, target and maximum levels under the 2017 Outperformance Plan.
(3) The amounts presented in this column represent the full grant date fair value of equity awards (calculated pursuant to FASB ASC Topic 718).
Options Exercises and Stock Vested in 20172023
|
| | | | | |
| | | Stock Awards |
| Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) |
| Jeffrey S. Olson | | 5,315 |
| | $150,733 |
| Mark J. Langer | | 14,234 |
| | $403,676 |
| Robert Minutoli | | 11,165 |
| | $316,639 |
| Michael Zucker | | 3,516 |
| | $99,714 |
| Herbert Eilberg | | 5,278 |
| | $149,684 |
____________________
(1) Computed by multiplyingNone of our NEOs exercised options in 2023. The following table sets forth, for each of our NEOs, the number and value of shares orCommon Shares and LTIP Units that vested by the average of the high and low price of our common shares on the date of vesting. A portion of Messrs. Langer, Eilberg and Zucker's shares that vested were withheld to satisfy withholding taxes.during 2023.
Mr. Olson | | | 106,613 | | | 1,661,509 |
Mr. Mooallem | | | — | | | — |
Mr. Langer | | | 31,735 | | | 494,634 |
Mr. Milton | | | 11,156 | | | 174,222 |
(1)
| Computed by multiplying the number of shares or LTIP Units that vested by the average of the high and low price of our Common Shares on the date of vesting. |
TABLE OF CONTENTS
Narrative to Summary Compensation Table
Olson Employment Agreement
Vornado entered into an amended and restated employment agreement with Jeffrey S. Olson, which became effective on September 1, 2014 (the “Olson Agreement Effective Date”) and which has an initial term of five years, with automatic one-year renewals thereafter unless either party provides the other party at least 90 days’ prior notice of nonrenewal. The employment agreement provides that, during the term of the agreement, Mr. Olson will serve as the Chairman of our Board and Chief Executive Officer of UE.
The employment agreement provides for an annual base salary of $1,000,000 and a target annual bonus of 100% of annual base salary paid 50% in cash and 50% in equity awards that vest ratably over four years. Pursuant to his employment agreement, the annual bonus paid in respect of fiscal year 2015 was not permitted to be less than $1,000,000. Also, prior to 2018, Mr. Olson was entitled to receive grants each year under UE’s long-term incentive compensation plans of options to purchase Common Shares with a grant date Black Scholes value equal to $500,000 that vest 25% on each anniversary of the grant date subject to continued employment. Mr. Olson is entitled to participate in the 401(k) and welfare and benefit plans that are generally offered to UE senior-level executives or employees and to a car and driver.
Pursuant to his employment agreement, on February 17, 2015, UE granted Mr. Olson options to purchase 2,092,137 of Common Shares (the “Initial Olson Option Award”) based on the volume-weighted average trading price of a Common Share on the NYSE for the 20 trading days following (but not including) January 15, 2015 (the “Average UE Price”). The options were granted pursuant to the Omnibus Share Plan. The Initial Olson Option Award is scheduled to vest 25% on each of the third and fourth anniversaries of the grant date and 50% on the fifth anniversary of the grant date subject to continued employment. Additionally, on February 17, 2015, pursuant to his employment agreement UE granted Mr. Olson 209,213 LTIP Units pursuant to the Omnibus Share Plan. Mr. Olson is also entitled to received a cash make-whole payment equal to $3,156,952 (which represents $5,000,000 less the value of certain equity awards Mr. Olson received from his prior employer), which was paid by Vornado shortly after the Olson Agreement Effective Date.
Minutoli Offer Letter
On October 16, 2017, Urban Edge Properties (the “Company”) entered into a letter agreement with Robert Minutoli (the “Letter Agreement”). The Letter Agreement replaces the Employment Agreement dated January 14, 2015 between Mr. Minutoli and the Company.
Pursuant to the Letter Agreement, Mr. Minutoli will continue to serve as the Chief Operating Officer and an Executive Vice President of the Company. Effective as of January 1, 2018, his annual base salary will be $600,000. He will continue to be eligible to receive a cash bonus, annual equity award and an annual allocation of any long-term incentive plan that may be adopted, in each case, in amounts and under terms and conditions determined by the Compensation Committee of the Board of Trustees of the Company. In connection with the execution of the Letter Agreement, Mr. Minutoli was paid a one-time cash bonus of $100,000.
Mr. Minutoli is also entitled to reimbursement of life, disability and similar insurance premiums in an amount not to exceed $30,000 in any calendar year.
Langer Employment Agreement
On April 20, 2015, Mark Langer was appointed to the position of Executive Vice President and Chief Financial Officer of the Company. Mr. Langer and UE are parties to an employment agreement that stipulated that Mr. Langer’s employment would commence on July 1, 2015, or an earlier date mutually agreed between Mr. Langer and UE, which mutually-agreed date was April 20, 2015 (the “Langer Agreement Effective Date”). The initial term of the employment agreement extends for four years following the Langer Agreement Effective Date, with automatic one-year renewals thereafter unless either party provides the other party at least 90 days’ prior notice of nonrenewal.
The employment agreement provides for an annual base salary of $525,000 and a target annual bonus of 100% of annual base salary paid 50% in cash and 50% in equity awards that vest ratably over three years subject to continued employment. Additionally, prior to 2018, Mr. Langer was entitled to receive annual grants under UE’s long-term incentive compensation plans of options to purchase Common Shares with a grant date Black Scholes value equal to $200,000, which vest ratably over three years subject to continued employment. Mr. Langer is entitled to participate in the 401(k) and welfare and benefit plans that are generally offered to UE senior-level executives or employees, a car and driver, reimbursement of life, disability and similar insurance premiums in an amount not to exceed $30,000 in any calendar year and relocation expense reimbursement.
Pursuant to contractual requirements contained in his employment agreement, on April 20, 2015 that were scheduled to vest ratably, UE granted Mr. Langer (1) options to purchase 127,551 Common Shares that vest ratably over four years subject to continued employment (the “Initial Langer Option Award”) and (2) 42,053 LTIP Units which were scheduled to vest ratably over four years subject to continued employment (the “Initial Langer Restricted LTIP Units”). Additionally, Mr. Langer was also entitled to receive a cash payment of $66,000 to compensate him for the forfeited amount of the retention bonus offered to him by his former employer, which UE paid.
Eilberg Offer Letter
On April 20, 2015, Mr. Herbert Eilberg was appointed to the position of Chief Investment Officer of the Company. Mr. Eilberg’s offer letter provides for an annualized salary of $350,000 and a target annual bonus of $400,000 for the year ended December 31, 2015 paid 50% in cash and 50% in shares of restricted stock that vest ratably over three years. Additionally, pursuant to his offer letter, UE granted Mr. Eilberg 20,928 restricted Common Shares (the "Initial Eilberg Equity Grant") on May 11, 2015, that vest as follows: 5,278 shares vest on January 1, 2016; 5,278 shares vest on January 1, 2017; 4,913 shares vest on January 1, 2018; 4,231 shares vest on January 1, 2019; and 1,228 shares vest on January 1, 2020.
2017 Outstanding Equity Awards at 2023 Fiscal Year End
The following table provides information on outstanding equity awards as of December 31, 20172023 for each NEO.NEO:
Mr. Olson | | | 128,534 | | | | | | 19.53 | | | 2/27/29 | | | | | | | | | | | | |
| | 104,602 | | | | | | 21.64 | | | 2/22/28 | | | | | | | | | | | | |
| | 97,656 | | | | | | 28.36 | | | 2/24/27 | | | | | | | | | | | | |
| | 140,056 | | | | | | 23.52 | | | 2/8/26 | | | | | | | | | | | | |
| | 2,092,137 | | | | | | 23.90 | | | 2/17/25 | | | | | | | | | | | | |
| | | | | | | | | | | | | | 329,780(3) | | | 6,034,974 | | | 397,801(4) | | | 7,279,758 |
Mr. Mooallem | | | — | | | | | | — | | | — | | | 43,859 | | | 802,620 | | | 44,714(4) | | | 818,266 |
Mr. Langer | | | 51,679 | | | | | | 19.53 | | | 2/27/29 | | | | | | | | | | | | |
| | 42,283 | | | | | | 21.64 | | | 2/22/28 | | | | | | | | | | | | |
| | 39,603 | | | | | | 28.36 | | | 2/24/27 | | | | | | | | | | | | |
| | 56,657 | | | | | | 23.52 | | | 2/8/26 | | | | | | | | | | | | |
| | 127,551 | | | | | | 23.52 | | | 4/20/25 | | | | | | | | | | | | |
| | | | | | | | | | | | | | 67,454(3) | | | 1,234,408 | | | 95,369(4) | | | 1,745,253 |
Mr. Milton | | | — | | | | | | — | | | — | | | 24,894(3) | | | 455,560 | | | 36,585(4) | | | 669,506 |
(1)
| Value based on number of shares or units multiplied by $18.30, which was the price of Common Shares as of the close of business on December 29, 2023. |
(2)
| | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | 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($)(2)
| | EquityThe awards under the column entitled “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1)
Vested” are awards of LTIP Units that remained subject to performance-based vesting conditions and were granted as 2023 LTI Awards, 2022 LTI Awards, and 2021 LTI Awards. These LTIP Units do not have any value unless specified performance criteria are met and specified criteria for converting and/or redeeming the LTIP Units for Common Shares are also met. As of December 31, 2023, these criteria had not been met (as the relevant measurement periods had not yet ended). In accordance with SEC rules, these rewards are reflected in the table in the manner set forth in Footnote (4) below. |
(3)
| The number of shares or units of stock that have not vested are comprised of the following: |
Mr. Olson | | | 7,188 | | | 4,381 | | | 17,700 | | | 64,416 | | | 90,811 | | | 145,284 | | | 329,780 |
Mr. Mooallem | | | — | | | — | | | — | | | — | | | — | | | 43,859 | | | 43,859 |
Mr. Langer | | | 2,540 | | | — | | | — | | | 10,777 | | | 19,050 | | | 35,087 | | | 67,454 |
Mr. Milton | | | 725 | | | — | | | — | | | 2,520 | | | 9,369 | | | 12,280 | | | 24,894 |
(a)
| Equity Incentive Plan Awards: Market or Payout ValueRepresents earned but unvested performance-based LTIP Units granted as part of Unearned Shares,the 2019 long-term incentive program, the measurement period for which ended February 26, 2022, scheduled to vest, for Messrs. Olson, Langer and Milton on February 27, 2024, subject to continued employment through such date. Represents unvested LTIP Units or Other Rights That Have Not Vested ($)(2)
granted as time-based 2019 LTI Awards scheduled to vest for Mr. Olson on February 27, 2023, subject to continued employment through such date. |
Jeffrey S.(b)
| Represents unvested LTIP Units granted in 2020 as annual bonus for 2019 scheduled to vest for Mr. Olson on February 20, 2024, subject to continued employment through such date. |
(c)
| Represents unvested LTIP Units granted as time-based 2020 LTI Awards scheduled to vest for Mr. Olson on February 20, 2024, subject to continued employment through such date. |
(d)
| | | | | | | | | | | | | | | |
| | | | 97,656 (3)
| | $28.36 | | 2/24/27 | | | | | | | | |
| | | | | | | | | | 31,734 (4)
| | $808,900 | | | | |
| | | | | | | | | | | | | | 15,272 (5)
| | $389,288 |
| | 35,014 (6)
| | 105,042 (6)
| | $23.52 | | 2/7/26 | | | | | | | | |
| | | | | | | | | | 15,948 (7)
| | $406,515 | | | | |
| | | | 2,092,137 (8)
| | $23.90 | | 2/17/25 | | | | | — |
| | | |
| | | — |
| | — |
| | | | — |
| | | | | 61,600 (9)
| | $1,570,184 |
Mark J.Represents unvested LTIP Units granted as time-based 2021 LTI Awards scheduled to vest, for Mr. Olson, in equal installments on February 10, 2024 and February 10, 2025 and, for Messrs. Langer | | | | | | | | | | | | | | | | |
| | | | 39,603 (10)
| | $28.36 | | 2/24/27 | | | | | | | | |
| | | | | | | | | | | | | | 10,690 (5)
| | $272,498 |
| | | | | | | | | | 14,158 (11)
| | $360,887 | | | | |
| | 18,885 (12)
| | 37,772 (12)
| | $23.52 | | 2/7/26 | | | | | | | | |
| | | | | | | | | | 7,442 (13)
| | $189,697 | | | | |
| | 63,776 (14)
| | 63,775 (14)
| | $23.52 | | 4/20/25 | | | | | — |
| | | |
| | | | | | | | | | 21,027 (15)
| | $535,978 | | | | |
| | | | | | | | | | | | | | 43,120 (9)
| | $1,099,129 |
Robert Minutoli | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | 12,218 (5)
| | $311,427 |
| | | | | | | | | | 12,341 (11)
| | $314,572 | | | | |
| | | | | | | | | | 9,799 (16)
| | $249,777 | | | | |
| | | | | | | | | | 12,553 (17)
| | $319,976 | | | | |
| | | | | | | | | | | | | | 49,280 (9)
| | $1,256,147 |
Michael Zucker | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | 6,109 (5)
| | $155,713 |
| | | | | | | | | | 10,944 (11)
| | $278,963 | | | | |
| | | | | | | | | | 5,670 (13)
| | $144,528 | | | | |
| | 9,082 (8)
| | 4,541 (8)
| | $24.46 | | 2/17/25 | | | | | | | | |
| | | | | | | | | | | | | | 24640 (9)
| | $628,074 |
| | | | | | | | | | 682 (18)
| | $17,384 | | | | |
Herbert Eilberg | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | 3,054 (5)
| | $77,857 |
| | | | | | | | | | 8,621 (11)
| | $219,749 | | | | |
| | | | | | | | | | 5,670 (13)
| | $144,528 | | | | |
| | | | | | | | | | | | | | 12,320 (9)
| | $314,037 |
| | | | | | | | | | 10,372 (19)
| | $264,382 | | | | and Milton, on February 10, 2024, in each case subject to continued employment through such dates. |
________________
(1) The awards under the column entitled “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” are awards of LTIP Units under the 2017 OPP and 2015 OPP. These LTIP Units do not have any value unless specified performance criteria are met and specified criteria for converting and/or redeeming the LTIP Units for Common Shares are also met. As of December 31, 2017, these criteria had not been met (as the relevant measurement period has not yet ended). If our performance for the three-year measurement period applicable to these LTIP Units continues to be the same as we experienced from the beginning of the applicable three-year measurement period through December 31, 2017, (i) the awards under the 2015 OPP would have been earned at maximum for the portion that is based on our TSR relative to a peer group and no amounts would have been earned for the portion that is based on our absolute TSR and (ii) the awards under the 2017 OPP would have been earned between threshold and target for the portion that is based on our TSR relative to a peer group and no amounts would have been earned for the portion that is based on our absolute TSR. Accordingly, pursuant to SEC rules, (i) the awards under the 2015 OPP are reflected in the table at maximum for the portion that is based on our TSR relative to a peer group and at threshold for the portion that is based on our absolute TSR and (ii) the awards under the 2017 OPP are reflected in the table at target for the portion that is based on our TSR relative to a peer group and at threshold for the portion that is based on our absolute TSR.
(2) Value based on number of shares or units multiplied by $25.49, which was the price of Common Shares as of the close of business on December 29, 2017.
(3) On February 24, 2017, the Company granted Options that vest ratably over four years, fully vesting on February 24, 2021.
(4) On February 24, 2017, the Company granted LTIP Units that vest ratably over four years, fully vesting on February 24, 2021.
(5) On February 24, 2017, the Company granted LTIP Units under the 2017 OPP Plan that vest 50% on February 24, 2020, 25% on February 24, 2021 and 25% on February 24, 2022 subject to achievement of performance criteria.
(6) On February 8, 2016, the Company granted Options that vest ratably over four years, fully vesting on February 8, 2020.
(7) On February 8, 2016, the Company granted restricted Common Shares that vest ratably over four years, fully vesting on February 8, 2020.
(8) On February 17, 2015, the Company granted Options that vest 25% on February 17, 2018, 25% on February 17, 2019, and 50% on February 17, 2020.
(9) On November 6, 2015, the Company granted LTIP Units under the 2015 OPP Plan that vest 50% on November 6, 2018, 25% on November 6, 2019, and 25% on November 6, 2020 subject to achievement of performance criteria.
(10) On February 24, 2017, the Company granted Options that vest ratably over three years, fully vesting on February 24, 2020.
(11) On February 24, 2017, the Company granted restricted Common Shares that vest ratably over three years, fully vesting on February 24, 2020.
(12) On February 8, 2016, the Company granted Options that vest ratably over three years, fully vesting on February 8, 2019.
(13) On February 8, 2016, the Company granted restricted Common Shares that vest ratably over three years, fully vesting on February 8, 2019.
(14) On April 20, 2015, the Company granted Options that vest ratably over four years, fully vesting on April 20, 2019.
(15) On April 20, 2015, the Company granted LTIP Units that vest ratably over four years, fully vesting on April 20, 2019.
(16) On February 9, 2016, the Company granted restricted Common Shares that vest ratably over three years, fully vesting on February 9, 2019.
(17) On February 17, 2015, the Company granted LTIP Units that vest ratably over four years, fully vesting on February 17, 2019.
(18) On February 17, 2015, the Company granted restricted Common Shares that vest ratably over three years, fully vesting on February 17, 2018.
(19) On May 11, 2015, the Company granted restricted Common Shares that vest 25% on May 11, 2016, 25% on May 11, 2017, 23% on May 11, 2018, 20% on May 11, 2019, and 7% on May 11, 2020.
TABLE OF CONTENTS
(e)
| Represents unvested LTIP Units granted as time-based 2022 LTI Awards scheduled to vest, for Mr. Olson, in equal installments on February 11, 2024, February 11, 2025 and February 11, 2026 and, for Messrs. Langer and Milton, in equal installments on February 11, 2024 and February 11, 2025, in each case subject to continued employment through such dates. |
(f)
| Represents unvested LTIP Units granted as time-based 2023 LTI Awards scheduled to vest, for Mr. Olson, in equal installments on February 10, 2024, February 10, 2025, February 10, 2026 and February 10, 2027 and, for Messrs. Mooallem, Langer and Milton, in equal installments on February 10, 2024, February 10, 2025, and February 10, 2026, in each case subject to continued employment through such dates. |
(4)
| Reflects performance-based LTIP Unit awards under our three outstanding long-term incentive programs for which the performance periods had not ended as of December 31, 2023. If our performance for the three-year measurement period applicable to these LTIP Units continued to be the same as we experienced from the beginning of the applicable three-year measurement period through December 31, 2023, we would earn varying amounts under each component of each program. Accordingly, pursuant to SEC rules, the number of units set forth in the table below includes the number of units that would be earned (i) if threshold performance was achieved under each component where no earning or threshold performance is forecast, (ii) if target performance was achieved under each component where earning between threshold and up to target performance is forecast, and (iii) if maximum performance was achieved under each component where earning above target performance is forecast. |
Mr. Olson | | | 134,661 | | | 113,252 | | | 149,888 | | | 397,801 |
Mr. Mooallem | | | — | | | — | | | 44,714 | | | 44,714 |
Mr. Langer | | | 33,299 | | | 26,299 | | | 35,771 | | | 95,369 |
Mr. Milton | | | 11,137 | | | 12,933 | | | 12,515 | | | 36,585 |
(a)
| Represents unearned LTIP Units awarded as performance-based 2021 LTI Awards. These LTIP Units are subject to performance-based vesting based on the achievement of absolute and relative TSR performance criteria over a three-year measurement period ending February 9, 2024. Earned LTIP Units would be subject to vesting based on continued employment, with 50% scheduled to vest on the date performance-based earning was determined and 25% scheduled to vest on each of February 10, 2025 and February 10, 2026, subject to continued employment through such dates. See “2021 Long-Term Incentive Awards” for more information. |
(b)
| Represents unearned LTIP Units awarded as performance-based 2022 LTI Awards. These LTIP Units are subject to performance-based vesting based on the achievement of (i) absolute and relative TSR performance criteria over a three-year measurement period ending February 10, 2025, and (ii) the Company’s FFO as Adjusted growth rate over the three-year measurement period ending December 31, 2024. Earned LTIP Units would be subject to vesting based on continued employment, with 50% scheduled to vest on the date performance-based earning is determined and 25% scheduled to vest on each of February 10, 2026 and February 10, 2027, subject to continued employment through such dates. See “2022 Long-Term Incentive Awards” for more information. |
(c)
| Represents unearned LTIP Units awarded as performance-based 2023 LTI Awards. These LTIP Units are subject to performance-based vesting based on the achievement of (i) absolute and relative TSR performance criteria over a three-year measurement period ending February 9, 2026, and (ii) the Company’s FFO as Adjusted growth rate and relative same property NOI growth rate over the three-year measurement period ending December 31, 2025. Earned LTIP Units would be subject to vesting based on continued employment, with 50% scheduled to vest on the date performance-based earning is determined and 25% scheduled to vest on each of February 9, 2027 and February 9, 2028, subject to continued employment through such dates. See “2023 Long-Term Incentive Awards” for more information. |
Employment Agreements and Potential Payments Upon Termination of Employment or a Corporate Transaction/Change in Control
Each of our NEOs serves at the pleasure of our Board. The disclosure below describes the terms of the current employment agreements, retention agreements and offer letters, as applicable, that we have with our NEOs, including certain compensation that may become payable to Messrs. Olson, Minutoli,Mooallem, Langer and EilbergMilton as a result of a qualifying termination of employment based on their respective employment agreement or offer letter, as applicable.these agreements. In addition, the following disclosure describes the impact of a qualifying termination of employment, a corporate transaction or a change in control under the terms of the equity awards held by each of our NEOs.
Olson Employment Agreement
On August 6, 2019, the Company entered into an employment agreement with Mr. Olson, the Company’s Chairman of the Board and Chief Executive Officer, which replaced the amended and restated employment agreement, dated November 18, 2014, between Mr. Olson and the Company, as further amended, that had an initial term scheduled to expire or automatically renew on September 1, 2019. The initial term for the new employment agreement extends until September 1, 2024, with automatic one-year renewals thereafter unless either party provides the other party at least 90 days’ prior notice of nonrenewal.
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The employment agreement provides that Mr. Olson will be entitled to an annual base salary of not less than $1,000,000 and eligible to receive an annual bonus with a target amount equal to 100% of his annual base salary, payable in cash and/or equity, in the sole discretion of the Company. The Company will have the discretion to establish the structure and performance targets for Mr. Olson’s annual bonus and determine the amount earned each year. If all or part of the bonus is paid in equity awards, such awards shall be full value equity awards (for example, restricted Common Shares or LTIP Units) that vest ratably over no more than four years from the date of grant. Mr. Olson also will be entitled to receive annual equity grants for each year under the Company’s long-term incentive compensation plans, beginning with 2020, with a value at target performance levels of no less than $3,200,000. The Company also agrees to provide Mr. Olson with a car and driver for use in connection with his performance of duties for the Company.
The employment agreement generally provides Mr. Olson with the same level of termination payments and benefits as existed under Mr. Olson’s prior employment agreement with the Company.
On any termination of Mr. Olson’s employment, Mr. Olson will be entitled to payment of any earned, but unpaid, base salary and annual bonus and accrued and unpaid vacation pay, and any compensation and benefits due to Mr. Olson under the terms of any other plan or program. On a termination ofIf Mr. Olson’s employment is terminated by UEthe Company without cause or by Mr. Olson for good reason (in each case, as defined in the employment agreement), subject to Mr. Olson’s execution of a release, Mr. Olson will be entitled to (1) a lump sum payment of the Severance Amount, (2) a Pro Rata Bonus paid at the time bonuses are otherwise paid, (3) the Medical Benefits, and (4) vesting of all outstanding unvested equity awards. Stock options held by Mr. Olson will remain exercisable for 60 days following termination (or, if earlier, for the remainder of the term of the option).awards that are subject to vesting based solely on continued employment. For purposes of Mr. Olson’s employment agreement:
The “Severance“Severance Amount” equals two times the sum of Mr. Olson’s base salary and target annual bonus, unless the termination is within three months prior to or in connection with (and in each case subject to the consummation of), or within two years following, a change in control of UEthe Company (a “Qualifying CIC Termination”), in which case it will equalequals three times the sum of Mr. Olson’s base salary and target annual bonus.
The “Pro“Pro Rata Bonus” equals (i) if such termination is a pro rata portionQualifying CIC Termination, the greater of Mr. Olson’s target annual bonus foror the annual bonus earned in the year of a termination based on actual performance with respect to the Company’s performance goals and deeming any individual performance goals to be achieved at the target level, or (ii) if such termination is not a Qualifying CIC Termination, the annual bonus earned in the year of termination based on actual performance or,with respect to the Company’s performance goals and deeming any individual performance goals to be achieved at the target level, in each case, prorated based on a Qualifying CIC Termination, means the greaterportion of the year that amount and Mr. Olson’s target annual bonus.had elapsed through the date of termination.
The “Medical“Medical Benefits” require UEthe Company to provide Mr. Olson medical insurance coverage substantially identical to that provided to other senior executives for three years subject to applicable law.following termination.
On a termination ofIf Mr. Olson’s employment is terminated due to death or disability, and, in the case of termination of employment due to disability, subject to Mr. Olson’s execution of a release, Mr. Olson will be entitled to vesting of the Initial Olson Option Awardunvested portion of the option award granted on February 17, 2015 and it will remain exercisable for one year following termination (or, if earlier, for the remainder of the term).
Mr. Olson is subject to non-competition and non-solicitation of employees covenants through the one-year anniversary of the date Mr. Olson’s employment terminates for any reason.
In the event that payments or benefits owed to Mr. Olson constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and would be subject to the excise tax imposed by Section 4999 of the Code, such payments or benefits will be reduced to an amount that does not result in the imposition of such excise tax, but only if such reduction results in Mr. Olson receiving a higher net-after-tax amount than he would have absent such reduction.
“Cause” generally means Mr. Olson’s (1) conviction of, or plea of guilty or nolo contendere to, a felony; (2) willful and continued failure to use reasonable best efforts to substantially perform his duties (other than such failure resulting from Mr. Olson’s incapacity due to physical or mental illness or after Mr. Olson’s notice
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of termination for good reason) that Mr. Olson fails to remedy to the reasonable satisfaction of UEthe Company within 30 days after UE’sthe Company’s written notice of such failure; or (3) willful misconduct that is or may reasonably be expected to have a material adverse effect on the reputation or interests of UE.the Company.
Mr. Olson may terminate his employment for “good reason” within 90 days after he has actual knowledge of the occurrence, without his written consent, of one of the following events that has not been cured within 30 days after Mr. Olson givesOlson’s written notice of such event to UE (provided that such notice is given to UEthe Company within 30 days after Mr. Olson becomes aware of the event): (1) a material reduction in base salary, aggregate annual cash compensation opportunity or the aggregate level of employee benefits; (2) a material diminution in Mr. Olson’s position, authority, duties or responsibilities; (3) a relocation of Mr. Olson’s location of employment to a location outside of Manhattan or outside ofmore than 30 miles outside of Paramus, New Jersey; or (4) UE’sthe Company’s material breach of any provision of the employment agreement, including (a) Mr. Olson not holding the title of Chairman and Chief Executive Officer, (b) delivery by UEthe Company of a notice of non-renewal of the employment agreement, (c) UE’sa failure of a successor to the Company to assume the employment agreement, (d) failure of the Company to appoint or elect Mr. Olson to the Board or removal of Mr. Olson from the Board (d) a failure of a successor to UE to assume the employment agreement and (e) a material change in Mr. Olson’s reporting relationship inconsistent with the terms of histhe employment agreement.
Minutoli Offer LetterMooallem Employment Agreement
UnderOn October 18, 2022, the Letter Agreement, ifCompany entered into an employment agreement with Jeffrey S. Mooallem in connection with his appointment as Executive Vice President and Chief Operating Officer. The employment agreement became effective January 9, 2023 and has a term of four years and one day from the date thereof.
The employment agreement provides for an annual base salary of not less than $625,000 and a target annual cash bonus of 100% of annual base salary. Mr. Minutoli is terminatedMooallem also will be entitled to receive annual equity grants for each year, beginning with 2023, with a value at target performance levels equal to $1,250,000, of which (x) 50% will be time-based LTIP Units subject to annual vesting (ratably on each of the first three anniversaries of the grant date) based solely on continued employment with the Company and (y) 50% will be performance LTIP Units subject to a three-year measurement period, 50% of which shall vest on the third anniversary of the grant date, 25% of which shall vest on the fourth anniversary of the grant date and 25% of which shall vest on the fifth anniversary of the grant date, in each case, based on such criteria as may be determined by the Company in its sole discretion, which may include, without limitation, achievement of one or more performance-based hurdles based on the Company’s operating performance or other metrics selected by the Company.
On any termination of Mr. Mooallem’s employment, Mr. Mooallem will be entitled to payment of any earned, but unpaid, base salary and annual bonus and accrued and unpaid vacation pay, and any compensation and benefits due to Mr. Mooallem under the terms of any other plan or program. On a termination of Mr. Mooallem’s employment by the Company without cause or resignsby Mr. Mooallem for good reason, subject to Mr. Mooallem’s execution of a release, Mr. Mooallem will be entitled to (1) a lump sum payment of the Severance Amount, (2) a Pro Rata Bonus paid at the time bonuses are otherwise paid, (3) the Medical Benefits and (4) vesting of all outstanding unvested equity awards that are subject to vesting based solely on continued employment. For purposes of Mr. Mooallem’s employment agreement:
“Severance Amount” equals 1.5 times Mr. Mooallem’s base salary and target annual bonus unless the termination is within three months prior to, in connection with or within two years following a change in control heof the Company (a “Qualifying CIC Termination”), in which case it will receive an amount equal to (x) 2.5 times the sum of (i) his then-currentMr. Mooallem’s base salary plus (ii) his then-currentand target annual bonus, plus (y)bonus.
“Pro Rata Bonus” equals a pro-ratedpro rata portion of Mr. Mooallem’s annual bonus paid for the year of termination. termination based on actual performance or, on a Qualifying CIC Termination, means the greater of that amount and Mr. Weilminster’s target annual bonus.
“Medical Benefits” require the Company to provide Mr. Mooallem medical insurance coverage substantially identical to that provided to other senior executives for one year following termination or, on a Qualifying CIC Termination, for two years following termination, subject to applicable law.
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If Mr. Minutoli retiresMooallem’s employment is terminated upon or after providing 90 days advance notice and actively assists the Company in transitioning his duties, then (a) heexpiration of the employment period, Mr. Mooallem will be paidentitled, subject to Mr. Mooallem’s execution of a release, to vesting of all outstanding unvested equity awards that are subject to vesting based solely on continued employment and a pro-rated annual bonus for the year of termination.
Mr. Mooallem is subject to non-competition and non-solicitation of employees covenants through the one-year anniversary of the date Mr. Mooallem’s employment terminates for any reason.
In the event that payments or benefits owed to Mr. Mooallem constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, such payments or benefits will be reduced to an amount that does not result in the imposition of such excise tax, but only if such reduction results in Mr. Mooallem receiving a higher net-after-tax amount than he would have absent such reduction.
“Cause” generally means Mr. Mooallem’s (1) conviction of, or plea of guilty or nolo contendere to, a felony; (2) willful and continued failure to use reasonable best efforts to substantially perform his duties (other than such failure resulting from Mr. Mooallem’s incapacity due to physical or mental illness or after Mr. Mooallem’s notice of termination for good reason) that Mr. Mooallem’s fails to remedy to the reasonable satisfaction of the Company within 30 days after the Company’s written notice of such failure; (3) willful misconduct that is or may reasonably be expected to have a material adverse effect on the reputation or interests of the Company or (4) failure to maintain his primary residence in the New York City metropolitan area.
Mr. Mooallem may terminate his employment for “good reason” within 90 days after he has actual knowledge of the occurrence, without his written consent, of one of the following events that has not been cured within 30 days after Mr. Mooallem gives written notice of such event to the Company (provided that such notice is given to the Company within 30 days after Mr. Mooallem becomes aware of the event): (1)(A) a material reduction in base salary or annual bonus opportunity or the aggregate level of employee benefits made available to Mr. Mooallem under the agreement or (B) a material diminution in Mr. Mooallem’s position, title, authority, duties or responsibilities; (2) a relocation of Mr. Mooallem’s location of employment to a location outside of Manhattan, New York or, for the Paramus, New Jersey office, a location more than 30 miles outside Paramus, New Jersey; or (3) the Company’s material breach of any provision of the employment agreement which he retireswill be deemed to include, but shall not be limited to, (a) the failure of a successor to the Company to assume this Agreement in accordance with Section 12(a), and (b) all service-based conditionsa material change in the Executive’s reporting relationship such that Executive no longer reports to the Chief Executive Officer of the Company.
Langer Retention Agreement
October 18, 2019, the Company entered into a retention agreement with Mr. Langer, the Company’s Executive Vice President and Chief Financial Officer, which replaces in its entirety the employment agreement, dated February 4, 2015, between Mr. Langer and the Company, that was in a one-year renewal period scheduled to expire or automatically renew on his unvested equity awards will vest (butJuly 1, 2020. The retention agreement has no fixed term.
The retention agreement sets forth Mr. Langer’s then current title, duties, compensation and additional benefits, and provides that these may be modified by the Company at any awards that include corporate performance-based vesting conditions, will remaintime in its sole and absolute discretion, subject to such conditions).
Langer Employment AgreementMr. Langer’s right to terminate the retention agreement for good reason, as described below.
On any termination of Mr. Langer’s employment, Mr. Langer will be entitled to payment of any earned, but unpaid, base salary and annual bonus and accrued and unpaid vacation pay, and any compensation and benefits due to Mr. Langer under the terms of any other plan or program. On a termination ofIf Mr. Langer’s employment is terminated by UEthe Company without cause or by Mr. Langer for good reason (in each case, as defined in the retention agreement), subject to Mr. Langer’s execution of a release, Mr. Langer will be entitled to (1) a lump sum payment of the Severance Amount, (2) a Pro Rata Bonus paid at the time bonuses are otherwise paid, (3) the Medical Benefits, and (4) vesting of all outstanding unvested equity awards. Stock options held by Mr. Langer will remain exercisable for 60 days following termination (or, if earlier, for the remainder of the term of the option).awards that are subject to vesting based solely on continued employment. For purposes of Mr. Langer’s employmentretention agreement:
The “Severance“Severance Amount” equals 1.5 times the sum of Mr. Langer’s base salary and target annual short-term incentive bonus, unless the termination is within three months prior to, in connection with or within two years following a change in control of UEthe Company (a “Qualifying CIC Termination”), in which case it equals 2.5 times2.5x the sum of Mr. Langer’s base salary and target annual short-term incentive bonus.
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“Pro Rata Bonus” equals (i) on a pro rata portionQualifying CIC Termination, the greater of Mr. Langer’s target annual short-term incentive bonus or the annual bonus forearned in the year of a termination based on actual performance, or (ii) if such termination is not a Qualifying CIC Termination, the annual bonus earned in the year of termination based on actual performance or,in each case prorated based on a Qualifying CIC Termination, the greaterportion of the year that amount and Mr. Langer’s target annual bonus.had elapsed through the date of termination.
The “Medical“Medical Benefits” require UEthe Company to provide Mr. Langer medical insurance coverage substantially identical to that provided to other senior executives for one year following termination or,(i) on a Qualifying CIC Termination, for up to two years following termination, or (ii) if such termination is not a Qualifying CIC Termination, one year, in each case subject to applicable law.
The Initial Langer Option Award was granted to Mr. Langer on April 20, 2015. On a termination of Mr. Langer’s employment due to death or disability, and, in the case of termination of employment due to disability, subject to Mr. Langer’s execution of a release, Mr. Langer will be entitled to vesting of the Initial Langer Option Awardunvested portion of the option award granted on April 20, 2015 and Initial Langer Restricted
LTIP Units, and the Initial Langer Option Awardit will remain exercisable for one year following termination (or, if earlier, for the remainder of the term).
Mr. Langer is subject to non-competition and non-solicitation of employees covenants through the one-year anniversary of the date Mr. Langer’s employment terminates for any reason.
In the event that payments or benefits owed to Mr. Langer constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, such payments or benefits will be reduced to an amount that does not result in the imposition of such excise tax, but only if such reduction results in Mr. Langer receiving a higher net-after-tax amount than he would have absent such reduction.
“Cause” generally means Mr. Langer’s (1) conviction of, or plea of guilty or nolo contendere to, a felony; (2) willful and continued failure to use reasonable best efforts to substantially perform his duties (other than such failure resulting from Mr. Langer’s incapacity due to physical or mental illness or after Mr. Langer’s notice of termination for good reason) that Mr. Langer fails to remedy to the reasonable satisfaction of UEthe Company within 30 days after UE’sthe Company’s written notice of such failure; or (3) willful misconduct that is or may reasonably be expected to have a material adverse effect on the reputation or interests of UE.the Company.
Mr. Langer may terminate his employment for “good reason” within 90 days after he has actual knowledge of the occurrence, without his written consent, of one of the following events that has not been cured within 30 days after Mr. Langer’s written notice of such event (provided that such notice is given to UEthe Company within 30 days after Mr. Langer becomes aware of the event): (1) a material reduction in base salary, annual bonus opportunity or the aggregate level of employee benefits; (2) a material diminution in Mr. Langer’s position, title, authority, duties or responsibilities; (3) a relocation of Mr. Langer’s location of employment to a location outside of Manhattan or more than 30 miles outside of Paramus, New Jersey; or (4) UE’sthe Company’s material breach of any provision of the employmentretention agreement, including (a) Mr. Langer not holding the title of Chief Financial Officer, (b) delivery by UE of a notice of non-renewal of the Agreement, (c) a failure of a successor to UEthe Company to assume thethis Agreement and (d)(b) a material change in the Mr. Langer’s reporting relationship.relationship such that Mr. Langer no longer reports to the Chief Executive Officer of the Company.
EilbergMilton Offer Letter
On January 4, 2016, Mr. Robert C. Milton III was appointed to the position of Executive Vice President, General Counsel and Secretary of the Company pursuant to an offer letter entered into on December 11, 2015. Mr. Milton’s offer letter provides for an annualized salary of $350,000 and a target annual bonus of $350,000 for the year ended December 31, 2016 paid 50% in cash and 50% in shares of restricted stock that vest ratably over three years.
On a termination of Mr. Eilberg’sMilton’s employment by UE without cause, or by Mr. Eilberg for good reason, if the Initial Eilberg Equity Grant has not been fully vested, the unvested portionCompany solely in connection with a change of the Initial Eilberg Equity Grant shall continue to vest according to the schedule set forth in the offer letter, notwithstanding the fact that Mr. Eilberg will no longer be an employeecontrol of the Company, at such time.
On a terminationMr. Milton will receive severance of
Mr. Eilberg’s employment by UE without cause, or by Mr. Eilberg for good reason, and if such termination occurs within 12 months after a change in control of UE,two times the
Company shall pay or cause to be paid to Mr. Eilberg a cash severance payment in an amount equal to (i) one yearsum of his
then-currentcurrent base
salary; plus (ii)salary and targeted bonus. However, Mr. Milton’s severance is governed by the
amount of his target bonus for that year. For these purposes, “cause” means (a) conviction of, or plea of guilty or nolo contendre to, a felony pertaining or otherwise relating to his employment with the Company or an affiliate; or (b) willful misconduct thatExecutive Severance and Change in Control Plan so long as it is
materially economically injurious to the Company or any of its affiliates, in
each case as determinedeffect (see “Executive Severance and Change in
the Company’s sole discretion; and “good reason” means (a) the assignment to the employee of duties materially and adversely inconsistent with the employee’s status prior to the change in control or a material and adverse alteration in the nature of the employee’s duties, responsibilities or authority; (b) a reduction in the employee’s base salary; or (c) a relocation of the employee’s own office location to a location more than 30 miles from its location prior to the change in control.Control Plan” beginning on page 53).TABLE OF CONTENTS
Equity Awards
Pursuant to the terms of the applicable award agreements entered into with our NEOs relating to restricted LTIP Units and Common Shares that are subject to vesting based solely on continued employment, all outstanding unvested LTIP Units and Common Shares held by each of our NEOs will fully vest in the event such NEO’s employment is terminated by us without cause or by the NEO for good reason within 24 months of a change in control or as a result of the NEO’s death. Pursuant to the terms of the applicable award agreements entered into with our NEOs relating to options to purchase Common Shares, all outstanding options held by each of our NEOs will fully vest in the event such NEO’s employment is terminated by us without cause or by the NEO for good reason within 24 months of a change in control or as a result of the NEO’s retirement on or after attainment of age 65, death or disability and the options will continue to be exercisable following termination for up to one year in the event of a termination due to qualifying retirement, death or disability and up to 60 days in the event of any other termination, other than a termination for cause (but in no event beyond the expiration of the term of the option).
With respect to the performance-based LTIP Units that we granted to our NEOs under as part of the 2015 OPP2021 LTI Awards, 2022 LTI Awards and the 2017 OPP,2023 LTI Awards, pursuant to the terms of the applicable award agreements, in the event of a change in control prior to the end of the applicable three-year measurement
period, we will determine the award earned by the NEOs based on our performance through the date of the change in control measured against pro-rated hurdles, provided that, in the event the change in control occurs within the first year of the three-year measurement period, the amount earned will be pro-rated based upon the portion of the three-year measurement period that elapsed from the first day of such period through the date of the change in control.hurdles. The LTIP Units earned will remain subject to vesting based on continued employment in the same manner as would have applied in the absence of a change in control (i.e., one-half of the LTIP Units that are earned will vest on the date the Compensation Committee determined the amount earned and the remainder will vest in equal installments on the fourth and fifth anniversaries of the beginning of the three-year measurement period), except that all of an NEO’s LTIP Units that are earned will vest if the NEO’s employment is terminated by the Company without cause or by the NEO for good reason within 18 months following the change in control or if the LTIP Units that are earned do not remain outstanding following the change in control. In addition, any LTIP Units earned prior to a change in control will fully vest if the NEO’s employment is terminated by the Company without cause or by the NEO for good reason within 18 months following the change in control.
In the event of a qualified termination of aan NEO prior to the end of the three-year measurement period for the 2015 OPPperformance-based 2021 LTI Awards, the performance-based 2022 LTI Awards or the 2017 OPP,performance-based 2023 LTI Awards, the NEO will be entitled to retain his LTIP Units subject to the same performance-based vesting conditions as applied prior to such termination; provided that the number of LTIP Units earned will be prorated based upon the portion of the three-year measurement period that elapsed from the first day of such period through the date of the qualified termination. Any LTIP Units subsequently earned will be fully vested, but, other than in the case of a termination upon death or disability, the NEO will not have the right to transfer the LTIP Units until the dates on which they would have vested if the qualified termination had not occurred. In the event of a qualified termination of aan NEO after the end of the three-year measurement period, any LTIP Units earned by such NEO will fully vest; provided that, other than in the case of a termination upon death or disability, the NEO will not have the right to transfer the LTIP Units until the dates on which they would have vested if the qualified termination had not occurred. The term qualified termination is defined in the award agreements for the 2015 OPPperformance-based 2021 LTI Awards, the performance-based 2022 LTI Awards and the 2017 OPPperformance-based 2023 LTI Awards to mean the termination of employment with us as a result of athe NEO’s death, disability or, after the first anniversary of the beginning of the three-year measurement period, a termination by us without cause or such NEO’s resignation for good reason.
In each case, the terms cause, good reason and change in control are specifically defined in the applicable award agreements.
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The following table sets forth potential payments and benefits that would have been provided to our NEOs upon the occurrence of a change in control or certain termination triggering events, assuming such change in control or terminating event occurred on December 31, 2017.2023.
Termination by Urban Edge Properties Without Cause or by the Executive for Good Reason |
Mr. Olson | | | 2x | | | 6,953,788 | | | 163,810 | | | 6,034,974 | | | 13,152,572 |
Mr. Mooallem | | | 1.5x | | | 2,924,219 | | | 30,536 | | | 802,620 | | | 3,757,375 |
Mr. Langer | | | 1.5x | | | 2,932,341 | | | 42,353 | | | 1,234,409 | | | 4,209,103 |
Mr. Milton | | | 1.0x | | | 866,000 | | | 42,353 | | | 455,561 | | | 1,363,914 |
Death | | | | | | | | | | | | | | | |
Mr. Olson | | | n/a | | | — | | | — | | | 6,034,974 | | | 6,034,974 |
Mr. Mooallem | | | n/a | | | — | | | — | | | 802,620 | | | 802,620 |
Mr. Langer | | | n/a | | | — | | | — | | | 1,234,409 | | | 1,234,409 |
Mr. Milton | | | n/a | | | — | | | — | | | 455,561 | | | 455,561 |
Change in Control without Termination(2) |
Mr. Olson | | | n/a | | | — | | | — | | | 3,190,467 | | | 3,190,467 |
Mr. Mooallem | | | n/a | | | — | | | — | | | 388,811 | | | 388,811 |
Mr. Langer | | | n/a | | | — | | | — | | | 764,221 | | | 764,221 |
Mr. Milton | | | n/a | | | — | | | — | | | 268,311 | | | 268,311 |
Termination Following Change in Control(2) |
Mr. Olson | | | 3x | | | 9,263,788 | | | 163,810 | | | 12,284,367 | | | 21,711,965 |
Mr. Mooallem | | | 2.5x | | | 4,174,219 | | | 61,071 | | | 1,580,243 | | | 5,815,533 |
Mr. Langer | | | 2.5x | | | 4,176,341 | | | 84,706 | | | 2,716,369 | | | 6,977,416 |
Mr. Milton | | | 1.5x | | | 1,299,000 | | | 63,530 | | | 978,916 | | | 2,341,446 |
|
| | | | | | | | | | | | | | | | | | |
| Name | | Salary and Cash Bonus (Multiple) | | Salary and Cash Bonus | | Health Benefits | | Vesting of Equity Awards (1) | | Total |
| Termination by Urban Edge Properties Without Cause or by the Executive for Good Reason |
| Jeffrey S. Olson | | 2x | | $ | 5,601,268 |
| | $ | 90,129 |
| | $ | 5,834,251 |
| | $ | 11,525,648 |
|
| Mark J. Langer | | 1.5x | | $ | 2,378,502 |
| | $ | 27,883 |
| | $ | 2,046,394 |
| | $ | 4,452,779 |
|
| Robert Minutoli | | n/a | | $ | — |
| | $ | — |
| | $ | 868,325 |
| | $ | 868,325 |
|
| Michael Zucker | | n/a | | $ | — |
| | $ | — |
| | $ | 434,163 |
| | $ | 434,163 |
|
| Herbert Eilberg | | n/a | | $ | — |
| | $ | — |
| | $ | 217,081 |
| | $ | 217,081 |
|
Death or Disability (2) |
| Jeffrey S. Olson | | n/a | | $ | — |
| | $ | — |
| | $ | 5,991,066 |
| | $ | 5,991,066 |
|
| Mark J. Langer | | n/a | | $ | — |
| | $ | — |
| | $ | 2,156,163 |
| | $ | 2,156,163 |
|
| Robert Minutoli | | n/a | | $ | — |
| | $ | — |
| | $ | 1,878,100 |
| | $ | 1,878,100 |
|
| Michael Zucker | | n/a | | $ | — |
| | $ | — |
| | $ | 942,440 |
| | $ | 942,440 |
|
| Herbert Eilberg | | n/a | | $ | — |
| | $ | — |
| | $ | 777,481 |
| | $ | 777,481 |
|
Change in Control without Termination (3) |
| Jeffrey S. Olson | | n/a | | $ | — |
| | $ | — |
| | $ | 834,463 |
| | $ | 834,463 |
|
| Mark J. Langer | | n/a | | $ | — |
| | $ | — |
| | $ | 584,124 |
| | $ | 584,124 |
|
| Robert Minutoli | | n/a | | $ | — |
| | $ | — |
| | $ | 667,570 |
| | $ | 667,570 |
|
| Michael Zucker | | n/a | | $ | — |
| | $ | — |
| | $ | 333,785 |
| | $ | 333,785 |
|
| Herbert Eilberg | | n/a | | $ | — |
| | $ | — |
| | $ | 166,892 |
| | $ | 166,892 |
|
Termination Following Change in Control (3) |
| Jeffrey S. Olson | | 3x | | $ | 7,601,268 |
| | $ | 90,129 |
| | $ | 6,417,771 |
| | $ | 14,109,168 |
|
| Mark J. Langer | | 2.5x | | $ | 3,428,502 |
| | $ | 55,766 |
| | $ | 2,454,857 |
| | $ | 5,939,125 |
|
| Robert Minutoli | | 2.5x | | $ | 3,184,384 |
| | $ | — |
| | $ | 2,219,464 |
| | $ | 5,403,848 |
|
| Michael Zucker | | n/a | | $ | — |
| | $ | — |
| | $ | 1,113,122 |
| | $ | 1,113,122 |
|
| Herbert Eilberg | | 1x | | $ | 752,500 |
| | $ | — |
| | $ | 698,063 |
| | $ | 1,450,563 |
|
________________(1) (1)
| LTIP Units and Common Shares that would have vested are valued based on the closing price of the Common Shares on the last business day of 2023, December 29, 2023, which was of $18.30. The value of the options to purchase Common Shares is calculated as the difference between the closing price of the Common Shares on December 29, 2023 and the exercise price of the options. No amounts were included for the performance-based 2021 LTI Awards, the performance-based 2022 LTI Awards, or the performance-based 2023 LTI Awards under “Termination by Urban Edge Properties Without Cause or by the Executive for Good Reason” or “Qualifying Death or Disability” as the earning of any such awards would remain subject to the achievement of the performance-based vesting hurdles through the end of the applicable three-year measurement period. Amounts under “Change in Control” for the performance-based 2021 LTI Awards, the performance-based 2022 LTI Awards or the performance-based 2023 LTI Awards reflect the amount that would vest upon the change in control (i.e., 50% of the amount earned based on achievement of the performance-based vesting conditions) and does not include the portion of the award that would remain subject to vesting based on continued employment. |
(2)
| In the event that any payments and benefits to be paid or provided to Messrs. Olson, Mooallem or Langer would be subject to “parachute payment” excise taxes under the Internal Revenue Code of 1986, as amended, such NEO’s payments and benefits will be reduced to the extent necessary to avoid such excise taxes, but only if such a reduction of pay or benefits would result in a greater after-tax benefit to such NEO. |
Executive Severance and Change in Control Plan On February 11, 2022, the Compensation Committee approved and adopted an Executive Severance and Change in Control Plan (the “Plan”) for the benefit of certain of the Company’s executive officers and other eligible employees that the Compensation Committee may designate from time to time (the “Participants”). Mr. Milton is a participant in the Plan (Messrs. Olson, Mooallem and Langer have severance benefits governed by the terms of their existing agreements with the Company).
Under the Plan, in the event that a Participant’s employment is terminated by the Company for any reason other than for cause or death or disability, such Participant shall be entitled to (i) a lump sum payment equal to the product of (A) a severance multiple of either 1.0 (or such lesser multiple as may be agreed for non-executive officers), as specified in the letter agreement provided to each Participant upon qualification for the Plan, and (B) the sum of the Participant’s annual base salary and most recent target annual cash performance bonus, (ii) continuing coverage under the Company’s group medical, dental and vision plans as would have vested are valuedapplied if the Participant remained employed for a number of years equal to the applicable severance multiple (at such cost to the Participant as would have applied in the absence of such termination), and (iii) full acceleration of time-base based on the closing price of the Common Shares on the last business day of 2017, December 29, 2017, which was of $25.49. The value of the options to purchase Common Shares is calculated as the difference between the closing price of the Common Shares on December 29, 2017 and the exercise price of the options. The amounts included for the 2015 OPP and the 2017 OPPequity awards under “Termination by Urban Edge Properties Without Cause orheld by the Executive for Good Reason” or “Qualifying Death or Disability” representParticipant and any accelerated
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vesting of equity awards with performance-based vesting to occur in accordance with the amounts that would be earned if performance through the endterms of the applicable three-year measurement period continued ataward agreement. In addition, if such termination occurs within three months prior to, or within 12 months following, a Change in Control (as defined in the same ratePlan), the relevant severance multiple will be 1.5 (or such lesser multiple as we experienced frommay be agreed for non-executive officers), as specified in the beginning of applicable three-year measurement period through December 31, 2017. Amounts under “Change in Control”letter agreement provided to each Participant upon qualification for the 2015 OPP and the 2017 OPP awards reflect the amount that would vest upon the change in control (i.e., 50% of the amount earned based on achievement of the performance-based vesting conditions) and does not include the portion of the award that would remain subject to vesting based on continued employment.Plan.
(2) In the event of a termination of employment due to disability, the NEOs would not have received accelerated vesting of their restricted LTIP Units or Common Shares that are subject to vesting based solely on continued employment and, as a result, the value of equity awards set forth above would have been reduced by the following amounts: Mr. Olson - $1,215,414, Mr. Langer - $1,086,562, Mr. Minutoli - $884,325, Mr. Zucker - $440,875 and Mr. Eilberg - $364,278.
(3)In the event that a Participant’s employment is terminated on account of his or her death or disability, such Participant (or the Participant’s estate or beneficiaries) shall be entitled to, among other things, full acceleration of time-based equity awards held by the Participant and any paymentsequity awards with performance-based vesting to remain outstanding and benefits toearned in accordance with the terms based on performance but without further vesting based on service. Additionally, in the event that a Participant’s employment is terminated on account of his or her disability, such Participant shall be paid or provided to Messrs. Olson or Langer would be subject to “parachute payment” excise taxes under the Internal Revenue Code of 1986, as amended, such NEO’s payments and benefits will be reduced to the extent necessary to avoid such excise taxes, but only if such a reduction of pay or benefits would result in a greater after-tax benefit to such NEO.
In the case of qualifying retirement, Mr. Minutoli would have been entitled to receive any compensation and/or benefits as may be due or payable to such Participant in accordance with the terms and provisions of any employee benefit plans or programs of Urban Edge.
As a prorated bonus of $684,384 and acceleration of equity awards with a value of $884,325 calculatedcondition to participation in the same manner asPlan, each Participant must enter into a letter agreement with the Company in the table above. Noneform attached as an exhibit to the Plan, which, among other things, contains restrictive covenants in favor of our other NEOs was eligiblethe Company, including confidentiality, intellectual property, non-disparagement, non-competition and non-solicitation covenants. Participants must generally also execute, deliver and not revoke a general release of claims in favor of the Company in order to receive benefits.
The foregoing is a summary of the Plan and should be read in conjunction with the full text of the Plan, which is attached as Exhibit 10.12 to the Company’s annual report on Form 10-K for qualifying retirement as ofthe year ended December 31, 2017.2023.
Employee Retirement Plan
The Company does not maintain a retirement plan other than a 401(k) plan.
Deferred Compensation
The Company does not currently sponsor or operate any deferred compensation programs that are generally offered to all eligible employees or to any of the NEOs.
Pay Ratio Disclosure
Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (the "Dodd-Frank Act"), the SEC adopted a rule requiring annual disclosure of the ratio of the median employee'semployee’s annual total compensation to the annual total compensation of the principal executive officer. Our principal executive officer ("PEO"). The PEO of our Company is Mr. Olson.Olson, our chief executive officer.
We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner that is intended to be consistent with the requirements of applicable SEC rules. For 2023, our last completed fiscal year:
For fiscal year 2017, Mr. Olson hadthe annual total compensation of approximately $4.4 million as reflected in the Summary Compensation Table. We estimate that theemployee who represents our median annual compensation for all Company employeescompensated employee (other than our chief executive officer) based on W-2 gross pay excludingwas $116,694; and
the annual total compensation of Mr. Olson, as reported in the Summary Compensation Table included above, was $91,150 for 2017. $7,645,622.
As a result, the ratio of Mr. Olson's 2017Olson’s compensation was approximately 48 timesto that of our median compensated employee was 66:1.
Determining the median annual compensation for all employees. AsMedian Employee
We used our employee population data as of December 31, 2017,2023 as the reference date for identifying our median employee. As of such date, our employee population consisted of 109 full-time employees.
To identify the median employee from our employee population, we had 120 employees.selected base salary and bonus, as reflected in our payroll records as reported to the Internal Revenue Service on Form W-2 for 2023, as the
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most appropriate measure of compensation, which was consistently applied to all of our employees included in the calculation. In identifying the median employee, we annualized the compensation of all full-time employees who were new hires in 2023 and on leave of absence in 2023.
Pay Versus Performance Disclosure
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing information about the relationship between executive compensation actually paid to our PEO and the other NEOs (as calculated in accordance with Item 402(v) of Regulation S-K) and certain financial performance measures. For additional information on our compensation programs and philosophy and how we design our compensation programs to align pay with performance, see the section titled “Compensation Discussion and Analysis” on page 31. 2023 | | | 7,645,622 | | | 12,243,167 | | | 2,380,189 | | | 2,949,313 | | | 112.34 | | | 98.30 | | | 259.9 | | | 1.25 |
2022 | | | 6,616,501 | | | 1,438,290 | | | 2,255,103 | | | 1,022,607 | | | 83.11 | | | 89.16 | | | 47.3 | | | 1.21 |
2021 | | | 6,830,104 | | | 8,566,102 | | | 2,010,966 | | | 3,110,209 | | | 107.66 | | | 98.78 | | | 107.8 | | | 1.09 |
2020 | | | 6,149,061 | | | 3,762,837 | | | 2,136,036 | | | 583,667 | | | 70.98 | | | 68.63 | | | 97.8 | | | 0.88 |
(1)
| Mr. Olson was our principal executive officer for all years shown. The amounts reported represent the “compensation actually paid” to our PEO, computed in accordance with Item 402(v) of Regulation S-K, but do not reflect the actual amount of compensation earned by or paid to our PEO in the applicable year. In accordance with Item 402(v) of Regulation S-K, below are the adjustments made to the amount reported for our PEO in the “Total” column of the Summary Compensation Table for each year to arrive at compensation actually paid to our principal executive officer during each year shown: |
Deduction for Amounts Reported under the “Stock Awards” Column in the SCT | | | $(4,189,334) | | | $(3,939,010) | | | $(3,699,999) | | | $(4,005,254) | |
Increase for Fair Value of Awards Granted during year that Remain Unvested as of Year end | | | 5,325,609 | | | 2,641,983 | | | 4,507,329 | | | 2,920,790 | |
Increase/deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | | | 3,015,205 | | | (4,145,858) | | | 423,532 | | | (998,121) | |
Increase/deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | | | 194,717 | | | 36,635 | | | 326,533 | | | (451,835) | |
Increase based on Dividends or other Earnings Paid During Year prior to Vesting Date of Award | | | 251,348 | | | 228,039 | | | 178,603 | | | 148,196 | |
Total Adjustments | | | $4,597,545 | | | $(5,178,211) | | | $1,735,998 | | | $(2,386,224) | |
(2)
| Our other NEOs are Messrs. Langer, Mooallem and Milton for 2023. For 2022, 2021 and 2022, our NEOs are Messrs. Langer, Weilminster, Eilberg and Milton, and for 2020 only, also including Mr. Briggs. The amounts reported represent the average “compensation actually paid” to the NEOs other than our PEO as a group, computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual average amount of compensation earned by or paid to such NEOs as a group in the applicable year. In accordance with Item 402(v) of Regulation S-K, the following adjustments were made to the average of the amounts reported in the “Total” column of the Summary Compensation Table for the NEOs as a group (excluding our PEO) for each year to determine the compensation actually paid, using the same methodology described above in Footnote 1: |
Deduction for Amounts Reported under the “Stock Awards” Column in the SCT | | | $(866,514) | | | $(903,503) | | | $(756,940) | | | $(1,042,067) | |
Increase for Fair Value of Awards Granted during year that Remain Unvested as of Year end | | | 1,030,058 | | | 228,632 | | | 923,437 | | | 491,467 | |
Increase/deduction for Change in Fair Value from prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end | | | 346,669 | | | (313,879) | | | 547,345 | | | (407,979) | |
Increase/deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year | | | 23,947 | | | (292,808) | | | 334,083 | | | (652,790) | |
Increase based on Dividends or other Earnings Paid During Year prior to Vesting Date of Award | | | 34,964 | | | 49,062 | | | 51,318 | | | 59,000 | |
Total Adjustments | | | $569,124 | | | $(1,232,496) | | | $1,099,243 | | | $(1,552,369) | |
(3)
| Peer group is the Dow Jones US Real Estate Strip Centers index. |
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(4)
| The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year. |
(5)
| The Company has identified FFO as Adjusted (per share) as the most important additional financial metric used to link pay and performance, for our company selected measure. While we consider numerous financial and non-financial performance measures for the purpose of evaluating and determining executive compensation, we consider FFO as Adjusted (per share), to be the most important performance measure used by to link compensation actually paid to the NEOs for fiscal year 2023 to Company performance. Our short-term incentive programs include FFO as Adjusted as the most heavily weighted metric (that impacts annual cash pay out to executive officers) based on our absolute level of FFO as Adjusted achieved for the year and, in 2023, 25% of the performance-based portion of 2023 long-term incentive plan pays out based on the three year growth rate of our FFO as Adjusted growth rate. FFO as Adjusted is a non-GAAP financial measure—please see “Non-GAAP Financial Measures” beginning on page 69 for a reconciliation to the most directly comparable GAAP measure. We consider FFO as Adjusted a meaningful and relevant measure in determining our operating performance. |
Relationship to Compensation Actually Paid
The following charts show the relationship of the compensation actually paid to our CEO and the average compensation actually paid to our other NEOs as compared to our GAAP reported net income and our FFO as Adjusted (per share).
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Tabular List of Performance Measures
The following table includes financial performance measures that the Company determines are its most important financial measures for 2023 and how they were used in the executive compensation program:
FFO as Adjusted (per share) | | | Absolute TSR |
Same-Property NOI Growth (%) | | | TSR (relative to our peer group) |
Development/Redevelopment: Pipeline to Active
(in $ millions) | | | FFO as Adjusted (per share) growth percentage |
SNO Pipeline (in $ millions) | | | Same-Property NOI Growth
(relative to our peer group) |
Please see the Compensation Discussion and Analysis on pages 31-42 for more information on these measures and how they are taken into account in determining compensation for each of our NEOs. TABLE OF CONTENTS
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Trustees of Urban Edge Properties, a Maryland real estate investment trust (the “Company”),the Company, has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K of the Securities and Exchange CommissionSEC 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 the proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 2023.
| | | Steven H. Grapstein (Chair) |
| | | Mary L. Baglivo |
| | | Norman K. Jenkins |
| | | Kevin P. O’Shea |
Michael A. Gould
Steven J. Guttman
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NON-BINDING ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Section 14A(a)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), generally requires each public company to include in its proxy statement a separate resolution subject to a non-binding stockholderadvisory shareholder vote to approve the compensation of the company’s named executive officers, as disclosed in its proxy statement pursuant to Item 402 of Regulation S-K, not less frequently than once every three years. Accordingly, pursuant to Section 14A(a)(1) of the Exchange Act, we are providing our shareholders an opportunity to indicate whether they support our compensation program for our named executive officers as described in this Proxy Statement by voting for or against the resolution that appears below. This vote, commonly referred to as “say on pay,” is not intended to address any specific item of compensation, but instead relates to the Compensation Discussion and Analysis, the tabular disclosures regarding named executive officer compensation, and the narrative disclosure accompanying the tabular presentation. We believe that it is appropriate to seek the views of our shareholders on the design and effectiveness of our executive compensation program. Although the vote on this resolution is advisory in nature and, therefore, will not bind us to take any particular action, our Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by shareholders in their vote and will carefully consider the outcome of the vote when making future compensation decisions for our named executive officers. At our 20162022 annual meeting of stockholders,shareholders, our stockholdersshareholders voted on, among other matters, a proposal regarding the frequency of holding a non-binding, advisory vote on the compensation of our named executive officers. A majority of the votes cast on the frequency proposal were cast in favor of holding a non-binding, advisory vote on the compensation of the Company’s named executive officers every year, which was consistent with the recommendation of the Board. The Board considered the voting results with respect to the frequency proposal as well as other factors, and currently intends for the Company to hold a non-binding, advisory vote on the compensation of the Company’s named executive officers every year until the next required advisory vote on the frequency of holding the non-binding, advisory vote on the compensation of our named executive officers.officers, which will occur not later than the 2028 annual meeting of shareholders.
Our executive compensation program is designed to encourage high performance, promote accountability and motivate our executives to achieve our business objectives while aligning their interests with those of our shareholders. To achieve these goals, significant portions of targeted compensation may only be earned upon achievement of specific performance goals and are delivered in the form of equity. Base salary is the only type of compensation awarded to our named executive officers that is fixed and not subject to any time or performance-based vestingvesting.
We believe that a majority of the compensation paid to our named executive officers should be closely aligned with our performance on both a short-term and long-term basis. As such, our executive compensation program includes incentive-based elements where the remuneration realized by each executive varies based on Company performance. For long-term incentive compensation, we grant a combination of time and performance vesting equity-based awards. Other than equity-based awards granted to our named executive officers to make them whole for compensation amounts forfeited by joining the Company and for awards to induce them to join the Company, the majority of the equity-based awards granted to our CEO and other named executive officers is in the form of performance-based units that vest only upon achievement of goals tied to the absolute and relative performance of our Common Shares over a three-year performance period. We believe equity-based awards that vest over multiple years ensures that the majority of each executive’s compensation opportunity is tied to our shareholders, with emphasis on share price appreciation and dividend growth, for the executives to realize value.
Prior to voting on this proposal, shareholders are encouraged to read the
sectionssection entitled
“Executive Officer Compensation-Compensation“Compensation Discussion and Analysis” beginning on page
2331 of this Proxy Statement, which
describedescribes in more detail our executive compensation program and the compensation decisions made by our Compensation Committee
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in 2017.2023. For the reasons discussed above, we believe our compensation program for our named executive officers is instrumental in helping us achieve our operational and financial goals. Accordingly, we believe that our compensation program should be endorsed by our shareholders, and we are asking our shareholders to vote “FOR” the following resolution:
“RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related narrative executive compensation disclosure contained in this Proxy Statement pursuant to the rules of the Securities and Exchange Commission.”
THE BOARD OF TRUSTEES RECOMMENDS A VOTE “FOR” THE
APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
AS DISCLOSED IN THIS PROXY STATEMENT. |
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VOTE ON THE BOARDURBAN EDGE PROPERTIES 2024 OMNIBUS SHARE PLAN
Proposal
The Board of Trustees believes that stock-based incentive awards can play an important role in the success of the Company by encouraging and enabling the employees, officers, non-employee trustees and consultants of the Company and its subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. The Board of Trustees believes that providing such persons with a direct stake in the Company assures a closer identification of the interests of such individuals with those of the Company and its shareholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.
On February 22, 2024, the Board of Trustees adopted, subject to shareholder approval, the Urban Edge Properties 2024 Omnibus Share Plan (the “Plan”). The Plan is designed to enhance the flexibility to grant equity awards to our officers, employees, non-employee trustees and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board of Trustees and/or the Compensation Committee. A copy of the Plan is attached as Exhibit A to this proxy statement and is incorporated herein by reference.
As of March 4, 2024, there were 1,402,086 unvested awards with time-based vesting and 1,094,275 unvested awards with performance-based vesting outstanding under our equity compensation plans. Other than the foregoing, no awards were outstanding under our equity compensation plans as of March 4, 2024. As of March 4, 2024, there were 118,672,537 Common Shares available for awards under our equity compensation plans.
Summary of Material Features of the Plan
The material features of the Plan are:
The maximum number of Common Shares to be issued under the Plan is 7,400,000;
The award of stock options (both incentive and non-qualified options), stock appreciation rights, performance shares, restricted stock, dividend equivalent rights, and other stock-based awards is permitted;
The following shares will not be added back to the Plan: (i) shares tendered or held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding, and (ii) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of such award upon exercise thereof. Additionally, shares we reacquire on the open market will not be added to the reserved pool under the Plan;
Stock options and stock appreciation rights will not be repriced in any manner without shareholder approval;
Any dividends and dividend equivalent rights payable with respect to any equity award subject to performance based vesting conditions are subject to the same vesting provisions as the underlying award;
Any material amendment to the Plan is subject to approval by our shareholders; and
Assuming it is approved by our shareholders at the Annual Meeting, the term of the Plan will expire on May 1, 2034.
Based solely on the closing price of our Common Shares as reported by the New York Stock Exchange on the Record Date and the maximum number of Common Shares that would have been available for awards as of such date under the Plan, the maximum aggregate market value of the Common Shares that could potentially be issued under the Plan is $127,132,000. The Common Shares underlying any awards that are forfeited, canceled or otherwise terminated, other than by exercise, or settled in cash in lieu of Common
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Shares under the Plan and our 2015 Omnibus Share Plan will be added back to the Common Shares available for issuance under the Plan; provided, however, that the number of Share Equivalents (as such term is defined in the Plan) that shall again be available for the grant under the Plan shall be increased by one Share Equivalent for each Common Share that is subject to a Full Value Award (as such term is defined in the plan) at the time such Full Value Award expires or is forfeited, terminated or cancelled and by one-half Share Equivalent for each Common Share that is subject to an award that is not a Full Value Award at the time such award expires or is forfeited, terminated or cancelled. Awards that use shares as a reference but that are paid or settled in whole or in part in cash shall not affect the number of Share Equivalents available under the Plan the extent paid or settled in cash. Common Shares tendered or held back upon exercise of a stock option or settlement of an award under the Plan to cover the exercise price or tax withholding and Common Shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the Common Shares available for issuance under the Plan. In addition, Common Shares repurchased on the open market will not be added back to the Common Shares available for issuance under the Plan.
Rationale for Plan Adoption
The Plan is critical to our ongoing effort to build shareholder value. Equity incentive awards are an important component of our executive and non-executive employees’ compensation. Our Compensation Committee and the Board of Trustees believe that we must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees necessary for our continued growth and success.
We manage our long-term shareholder dilution by limiting the number of equity incentive awards granted annually. The Compensation Committee carefully monitors our annual net burn rate, total dilution and equity expense in order to maximize shareholder value by granting only the number of equity incentive awards that it believes are necessary and appropriate to attract, reward and retain our employees. Our compensation philosophy reflects broad-based eligibility for equity incentive awards for high performing employees. By doing so, we link the interests of those employees with those of our shareholders and motivate our employees to act as owners of the business.
Burn rate
The following table sets forth information regarding historical awards granted and earned for the 2021 through 2023 period, and the corresponding burn rate, which is defined as the number of Common Shares subject to equity-based awards granted in a year divided by the weighted average number of Common Shares outstanding for that year, for each of the last three fiscal years:
Stock Options Granted | | | 0 | | | 0 | | | 0 |
Time-Based Full-Value Awards Granted | | | 353,766 | | | 475,544 | | | 394,637 |
Performance-Based Full-Value Awards Granted | | | 398,977 | | | 349,438 | | | 309,611 |
Total Awards Granted | | | 752,743 | | | 824,982 | | | 704,248 |
Weighted Average Common Shares Outstanding During the Fiscal Year | | | 117,029,000 | | | 117,366,000 | | | 117,506,000 |
Annual Burn Rate | | | 0.64% | | | 0.70% | | | 0.60% |
Three-Year Average Burn Rate(1) | | | | | | | | | 0.65% |
(1)
| As illustrated in the table above, our three-year average burn rate is below ISS’s burn rate threshold for REITs (Russell 3000) 1.05%. |
Our Compensation Committee determined the size of reserved pool under the Plan based on projected equity awards to anticipated new hires, projected annual equity awards to existing employees and an assessment of the magnitude of increase that our institutional investors and the firms that advise them would likely find acceptable. We anticipate that if our request to approve the adoption of the Plan is approved by our shareholders, it will be sufficient to provide equity incentives to attract, retain, and motivate employees for the next five years.
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Summary of the Plan
The following description of certain features of the Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the Plan, which is attached hereto as Exhibit A.
Administration. The Plan will be administered and interpreted by the Compensation Committee. The Compensation Committee is made up of at least two members of the Board. The Committee may delegate any of its responsibilities or duties under the Plan to a subcommittee. The Board, in its sole discretion, also may grant awards or administer the Plan. The Compensation Committee is authorized to select employees, non-employee trustees and consultants to receive awards, determine the type of awards to be made, determine the number of equity-based securities subject to any award and determine the other terms and conditions of such awards.
Eligibility; Plan Limits. All employees who have demonstrated significant management potential or who have the capacity for contributing in a substantial measure to the successful performance of the Company, as determined by the Compensation Committee, will be eligible to receive awards under the Plan. Non-employee trustees and consultants who provide bona fide services to the Company will also be eligible to receive awards under the Plan, as determined by the Committee. As of March 4, 2024, approximately 39 individuals would have been eligible to participate in the Plan had it been effective on such date, which includes four executive officers, 27 employees who are not executive officers, eight non-employee directors and no consultants. There are certain limits on the number of awards that may be granted under the Plan. For example, no more than 7,400,000 Common Shares may be granted in the form of incentive stock options.
Stock Options. Stock options entitle the holder to purchase Common Shares at a per share price determined by the Compensation Committee, which in no event may be less than the fair market value of the Common Shares on the date of grant. Options granted under the Plan could be either incentive stock options within the meaning of Section 422 of the Code or non-qualified stock options. Stock options will be exercisable for such period as is determined by the Compensation Committee, but in no event will the options be exercisable after 10 years from the date of grant. The option price for the Common Shares purchased upon the exercise of an option will be paid in full at the time of exercise and may be paid in cash, by tender or the withholding of the Common Shares, by such other consideration as the Compensation Committee deems appropriate or by a combination of cash, Common Shares and such other consideration.
To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of Common Shares subject to incentive options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The Compensation Committee may award stock appreciation rights subject to such conditions and restrictions as the Compensation Committee may determine. The Compensation Committee will establish the grant price, which may not be less than the fair market value of the Common Shares on the date of grant, and the term, which will not be more than 10 years from the date of grant. Stock appreciation rights may be granted in tandem with a stock option or in addition to a stock option or may be freestanding and unrelated to a stock option. The Compensation Committee is authorized under the Plan to determine whether a stock appreciation right will be settled in cash, Common Shares or a combination thereof. Stock appreciation rights settled in cash will not reduce the number of Common Shares issuable under the Plan.
Performance Shares and Restricted Shares. The Compensation Committee may award Common Shares to participants subject to such conditions and restrictions as the Compensation Committee may determine. Performance share awards consist of a grant of Common Shares or share units having a value equal to an identical number of Common Shares in amounts to be determined by the Compensation Committee at the time of grant. Performance share awards consisting of actual Common Shares will entitle the holder to receive Common Shares in an amount based upon performance conditions of the Company over a performance period as determined by the Compensation Committee at the time of grant. Such performance share awards may provide the holder with dividends and voting rights prior to vesting. Performance share awards consisting of share units will entitle the holder to receive the value of such units in cash, Common Shares or a combination thereof based upon performance conditions and over a performance period as determined by the Committee at the time of grant.
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Restricted share awards consist of a grant of Common Shares or share units having a value equal to an identical number of Common Shares. Restricted share awards consisting of Common Shares will entitle the holder to receive Common Shares. Such restricted share awards may provide the holder with dividends and voting rights prior to vesting. Restricted share awards consisting of share units will entitle the holder to receive the value of such units in cash, Common Shares or a combination thereof as determined by the Compensation Committee. The employment or other conditions and the length of the period for vesting of restricted share awards will be established by the Compensation Committee at the time of grant.
Other Cash-Based and Stock-Based Awards. Other types of cash-based, equity-based or equity-related awards, including the grant or offer for sale of unrestricted Common Shares and performance stock and performance units settled in Common Shares or cash, may be granted under such terms and conditions as may be determined by the Compensation Committee. Such awards may be subject to certain performance-based conditions.
Operating Partnership Units. Operating partnership unit awards consist of a grant of limited partnership units (“OP Units”) of Urban Edge Properties LP (or any successor entity), the entity through which the Company conducts substantially all its business. OP Units can be granted by the Compensation Committee either as free-standing awards or in tandem with other awards under the Plan and are valued by reference to the value of Common Shares. The employment conditions, the length of the period for vesting and other applicable conditions and restrictions of OP Unit awards, including computation of financial metrics and/or achievement of pre-established performance goals, will be established by the Compensation Committee. Such OP Unit awards may provide the holder with dividend-equivalent rights prior to vesting.
Adjustments for Stock Dividends, Stock Splits, Mergers, Etc. In the event of any change in the outstanding Common Shares by reason of any share dividend or split, reverse split, recapitalization, merger, consolidation, spinoff, combination or exchange of Common Shares or other corporate change, or any distributions to shareholders other than regular cash dividends, the Compensation Committee will make such substitution or adjustment, if any, as it deems equitable to the number of Common Shares for which awards may be granted under the Plan or the number or kind of Common Shares or other securities issued or reserved for issuance pursuant to outstanding awards, the individual participant limitations and the number of Common Shares that can be issued through incentive stock options.
Tax Withholding. Participants in the Plan are responsible for the payment of any federal, state or local taxes that the Company is required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The Company may deduct from any payment to be made pursuant to the Plan, or to require prior to the issuance or delivery of any Common Shares or the payment of cash under the Plan, any taxes required by law to be withheld. The Compensation Committee, in its sole discretion, may permit a participant who is an employee to elect to satisfy this withholding obligation with Common Shares. Any fraction of a Common Share required to satisfy such obligation will be disregarded, and the amount due will instead be paid in cash to or by the participant, as the case may be.
Amendments and Termination. The Board of Trustees may at any time amend or discontinue the Plan and the Compensation Committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may, without shareholder approval (i) increase the maximum aggregate number of Common Shares that may be issued under the Plan, (ii) materially modify the requirements for participation under the Plan, (iii) result in a material increase in the benefits accrued to participants of the Plan, or (iv) reduce the exercise price of outstanding stock options or stock appreciation rights, or cancel such awards in exchange for cash or other awards (including stock options or stock appreciation rights with a lower exercise price). Further, no amendment to the Plan shall be made without shareholder approval if shareholder approval is required by applicable law, including the rules of the New York Stock Exchange or any other self-regulatory agency. To the extent required under the rules of the New York Stock Exchange, any amendments that materially change the terms of the Plan will be subject to approval by our shareholders. Amendments shall also be subject to approval by our shareholders if and to the extent determined by the Compensation Committee to be required by the Code to preserve the qualified status of incentive options.
Effective Date of Plan. The Plan was approved by our Board of Trustees on February 22, 2024. No awards may be granted under the Plan after the date that is ten years from the date of shareholder approval.
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New Plan Benefits
Because the grant of awards under the Plan is within the discretion of the Compensation Committee, the Company cannot determine the dollar value or number of Common Shares that will in the future be received by or allocated to any participant in the Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the Plan, the following table provides information concerning the benefits that were received by the following persons and groups during 2023: each named executive officer; all current executive officers, as a group; all current Trustees who are not executive officers, as a group; and all current employees who are not executive officers, as a group.
Jeffrey S. Olson, Chairman and Chief Executive Officer | | | n/a | | | — | | | 4,189,334 | | | 388,349 |
Jeffrey S. Mooallem, Chief Operating Officer | | | n/a | | | — | | | 1,249,792 | | | 116,371 |
Mark J. Langer, Chief Financial Officer | | | n/a | | | — | | | 999,821 | | | 93,096 |
Robert C. Milton III, General Counsel & Secretary | | | n/a | | | — | | | 349,929 | | | 32,582 |
All current executive officers, as a group | | | n/a(2) | | | — | | | 6,788,876(3) | | | 630,398 |
All current Trustees who are not executive officers, as a group | | | n/a(2) | | | — | | | 1,076,438(3) | | | 83,251 |
All current employees who are not executive officers, as a group | | | n/a(2) | | | — | | | 1,165,000(3) | | | 82,234 |
(1)
| The valuation of stock awards is based on the grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions used in calculating these values, see Note 15 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023. |
(2)
| Represents the weighted-average exercise price for the group. |
(3)
| Represents the aggregate grant date fair value for the group. |
Tax Aspects Under the Code
The following is a summary of the principal federal income tax consequences of certain transactions under the Plan. It does not describe all federal tax consequences under the Plan, nor does it describe state or local tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If Common Shares issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the option exercise price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If Common Shares acquired upon the exercise of an incentive option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the Common Shares at exercise (or, if less, the amount realized on a sale of such Common Shares) over the option price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive option is paid by tendering Common Shares.
If an incentive option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified option. Generally, an incentive option will not be eligible for the tax
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treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. No income is realized by the optionee at the time a non-qualified option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option exercise price and the fair market value of the Common Shares on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the Common Shares have been held. Special rules will apply where all or a portion of the exercise price of the non-qualified option is paid by tendering Common Shares. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Stock Appreciation Rights. A VOTE “FOR” THE APPROVALparticipant will not be subject to tax upon the grant of a stock appreciation right. Upon exercise of a stock appreciation right, an amount equal to the cash and/or the fair market value (measured on the date of exercise) of the Common Shares received will be taxable to such participant as ordinary income. This amount of income will be subject to income tax withholding and employment taxes. A participant’s basis in any shares received will be equal to the fair market value of the Common Shares on the date of exercise, and the holding period in such shares will begin on the day following the date of exercise. Upon the exercise of a stock appreciation right, the amount taxable to a participant as ordinary income will generally be deductible by the Company.
Performance Shares and Restricted Shares. A participant will not be subject to tax upon the grant of performance share awards or restricted share awards consisting of actual Common Shares unless such participant makes the election referred to below. Upon lapse of the applicable forfeiture conditions or transfer restrictions (i.e., the vesting date), the participant will recognize ordinary income equal to the fair market value of the Common Shares on the date of lapse (less any amount such participant may have paid for the shares). This amount of income will be subject to income tax withholding and employment taxes. A participant’s basis in the shares received will be equal to the fair market value of the Common Shares on the vesting date, and the holding period in such shares begins on the vesting date. If any dividends are paid on the Common Shares prior to the vesting date, they will be includible in a participant’s income during the restricted period as additional compensation (and not as dividend income) and will be subject to income tax withholding and employment taxes.
A participant may elect within 30 days after the date of grant of performance share awards or restricted share awards to recognize immediately (as ordinary income) the fair market value of such shares (less any amount such participant may have paid for the shares), determined on the date of grant (without regard to the forfeiture conditions and transfer restrictions). Such income will be subject to income tax withholding and employment taxes. This election is made pursuant to Section 83(b) of the Code and the regulations thereunder. If a participant makes this election, the holding period will begin the day after the date of grant, dividends paid on the shares will be subject to the normal rules regarding distributions on stock and no additional income will be recognized by such participant upon the vesting date. However, if a participant forfeits such performance share awards or restricted share awards before the vesting date, no deduction or capital loss will be available to that participant (even though the participant previously recognized income with respect to such forfeited shares).
In the taxable year in which a participant recognizes ordinary income on account of shares awarded to such participant, the Company generally will be entitled to a deduction equal to the amount of income recognized by such participant. In the event that the shares are forfeited by such participant after having made the Section 83(b) election referred to above, the Company generally will include in its income the amount of its original deduction.
Performance Share Units and Restricted Share Units. A participant will not be subject to tax upon the grant of performance share unit awards or restricted share unit awards. Upon vesting of the units, the fair market value of the Common Shares covered by the award on the vesting date will be subject to employment taxes. Upon distribution of the shares and/or cash underlying the units, a participant will recognize as ordinary income an amount equal to the fair market value (measured on the date of distribution) of the shares and/or cash received. This amount of income will be subject to income tax withholding on the date of distribution. A
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participant’s basis in any shares received will be equal to the fair market value of the shares on the date of distribution, and the holding period in such shares will begin on the day following the date of distribution. Upon distribution of the shares and/or cash underlying the units, the amount taxable to a participant as ordinary income will generally be deductible by the Company.
OP Units. OP Unit awards are intended to be structured to qualify as so-called “profits interests” for federal income tax purposes, meaning that no income is expected to be recognized by the recipient upon grant or vesting, and the Company will not be entitled to any deduction. If OP Units are not disposed of within the 36-month period beginning on the date of grant of the OP Unit award, any gain (assuming the applicable tax elections are made by the grantee) realized by the recipient upon disposition is expected to be taxed as long-term capital gain.
Parachute Payments. The vesting of any portion of an award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to the Company, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions. Under Section 162(m) of the Code, the Company’s deduction for awards under the Plan may be limited to the extent that any “covered employee” (as defined in Section 162(m) of the Code) receives compensation in excess of $1 million a year.
Equity Compensation Plan Information
The following table summarizes information, as of December 31, 2023, relating to our equity compensation plans pursuant to which our common shares or other equity securities may be granted from time to time.
Equity compensation plans approved by security holders | | | 2,979,723(1) | | | N/A | | | 3,780,034(3) |
Equity compensation plans not approved by security holders | | | 170,628(4) | | | N/A | | | N/A |
Total | | | 3,150,351 | | | N/A | | | 3,780,034 |
(1)
| Represents 2,979,723 Common Shares issuable in exchange for common units which may, upon satisfaction of certain conditions, be issuable pursuant to outstanding LTIP Units in our Operating Partnership. The LTIP Units outstanding as of December 31, 2023 include 1,017,792 LTIP Units issued pursuant to our 2021 LTI Plan, 2022 LTI Plan, and 2023 LTI Plan which remain subject to performance-based vesting criteria. Excludes 2,939,263 common shares issuable upon exercise of outstanding vested options, which have no intrinsic value as of December 31, 2023. |
(2)
| The LTIP Units do not have an exercise price. Accordingly, these awards are not included in the weighted-average exercise price calculation. |
(3)
| Includes (i) 1,584,191 Common Shares remaining available for issuance under the Urban Edge Properties 2015 Omnibus Incentive Plan (the “2015 Plan”) and (ii) 2,195,843 Common Shares remaining available under the Urban Edge Properties 2015 Employee Share Purchase Plan (“ESPP”). The number of Common Shares remaining available for issuance under the Plan is based on awards being granted as “Full Value Awards,” as defined in the Plan, including awards such as restricted stock, LTIP units or performance units that do not require the payment of an exercise price. If we were to grant awards other than “Full Value Awards,” as defined in the Plan, including stock options or stock appreciation rights, the number of securities remaining available for future issuance under the Plan would be 3,168,381. Pursuant to the terms of the ESPP, on each January 1 prior to the tenth anniversary of the ESPP’s effective date, an additional number of Common Shares will be added to the maximum number of shares authorized for issuance under the ESPP equal to the lesser of (a) 0.1% of the total number of Common Shares outstanding on December 31 of the preceding calendar year and (b) 150,000 Common Shares; provided that the Compensation Committee of our Board of Trustees may act prior to January 1 of any calendar year to provide that there will be no increase in the share reserve for that calendar year, or that the increase in the share reserve for that calendar year shall be less than the increase that would otherwise occur. |
TABLE OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.CONTENTS
(4)
| Relates to the Urban Edge Properties 2018 Inducement Equity Plan, which is an omnibus equity plan pursuant to which we may grant a variety of equity awards pursuant to the employment inducement award exemption provided by Section 303A.08 of the New York Stock Exchange Listed Company Manual, including options, share appreciation rights, performance shares, restricted shares and other share-based awards including LTIP Units. A total of 170,628 Common Shares are authorized to be issued under the 2018 Inducement Equity Plan. The 2018 Inducement Equity Plan has a ten-year term expiring on September 20, 2028 and generally may be amended at any time by our Board of Trustees. Included in the 170,628 Common Shares authorized to be issued under the 2018 Inducement Equity Plan are an aggregate of (i) 170,628 Common Shares issuable in exchange for common units which may, upon satisfaction of certain conditions, be issuable pursuant to outstanding LTIP Units in our Operating Partnership (“LTIP Units”) (excluding 1,000,000 Common Shares issuable upon exercise of outstanding vested options). |
Vote Required
The affirmative vote of a majority of votes cast on this proposal is required for the approval of the Plan.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE “FOR” THE
APPROVAL OF THE URBAN EDGE PROPERTIES 2024 OMNIBUS SHARE PLAN
DISCLOSED IN THIS PROXY STATEMENT. |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We review all relationships and transactions in which we and our significant shareholders, Trustees and our executive officers or their respective immediate family members are participants (including transactions required to be disclosed under Item 404 of Regulation S-K) to determine whether such persons have a direct or indirect material interest in the transaction. Our policy (as set forth in our Code of Business Conduct and Ethics) is to determine whether such persons have a direct or indirect material interest in the transaction. In determining whether such an interest exists, we apply the standards set forth in Item 404 of Regulation S-K, our Code of Business Conduct and Ethics and our Corporate Governance Guidelines.
Our legal and financial staff is primarily responsible for the development and implementation of processes and controls to obtain information from our significant shareholders, Trustees and our executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether we or a related person has a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to the Company or a related person are disclosed in this Schedule 14A. We also disclose transactions or categories of transactions we consider in determining that a Trustee is independent.
In addition, our Audit Committee and/or our Corporate Governance and Nominating Committee reviews and, if appropriate, approves or ratifies any related person transaction that is required to be disclosed. These committees, in the course of their review of a disclosable related-party transaction, consider: (1) the nature of the related person’s interest in the transaction; (2) the material terms of the transaction; (3) the importance of the transaction to the related person; (4) the importance of the transaction to the Company; (5) whether the transaction would impair the judgment of a Trustee or executive officer to act in the best interest of the Company; and (6) any other matters these committees deem appropriate.
The following is a summary of related person transactions since January 1, 2017,2023, other than compensation arrangements which are described under “Executive Officer Compensation”“Compensation Discussion and Analysis” and “Compensation of Trustees.” The related person transactions listed below were all approved by our Board.
Transition Services Agreement
UE and Vornado entered into a Transition Services Agreement on January 15, 2015, prior to the separation, pursuant to which Vornado and its subsidiaries will provide various corporate support services to the Company on an interim, transitional basis. The services provided to UE included treasury management, human resources, information technology, tax, financial reporting, SEC compliance, risk management and insurance. Costs of the services provided to UE by Vornado during 2017 were $649,469. These costs are expected to diminish over time as UE fills vacant positions and builds its own infrastructure. We believe that the terms are comparable to those that would have been negotiated on an arm’s-length basis.
Initially the Transition Services Agreement was to terminate two years after the date of its execution, but in 2016 the health benefits, information technology and risk management services under the Transition Services Agreement were extended until July 2018 or, if earlier, the date that such services are no longer provided under the agreement. IT and risk management services terminated in 2017. Either party may terminate the agreement if the other party experiences a change-in-control, and UE, as the recipient for a particular service, generally may terminate a service prior to the scheduled expiration date of such service.
Subject to certain exceptions, the liability of each party under the Transition Services Agreement will generally be limited to the aggregate fees paid pursuant to the Transition Services Agreement during the 12-month period immediately preceding the applicable claim for losses or damages. The Transition Services Agreement also specifies that the provider of a service shall not be liable to the recipient of such service for any special, indirect, incidental, consequential or punitive damages.
Lease of Office Space from Vornado
In connection with the spin-off UEfrom Vornado, the Company entered into a lease with Vornadoindividual leases pursuant to which UEthe Company leases office space at (i) 210 Route 4 East, Paramus, New Jersey 07652, Vornado’s administrative headquarters. UE also entered into a lease with Vornado pursuant to which UE will lease office space atheadquarters; and (ii) 888 Seventh Avenue, New York, New York 10019, Vornado’s executive headquarters. Rent payments will generally be adjusted each year ofunder each lease to reflect increases or decreases in operating and maintenance expenses and other factors. Rent payments in 20172023 were $907,099,$960,169, comprised of rent for 210 Route 4 East, Paramus, New Jersey 07652 in the amount of $519,809$557,983 and 888 Seventh Avenue, New York, New York 10019 in the amount of $387,290.$402,186.
Property Management and Leasing Services
In connection with the spin-off, the Company and Vornado entered into a property management agreement under which the Company provides management, development, leasing and other services to certain properties owned by Vornado and its affiliates, including Interstate Properties (“Interstate”) and Alexander’s, Inc. (NYSE:ALX). Interstate is a general partnership that owns retail properties in which Steven Roth, Chairman of Vornado’s Board and Chief Executive Officer of Vornado, and a member of our Board of Trustees, is the managing general partner. Interstate and its partners beneficially owned an aggregate of approximately 7.1% of the common shares of beneficial interest of Vornado as of December 31, 2017. As of, and for the twelve months ended December 31, 2017, Vornado owned 26.2% of Alexander’s, Inc. We recognized management and development fee income of $1.5 million, $1.8 million and $2.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017 and December 31, 2016, there were $0.2 million and $0.3 million of fees, respectively, due from Vornado included in tenant and other receivables in our consolidated balance sheets.
OTHER BUSINESS
The Board has no knowledge of any other matter to be submitted at the Annual Meeting. IfShould any other matter shall properly come before the Annual Meeting, including a question of adjourning or postponing the meeting, the personsAnnual Meeting, named in this Proxy Statementproxies will have discretionary authority to vote the shares thereby represented in accordance with their best judgment.
NON- GAAPNON-GAAP FINANCIAL MEASURES
The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. FFO, FFOAdditionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by
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other REITs or real estate companies that define these metrics differently and, as Adjusted, cash NOIa result, it is important to understand the manner in which the Company defines and same-property cash NOI arecalculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance. performance:
FFO: The Company believes FFO is a useful, supplemental measure of its operating performance that is a recognized metric used extensively by the real estate industry and, in particular REITs. FFO, as defined by Nareit and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business, earnings from consolidated partially owned entities and rental property depreciation and amortization expense. The Company believes that financial analysts, investors and shareholders are better served by the presentation of comparable period operating results generated from FFO primarily because it excludes the assumption that the value of real estate assets diminishes predictably. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions.
FFO as Adjusted: The Company provides disclosure of FFO as Adjusted because it believes it is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO as Adjusted is calculated by making certain adjustments to FFO to account for items the Company does not believe are representative of ongoing core operating results, including non-comparable revenues and expenses. The Company's method of calculating FFO as Adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
NOI: The Company uses NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The Company calculates NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for non-cash rental income and expense, impairments on depreciable real estate or land, and income or expenses that we do not believe are representative of ongoing operating results, if any. In addition, the Company uses NOI margin, calculated as NOI divided by total property revenue, which the Company believes is useful to investors for similar reasons.
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Same-property NOI: The Company provides disclosure of NOI on a same-property basis, which includes the results of properties that were owned and operated for the entirety of the reporting periods being compared, which total 68 properties for the quarters ended December 31, 2023 and 2022 and 66 properties for the years ended December 31, 2023 and 2022. Information provided on a same-property basis excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area (“GLA”) is taken out of service and also excludes properties acquired, sold, or that are in the foreclosure process during the periods being compared. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition, disposition, or foreclosure of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company's properties. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when it is designated as a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan that is expected to have a significant impact on its operating income. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. The Company has also provided disclosure of NOI on a same-property basis adjusted to include redevelopment properties. Same-property NOI may include other adjustments as detailed in the Reconciliation of Net Income to NOI and same-property NOI included in the tables accompanying this proxy statement. We also present this metric excluding the collection of amounts previously deemed uncollectible.
The Company believes net income is the most directly comparable GAAP financial measure to FFO, FFO as Adjusted, cash NOI and same-property cash NOI.the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables below.that follow.
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Reconciliation of Net Income to FFO and FFO as Adjusted
The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the yearyears ended December 31, 2017.2023 and 2022. Net income is considered the most directly comparable GAAP measure.
Net income | | | $259,876 | | | $47,339 |
Less net (income) loss attributable to noncontrolling interests in:
| | | | | | |
Operating partnership | | | (11,899) | | | (1,895) |
Consolidated subsidiaries | | | 520 | | | 726 |
Net income attributable to common shareholders | | | 248,497 | | | 46,170 |
Adjustments:
| | | | | | |
Rental property depreciation and amortization | | | 107,695 | | | 97,460 |
Gain on sale of real estate(6) | | | (217,708) | | | (353) |
Real estate impairment loss(2) | | | 34,055 | | | — |
Limited partnership interests in operating partnership | | | 11,899 | | | 1,895 |
FFO Applicable to diluted common shareholders | | | 184,438 | | | 145,172 |
FFO per diluted common share(1) | | | 1.51 | | | 1.19 |
Adjustments to FFO:
| | | | | | |
Gain on extinguishment of debt(7) | | | (41,144) | | | — |
Impact of property in foreclosure(3) | | | 3,060 | | | — |
Transaction, severance and litigation expenses | | | 2,039 | | | 4,938 |
Real estate tax settlements related to prior periods | | | — | | | (1,232) |
Tax Impact of Shops at Caguas financing(5) | | | 16,302 | | | — |
Income tax refund related to prior periods | | | (684) | | | — |
Tenant bankruptcy settlement income | | | (114) | | | (36) |
Termination fees and non-cash adjustments, net(4) | | | (847) | | | (384) |
Litigation settlement income | | | (10,000) | | | — |
FFO as Adjusted applicable to diluted common shareholders | | | $153,050 | | | $148,458 |
FFO as Adjusted per diluted common share(1) | | | $1.25 | | | $1.21 |
| | | | | | |
Weighted Average diluted common shares(1) | | | 122,064 | | | 122,318 |
|
| | | | | | | |
| | Year Ended December 31, 2017 |
| | (in thousands) | | (per share) (2) |
| Net (loss) income | $ | 72,938 |
| | $ | 0.62 |
|
| Less (net income) attributable to noncontrolling interests in: | | | |
| Operating partnership | (5,824 | ) | | (0.05 | ) |
| Consolidated subsidiaries | (44 | ) | | — |
|
| Net (loss) income attributable to common shareholders | 67,070 |
| | 0.57 |
|
| Adjustments: | | | |
| Rental property depreciation and amortization | 81,401 | | 0.68 |
|
| Real estate impairment loss | 3,467 |
| | 0.03 |
|
| Limited partnership interests in operating partnership | 5,824 |
| | 0.05 |
|
FFO applicable to diluted common shareholders(1) | 157,762 |
| | 1.33 |
|
| | | | |
| Loss on extinguishment of debt | 35,336 |
| | 0.30 |
|
| Casualty loss | 6,092 |
| | 0.05 |
|
| Construction settlement due to tenant | 902 |
| | 0.01 |
|
| Transaction costs | 278 |
| | — |
|
| Gain on sale of land | (202 | ) | | — |
|
| Tenant bankruptcy settlement income | (655 | ) | | (0.01 | ) |
| Income tax benefit from hurricane losses | (1,767 | ) | | (0.01 | ) |
| Income from acquired leasehold interest | (39,215 | ) | | (0.33 | ) |
FFO as Adjusted applicable to diluted common shareholders(1) | $ | 158,531 |
| | $ | 1.34 |
|
| |
|
| | |
Weighted average diluted common shares - FFO(1) | 118,390 |
| | |
(1)
| Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the years ended December 31, 2023 and December 31, 2022, respectively are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares. |
(2)
| During the year ended December 31, 2023, the Company recognized an impairment charge reducing the carrying value of Kingswood Center, an office and retail property located in Brooklyn, NY. |
(3)
| In April 2023, the Company notified the lender of its mortgage secured by Kingswood Center that the cash flows generated by the property are insufficient to cover the debt service and that the Company is unwilling to fund future shortfalls. As such, the Company defaulted on the loan and adjusted for the default interest incurred for the second quarter of 2023. The Company determined it is appropriate to exclude the operating results of Kingswood Center from FFO as Adjusted as the property is in the foreclosure process. |
(4)
| Includes the acceleration and write-off of lease intangibles related to tenant bankruptcies and terminations, net of termination payments, and write offs and reinstatements of receivables arising from the straight-lining of rents for tenants moved to and from the cash basis of accounting. This adjustment to FFO in calculating FFO as Adjusted is net of the portion attributable to the noncontrolling interest in Sunrise Mall. |
(5)
| Amount reflects the tax-related impact of the $43 million gain on extinguishment of debt related to the Shops at Caguas loan refinancing that occurred in August 2023. |
(6)
| The Company recognized a gain on sale of real estate for the year ended December 31, 2023 related to the disposition of the East Hanover Warehouses portfolio, Freeport Commons, and a parcel located on our Tonnelle Commons property. |
(7)
| Includes prepayment penalties and write-offs of unamortized debt issuance costs related to the payoff of mortgage loans prior to maturity. |
(1) OP and LTIP Units are excluded from the calculation of earnings per diluted share for the quarter because their inclusion is anti-dilutive and are included for the year because their inclusion is dilutive. FFO per share includes units as these units are dilutive.
(2) Individual items may not add up due to total rounding.
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Reconciliation of Net Income to Cash NOI and Same-Property Cash NOI
The following table reflects the reconciliation of cash NOI, same-property cash NOI (with and without redevelopment) to net income, the most directly comparable GAAP measure, for the year ended December 31, 2017 and 2016.
|
| | | | | | | | |
| | | Twelve Months Ended December 31, |
| (Amounts in thousands) | | 2017 | | 2016 |
| Net (loss) income | | $ | 72,938 |
| | $ | 96,630 |
|
| Add: income tax (benefit) expense | | (278 | ) | | 804 |
|
| Interest income | | (2,248 | ) | | (679 | ) |
| Gain on sale of real estate | | (202 | ) | | (15,618 | ) |
| Interest and debt expense | | 56,218 |
| | 51,881 |
|
| Loss on extinguishment of debt | | 35,336 |
| | — |
|
| Management and development fee income from non-owned properties | | (1,535 | ) | | (1,759 | ) |
| Other income | | (235 | ) | | (121 | ) |
| Depreciation and amortization | | 82,281 |
| | 56,145 |
|
| Casualty and impairment loss | | 7,382 |
| | — |
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| General and administrative expense | | 30,413 |
| | 27,438 |
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| Transaction costs | | 278 |
| | 1,405 |
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| Less: non-cash revenue and expenses | | (47,161 | ) | | (6,465 | ) |
| Cash NOI | | 233,187 |
| | 209,661 |
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| Adjustments | | | | |
| Non-same property cash NOI | | (46,766 | ) | | (28,164 | ) |
| Hurricane relates operating loss | | 1,267 |
| | — |
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| Construction settlement due to tenant | | 902 |
| | — |
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| Tenant bankruptcy settlement income | | (975 | ) | | (2,378 | ) |
| Same-property cash NOI | | 187,615 |
| | 179,119 |
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| Adjustments: | | | | |
| Cash NOI related to properties being redeveloped | | 25,304 |
| | 22,846 |
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| Same-property cash NOI including properties in redevelopment | | $ | 212,919 |
| | $ | 201,965 |
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(1) Cash NOI is calculated as total property revenues less property operating expenses, excluding the net effects of non-cash rental income and non-cash ground rent expense.
(2) Other adjustments include revenue and expense items attributable to non-same properties and corporate activities.
(3) Tenant bankruptcy settlement income includes lease termination income.
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
The following table reflects the reconciliation of net income (loss) to EBITDANOI, same-property NOI and Adjusted EBITDAsame-property NOI including properties in redevelopment for the quarter and yearyears ended December 31, 2017.2023 and 2022. Net income (loss) is considered the most directly comparable GAAP measure, for the year ended December 31, 2017 and 2016.measure.
Net income | | | $259,876 | | | $47,339 |
Depreciation and amortization | | | 108,979 | | | 98,432 |
Interest and debt expense | | | 74,945 | | | 58,979 |
General and administrative expense | | | 37,070 | | | 43,087 |
Gain on extinguishment of debt | | | (41,144) | | | — |
Real estate impairment loss | | | 34,055 | | | — |
Income tax expense | | | 17,800 | | | 2,903 |
Interest income | | | (3,037) | | | (1,107) |
Non-cash revenue and expenses | | | (11,610) | | | (8,257) |
Other Income(5) | | | (9,097) | | | (125) |
Gain on sale of real estate | | | (217,708) | | | (353) |
NOI | | | 250,129 | | | 240,898 |
Adjustments:
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Tenant bankruptcy settlement income and lease termination income | | | (1,428) | | | (822) |
Sunrise Mall net operating loss(4) | | | 2,427 | | | 2,544 |
Real estate tax settlements related to prior periods | | | — | | | (1,441) |
Non-same property NOI and other(1) | | | (43,176) | | | (35,503) |
Same-property NOI(2) | | | $207,952 | | | $205,676 |
NOI related to properties being redeveloped | | | 23,686 | | | 20,364 |
Same-property NOI including properties in redevelopment(3) | | | $231,638 | | | $226,040 |
(1)
| Non-same property NOI includes NOI related to properties being redeveloped and properties acquired, disposed, or that are in the foreclosure process during the periods being compared. |
(2)
| Excluding the collection of amounts previously deemed uncollectible, the increase would have been 2.9% compared to the year ended December 31, 2023. |
(3)
| Excluding the collection of amounts previously deemed uncollectible, the increase would have been 4.3% compared to the year ended December 31, 2023. |
(4)
| Net operating loss at Sunrise Mall includes real estate tax settlements of $1.3 million related to the 2022 calendar year. Excluding the impact of the 2022 real estate tax settlements, net operating loss for the year ended December 31, 2022 is $3.9 million. |
(5)
| Includes $10 million of litigation settlement income received in the fourth quarter of 2023. |
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| | | Twelve Months Ended December 31, |
| (Amounts in thousands) | | 2017 | | 2016 |
| Net (loss) income | | $ | 72,938 |
| | $ | 96,630 |
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| Depreciation and amortization | | 82,281 |
| | 46,145 |
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| Interest and debt expense | | 56,218 |
| | 51,881 |
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| Income tax (benefit) expense | | (278 | ) | | 804 |
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| EBITDA | | 21,159 |
| | 205,460 |
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| Adjustments for Adjusted EBITDA: | | | | |
| Casualty loss | | 6,092 |
| | — |
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| Construction settlement due to tenant | | 902 |
| | — |
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| Real estate impairment loss | | 3,467 |
| | — |
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| Transaction costs | | 278 |
| | 1,405 |
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| Loss on extinguishment of debt | | 35,336 |
| | — |
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| Tenant bankruptcy settlement income | | (655 | ) | | (2,378 | ) |
| Gain on sale of real estate | | (202 | ) | | (15,618 | ) |
| Income from acquired leasehold interest | | (39,215 | ) | | — |
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| Adjusted EBITDA | | $ | 217,162 |
| | 188,869 |
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FINANCIAL STATEMENTS
Financial Statements
A copy of our 20172023 Annual Report on Form 10‑K,10-K, including our financial statements for the year ended December 31, 2017,2023, is being furnished to shareholders concurrently herewith.
Delivery of Proxy Materials to Households
Under the rules of the SEC and Maryland law, we are permitted to use a method of delivery for proxy materials referred to as “householding.” Householding permits us to mail a single set of proxy materials to any household in which two or more different shareholders reside and are members of the same household, or where one shareholder has multiple accounts. If we household proxy materials, then only one copy of our annual report and proxy statement will be sent to multiple shareholders who share the same address and last name, unless we have received contrary instructions from one or more of those shareholders. In addition, we have been notified that certain intermediaries (i.e., brokers, banks or other nominees) will household proxy materials for the Annual Meeting. For voting purposes, a separate proxy card will be included for each account at the shared address. We will deliver promptly, upon oral or written request, a separate copy of the annual report and proxy statement to any shareholder residing at the same address. If you wish to receive a separate copy of the annual report and proxy statement, or future annual reports and proxy statements, then you may contact our Investor Relations Department by: (a) mail at Urban Edge Properties, Attention: Investor Relations, 888 Seventh Avenue, New York, New York 10019, (b) telephone at (212) 956-2556, or (c) e-mail at rmilton@uedge.com. You can also contact your broker, bank or other nominee to make a similar request. Shareholders sharing an address who now receive multiple copies of our annual report and proxy statement may request delivery of a single copy by contacting us as indicated above, or by contacting their broker, bank or other nominee, provided that such broker, bank or other nominee has elected to household proxy materials.
Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our executive officers and trustees, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Officers, trustees and greater than 10% shareholders are required by the SEC’s regulations to furnish our Company with copies of all Section 16(a) forms they file. To our knowledge all Section 16(a) filing requirements applicable to our executive officers, board members and greater than 10% beneficial owners were satisfied on a timely basis.
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SHAREHOLDER PROPOSALS FOR THE
20192025 ANNUAL MEETING
Shareholder proposals intended to be presented at the 20192025 annual meeting of shareholders must be received by our Secretary at our principal executive offices no later than November 30, 201822, 2024 in order to be considered for inclusion in our proxy statement relating to the 20182025 annual meeting of our shareholders pursuant to Rule 14a-8 under the Exchange Act (“Rule 14a-8”). Shareholder proposals received after November 30, 201822, 2024 will be considered untimely under our Bylaws. While the Board will consider shareholder proposals, we reserve the right to omit from our annual proxy statement shareholder proposals that we are not required to include under the Exchange Act, including Rule 14a-8.
Our Bylaws currently provide that, in order for a shareholder to nominate a candidate for election as a Trustee or a shareholder to propose other business to be presented at our 20182025 annual meeting of shareholders, other than a shareholder proposal included in our Proxy Statement pursuant to Rule 14a-8, notice of such nomination or proposal must be delivered to our Secretary at our executive office not earlier than October 3, 201823, 2024 and no later than 5:00 p.m., Eastern Time, on November 30, 2017,22, 2024, except that, if the 20192025 annual meeting of our shareholders is originally scheduled for a date that is before April 10, 20191, 2025 or after June 9, 2019,May 31, 2025, notice must be delivered no earlier than the 150th day prior to the date of the 20192025 annual meeting of our shareholders and not later than 5:00 p.m., Eastern Time on the later of the 120th day prior to the date of the 20192025 annual meeting of shareholders, as originally convened, or the tenth day following the day on which public announcement of the date of the 20182025 annual meeting of shareholders is first made. The public announcement of a postponement or adjournment of an annual meeting will not extend or restart any time period for giving such a notice. Any such notice or proposal should be mailed to Urban Edge Properties, 888 Seventh Avenue, New York, New York 10019, Attention: Robert C. Milton III, Executive Vice President, General Counsel and Secretary.Secretary, and must set forth information required by our Bylaws. In addition to the foregoing, shareholders that intend to solicit proxies for the Company’s 2025 annual meeting of shareholders in support of trustee nominees other than the Company’s nominees must provide a notice that sets forth the information required by our Bylaws and Rule 14a-19 under the Exchange Act.
Proxy Access
The proxy access provision of our Bylaws permits a shareholder (or a group of no more than 20 shareholders) owning at least 3% of the aggregate of issued and outstanding Common Shares continuously for at least the prior three years to nominate and include in our proxy materials trustee nominees constituting the greater of (i) two or (ii) 20% of the number of trustees in office as of the last day on which a notice requesting the inclusion of trustee nominees in our proxy materials may be timely delivered pursuant to our Bylaws, provided the nominating shareholder(s) and the nominee(s) satisfy the requirements specified in our Bylaws. In order for an eligible shareholder or group of shareholders to nominate a trustee nominee for election at the 2025 annual shareholders meeting pursuant to the proxy access provision of our Bylaws, notice of such nomination and other required information must be received in writing by the Secretary at our principal executive office not earlier than October 23, 2024 and no later than 5:00 p.m., Eastern Time, on November 22, 2024, except that, if the 2025 annual meeting of our shareholders is originally scheduled for a date that is before April 1, 2025 or after May 31, 2025, notice must be delivered no earlier than the 150th day prior to the date of the 2025 annual meeting of our shareholders and not later than 5:00 p.m., Eastern Time on the later of the 120th day prior to the date of the 2025 annual meeting of shareholders, as originally convened, or the tenth day following the day on which public announcement of the date of the 2025 annual meeting of shareholders is first made. In addition, our Bylaws require the eligible shareholder or group of shareholders to update and supplement such information (or provide notice stating that there are no updates or supplements) as of specified dates. The foregoing proxy access right is subject to additional eligibility, procedural and disclosure requirements set forth in our Bylaws.
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FORWARD LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this proxy statement. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) macroeconomic conditions, including geopolitical conditions and instability, which may lead to rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company’s share price; (ii) the economic, political and social impact of, and uncertainty relating to, epidemics and pandemics; (iii) the loss or bankruptcy of major tenants; (iv) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (v) the impact of e-commerce on our tenants’ business; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates, rising inflation, and other factors; (ix) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for any forward-looking statements included in this proxy statement. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this proxy statement. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this proxy statement.
| | | By Order of the Board of Trustees, |
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| | | ROBERT C. MILTON III |
| | | Executive Vice President, General Counsel and Secretary |
| | | March 22, 2024 |
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EXHIBIT A
Urban Edge Properties
Form of 2024 Omnibus Share Plan
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The purpose of the 2024 Omnibus Share Plan of Urban Edge Properties, as amended from time to time (the “Plan”), is to promote the financial interests of Urban Edge Properties (the “Trust”), including its growth and performance, by encouraging employees of the Trust and its subsidiaries, including officers (together, the “Employees”), its non-employee trustees of the Trust and non-employee directors of its subsidiaries (together, the “Non-Employee Trustees”), and certain non-employee advisors and consultants that provide bona fide services to the Trust or its subsidiaries (together, the “Consultants”) to acquire an ownership position in the Trust, enhancing the ability of the Trust and its subsidiaries to attract and retain Employees, Non-Employee Trustees and Consultants of outstanding ability, and providing Employees, Non-Employee Trustees and Consultants with a way to acquire or increase their proprietary interest in the Trust’s success and to further align the interests of the Employees, Non-Employee Trustees and Consultants with shareholders of the Trust.
2. Shares Available for Awards Subject to the provisions of this Section 2 or any adjustment as provided in Section 16, awards may be granted under the Plan with respect to 3,700,000 Share Equivalents (as defined below), which, in accordance with the share counting provisions of this Section 2, would result in the issuance of up to a maximum of 3,700,000 common shares, par value $.01, of beneficial interest in the Trust (the “Shares”) if all awards granted under the Plan were Full Value Awards (as defined below) and 7,400,000 Shares if all awards granted under the Plan were not Full Value Awards. The Shares issued under the Plan may be authorized and unissued Shares or treasury Shares, as the Trust may from time to time determine. Any Shares that are subject to awards that are not Full Value Awards shall be counted against the number of Share Equivalents available for the grant of awards under the Plan, as set forth in the first sentence of this Section 2, as one-half Share Equivalent for every Share granted pursuant to an award; any Shares that are subject to awards that are Full Value Awards shall be counted as one Share Equivalent for every Share granted pursuant to an award. “Full Value Award” means an award under the Plan other than a stock option, stock appreciation right or other award that does not deliver to a Participant on the grant date of such award the full value of the underlying Shares. “Share Equivalent” shall be the measuring unit for purposes of the Plan to determine the number of Shares that may be subject to awards hereunder, which number of Shares shall not in any event exceed 7,400,000, subject to the provisions of this Section 2 or any adjustment as provided in Section 16.
The Committee (as defined in Section 3) may, without affecting the number of Share Equivalents available pursuant to this Section 2, authorize the issuance or assumption of benefits under the Plan in connection with any merger, consolidation, acquisition of property or stock, reorganization or similar transaction upon such terms and conditions as it may deem appropriate, subject to compliance with Section 409A (as defined in Section 16) and any other applicable provisions of the Code.
Shares subject to an award granted under the Plan or the Trust’s 2015 Omnibus Share Plan that expires, is forfeited, terminated or cancelled, in whole or in part, other than by exercise, or is paid in cash in lieu of Shares, shall thereafter again be available for grant under the Plan; provided, however, that the number of Share Equivalents that shall again be available for the grant under the Plan shall be increased by one Share Equivalent for each Share that is subject to a Full Value Award at the time such Full Value Award expires or is forfeited, terminated or cancelled and by one-half Share Equivalent for each Share that is subject to an award that is not a Full Value Award at the time such award expires or is forfeited, terminated or cancelled. Awards that use Shares as a reference but that are paid or settled in whole or in part in cash shall not affect the number of Share Equivalents available under the Plan pursuant to this Section 2 to the extent paid or settled in cash. The number of Share Equivalents available for the purpose of awards under the Plan shall be reduced by (i) one-half of the gross number of Shares for which stock options or stock appreciation rights are exercised, regardless of whether any of the Shares underlying such awards are not actually issued to the Participant as the result of a net settlement and (ii) one-half of any Shares withheld to satisfy any tax withholding obligation with respect to any award that is not a Full Value Award and one Share for each Share withheld to satisfy any tax withholding obligation with respect to any Full Value Award, as described further in Section 13. Notwithstanding the foregoing, the following Shares shall not be added to the Shares
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authorized for grant under the Plan: (i) shares tendered or held back upon exercise of a stock option or settlement of an award to cover the exercise price or tax withholding and (ii) Shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof.
The maximum aggregate number of Shares that may be issued under the Plan pursuant to the exercise of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”) shall not exceed 3,700,000 Shares (as adjusted pursuant to the provisions of Section 16).
The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Trustees of the Trust. A majority of the Committee shall constitute a quorum, and the acts of a majority shall be the acts of the Committee. Notwithstanding anything to the contrary contained herein, the Board of Trustees may, in its sole discretion, at any time and from time to time, grant awards or administer the Plan. In any such case, the Board of Trustees will have all of the authority and responsibility granted to the Committee herein.
ROBERT C. MILTON III
Executive Vice President, General CounselSubject to the provisions of the Plan, the Committee shall select the Employees, Non-Employee Trustees and Secretary
March 29, 2018
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| VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the on May 8, 2018. Have your proxy cardConsultants who will be participants in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 8, 2018. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it by May 8, 2018 to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
SHAREHOLDER MEETING REGISTRATION
To vote and/or attend the meeting, go to the "shareholder meeting registration" link at www.proxyvote.com.
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URBAN EDGE PROPERTIES
888 SEVENTH AVENUE
NEW YORK, NY 10019
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
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Important Notice Regarding the AvailabilityPlan (together, the “Participants”). The Committee shall (i) determine the type of Proxy Materialsawards to be made to Participants, determine the Shares or share units subject to awards, and (ii) have the authority to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements entered into hereunder, and to make all other determinations necessary or advisable for the Annual Meeting:administration of the Plan, based on, among other things, information made available to the Committee by the management of the Trust. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any award in the manner and to the extent it shall deem desirable to carry it into effect. The determinations of the Committee in its administration of the Plan, as described herein, shall be final and conclusive.
The Notice & Proxy Statement, Form 10‑K is/4. EligibilityAll Employees who have demonstrated significant management potential or who have the capacity for contributing in a substantial measure to the successful performance of the Trust, as determined by the Committee, and Non-Employee Trustees and Consultants, as determined by the Committee, are availableeligible to be Participants in the Plan.
Awards under the Plan may consist of the following: stock options (either incentive stock options within the meaning of Section 422 of the Code or non-qualified stock options), stock appreciation rights, performance shares, grants of restricted stock and other-stock based awards, including OP Units (as defined in Section 11). Awards of performance shares, restricted stock or share units and other-stock based awards may provide the Participant with dividends or dividend equivalents and voting rights prior to vesting (whether based on a period of time or based on attainment of specified performance conditions). Unless the Committee otherwise specifies in the award agreement, if dividends or dividend equivalent rights are granted, dividends and dividend equivalents shall be paid to the Participant at www.proxyvote.com.the same time as the Trust pays dividends to common shareholders (even if the Shares subject to the underlying award are held by the Trust) but not less than annually and not later than the fifteenth day of the third month following the end of the calendar year in which the dividends or dividend equivalents are credited (or, if later, the fifteenth day of the third month following the end of the calendar year in which the dividends or dividend equivalents are no longer subject to a “substantial risk of forfeiture” within the meaning of Section 409A (as defined in Section 16)); provided, however, that dividend and dividend equivalent payments in the case of an award that is subject to performance vesting conditions shall be treated as unvested so long as such award remains unvested, and any such dividend and dividend equivalent payments that would otherwise have been paid during the vesting period shall instead be accumulated (and, if paid in cash, reinvested in additional Shares based on the Surrender Value (as defined in Section 6) of the Shares on the date of reinvestment) and paid
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URBAN EDGE PROPERTIES
Annual Meeting of Shareholders
May 9, 2018 9:00AM
This proxy is solicited by the Board of Trustees
The undersigned hereby appoints Mark J. Langer, Robert C. Milton III and Alexandra Ferrone, and each of them (with full power of substitution), as proxies for the undersigned, and hereby authorizes them to represent and to vote, as designated on the reverse side of this proxy, all of the common shares of beneficial interest of Urban Edge Properties that the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 AM Eastern Time on May 9, 2018, at the offices of Goodwin Procter LLP, The New York Times Building, 620 Eighth Avenue, New York, NY 10018, and at any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Trustees’ recommendations.
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within 30 days following the date on which such award is determined by the Committee to have satisfied such performance vesting conditions. Any dividends or dividend equivalents that are accumulated and paid after the date specified in the preceding sentence may be treated separately from the right to other amounts under the award.
Notwithstanding any other provision of the Plan to the contrary, Full Value Awards (a) that vest on the basis of the Participant’s continued employment or service shall be subject to a minimum vesting schedule of at least three years (with no more than one-third of the Shares subject thereto vesting earlier than a date 60 days prior to the first anniversary of the date on which such award is granted and on each of the next two anniversaries of such initial vesting date) and (b) that vest on the basis of the attainment of performance goals shall provide for a performance period that ends no earlier than 60 days prior to the first anniversary of the commencement of the period over which performance is evaluated; provided, however, that the foregoing limitations shall not preclude the acceleration of vesting of any such award upon the death, disability or retirement of the Participant or upon an actual change in control (and not, for example, the commencement of a tender offer for the Trust’s shares or shareholder approval of a transaction that, if consummated, would result in an actual change in control). Notwithstanding the foregoing, Full Value Awards with respect to 5% of the maximum aggregate number of Share Equivalents available for the purpose of awards under the Plan pursuant to Section 2 may be granted under the Plan to any one or more Participants without respect to such minimum vesting provisions.
The Committee shall establish the option price at the time each stock option is granted, which price shall not be less than 100% of the Fair Market Value (as defined below) of the Shares on that date. Stock options shall be exercisable for such period as specified by the Committee but in no event may options be exercisable more than ten years after their date of grant. No stock option shall be exercisable earlier than a date 60 days prior to the first anniversary of the date on which such award is granted, except in the event of the Participant’s retirement, death or disability or an actual change in control. The option price of each Share as to which a stock option is exercised shall be paid in full at the time of such exercise. Such payment shall be made (i) in cash, (ii) by tender of Shares owned by the Participant valued at Surrender Value as of the date of exercise, (iii) to the extent approved by the Committee in its sole discretion, by surrender of all or part of the Shares issuable upon exercise of the option by the largest whole number of Shares with a Surrender Value that does not exceed the aggregate exercise price; provided, however, that the Trust shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole Shares to be issued, (iv) in such other consideration as the Committee deems appropriate, or (v) by a combination of cash, Shares and such other consideration.
For purposes of the Plan, (i) “Fair Market Value” means, with respect to a Share, the average of the high and the low prices reported for the Shares on the applicable date as reported on the New York Stock Exchange or, if not so reported, as determined in accordance with a valuation methodology approved by the Committee in a manner consistent with Section 409A, unless determined as otherwise specified herein and (ii) “Surrender Value” means, with respect to a Share, the closing price reported for the Shares on the applicable date as reported on the New York Stock Exchange or, if not so reported, as determined in accordance with a valuation methodology approved by the Committee in a manner consistent with Section 409A, unless determined as otherwise specified herein. For purposes of the grant of any award, the applicable date will be the trading day on which the award is granted or, if the date the award is granted is not a trading day, the trading day immediately prior to the date the award is granted. For purposes of the exercise of any award, the applicable date is the date a notice of exercise is received by the Trust or, if such date is not a trading day, the trading day immediately following the date a notice of exercise is received by the Trust.
7. Stock Appreciation Rights Stock appreciation rights may be granted in tandem with a stock option, in addition to a stock option, or may be freestanding and unrelated to a stock option. Stock appreciation rights granted in tandem with or in addition to a stock option may be granted either at the same time as the stock option or at a later time. The Committee shall establish the grant price of each stock appreciation right granted at the time each such stock appreciation right is granted, which price shall not be less than 100% of the Fair Market Value of the Shares
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subject to such award on that date. No stock appreciation right shall be exercisable earlier than a date 60 days prior to the first anniversary of the date on which such award is granted, except in the event of the Participant’s retirement, death or disability or an actual change in control, or later than 10 years from the grant date of such award. A stock appreciation right shall entitle the Participant to receive from the Trust an amount equal to the increase of the Fair Market Value of the Shares on the exercise of the stock appreciation right over the grant price. The Committee, in its sole discretion, shall determine whether the stock appreciation right shall be settled in cash, Shares or a combination of cash and Shares.
Performance shares may be granted in the form of actual Shares or share units having a value equal to an identical number of Shares. In the event that a certificate is issued in respect of Shares subject to a grant of performance shares, such certificate shall be registered in the name of the Participant but shall be held by the Trust until the time the Shares subject to the grant of performance shares are earned. The performance conditions and the length of the performance period shall be determined by the Committee. The Committee, in its sole discretion, shall determine whether performance shares granted in the form of share units shall be paid in cash, Shares, or a combination of cash and Shares.
Restricted stock may be granted in the form of actual Shares or share units having a value equal to an identical number of Shares. In the event that a certificate is issued in respect of Shares subject to a grant of restricted stock, such certificate shall be registered in the name of the Participant but shall be held by the Trust until the end of the restricted period. The employment conditions and the length of the period for vesting of restricted stock shall be established by the Committee at time of grant. The Committee, in its sole discretion, shall determine whether restricted stock granted in the form of share units shall be paid in cash, Shares, or a combination of cash and Shares.
10. Other Cash-Based and Stock-Based Awards Other types of cash-based, equity-based or equity-related awards (including the grant or offer for sale of unrestricted Shares and performance stock and performance units settled in shares or cash) may be granted under such terms and conditions as may be determined by the Committee in its sole discretion. Such awards may, at the discretion, be subject to performance-based conditions. Any such performance-based conditions shall be based on one or more of the following business criteria (either separately or in combination) with regard to the Trust (or a subsidiary, division, other operational unit or administrative department of the Trust): (i) pre-tax income, (ii) after-tax income, (iii) net income (meaning net income as reflected in the Trust’s financial reports for the applicable period, on an aggregate, diluted and/or per share basis), (iv) operating income, (v) cash flow, (vi) earnings per share, (vii) return on equity, (viii) return on invested capital or assets, (ix) cash and/or funds available for distribution, (x) appreciation in the Fair Market Value of Shares, (xi) return on investment, (xii) total return to shareholders, (xiii) net earnings growth, (xiv) stock appreciation (meaning an increase in the price or value of the Shares after the date of grant of an award and during the applicable period), (xv) related return ratios, (xvi) increase in revenues, (xvii) net earnings, (xviii) changes (or the absence of changes) in the per share or aggregate market price of the Shares, (xix) number of securities sold, (xx) earnings before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in the Trust’s financial reports for the applicable period, (xxi) total revenue growth (meaning the increase in total revenues after the date of grant of an award and during the applicable period, as reflected in the Trust’s financial reports for the applicable period), (xxii) total shareholder return, (xxiii) funds from operations, as determined and reported by the Trust in its financial reports, (xxiv) increase in net asset value per Share, (xxv) economic value-added, (xxvi) volume of acquisitions, dispositions or other strategic transactions, (xxvii) productivity, (xxviii) development-related activities, (xxix) leasing, (xxx) rent growth, occupancy or percentage leased, and (xxxi) balance sheet measures. The performance goals may differ from Participant to Participant.
Performance criteria may be absolute amounts or percentages of amounts or may be relative to the performance of a peer group of real estate investment trusts or other corporations or indices. Except as otherwise expressly provided, all financial terms are used as defined under Generally Accepted Accounting Principles (“GAAP”) and all determinations shall be made in accordance with GAAP, as applied by the Trust
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in the preparation of its periodic reports to shareholders. In addition, the performance goals may be based upon the attainment of specified levels of Trust (or subsidiary, division, other operational unit or administrative department of the Trust) performance under one or more of the measures described above relative to the performance of other real estate investment trusts or the historic performance of the Trust. Unless the Committee provides otherwise at the time of establishing the performance goals, for each fiscal year of the Trust, the Committee may provide for objectively determinable adjustments, modifications or amendments, as determined in accordance with GAAP, to any of the performance criteria described above for one or more of the items of gain, loss, profit or expense: (A) determined to be extraordinary or unusual in nature or infrequent in occurrence, (B) related to the disposal of a segment of a business, (C) related to a change in accounting principle under GAAP, (D) related to discontinued operations that do not qualify as a segment of business under GAAP, and (E) attributable to the business operations of any entity acquired by the Trust during the fiscal year.
Following the completion of each performance period, the Committee shall have the sole discretion to determine, based on information made available to the Committee by the management of the Trust, whether the applicable performance goals have been met with respect to a given Participant and, if they have, shall so certify and ascertain the amount of the applicable performance-based award. No Performance-Based Awards will be paid for such performance period until such certification is made by the Committee. The amount of the Performance-Based Award actually paid to a given Participant may be less (but not more) than the amount determined by the applicable performance goal formula, at the discretion of the Committee. The amount of the Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion, after the end of such performance period and after the Committee’s certification described above.
11. Operating Partnership Units Awards may be granted under the Plan in the form of undivided fractional limited partnership interests in Urban Edge Properties LP (together with any successor entity, the “Operating Partnership”), a Delaware limited partnership, the entity through which the Trust conducts its business and an entity that has elected to be treated as a partnership for federal income tax purposes, of one or more classes (“OP Units”) established pursuant to the Operating Partnership’s agreement of limited partnership, as amended from time to time. Awards of OP Units shall be valued by reference to, or otherwise determined by reference to or based on, Shares. OP Units awarded under the Plan may be (1) convertible, exchangeable or redeemable for other limited partnership interests in the Operating Partnership (including OP Units of a different class or series) or Shares, or (2) valued by reference to the book value, fair value or performance of the Operating Partnership. Awards of OP Units are intended to qualify as “profits interests” within the meaning of IRS Revenue Procedure 93-27, as clarified by IRS Revenue Procedure 2001-43, with respect to a Participant in the Plan who is rendering services to or for the benefit of the Operating Partnership, including its subsidiaries.
For purposes of calculating the number of Shares underlying an award of OP Units relative to the total number of Share Equivalents available for issuance under the Plan, the Committee shall establish in good faith the maximum number of Shares to which a Participant receiving such award of OP Units may be entitled upon fulfillment of all applicable conditions set forth in the relevant award documentation, including vesting conditions, partnership capital account allocations, value accretion factors, conversion ratios, exchange ratios and other similar criteria. If and when any such conditions are no longer capable of being met, in whole or in part, the number of Shares underlying such awards of OP Units shall be reduced accordingly by the Committee, and the number of Share Equivalents shall be increased by one Share Equivalent for each Share so reduced. Awards of OP Units may be granted either alone or in addition to other awards granted under the Plan. The Committee shall determine the eligible Participants to whom, and the time or times at which, awards of OP Units shall be made; the number of OP Units to be awarded; the price, if any, to be paid by the Participant for the acquisition of such OP Units; and the restrictions and conditions applicable to such award of OP Units. Conditions may be based on continuing employment (or other service relationship), computation of financial metrics and/or achievement of pre-established performance goals and objectives, with related length of the service period for vesting, minimum or maximum performance thresholds, measurement procedures and length of the performance period to be established by the Committee at the time of grant, in its sole discretion. The Committee may allow awards of OP Units to be held through a limited partnership, or
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similar “look-through” entity, and the Committee may require such limited partnership or similar entity to impose restrictions on its partners or other beneficial owners that are not inconsistent with the provisions of this Section 11. The provisions of the grant of OP Units need not be the same with respect to each Participant.
Notwithstanding Section 5 of the Plan, the award agreement or other award documentation in respect of an award of OP Units may provide that the recipient of an award under this Section 11 shall be entitled to receive, currently or on a deferred or contingent basis, dividends or dividend equivalents with respect to the number of Shares underlying the award or other distributions from the Operating Partnership prior to vesting (whether based on a period of time or based on attainment of specified performance conditions), as determined at the time of grant by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or OP Units.
OP Units awarded under this Section 11 may be issued for no cash consideration.
Each award under the Plan shall be evidenced by an agreement setting forth the terms and conditions, as determined by the Committee, which shall apply to such award, in addition to the terms and conditions specified in the Plan.
The Trust shall have the right to deduct from any payment to be made pursuant to the Plan, or to require prior to the issuance or delivery of any Shares or the payment of cash under the Plan, any taxes required by law to be withheld therefrom. The Committee, in its sole discretion, may permit a Participant who is an employee of the Trust or its subsidiaries to elect to satisfy such withholding obligation by having the Trust retain the number of Shares whose Fair Market Value equals the minimum statutory amount of taxes required by applicable law to be withheld. Any fraction of a Share required to satisfy such obligation shall be disregarded, and the amount due shall instead be paid in cash to or by the Participant, as the case may be.
No award under the Plan shall be assignable or transferable except by will or the laws of descent and distribution, and no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant. Notwithstanding the foregoing, the Committee may determine, at the time of grant or thereafter, that an award (other than stock options intended to be incentive stock options within the meaning of Section 422 of the Code) is transferable by the Participant to such Participant’s immediate family members (or trusts, partnerships, or limited liability companies established for such immediate family members). For this purpose, immediate family member means, except as otherwise defined by the Committee, the Participant’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brothers and sisters), in-laws and persons related by reason of legal adoption. Such transferees may transfer an award only by will or the laws of descent or distribution. An award transferred pursuant to this Section 14 shall remain subject to the provisions of the Plan, and shall be subject to such other rules as the Committee shall determine. Upon transfer of a stock option, any related stock appreciation right shall be canceled. Except in the case of a holder’s incapacity, an award shall be exercisable only by the holder thereof.
15. No Right to Employment No person shall have any claim or right to be granted an award, and the grant of an award shall not be construed as giving a Participant any right to continue his or her service to the Trust or its subsidiaries as an Employee, Non-Employee Trustee or Consultant. Further, the Trust and its subsidiaries expressly reserve the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any agreement entered into hereunder.
16. Adjustment of and Changes in Shares In the event of any change in the outstanding Shares by reason of any share dividend or split, reverse split, recapitalization, merger, consolidation, spinoff, combination or exchange of Shares or other corporate change, or any distributions to common shareholders other than regular cash dividends, the Committee shall
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make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number of Share Equivalents for which awards may be granted under the Plan, (ii) the number or kind of Shares or other securities issued or reserved for issuance pursuant to outstanding awards, (iii) the individual Participant limitation set forth in Section 2, and (iv) the number of Shares set forth in Section 2 that can be issued through incentive stock options within the meaning of Section 422 of the Code; provided, however, that no such substitution or adjustment shall be required if the Committee determines that such action could cause an award to fail to satisfy the conditions of an applicable exception from the requirements of Section 409A of the Code (“Section 409A”) or otherwise could subject a Participant to the additional tax imposed under Section 409A in respect of an outstanding award; and further provided that no Participant shall have the right to require the Committee to make any adjustment or substitution under this Section 16 or have any claim or right whatsoever against the Trust or any of its subsidiaries or affiliates or any of their respective trustees, directors, officer or employees in respect of any action taken or not taken under this Section 16.
The Committee may amend or terminate the Plan or any portion thereof from time to time, provided that no amendment shall be made without shareholder approval if such amendment (i) would increase the maximum aggregate number of Shares that may be issued under the Plan (other than pursuant to Section 16), (ii) would materially modify the requirements for participation in the Plan, (iii) would result in a material increase in the benefits accrued to Participants under the Plan, (iv) would reduce the exercise price of outstanding stock options or stock appreciation rights or cancel outstanding stock options or stock appreciation rights in exchange for cash, other awards or stock options or stock appreciation rights with an exercise price that is less than the exercise price of the original stock options or stock appreciation rights (other than pursuant to Section 16) or (v) requires shareholder approval to comply with any applicable laws, regulations or rules, including the rules of a securities exchange or self-regulatory agency.
It is the Trust’s intent that awards under the Plan be exempt from, or comply with, the requirements of Section 409A, and that the Plan be administered and interpreted accordingly. If and to the extent that any award made under the Plan is determined by the Trust to constitute “non-qualified deferred compensation” subject to Section 409A and is payable to a Participant by reason of the Participant’s termination of employment, then (a) such payment or benefit shall be made or provided to the Participant only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if the Participant is a “specified employee” (within the meaning of Section 409A and as determined by the Trust), such payment or benefit shall not be made or provided before the date that is six months after the date of the Participant’s separation from service (or the Participant’s earlier death).
The Plan was adopted on February 9, 2024 by the Compensation Committee of the Board of Trustees of the Trust and on February 22, 2024 by the Board of Trustees of the Trust, in each case, subject to the approval of the shareholders of the Trust, and shall be effective as of the date of such shareholder approval (the “Effective Date”). Subject to earlier termination pursuant to Section 17, the Plan shall have a term of ten years from the Effective Date; provided, however, that all awards made under the Plan before its termination, and the Committee’s authority to administer the terms of such awards, will remain in effect until such awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable award agreements.
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