Filed by the Registrant ☒Filed by a Party other than the Registrant o o o☒ o☐ o o o☐ o
ONE LIBERTY PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of One Liberty Properties, Inc., a Maryland corporation (“we,” “us” or the “Company”), will be held at our offices, located at 60 Cutter Mill Road, Suite 303, Great Neck, NY, on Thursday, June 13, 201910, 2020 at 9:30 a.m., local time, to consider and vote on the following matters:
1. | The election of three directors, each to serve until the |
2. | A proposal to approve a non-binding advisory resolution regarding the |
3. | A proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for |
4. | Proposals to amend our charter, in each case as more fully described in the accompanying proxy statement, to: |
A. | increase the Company’s authorized capital stock and its authorized common stock; |
B. | revise the requirements in our charter to indemnify and advance the expenses of our officers, directors and employees with respect to liabilities arising in connection with their services to us; and |
C. | change the vote required for our stockholders to approve certain actions. |
5. | Proposals to amend our Bylaws, in each case as more fully described in the accompanying proxy statement, to: |
A. | eliminate certain restrictions on our ability to engage in certain investment, financing, re-leasing and other transactions; and |
B. | eliminate certain requirements relating to management arrangements; and |
6. | Any other business |
3, “FOR” the Charter Amendment Proposal and “FOR” the Bylaw Amendment Proposal.
By Order of the Board of Directors | |
Dated: April 23, 2019
___, 2020
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PROXY STATEMENT
JeffreyCharles Biederman, Patrick J. Callan, Jr., and Karen A. Gould, Matthew J. Gould and J. Robert Lovejoy,Till (collectively the “Nominees”), each to hold office until the 20222023 annual meeting and his or her successor is duly elected and qualifiesqualifies;2019 Incentive Plan; andnon-binding advisory resolution regarding our executive compensation;2019.the year ending December 31, 2020;
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How do I vote?
• | Vote online. You may vote online at www.voteproxy.com. To vote online, you must have your control number provided in the proxy card. |
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Who will count the vote?
voted as instructed in the proxy.
Yes. Under applicable rules, brokers, banks and other nominees are prohibited from voting shares held
have been approved, and if one but fewer than all of Proposals 5.A and 5.B are approved, the Bylaws will be revised to reflect only those proposals that have been approved.
nominees and the approval of such proposals.
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other record holders to forward copies of the proxy statement and other soliciting materials to persons for whom they hold shares and to request authority for the exercise of proxies. We will reimburse such record holders for their reasonable out-of-pocket expenses in forwarding proxies and proxy materials to stockholders. We have retained DF King for a fee of $6,000 plus expenses and other customary charges, to aid in the solicitation of proxies from our stockholders. To the extent necessary to ensure sufficient representation at the meeting, we or our proxy solicitor may solicit the return of proxies by personal interview, mail, telephone, facsimile, internet or other means of electronic transmission. The extent to which this will be necessary depends upon how promptly proxies are returned. We urge you to send in your proxy without delay.
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this meeting.
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Name | Audit | Compensation | Nominating and Corporate Governance | ||||||
Charles Biederman | ✓ | ✓ | |||||||
Joseph A. DeLuca | ✓ | ||||||||
J. Robert Lovejoy | ✓ | ✓ | |||||||
Louis P. Karol | Chair | ||||||||
Leor Siri(1) | Chair | ||||||||
Eugene I. Zuriff | ✓ | Chair | |||||||
Number of Meetings | 5 | 5 | (2) | 2 | (2) |
Name | Audit | Compensation | Nominating | |||||
Charles Biederman(1) | ✔ | Chair | ||||||
Joseph A. DeLuca | ✔ | |||||||
J. Robert Lovejoy(2) | Chair | ✔ | ||||||
Louis P. Karol(3) | Chair | |||||||
Leor Siri(4) | Chair | |||||||
Karen A. Till (5) | ✔ | |||||||
Eugene I. Zuriff(2) | ✔ | Chair | ||||||
Number of Meetings | 4 | 4(6) | 3(6) |
(1) | Mr. Biederman’s service as chair of this committee began September 11, 2019. |
(2) | Mr. Zuriff served as chair of this committee through June 13, 2019 at which time Mr. Lovejoy became chair. |
(3) | Mr. Karol resigned as a director and as chair of the nominating committee on August 2, 2019. |
(4) | Mr. Siri served as our audit committee financial expert in |
Ms. Till was elected on September 11, 2019 by the Board to serve as a director and as a member of the nominating committee. |
(6) | Includes a joint meeting of the compensation committee and nominating |
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Compensation Committee
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In evaluating the independence of Messrs. Biederman Lovejoy and Karol,Lovejoy, the Board was aware that each of suchthese directors has agreed to invest up to $250,000, asare limited partners in a fund, which we refer to as the New Fund, in each case representing 2% of the low range of New Fund’s anticipated capitalization. New Fund intends to invest in real estate properties – we have no interest in acquiring the properties that New Fund intends to acquire. The manager of New Fund isan investment vehicle managed by an affiliate of Gould Investors. In concluding that such directors are independent, the Board took into account, among other things, the limited voting rights associated with the limited partnership interests, that such directors do not have any management involvement in Gould Investors or New Fund, and that each such director’s investment does not constitute a significant component of such director’s net worth. Gould Investors is a stockholder and an affiliate of ours and is primarily engaged in the ownership and operation of real estate properties held for investment. See “Certain Relationships and Related Transactions.”
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Committee | ||||||||||||
Board | Audit | Compensation | Nominating | |||||||||
Annual retainer(1) | $ | 32,000 | $ | 12,000 | $ | 6,000 | $ | 5,000 | ||||
Participation in meeting | 1,000 | — | — | — | ||||||||
Chairman’s annual retainer(2) | 275,625 | 15,000 | 8,500 | 7,000 | ||||||||
Vice Chairman’s annual retainer(2) | 110,250 | — | — | — | ||||||||
Lead director’s annual retainer | 25,000 | — | — | — |
Committee(3) | ||||||||||||||||||
Board | Audit | Compensation | Nominating | |||||||||||||||
Annual retainer (1) | $ | 32,000 | (2) | $ | 12,000 | $ | 6,000 | $ | 5,000 | |||||||||
Participation in meeting | 1,000 | — | — | — | ||||||||||||||
Chairman’s annual retainer (2) | 289,406 | (3) | 15,000 | 8,500 | 7,000 | |||||||||||||
Vice Chairman’s annual retainer | 115,763 | (3) | — | — | — | |||||||||||||
Lead director’s annual retainer | 25,000 | — | — | — | ||||||||||||||
(1) | Effective January 1, 2020, the annual retainer for serving as a director or member of the audit, compensation or nominating committee is $33,000, $12,400, $6,200 and $5,200, respectively. |
(2) | The amounts paid for serving as the chair of the applicable committee are in addition to the annual retainer for service on such committee. |
Matthew J. Gould and Fredric H. Gould, members of management, were paid the Chairman’s and Vice Chairman’s annual retainer, respectively. See “Executive Compensation— Compensation Discussion and Analysis — Compensation of the Chairman and Vice Chairman of the Board” and “Certain Relationships and Related Transactions.” |
Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | ||||||
Charles Biederman | 47,000 | 80,992 | 127,992 | ||||||
Joseph A. DeLuca | 48,000 | 80,992 | 128,992 | ||||||
J. Robert Lovejoy | 72,000 | 80,992 | 152,992 | ||||||
Louis P. Karol | 48,000 | 80,992 | 128,992 | ||||||
Leor Siri | 63,000 | 80,992 | 143,992 | ||||||
Eugene I. Zuriff | 62,500 | 80,992 | 143,492 |
Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | ||||||||||
Charles Biederman | 47,750 | 82,240 | 129,990 | ||||||||||
Joseph A. DeLuca | 47,000 | 82,240 | 129,240 | ||||||||||
J. Robert Lovejoy | 76,250 | 82,240 | 158,490 | ||||||||||
Louis P. Karol | 36,000 | 82,240 | 118,240 | ||||||||||
Leor Siri | 63,000 | 82,240 | 145,240 | ||||||||||
Karen A. Till | 10,250 | – | 10,250 | ||||||||||
Eugene I. Zuriff | 58,250 | 82,240 | 140,490 | ||||||||||
(1) | The compensation received by: (a) Matthew J. Gould, Chairman of the Board, Fredric H. Gould, Vice Chairman of the Board and Patrick J. Callan, Jr., President, Chief Executive Officer and a Director, is set forth in the Summary Compensation Table; and (b) Jeffrey A. Gould, a Senior Vice President and Director, is set forth in “Certain Relationships and Related Transactions.” |
(2) | Includes all fees earned for services as a director, including annual retainer fees, committee and committee chair fees, independent lead director fee and meeting fees of $1,000 per board meeting. Each non-management director is entitled to reimbursement of travel and other expenses incurred in connection with attendance at board and committee meetings, which amounts are not included in this table. |
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committee chairman fees, independent lead director fee and meeting fees of $1,000 per board meeting. Each non-management director is entitled to reimbursement of travel and other expenses incurred in connection with attendance at board and committee meetings, which amounts are not included in this table.
(3) | Represents the aggregate grant date fair value of these restricted stock awards computed in accordance with Accounting Standards Codification Topic 718—Stock Compensation, which we refer to as ASC Topic 718. The closing price per share on January |
Name(1) | Unvested Restricted Stock (#) | Market Value of Unvested Restricted Stock ($)(2) | ||||
Charles Biederman | 14,200 | 343,924 | ||||
Joseph A. DeLuca | 14,200 | 343,924 | ||||
J. Robert Lovejoy | 14,200 | 343,924 | ||||
Louis P. Karol | 14,200 | 343,924 | ||||
Leor Siri | 11,700 | 283,374 | ||||
Eugene I. Zuriff | 14,200 | 343,924 |
Name(1) | Unvested Restricted Stock (#) | Market Value of Unvested Restricted Stock ($)(2) | |||||||
Charles Biederman | 14,900 | 405,131 | |||||||
Joseph A. DeLuca | 14,900 | 405,131 | |||||||
J. Robert Lovejoy | 14,900 | 405,131 | |||||||
Louis P. Karol | – | – | |||||||
Leor Siri | 14,900 | 405,131 | |||||||
Karen A. Till | – | – | |||||||
Eugene I. Zuriff | 14,900 | 405,131 | |||||||
(1) | Information regarding the outstanding restricted stock units (“RSUs”) and shares of restricted stock held by Fredric H. Gould, Patrick J. Callan, Jr. and Matthew J. Gould, our named executive officers who also serve as directors, is set forth under “Executive Compensation – Outstanding Equity Awards at Fiscal Year End.” |
(2) | The closing price on the New York Stock Exchange on December 31, |
Name | Amount of Beneficial Ownership(1) | Percent of Class | ||||
Charles Biederman(2) | 26,650 | * | ||||
Patrick J. Callan, Jr. | 221,460 | 1.1 | % | |||
Joseph A. DeLuca(3) | 40,736 | * | ||||
Fredric H. Gould(4)(5) | 2,449,544 | 12.5 | % | |||
Jeffrey A. Gould(4)(6) | 2,101,089 | 10.7 | % | |||
Matthew J. Gould(4)(7) | 2,088,742 | 10.7 | % | |||
David W. Kalish(8) | 328,154 | 1.7 | % | |||
Louis P. Karol | 25,025 | * | ||||
J. Robert Lovejoy(9) | 71,380 | * | ||||
Lawrence G. Ricketts, Jr. | 127,424 | * | ||||
Leor Siri(10) | 14,900 | * | ||||
Eugene I. Zuriff(11) | 35,057 | * | ||||
Directors and executive officers as a group (20 individuals)(4) | 4,294,045 | 21.9 | % | |||
Gould Investors L.P.(4)(12) | 1,785,976 | 9.1 | % | |||
BlackRock, Inc.(13) | 1,324,174 | 6.8 | % | |||
The Vanguard Group(14) | 1,583,218 | 8.1 | % | |||
Vanguard Specialized Funds – Vanguard REIT Index Fund(15) | 692,664 | 3.5 | % |
Name | Amount of Beneficial Ownership(1) | Percent of Class | |||||||
Charles Biederman(2) | 29,850 | * | |||||||
Patrick J. Callan, Jr. | 243,210 | 1.2 | % | ||||||
Joseph A. DeLuca(3) | 43,936 | * | |||||||
Fredric H. Gould(4)(5) | 2,289,800 | 11.4 | % | ||||||
Jeffrey A. Gould(4)(6) | 2,105,696 | 10.5 | % | ||||||
Matthew J. Gould(4)(7) | 2,065,718 | 10.3 | % | ||||||
David W. Kalish(8) | 338,874 | 1.7 | % | ||||||
J. Robert Lovejoy(9) | 74,580 | * | |||||||
Lawrence G. Ricketts, Jr. | 134,335 | * | |||||||
Leor Siri(10) | 18,100 | * | |||||||
Karen A. Till | 3,200 | * | |||||||
Eugene I. Zuriff(11) | 32,957 | * | |||||||
Directors and executive officers as a group (19 individuals)(4) | 4,327,010 | 21.6 | % | ||||||
Gould Investors L.P.(4)(12) | 1,785,976 | 8.9 | % | ||||||
BlackRock, Inc.(13) | 1,299,784 | 6.5 | % | ||||||
The Vanguard Group(14) | 1,627,762 | 8.1 | % | ||||||
Renaissance Technologies LLC(15) | 1,044,025 | 5.2 | % | ||||||
* | Less than 1% |
(1) | Securities are listed as beneficially owned by a person who directly or indirectly holds or shares the power to vote or to dispose of the securities, whether or not the person has an economic interest in the securities. In addition, a person is deemed a beneficial owner if he has the right to acquire beneficial ownership of shares within 60 days of March |
(2) | Excludes |
(3) | Includes shares of common stock owned by a corporation of which he is the sole shareholder. Excludes 500 shares of common stock owned by his wife as to which he disclaims beneficial ownership. |
(4) | Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould are the directors of the corporate managing partner of Gould Investors L.P., which we refer to as Gould Investors, and accordingly may be deemed to share voting and dispositive power with respect to the shares owned by Gould Investors. |
(5) | Includes |
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(6) | Includes |
(7) | Includes 261,719 shares of common stock owned directly, 1,785 shares of common stock owned by Gould Investors and 13,979 shares of common stock owned by a foundation over which he has shared voting and dispositive power. Also |
(8) | Includes |
(9) | Includes shares of common stock owned by his IRA. Excludes |
(10) | Excludes 285 shares held by his spouse, as custodian for their children, as to which shares he disclaims beneficial ownership. |
(11) | Excludes 5,000 shares of common stock owned by his wife, as to which shares he disclaims beneficial ownership. |
(12) | Address is 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021. This stockholder is primarily engaged in the ownership and operation of real estate properties held for investment. |
(13) | As of December 31, |
(14) | As of December 31, |
(15) | As of December 31, |
Name and Age | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF JEFFREY A. GOULD, MATTHEW J. GOULD AND J. ROBERT LOVEJOY AS DIRECTORS.
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Directors to Continue in Office Until the 2020 Annual Meeting
Charles L. Biederman 86 Years | Director since 1989; Chairman from 2008 to 2010 of Universal Development Company, a commercial general contractor engaged in turnkey hotel, commercial and residential projects; Principal of Sunstone Hotel Investors, LLC, a company engaged in the management, ownership and development of hotel properties, from 1994 to 2007; Executive Vice President of Sunstone Hotel Investors, Inc., a real estate investment trust engaged in the ownership of hotel properties, from 1994 to 1998 and Vice Chairman of Sunstone Hotel Investors from 1998 to 1999. Mr. Biederman, a retired professional architect, was involved for many years in the development and construction of residential communities. He subsequently became involved, as an executive officer and a director, in the activities of a publicly traded real estate investment trust engaged in the ownership of hotel properties and developed, as an investor, principal and partner, residential properties and hotels. In his business activities he has been involved in all aspects of real estate ownership and operation and in real estate development, which includes financing and related financial matters. His many years of diverse business experience make him a valued member of our Board. |
Patrick J. Callan, Jr. 57 Years | Director since 2002, President since 2006 and Chief Executive Officer since 2008; Senior Vice President of First Washington Realty, Inc. from 2004 to 2005; Vice President of Real Estate for Kimco Realty Corporation, a real estate investment trust, from 1998 to 2004. Mr. Callan joined us in 2002, as a director, with significant experience in commercial leasing with a publicly traded real estate investment trust and thereafter served as a senior executive officer of another real estate investment trust. His knowledge of our business and industry made him an excellent choice to become our president in 2006 and our chief executive officer in 2008. |
57 Years | Director since |
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Name and Age | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
Joseph A. DeLuca 74 Years | Director since 2004; Principal and sole shareholder of Joseph A. DeLuca, Inc., engaged in commercial and multifamily real estate debt and equity investment advisory and restructuring, since 1998; Director of Capmark Bank, a commercial and multifamily Industrial Bank real estate lender from 2011 through its successful resolution, repayment of all deposits, collection / liquidation of assets, return of shareholder (parent) capital and completion of de-banking at year end 2013; Member of Board of Managers of Wrightwood Capital LLC, a private commercial real estate lender and investment manager beginning in 2010 and continuing through June 2015, encompassing modifications to Wrightwood’s financing structure, operating platform and the restructuring/monetization of its real estate assets and portfolios; Consultant to Gramercy Capital Corp. from 2008 to 2011 for restructuring /special servicing /monetization of various real estate investments; Principal of MHD Capital Partners, LLC from 2006 to 2009, an equity oriented real estate investing entity; Director of Real Estate Investments for Equitable Life Assurance Society of America under a consulting contract from 1999 to 2002; Executive Vice President /Managing Director/Group Head of the Real Estate Finance & Real Estate Investment Banking Groups for Chemical Bank from 1990 and continuing in this capacity through the 1992 merger with Manufacturers Hanover Corporation and through the 1996 merger with the Chase Manhattan Bank to 1998. He has served as a Governor of the Real Estate Board of New York and as Chairman of the Advisory Board of the NYU Real Estate Institute. He also has served as a Senior Vice Chairman of the Real Estate Roundtable in Washington, DC and is currently a member of its Real Estate Capital Policy Committee. After leaving the bank in 1998, Mr. DeLuca has been a consultant on real estate matters to various public and private entities. His years of experience in banking and the real estate industry, particularly in real estate finance matters, provides our board with a director who has exceptional knowledge and understanding of real estate finance, credit issues from both the lender’s and borrower’s perspectives, and investment property acquisitions and dispositions. |
Name and Age | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
Fredric H. Gould 84 Years | Vice Chairman since June 2013, Chairman from 1989 through June 2013, Chief Executive Officer from 1999 to 2001 and from 2005 to 2007; From 1997 through 2013, Chairman of Georgetown Partners, Inc., managing general partner of Gould Investors, which is primarily engaged in the ownership and operation of real estate properties held for investment; Since 1984, a director of, and from 1984 through 2013, Chairman of the Board of BRT |
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industrial properties, | |
Leor Siri 47 Years | Director since 2014; Since 2014, Chief Financial Officer and a member of the Management Committee of Silverstein Properties, Inc.; Chief Financial Officer of Ian Schrager Company from 2013 to 2014; Chief Financial Officer and member of the Executive Investment Committee of Seavest Inc., from 2011 to 2013; Chief Accounting Officer, Treasurer and Director of Elad Group, Ltd. From 2006 to 2011; from 1996 to 2006, served in various capacities (including senior manager) at Ernst & Young LLP. Mr. Siri is a certified public accountant. His experience as chief financial officer of businesses engaged in the real estate industry adds an informed voice to our board and audit committee. |
Eugene I. Zuriff 80 Years | Director since 2005; Consultant to the restaurant industry |
Directors to Continue in Office Until the 2022 Annual Meeting
Name and Age | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
Jeffrey A. Gould 54 Years | Director since 1999, Vice President from 1989 to 1999 and Senior Vice President since 1999; Since 1996, President, from 1996 through 2001, Chief Operating Officer, and since 2002, Chief Executive Officer of BRT Apartments Corp., a New York Stock Exchange listed real estate investment trust; Director of BRT Apartments since 1997; Since 1996, Senior Vice President and since 2013, director of Georgetown Partners, Inc., the managing general partner of Gould Investors. Jeffrey A. Gould is the son of Fredric H. Gould and brother of Matthew J. Gould. Mr. Gould has spent his entire career in the real estate business. His principal activity for more than the past 17 years has been first as chief operating officer and then as chief executive officer of BRT Apartments. His experience in operating a public REIT and expertise in evaluating real estate acquisitions and dispositions, makes him a valued member of our board. |
Matthew J. Gould 60 Years | Chairman since June 2013, Vice Chairman from 2011 through June 2013; Director since 1999; President and Chief Executive Officer from 1989 to 1999 and a Senior Vice President from 1999 through 2011; From 1996 through 2013, President, and from 2013, Chairman of the Board and Chief Executive Officer of Georgetown Partners, the managing general partner of Gould Investors; Senior Vice President of BRT Apartments since 1993 and director since 2001; Vice President of Majestic for more than the past five years. Matthew J. Gould is the son of Fredric H. Gould and brother of Jeffrey A. Gould. In addition to his general knowledge of real estate matters, he devotes a significant amount of his business time to the acquisition and sale of real property, and he brings his knowledge and expertise in these areas to his board activities. He also has experience in mortgage financing and real estate management, activities in which he is frequently involved. His more than 35 years’ experience as a real estate executive is a valuable asset to our board of directors. |
J. Robert Lovejoy 75 Years | Director since 2004 and Independent Lead Director since 2011; Founder and principal of J.R. Lovejoy & Co. LLC, providing consulting and advisory services to corporate, investment and financial clients; Partner and Chief Administrative Officer of Deimos Asset Management LLC, a privately owned multi-strategy fund management company, from 2015 to 2016. Director from 2000 to 2013, Chairman from 2011 to 2013, and Interim Chief Executive Officer from 2011 to 2012 of Orient-Express Hotels Ltd., (now called Belmond Ltd.), a luxury lodging and adventure travel company which was acquired in 2019 by LVMH Moët Hennessey Louis Vuitton; Partner, Chief Administrative Officer and General Counsel of Coatue Management LLC, a privately owned investment management company, from 2009 through 2010; Managing Director of Groton Partners, LLC, merchant bankers, from 2006 to 2009; Senior Managing Director of Ripplewood Holdings, LLC, a private equity investment firm, from 2000 to 2005; Managing Director of Lazard Freres & Co. LLC and General Partner of Lazard’s predecessor partnership from 1984 to 2000; Partner, and previously Associate, of Davis Polk & Wardwell, law firm, from 1971 to 1984. Mr. Lovejoy, an attorney, has extensive experience in asset management and investment and merchant banking, and throughout his career has been involved in raising capital in private and public transactions, mergers and acquisitions, business law and accounting issues. His extensive experience in these areas makes him a valued member of our board of directors. |
Set forth below are somevote and will consider our stockholders’ concerns and take them into account in future determinations concerning our executive compensation program. Our Board recommends that you indicate your support for our compensation policies and procedures for our named executive officers, as outlined in the resolution below. Accordingly, the following resolution will be submitted for a stockholder vote at the Annual Meeting:
General
The Board has approved, subject to stockholder approval, the adoption of the One Liberty Properties, Inc. 2019 Incentive Plan.
The Board believes that granting equity based compensation is an important component of our compensation structure. The purpose of the Plan is to motivate, retain and attract employees, officers and directors of experience and ability and to further the financial success of our company by aligning the interests of participants in the Plan, through the ownership of shares of common stock, with the interests of our stockholders.
As of the close of business on the record date, an aggregate of 841,650 shares of restricted stock and shares subject to RSUs (i.e., 689,150 shares of restricted stock and 152,500 shares subject to RSUs) issued pursuant to all of our equity incentive plans are outstanding. The outstanding restricted stock vests annually in approximately equal amounts from 2020 through 2024 and, subject to satisfaction of performance and market based conditions, 50% of the shares subject to RSUs vest in each of 2020 and 2021. See “Executive Compensation – Outstanding Equity Awards at Fiscal Year End.” There are 162,900 shares available to be awarded pursuant to our 2016 Incentive Plan, which we refer to as the 2016 Plan, and we propose the adoption of the Plan pursuant to which up to 750,000 shares may be awarded. If stockholders adopt the Plan, no further awards will be made under the 2016 Plan. Generally, the awards granted each year have represented less than 1% of our outstanding shares at the time of grant.
The following summary of major features of the Plan is qualified in its entirety by reference to the actual text of the Plan, set forth as Annex A.
Shares Subject to the Plan
The total number of shares available for grant under the Plan will not exceed 750,000 shares. The Plan authorizes the discretionary grant of (i) incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code”, (ii) non-qualified stock options, (iii) restricted stock, (iv) restricted stock units, (v) dividend equivalent rights and (vi) performance-based awards. The shares available for issuance under the Plan will be authorized but unissued common shares. Shares related to awards that are forfeited, cancelled, terminated or expire unexercised will be available for grant under the Plan. Neither shares tendered by a participant to pay the
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exercise price of an award, nor any shares withheld by us for taxes, will be available for future grants under the Plan. In the event of a stock dividend or stock split affecting our shares, the number of shares issuable and issued under the Plan and the number of shares covered by and the exercise price and other terms of outstanding awards will be adjusted to reflect such event to prevent dilution or diminution of awards.
Administration of the Plan
The Plan will be administered by our compensation committee which, to the extent deemed necessary by the Board, will consist of two or more persons who satisfy the requirements for a “non-employee director” under Rule 16(b) under the Exchange Act. The compensation committee has authority to administer and construe the Plan in accordance with its provisions, including the power to (a) determine persons eligible for awards, (b) prescribe the terms and conditions of awards granted under the Plan, (c) adopt rules for the administration, interpretation and application of the Plan which are consistent with the Plan and (d) establish, interpret, amend or revoke any such rules. A non-management director may not be granted awards with respect to more than 10,000 shares in any calendar year.
Options
Stock options entitle the holder to purchase a specified number of shares at a specified exercise price subject to the terms and conditions of the option grant. The purchase price per share for each incentive stock option is determined by the compensation committee, but must be at least 100% of the fair market value per share on the date of grant. The aggregate fair market value of shares with respect to which incentive stock options are exercisable for the first time by an individual during any calendar year cannot exceed $100,000. To the extent that the fair market value of shares with respect to which incentive stock options become exercisable for the first time during any calendar year exceeds $100,000, the portion in excess of $100,000 will be treated as a non-qualified option. Options granted under the Plan may be exercisable for a term up to ten years. If a participant owns more than 10% of the total voting power of all classes of our shares at the time the participant is granted an incentive stock option, the option price per share cannot be less than 110% of the fair market value per share on the date of grant and the term of the option cannot exceed five years.
The closing price of a share of our common stock on the New York Stock Exchange on April 17, 2019 was $26.71.
Restricted Stock and RSUs
Restricted stock are shares that may not be sold, transferred, gifted, bequeathed, pledged, assigned or otherwise disposed of until the end of a specified restriction period. Restricted stock units or RSUs represent the right, upon satisfaction of specified conditions, to receive shares and are subject to the same restrictions on transferability applicable to restricted stock. RSU’s and shares of restricted stock will be issued at the beginning of the restriction period and the compensation committee shall set restrictions and other conditions applicable to the vesting of such award, including restrictions based on the achievement of specific performance goals, time based restrictions or any other basis determined by the compensation committee.
Generally, recipients of restricted stock have the right to vote such shares and to receive and retain cash dividends and other distributions, if any, paid thereon, even if such restricted stock is later forfeited. Recipients of RSUs are not entitled to dividends (except to the extent a dividend equivalent right is granted in tandem with an RSU) or vote with respect to the underlying shares until such units vest. Recipients of these awards will not be entitled to delivery of the stock certificate (or its equivalent) representing the shares until the applicable restrictions have been satisfied. The Plan provides that except as otherwise determined by the compensation committee, RSUs and shares of restricted stock for which the vesting and other applicable conditions have not been met will be forfeited upon the death, disability or retirement of such participant; it is anticipated that to the extent permitted by law, the compensation committee will, as it has in the past, provide that (i) shares of restricted stock vest upon such occurrence and (ii) with respect to RSUs, subject to the satisfaction of the applicable market and/or performance conditions, a pro-rata portion (based on the time elapsed between the grant and the triggering event) of the RSUs will vest. See “Executive Compensation – Components of Executive Compensation – Employment and Severance Agreements; Post-Employment Benefits; Change of Control.”
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Generally, restricted stock or RSUs that do not vest as provided in the applicable award agreement will be forfeited and the recipient of such award will not have any rights after such forfeiture with respect to such award other than to retain dividends paid prior thereto.
Dividend Equivalent Rights
The Plan allows the compensation committee to grant dividend equivalents rights in tandem with the grant of RSUs and performance based awards (other than restricted stock and options). These rights entitle the holder to receive an amount of cash equal to the cash distributions that would have been paid on shares underlying the award to which such right relates, as if such shares were outstanding during the period beginning with the grant date (or if otherwise determined by the compensation committee, the beginning of the performance cycle) of the award to which such dividend equivalent right relates through the vesting date (or if otherwise determined by the compensation committee, the conclusion of the performance cycle) of such award. Dividend equivalents rights will only vest to the extent the related award vests.
Performance Based Awards
Performance based awards will be made by the issuance of restricted stock units or other awards, or a combination thereof, contingent upon the attainment, as established by the compensation committee, of one or more performance goals (described below) over a specified period. The maximum number of shares with respect to which a participant may be granted performance based awards in any calendar year is 100,000 shares.
The terms and conditions of a performance based award will provide for the vesting of the award to be contingent upon the achievement of one or more specified performance goals that the compensation committee establishes. For this purpose, “performance goals” means for a performance cycle, the specific goals that the compensation committee establishes that may be based on one or more of the following performance criteria:
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The performance goals need not be the same with respect to all participants and may be established for the Company in the aggregate or on a per share basis (whether diluted or undiluted), may be based on an absolute or relative basis, may be based on our performance compared to the performance of businesses or indices specified by the compensation committee, may be compared to any prior period, may be based on a company-wide basis or in respect of any one or more business units, may be adjusted for non-controlling interests, and any one or more of the foregoing.
Amendment and Termination of the Plan
No awards may be made under the Plan on or after the tenth anniversary of the Plan’s effective date. Our Board may amend, suspend or terminate the Plan at any time for any reason provided that no amendment, suspension or termination may impair rights or obligations under any outstanding award without the participant’s consent or violate the Plan’s prohibition on repricing (i.e., the replacing or regranting of an option in connection with the cancellation of the option or by amending an award agreement to lower the exercise price of an option or the cancellation of any award in exchange for cash). The stockholders must approve any amendment: (i) if such approval is required under applicable law or stock exchange requirements; or (ii) that changes the no-repricing provisions of the Plan.
Clawbacks; Compliance with Laws; Compliance with REIT Requirements
The grant of awards and the issuance of shares under the Plan is subject to all applicable laws, rules and regulations, approvals by governmental and quasi-governmental authorities and the applicable provisions of any claw-back policy implemented by us, whether implemented prior to or after the grant of such award.
If a recipient’s relationship with us is terminated for cause (e.g., insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform such person’s duties and responsibilities and other misconduct, as determined by the compensation committee), then (i) all options (except to the extent exercised) immediately terminate and (ii) the recipient’s rights to all restricted stock, RSUs and performance share awards (except to the extent such awards have vested) are forfeited immediately.
Awards are not exercisable if such award or its exercise could cause the participant to be in violation of any restrictions on ownership and transfer of our securities, or if, in the discretion of the Committee, such award could otherwise impair our status as a real estate investment trust under the Code.
Change in Control
Awards granted under the Plan that are outstanding and not then exercisable or subject to restrictions at the time of a change in control (as described below and in the Plan) become immediately exercisable and all restrictions are removed effective as of such change in control, except as otherwise provided in the award agreement. Our RSUs limit the vesting of such awards upon a change of control. See “Executive Compensation – Compensation Discussion and Analysis – Employment and Severance Agreements; Post-Employment Benefits; Change of Control.” The Plan defines a change in control as follows:
(a) the acquisition (other than from us) in one or more transactions by any person (as defined in Section 13(d) of the Exchange Act) of the beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 25% or more of the outstanding shares or the combined voting power of the then outstanding securities entitled to vote in the election of directors (provided that this provision is not applicable to acquisitions made individually, or as a group, by Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould and their respective spouses, lineal descendants and affiliates);
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(b) individuals who, at the date of the award, constitute our board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the board; provided, however, that an individual becoming a director subsequent to the date of an award whose election or nomination for election was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individuals were a member of the Incumbent Board, but excluding any individual whose initial assumption of office occurs as a result either of an actual or threatened election contest or other actual or threatened solicitation of proxies or consent by and behalf of a person other than the Incumbent Board;
(c) the closing of a sale or other conveyance of all or substantially all of our assets;
(d) the effective time of any merger or other business combination involving us if immediately after such transactions persons who hold a majority of outstanding voting securities entitled to vote generally in the election of the directors of the surviving entity are not persons who, immediately prior to such transaction, held our voting stock.
Federal Income Tax Consequences
The federal tax rules applicable to awards under the Plan under the Code are summarized below. This summary omits the tax laws of any municipality, state, or foreign country in which a participant resides.
Stock option grants under the Plan may be intended to qualify as incentive stock options under Section 422 of the Code or may be non-qualified stock options governed by Section 83 of the Code. Generally, federal income tax is not due from a participant upon the grant of a stock option, and a deduction is not taken by us. Under current tax laws, if a participant exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the market price of the common shares on the exercise date and the stock option grant price. We are entitled to a corresponding deduction on our income tax return. A participant will not have any taxable income upon exercising an incentive stock option after the applicable holding periods have been satisfied (except that the alternative minimum tax may apply), and we will not receive a deduction when an incentive stock option is exercised. The treatment of a disposition of shares acquired through the exercise of a stock option depends on how long the shares were held and whether the shares were acquired by exercising an incentive stock option or a non-qualified stock option. We may be entitled to a deduction in the case of a disposition of shares acquired under an incentive stock option before the applicable holding periods have been satisfied.
Generally, taxes are not due from the participant or owed by us when a grant of restricted stock, RSUs or performance based awards is initially made (unless the recipient of a restricted stock award makes election under Section 83(b) of the Code in which case it is taxed at the time of grant), but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” (i.e., it becomes vested or transferable), in the case of restricted stock, or when shares are issuable in connection with vesting, in the case of an RSU or performance based award. Except with respect to awards for which a Section 83(b) election is made, income tax is paid on the value of the stock units or awards at ordinary rates when the restrictions lapse, and then at capital gain rates when the shares are sold. Generally, we will be entitled to a deduction equal to the amount of ordinary income recognized by the participant at the time the participant recognizes such income for tax purposes.
The grant of dividend equivalents rights generally will have no federal income tax consequences for the participant. Generally, the participant will recognize ordinary income and/or capital gain, depending on the characterization of such distribution as ordinary income and/or capital gain, on the amount distributed to the participant pursuant to such dividend equivalent rights. Generally, we will be entitled to a dividend paid deduction equal to the amount of ordinary income and/or capital gain recognized by the participant at the time the participant recognizes such income for tax purposes.
Section 409A of the Code affects taxation of awards to employees but does not affect our ability to deduct deferred compensation. Section 409A applies to RSUs, performance units, and performance shares. Such grants are taxed at vesting but will be subject to new limits on plan terms governing when vesting may occur. If grants under such plans do not allow employees to elect further deferral on vesting or on distribution, under the regulations, a negative impact should not attach to the grants.
Section 409A of the Code does not apply to incentive stock options, non-qualified stock options (that are not discounted), and restricted stock, provided that there is no deferral of income beyond the vesting date.
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See “Executive Compensation – Deductibility of Executive Compensation” for information regarding Section 162(m) of the Code.
New Plan Benefits Table
We have not determined the type, amount or recipients of awards under the 2019 Plan. Accordingly, we provide the following table which reflects the awards granted in 2018proxy statement pursuant to the 2016 Plan to the persons and groups indicated as if such grants were made pursuant to the 2019 Plan. These awards were in the form of restricted stock that vest on a “cliff-vesting” basis five years after grant and RSUs that generally vest, subject to satisfaction of market and/or performance conditions, on a “cliff-vesting” basis three years after grant. (The table assumes thatcompensation disclosure rules of the performanceSecurities and market conditions with respect to the RSUs will vest at the maximum level and accordingly, reflects the maximum numberExchange Commission.”
Name and Position | Dollar Value(1) | Number of Units | ||||
Patrick J. Callan, Jr. President and Chief Executive Officer | 823,480 | 34,000(2 | ) | |||
Lawrence Ricketts Chief Operating Officer and Executive Vice President | 656,362 | 27,100(3 | ) | |||
David W. Kalish Chief Financial Officer and Senior Vice President | 351,190 | 14,500(4 | ) | |||
Matthew J. Gould Chairman of the Board | 356,034 | 14,700(5 | ) | |||
Fredric H. Gould Vice Chairman of the Board | 356,034 | 14,700(5 | ) | |||
Executive group (14 individuals) | 4,346,231 | 179,448(6 | ) | |||
Non-executive director group (6 individuals) | 465,024 | 19,200(7 | ) | |||
Non-executive officer and employee group (36 individuals) | 541,365 | 22,352(8 | ) |
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE PROPOSAL TO ADOPT THE ONE LIBERTY PROPERTIES, INC. 2019 INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
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Use rigorous performance goals. Only 32.2% of the RSUs awarded to our executive officers in 2017, 2018 and 2019 would have vested as of December 31, 2019 (assuming the measurement and vesting date was December 31, 2019, demonstrating the rigorous performance and market conditions established for our equity incentive awards. |
✔ | Alignment of pay and performance. For the three years ended December 31, 2019, our total stockholder return was 62.1% and Messrs. Callan and Ricketts base compensation (i.e. salary, bonus and grant date fair value of restricted stock and restricted stock units) increased 34.7% over such period. |
✔ | Emphasize equity awards as a significant portion of the performance/incentive component of compensation. Long-term equity (i.e., the grant date fair value of the restricted stock awarded in 2020 for 2019 performance) and equity incentive awards (i.e., the grant date fair value of RSUs awarded in 2019; the long-term equity and equity incentive awards referred to collectively as the “Equity Awards”), accounted for 90.0% and 90.4% of the performance/incentive based component of compensation awarded to Messrs. Callan and Ricketts, respectively, in 2019. |
✔ | Equity awards as a significant component of annual base compensation. In 2019, Equity Awards, as a percentage of base annual compensation (i.e., salary, cash bonus and the grant date fair value of the Equity Awards), were 45.6% and 52.2% for Messrs. Callan and Ricketts, respectively. |
✔ | Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of our executive officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of longer-term value. |
✔ | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance between shorter and longer-term incentives. |
✔ | Capped equity award payouts. Shares that can be earned under the long-term incentive program are capped. |
✔ | Independent compensation committee. Our compensation committee is comprised entirely of independent directors and it oversees risks with respect to our compensation practices. |
✔ | Clawback policy. We are entitled to recoup compensation or cause the forfeiture of compensation as more fully described under “– Components of Executive Compensation – Clawbacks”. |
✔ | Stock ownership guidelines. All of our named executive officers and non-management directors own a meaningful amount of our stock– see “Components of Executive Compensation – Stock Ownership Guidelines.” |
✔ | Diversity; Responsiveness to Stockholder’s Corporate Governance Comments. We are responsive to comments and concerns raised by our stockholders. In response to comments raised by stockholders regarding board diversity, we added a highly qualified woman, Karen A. Till, to our board. Ms. Till has served as director since 2019 and we have nominated her for election as a director at the Annual Meeting |
û | No employment agreements. None of our officers have employment agreements. Employment of all of our full-time executive officers is “at will.” |
û | No severance arrangements. There are no severance or similar arrangements for our executive officers, other than accelerated vesting of shares of restricted stock and RSUs upon the occurrence of specified events (e.g.,death, disability, retirement or change of control) |
û | No golden parachute tax gross-ups. There are no excise tax gross ups or similar arrangements for our executive officers. |
û | No dividend or dividend equivalents on unearned equity incentive awards. No dividends are paid on RSUs until the underlying shares are earned. |
û | Grant multi-year or guaranteed bonuses or equity grants. We do not pay guaranteed bonuses to anyone and currently have no guaranteed commitments to grant any equity-based awards. This ensures that we are able to base all compensation awards to measurable performance factors and business results. |
û | Offer costly defined benefit pension or supplemental retirement plans. We do not provide costly retirement benefits to our executive officers that reward longevity rather than contributions to our performance. |
Compensation Discussion and Analysis
This compensation discussion and analysis describesWe describe below our compensation objectives, policies and decisions as applied to the compensation provided by us in 20182019 to our named executive officers. This discussion and analysis focuses on the information contained in the compensation tables that followappears beginning at page [ ] of this discussion and analysis,proxy statement, but also describes our historic compensation structure to enhance an understanding of our executive compensation disclosure. Our compensation committee oversees our compensation program, recommends the compensation of the named executive officers employed by us on a full-time basis to our board of directors for its approval, recommends the annual fee paid by us to the chairman and vice chairman of our board of directors and makes most determinations with respect to grants of restricted stock and RSUs. Our audit and/or compensation committees, and independent directors, approve the annual fees paid by us pursuant to a compensation and services agreement to Majestic Property Management Corp., which may result in the payment by Majestic of compensation to our part-time officers, including Fredric H. Gould, Matthew J. Gould and David W. Kalish, named executive officers.Kalish. Majestic Property Management Corp., which we refer to as Majestic, is wholly-owned by Fredric H. Gould, the Vice Chairman of our Board.
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Background
We have two categories of officers: (i) officers who devote their full business time to our affairs; and (ii) officers who devote their business time to us on a part-time basis. Our full-time officers and employees are compensated directly and solely by us. Except for equity based awards (i.e., restricted stock and RSUs)Equity Awards and our payment of the chairman’s and vice chairman’s fee, our part-time officers and employees are compensated by Majestic which, pursuant to the compensation and services agreement, provides us with the services of executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services with respect to mortgage financings and construction supervisory services (collectively, the “Services”). In consideration for providing the Services in 2018,2019, we paid Majestic $2,745,000,$2,826,000, of which approximately $1,226,000$1,307,000 relates to amounts paid for property management services. Majestic may earn a profit from payments made to it under thesuch agreement. In addition, under this agreement, we made an additional payment to Majestic of $216,000 in 20182019 for our share of all direct office expenses, including rent, telephone, computer services, internet usage and supplies. The amount of the annual payments to be made by us to Majestic under the compensation and services agreement is approved each year by our audit and/or compensation committee(s) and our independent directors. See “Certain Relationships and Related Transactions.” Our part-time officers also receive compensation from other companies affiliated with One Liberty for services unrelated to One Liberty.
Our compensation committee is authorized by its charter to retain independent counsel, compensation and benefits consultants, and other outside experts or advisors. In 2018, our compensation committee engaged FPL Associates L.P., which we refer to as “FPL”, to conduct, among other things, a comprehensive compensation study of several of our senior full-time executive officers. FPL, a nationally recognized
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compensation consulting firm specializing in the real estate industry, has no relationship with us or any of our affiliates, except that it also serves as the independent compensation consultant for BRT Apartments Corp., a NYSE listed REIT, which may be deemed an affiliate of ours.
In its analysis, FPL compared our compensation practices to the the following REITs, which we refer to as the “peer group”: Agree Realty Corporation, CatchMark Timber Trust, Inc., Chatham Lodging Trust, Community Healthcare Trust Incorporated, Getty Realty Corp., Lexington Realty Trust, MedEquities Realty Trust, Inc., Ramco-Gershenson Properties Trust, Terreno Realty Corporation, UMH Properties, Inc., Urstadt Biddle Properties, Inc. FPL selected this peer group because they are generally similar to us in terms of (i) portfolio/assets (i.e., active, as we are, in net leasing activities), (ii) size (measured by total capitalization and/or other factors), and/or (iii) location of the principal executive office (i.e., New York based).
FPL’s report, which was presented to the compensation committee in late November 2017 in connection with the committee’s determinations with respect to 2018 compensation, concluded that total compensation (i.e., sum of salary, cash bonus and equity grants) paid to Messrs. Callan and Ricketts, our full-time named executive officers, ranked in approximately the 25th percentile of the total compensation received by officers with similar responsibilities at the peer group.
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behalf is determined by Matthew J. Gould and/or Fredric H. Gould, in their capacity as officers of such entities, in consultation with certain of our part-time senior officers.
Compensation Element | Philosophy Statement | Retention | Reward short-term Performance | long-term Performance | Align to Stockholder Interests | Participation of Part-Time Executive Officers | |||||||
Base Pay | We intend to provide base pay forms the foundation for our other reward vehicles. | X | |||||||||||
Performance-based | |||||||||||||
Rewards annual performance in the form of an annual cash bonus. The amount of the cash bonus is recommended by the compensation committee which takes into account funds from operations, tenant occupancy rates, overall management of the portfolio and discretionary factors. | X | X | X | ||||||||||
Pay-for- Performance Incentive Plan | |||||||||||||
Provides for long-term equity based incentive award in the form of RSUs that rewards, after three years and assuming a continued relationship with us, achievement of pre-established performance targets relating to average annual total stockholder return and/or average annual return on capital. | X | X | X | X | |||||||||
Time-Based Restricted Stock Awards | |||||||||||||
Focus directly on retention while providing an opportunity for increased rewards as stockholder return increases. These awards vest on a cliff vesting basis after five years, assuming a continued relationship with us. | X | X | X | X | |||||||||
Other Compensation and Benefits Programs | |||||||||||||
We offer benefits programs that provide health and retirement benefits for all employees. | X |
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Full-time Officers
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annual bonus to be paid to each of these executive officers, the compensation committee presents its recommendations to the board of directors for its approval. These bonuses are generally determined at the end of the year for which such bonus is awarded and is generally paid in the beginning of the following year.
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The conditions that must be satisfied to earn the performance-based compensation are tied to the achievement of rigorous, sustained performance and/or market goals – as further described below, 50% of the award is based on return on capital (“ROC”) and 50% on total stockholder return (“TSR”). The specific goals and the other material terms and conditions of the 2018 plan2019 Performance Plan are as follows:
Long–Term Equity Incentive Awards Performance Criteria | Weight | Minimum Performance Criteria | Maximum Performance Criteria | ||
Return on Capital (ROC) | 50% | Average of the annual | Average of the annual | ||
If the average of the annual | |||||
Total Stockholder Return (TSR) | 50% | Average of the annual TSR greater than 7% | Average of the annual TSR of 12.75% or greater | ||
If the average of our annual TSR for the three- year period exceeds 7%, but is less than 12.75%, then a pro rata number of Units vest and the shares of our common stock underlying the vested Units will be issued. |
2019 Performance Plan.
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Employment and Severance Agreements; Post-Employment Benefits; Change of Control
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Summary
In accordance with the compensation setting process described above, the following base salaries, bonuses and equity awards were approved for our full-time named executive officers for 20182019 and 2017:
Base Salary | Cash Bonus | Equity Grants | |||||||||||||||||||||||||
Name | 2018 ($)(1) | 2017 ($)(1) | % Change | 2018 ($)(2) | 2017 ($)(2) | % Change | 2018 ($) (3) | 2017 ($) (4) | % Change | ||||||||||||||||||
Patrick J. Callan, Jr. | 812,700 | 789,000 | 3.0 | 86,000 | 78,900 | 9.0 | 750,991 | 689,745 | 8.9 | ||||||||||||||||||
Lawrence G. Ricketts, Jr. | 471,000 | 448,500 | 5.0 | 65,000 | 56,700 | 14.6 | 590,512 | 549,255 | 7.5 |
Base Salary | Cash Bonus | Equity Grants | ||||||||||||||||||||||||||||||||||
Name | 2019 ($) | 2018 ($) | % Change | 2019 ($)(2) | 2018 ($)(2) | % Change | 2019 ($) (3) | 2018 ($) (4) | % Change | |||||||||||||||||||||||||||
Patrick J. Callan, Jr. (1) | 837,100 | 812,700 | 3.0 | 86,000 | 86,000 | — | 774,325 | 750,991 | 3.1 | |||||||||||||||||||||||||||
Lawrence G. Ricketts, Jr.(1) | 494,550 | 471,000 | 5.0 | 65,000 | 65,000 | — | 611,042 | 590,512 | 3.5 |
(1) | Messrs. Callan’s and Ricketts’ base salaries for |
(2) | Reflects the cash bonuses paid in recognition of performance for such year, which bonuses are paid in the following year. |
(3) | Represents the aggregate grant date fair value of the shares of restricted stock granted in 2020 for 2019 performance and the RSUs granted in 2019. Messrs. Callan and Ricketts were granted (i) in 2020, for 2019 performance, 21,750 and 17,100 shares of restricted stock, respectively, and (ii) in 2019, 13,750 and 11,000 RSUs, respectively. |
(4) | Represents the aggregate grant date fair value of shares of the restricted stock granted in 2019 for 2018 performance and the RSUs granted in 2018. Messrs. Callan and Ricketts were granted (i) in 2019, for 2018 performance, 21,250 and 16,600 shares of restricted stock, respectively |
Base Salary and Bonus
In furtherance of the
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Long-term Equity and Equity Incentive Awards
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$24.22$27.19 per share as of December 31, 2018)2019) of equity awards that would vest upon the occurrence of the specified events as of December 31, 2018:2019:
Disability(1)
Control
Stock ($)
($)(2)
Stock ($) Name RSUs ($) Patrick J. Callan, Jr.(3) David W. Kalish Lawrence G. Ricketts, Jr.(3) Matthew J. Gould Fredric H. Gould (1) 2018;2019; the market value of such person’s restricted stock awards and RSUs are reflected in the applicable column.(2) “− “— Outstanding Equity Awards at Fiscal Year End.”(3) “− “— Summary Compensation Table” for information regarding the amount accumulated for this individual pursuant to our defined contribution plan.Minimum Ownership Requirement
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All shares deemed to be beneficially owned as determined under Rule 13d-3 promulgated pursuant to the Exchange Act (including shares as to which beneficial ownership is disclaimed), are counted towards meeting the guidelines. The individuals subject to these guidelines have five years to achieve the requisite ownership, which will be measured as of December 31 of each year. The stock price used in determining satisfaction of the guidelines is the most favorable price during the two years preceding, and ending, on the December 31 measurement date. As of December 31, 2018,2019, each of our named executive officers and non-employee directors satisfied these guidelines.
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Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||
Patrick J. Callan, Jr. | 2018 | 812,700 | 86,000 | 717,394 | 218,454 | (6) | 1,834,548 | |||||||||||
President and Chief Executive | 2017 | 789,000 | 78,900 | 659,842 | 131,217 | 1,658,959 | ||||||||||||
Officer(4) | 2016 | 765,000 | 93,000 | 402,190 | 86,250 | 1,346,440 | ||||||||||||
David W. Kalish | 2018 | — | — | 319,628 | 176,856 | (7) | 496,484 | |||||||||||
Senior Vice President and | 2017 | — | — | 296,249 | 190,124 | 486,373 | ||||||||||||
Chief Financial Officer(5) | 2016 | — | — | 200,008 | 145,008 | 345,016 | ||||||||||||
Lawrence G. Ricketts, Jr. | 2018 | 471,000 | 65,000 | 571,383 | 50,329 | (8) | 1,157,712 | |||||||||||
Executive Vice President and | 2017 | 448,500 | 56,700 | 525,389 | 48,371 | 1,078,960 | ||||||||||||
Chief Operating Officer(4) | 2016 | 411,500 | 56,700 | 336,970 | 47,057 | 852,227 | ||||||||||||
Matthew J. Gould | 2018 | 275,625 | — | 322,605 | 331,762 | (9) | 929,992 | |||||||||||
Chairman of the Board(5) | 2017 | 275,625 | — | 298,811 | 354,809 | 929,245 | ||||||||||||
2016 | 262,500 | — | 200,008 | 268,869 | 731,377 | |||||||||||||
Fredric H. Gould | 2018 | 110,250 | — | 322,605 | — | (10) | 432,855 | |||||||||||
Vice Chairman of the Board(5) | 2017 | 110,250 | — | 298,811 | — | 409,061 | ||||||||||||
2016 | 105,000 | — | 200,008 | — | 305,008 |
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||
Patrick J. Callan, Jr. | 2019 | 837,100 | 86,000 | 709,275 | 180,626 | (6 | ) | 1,813,001 | |||||||||||||||
President and Chief Executive | 2018 | 812,700 | 86,000 | 717,394 | 218,454 | 1,834,548 | |||||||||||||||||
Officer(4) | 2017 | 789,000 | 78,900 | 659,842 | 131,217 | 1,658,959 | |||||||||||||||||
David W. Kalish | 2019 | — | — | 319,473 | 164,595 | 484,068 | |||||||||||||||||
Senior Vice President and | 2018 | — | — | 319,628 | 176,856 | 496,484 | |||||||||||||||||
Chief Financial Officer(5) | 2017 | — | — | 296,249 | 190,124 | 486,373 | |||||||||||||||||
Lawrence G. Ricketts, Jr. | 2019 | 494,550 | 65,000 | 557,152 | 51,016 | (7 | ) | 1,167,718 | |||||||||||||||
Executive Vice President and | 2018 | 471,000 | 65,000 | 571,383 | 50,329 | 1,157,712 | |||||||||||||||||
Chief Operating Officer(4) | 2017 | 448,500 | 56,700 | 525,389 | 48,371 | 1,078,960 | |||||||||||||||||
Matthew J. Gould | 2019 | 289,406 | — | 321,851 | 308,997 | 920,254 | |||||||||||||||||
Chairman of the Board(5) | 2018 | 275,625 | — | 322,605 | 331,762 | 929,992 | |||||||||||||||||
2017 | 275,625 | — | 298,811 | 354,809 | 929,245 | ||||||||||||||||||
Fredric H. Gould | 2019 | 115,763 | — | 321,851 | — | 437,614 | |||||||||||||||||
Vice Chairman of the Board(5) | 2018 | 110,250 | — | 322,605 | — | 432,855 | |||||||||||||||||
2017 | 110,250 | — | 298,811 | — | 409,061 |
(1) | Reflects bonuses paid in 2020, 2019 and 2018 for services rendered in 2019, 2018 and 2017, |
(2) | Represents RSUs |
(3) | Includes for Messrs. |
(4) | All compensation received by Messrs. Callan and Ricketts is paid solely and directly by us. |
(5) | Other than the restricted stock awarded to these individuals and the fees paid to Messrs. M. Gould and F. Gould for serving as Chairman and Vice Chairman, respectively: (a) we did not pay, nor were we allocated, any portion of such person’s base salary, bonus, defined contribution plan payments or perquisites in 2019, 2018 |
(6) | Includes a |
(7) |
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Includes a contribution of |
Name | Grant Date | Grant Type | Estimated Future Payouts under Equity Incentive Plan Awards: Maximum(#)(1) | All Other Stock Awards: Number of Shares of Stocks or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | ||||||
Patrick J. Callan, Jr. | 1/18/2018 | RS | — | 20,250 | 512,528 | ||||||
7/1/2018 | RSU-TSR(4) | 6,875 | — | 63,044 | |||||||
7/1/2018 | RSU-ROC(5) | 6,875 | — | 141,822 | |||||||
David W. Kalish | 1/18/2018 | RS | — | 9,950 | 251,835 | ||||||
7/1/2018 | RSU-TSR(4) | 2,275 | — | 20,862 | |||||||
7/1/2018 | RSU-ROC(5) | 2,275 | — | 46,931 | |||||||
Lawrence G. Ricketts, Jr. | 1/18/2018 | RS | — | 16,100 | 407,491 | ||||||
7/1/2018 | RSU-TSR(4) | 5,500 | — | 50,435 | |||||||
7/1/2018 | RSU-ROC(5) | 5,500 | — | 113,457 | |||||||
Matthew J. Gould | 1/18/2018 | RS | — | 9,950 | 251,835 | ||||||
7/1/2018 | RSU-TSR(4) | 2,375 | — | 21,779 | |||||||
7/1/2018 | RSU-ROC(5) | 2,375 | — | 48,991 | |||||||
Fredric H. Gould | 1/18/2018 | RS | — | 9,950 | 251,835 | ||||||
7/1/2018 | RSU-TSR(4) | 2,375 | — | 21,779 | |||||||
7/1/2018 | RSU-ROC(5) | 2,375 | — | 48,991 | |||||||
Name | Grant Date | Grant Type | Estimated Future Payouts under Equity Incentive Plan Awards: Maximum(#)(1) | All Other Stock Awards: Number of Shares of Stocks or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | |||||||||||
Patrick J. Callan, Jr. | 1/10/2019 | RS | — | 21,250 | 546,125 | |||||||||||
7/1/2019 | RSU-TSR(4) | 6,875 | — | 65,931 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 6,875 | — | 97,219 | ||||||||||||
David W. Kalish | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,275 | — | 21,817 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,275 | — | 32,175 | ||||||||||||
Lawrence G. Ricketts, Jr. | 1/10/2019 | RS | — | 16,600 | 426,620 | |||||||||||
7/1/2019 | RSU-TSR(4) | 5,500 | — | 52,745 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 5,500 | — | 77,787 | ||||||||||||
Matthew J. Gould | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,375 | — | 22,776 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,375 | — | 33,594 | ||||||||||||
Fredric H. Gould | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,375 | — | 22,776 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,375 | — | 33,594 |
(1) | Represents the maximum number of shares underlying RSUs that will be issued if all the applicable market and performance conditions are met. |
(2) | Reflects restricted stock awards. These shares generally vest, on a cliff vesting basis, five years from the grant date, subject to such persons continued relationship with us. Dividends are paid on restricted stock unless such shares are forfeited prior to vesting due to the termination, with certain exceptions, of the relationship between us and the executive. In the event the shares are forfeited, the recipient is (i) entitled to retain the dividends paid prior to the forfeiture, and (ii) is not entitled to any dividends paid after the forfeiture of such shares. |
(3) | The grant date fair value of the restricted stock, RSU – TSR and RSU – ROC awards are |
(4) | Represents shares underlying RSUs that vest on June 30, |
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vest; and is more than 7% and less than 12.75%, a pro rata portion of the shares underlying such RSUs vest. There are no dividends or voting rights associated with these RSUs.
(5) | Represents shares underlying RSUs that vest on June 30, |
Stock Awards | ||||||||||||
Name | Number of Shares of Restricted Stock That Have Not Vested (#) | Market Value of Shares of Restricted Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Shares Subject to RSUs That Have Not Vested ($)(1)(2)(3) | ||||||||
Patrick J. Callan, Jr. | 90,750 | (4) | 2,197,965 | 27,500 | 660,050 | |||||||
David W. Kalish | 45,950 | (5) | 1,112,909 | 9,100 | 220,402 | |||||||
Lawrence G. Ricketts, Jr. | 73,600 | (6) | 1,782,592 | 22,000 | 532,840 | |||||||
Matthew J. Gould | 45,950 | (5) | 1,112,909 | 9,500 | 230,090 | |||||||
Fredric H. Gould | 45,950 | (5) | 1,112,909 | 9,550 | 230,090 |
Stock Awards | ||||||||||||||||
Name | Number of Shares of Restricted Stock That Have Not Vested (#) | Market Value of Shares of Restricted Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Shares Subject to RSUs That Have Not Vested ($)(1)(2)(3) | ||||||||||||
Patrick J. Callan, Jr. | 97,500(4 | ) | 2,651,025 | 41,250 | 1,121,588 | |||||||||||
David W. Kalish | 47,680(5 | ) | 1,296,419 | 13,650 | 371,144 | |||||||||||
Lawrence G. Ricketts, Jr. | 78,700(6 | ) | 2,139,853 | 33,000 | 897,270 | |||||||||||
Matthew J. Gould | 47,680(5 | ) | 1,296,419 | 14,250 | 387,458 | |||||||||||
Fredric H. Gould | 47,680(5 | ) | 1,296,419 | 14,250 | 387,458 |
(1) | The market value represents the product of the closing price of our common stock as of December 31, |
(2) | Assumes that all of the RSUs vest. |
(3) | If the measurement and vesting dates were December 31, |
(4) | With respect to this individual, |
(5) | With respect to this individual, 8,600 shares vest in |
(6) | With respect to this individual, |
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OPTION EXERCISES AND STOCK VESTED
Stock Awards | ||||||
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(1) | ||||
Patrick J. Callan, Jr. | 12,500 | 317,500 | ||||
David W. Kalish | 8,600 | 218,440 | ||||
Lawrence G. Ricketts, Jr. | 10,000 | 254,000 | ||||
Matthew J. Gould | 8,600 | 218,440 | ||||
Fredric H. Gould | 8,600 | 218,440 |
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(1) | ||||||
Patrick J. Callan, Jr. | 14,500 | 355,105 | ||||||
David W. Kalish | 8,600 | 210,614 | ||||||
Lawrence G. Ricketts, Jr. | 11,500 | 281,635 | ||||||
Matthew J. Gould | 8,600 | 210,614 | ||||||
Fredric H. Gould | 8,600 | 210,614 |
(1) | Reflects the aggregate market value of the shares that vested as of the applicable vesting date. The closing market price of a share of our common stock on the vesting date of the restricted stock awards (i.e., January |
Respectfully submitted,
Eugene I. Zuriff, Chaircomparable to the pay ratio we report.
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During 20172019 and 2018, $1,539,000$1,973,000 and $1,765,000, respectively, of non-cash compensation expense relating to the restricted stock and RSUs held by our part-time executive officers and employees (who may also be compensated by Majestic or its affiliates), was charged to our operations. See “Executive Compensation-Compensation Discussion and Analysis-Background”. The grant date fair value of the shares of restricted stock and RSUs awarded in 20172019 and 2018 to persons performing services for us pursuant to the compensation and services agreement is $2,143,000$2,278,000 and $2,326,000, respectively. The grant date fair value of such awards in 20172019 and 2018, respectively, to these individuals is as follows: Jeffrey A. Gould, $299,000$322,000 and $323,000; Mark H. Lundy, $299,000$319,000 and $323,000; Israel Rosenzweig, $164,000$163,000 and $175,000; Isaac Kalish, $161,000$163,000 and $172,000; and Steven Rosenzweig, $86,000$99,000 and $109,000.
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2020.
2018 | 2017 | |||||
Audit fees(1) | $ | 936,000 | $ | 959,000 | ||
Audit-related fees | — | — | ||||
Tax fees(2) | 15,000 | 15,000 | ||||
All other fees | — | — | ||||
Total fees | $ | 951,000 | $ | 974,000 |
2019 | 2018 | |||||||
Audit fees(1) | $ | 1,026,000 | $ | 936,000 | ||||
Audit-related fees | — | — | ||||||
Tax fees(2) | 16,000 | 15,000 | ||||||
All other fees | — | — | ||||||
Total fees | $ | 1,042,000 | $ | 951,000 |
(1) | Includes fees for audit services and related expenses associated with the annual audit of our consolidated financial statements, including the audit of internal control over financial reporting, reviews of our quarterly reports, comfort letters, consents, and review of documents filed with the SEC. |
(2) | Tax fees consist of fees for certain tax compliance services and tax advice. |
2018.
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subsequently thereafter, approve the provision of tax and other non-audit related services and the maximum expenditure which may be incurred for such services for such year. Any fees for the audit in excess of those approved and any fees for non-audit related services in excess of the maximum established by the audit committee must receive the approval of the audit committee.
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Prior to and in conjunction with the filing of the quarterly and annual financial statements, the audit committee meets with the independent registered public accounting firm and the accounting firm performing the internal control audit function, with and without management present, to discuss the results of their review or audit, as applicable, their evaluations of the internal controls, and the overall quality and acceptability of our financial reporting.
2020.
Respectfully submitted, | |
Leor Siri, Chair | |
Joseph A. DeLuca | |
Eugene I. Zuriff |
A. | increase the total number of authorized shares of our common stock from 25,000,000 shares to 50,000,000 shares, with a corresponding increase in the total number of shares that we are authorized to issue; |
B. | revise and modernize the requirements in our Current Charter to indemnify and advance the expenses of our officers, directors and employees; and |
C. | reduce the vote required for our stockholders to approve certain actions, to eliminate the majority of the outstanding shares voting requirement to approve routine actions, including the election of directors, and eliminate the supermajority voting requirement for certain charter amendments. |
In calculating this estimate, we included asboard of directors, to indemnify our employees, as well as directors and officers of our predecessors, subject to the same limitations set forth in the immediately preceding paragraph.
SEC rules allow companies to adoptapproval of Charter Amendment Proposal 4.C.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)our bylaws described under Proposals 5.A and 5.B, (the “Bylaw Amendment Proposals”) would:
A. | Repeal Section 17 of Article III of our Bylaws, which currently provides, in general, that we may invest in any type of real property, mortgage loans or other assets, as long as the investment does not adversely affect our ability to qualify as a REIT or require us to register as an investment company under the Investment Company Act of 1940, as amended; and |
B. | Repeal Section 18 of Article III of our Bylaws, which currently permits us to delegate the day-to-day operations of our business to a third-party management company. |
Based on18 of Article III of our Bylaws as it is obsolete.
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Great Neck, NY | |
April | By order of the Board of Directors |
S. Asher Gaffney, Secretary |
SECTION 1
1.1 Effective Date. This Plan (as defined)RESIDENT AGENT
1.2 PurposeCorporation on stockholders, directors and officers are granted subject to this reservation.
SECTION 2DEFINITIONS
The following terms shall have the following meanings (whether usedmeanings:
Board of Directors from time to time with respect to such Person and (ii) the Existing Holder Amount.
“Affiliate” or “Affiliates” has the meaning ascribed to such term by Rule 501 promulgated under the Securities Act of 1933, as amended.
“Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights and Performance Share Awards.
“Award Agreement” means either (1) the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan or (2) a statement (including an electronic communication) issued by the Company to a Participant describing the terms andother provisions of such Award.
the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.
“Code” meansshares of the Internal Revenue Code of 1986,Corporation as amendedmay be authorized and issued from time to time and the regulations thereunder.
“Committee” means the Compensation Committee of the Board or the committee of the Board appointed to administer the Plan.
“Company” means One Liberty Properties, Inc., a Maryland corporation.
“Company Voting Stock” has the meaning ascribed to such terms by Section 12.1(a).
“Dividend Equivalent Right” means an Award granted pursuant to Section 9, entitling the Participant to receive an amount of cash equal to the cash distributions that would have been paid on the Shares specified in the Award to which such Dividend Equivalent Right relates, as if such Shares had been issued to and held by the Participant holding such Dividend Equivalent Right during the period beginning with the grant date (or if otherwise determined by the Committee, the beginning of the Performance Cycle) of the Award to which the Dividend Equivalent Right relates through the vesting date of such award (or if otherwise determined by the Committee, the conclusion of such Performance Cycle).
“Disability” or “Disabled” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
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“Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option.
“Fair Market Value” means, as of any given date: (i) the closing sales price of the Shares on any national securities exchange on which the Shares are listed; (ii) the closing sales price if the Shares are listed on the OTCBB or other over the counter market; or (iii) if there is no regular public trading market for such Shares, the fair market value of the Shares as determined by the Committee.
“Grant Date” means, with respect to an Award, the effective date that such Award is granted to a Participant.
“Incentive Stock Option” means an Option to purchase Shares which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code.
“Incumbent Board” has the meaning ascribed to such term by Section 12.1(b).
“Non-management director” means a director who, in the applicable calendar year, was not compensated, directly or indirectly, by the Company, any Subsidiary or any of their Affiliates, other than compensation for service as a director or as a member of any committee of the Board.
“Non-qualified Stock Option” means an Option to purchase Shares which is not an Incentive Stock Option.
“Option” means an Incentive Stock Option or a Nonqualified Stock Option.
“Participant” means an officer, employee, director or consultant of the Company or any of its Subsidiaries.
“Performance CriteriaTransfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of Shares (including (a) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Shares, (b) the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Shares and (c) any transfer or other disposition of any interest in Shares as a combinationresult of a change in the marital status of the holder thereof), whether voluntary or involuntary, whether of record, constructively or beneficially and whether by operation of law or otherwise. The terms “Transfers” and “Transferred” shall have the correlative meanings.
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“Performance-Based Award” means an Award granted pursuant to Section 8 of the Plan.
“Performance Cycle” means one or more periods of time which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participants right to and the payment of a Restricted Stock Award, Restricted Stock Unit, Option or Performance Share Award.
“Performance Goals” means for a Performance Cycle, the applicable Performance Criteria.
“Period of Restriction” means the period during which an Award granted hereunder is subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of Performance Goals or the occurrence of other events as determined by the Committee.
“Plan” means the One Liberty Properties, Inc. 2019 Incentive Plan, as set forth in this instrument, and as hereafter amended from time to time.
“Restricted Stock” means an Award of Shares, the grant, issuance, retention and/or vesting of which is subject to such conditions as are expressed in the Award Agreement and as contemplated herein.
“Restricted Stock Unit” or “RSU” means an Award of a right to receive one Share, the grant, issuance, retention and/or vesting of which is subject to such conditions as are expressed in the Award Agreement and as contemplated herein.
“Retirement” means (i) a director who has attained the age of 65 years who resigns or retires from the Board or does not stand for re-election to the Board and has served continuously as a director of the Company for not less than six consecutive years, and (ii) an officer or employee of, or consultant to, the Company or one of its Subsidiaries who has attained the age of 65 years who resigns or retires from the Company or one of its Subsidiaries and has served in any such capacity with the Company or one of its Subsidiaries for not less than ten consecutive years at the time of retirement or resignation.
“Shares” means the shares of common stock, $1.00 par value, of the Company, or any other security of the Company determined by the Committee pursuant to Section 5.3.
“Subsidiary” means (i) a corporation, association or other business entity of which 50% or more of the total combined voting power of all classes of capital stock is owned, directly or indirectly, by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company, (ii) any partnership or limited liability company of which 50% or more of the capital and profit interests is owned, directly or indirectly, by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company, or (iii) any other entity not described in clauses (i) or (ii) above of which 50% or more of the ownership and the power, pursuant to a written contract or agreement, to direct the policies and management or the financial and the other affairs thereof, are owned or controlled by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company.
SECTION 3ELIGIBILITY
3.1 Participants. Awards may be granted in the discretion of the Committee to officers, employees, directors and consultants of the Company or its Subsidiaries.
3.2 Non-Uniformity. Awards granted hereunder need not be uniform among eligible Participants and may reflect distinctions based on title, compensation, responsibility or any other factor the Committee deems appropriate.
SECTION 4ADMINISTRATION
4.1 The Committee. The Plan will be administered by the Committee, which, to the extent deemed necessary by the Board, will consist of two or more persons who satisfy the requirements for a “non-employee director” under Rule 16b-3 promulgated under the 1934 Act. The members of the Committee shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. In the absence of such appointment, the Board of Directors shall serve as the Committee and shall have all of the responsibilities, duties, and authority of the Committee set forth herein.
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4.2 Authority of the Committee. Subject to applicable law, the Committee shall have the exclusive authority to administer and construe the Plan in accordance with its provisions. The Committee’s authority shall include, without limitation, the power to (a) determine persons eligible for Awards, (b) prescribe the terms and conditions of the Awards, (c) construe and interpret the Plan, the Awards and any Award Agreement, (d) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith and (e) establish, interpret, amend or revoke any such rules. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more officers of the Company to the extent permitted by law.
4.3 Decisions Binding. All determinations and decisions made by the Committee and any of its delegatees pursuant to Section 4.2 shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by law.
4.4 Limitation on Awards Granted to Non-management directors. The maximum number of Shares issuable pursuant to Awards that may be granted to a Non-management director in any calendar year shall not exceed 10,000 Shares.
SECTION 5SHARES SUBJECT TO THE PLAN
5.1 Number of Shares. Subject to adjustment as provided in Section 5.3, the total number of Shares available for grant under the Plan shall not exceed 750,000 Shares. The Shares available for issuance under the Plan shall be authorized but unissued Shares of the Company.
5.2 Lapsed Awards. Unless determined otherwise by the Committee, Shares related to Awards that are forfeited, cancelled, terminated or expire unexercised, shall be available for grant under the Plan. Shares that are tendered by a Participant to the Company in connection with the exercise of an Award, withheld from issuance in connection with a Participant’s payment of tax withholding liability, or settled in such other manner so that a portion or all of the Shares included in an Award are not issued to a Participant shall not be available for grant under the Plan.
5.3 Adjustments in Awards and Authorized Shares. In the event of a stock dividend or stock split, the number of Shares subject to the Plan, outstanding Awards and the numerical amounts set forth in Sections 5, 6, 7 and 8 shall automatically be adjusted proportionally to prevent the dilution or diminution of such Awards, except to the extent directed otherwise by the Committee. In the event of a merger, reorganization, consolidation, recapitalization, separation, liquidation, combination or other similar change in the structure of the Company affecting the Shares, the Committee shall adjust the number and class of Shares which may be delivered under the Plan, the number, class and price of Shares subject to outstanding Awards, and the numerical limits of Sections 5, 6, 7 and 8 in such manner as the Committee shall determine to be advisable or appropriate to prevent the dilution or diminution of such Awards. Any such numerical limitations shall be subject to adjustment under this Section only to the extent such adjustment will not affect the ability to grant or the qualification of Incentive Stock Options under the Plan or subject the Participant to taxes, penalties and interest imposed under section 409A(a)(1) of the Code.
5.4 Restrictions on Transferability. The Committee may impose such restrictions on any Award, Award of Shares or Shares acquired pursuant to an Award as it deems advisable or appropriate,Transfer, including, but not limited to, restrictions relatedrefusing to applicable Federal securities laws,give effect to such Transfer on the requirementsbooks of the Corporation or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers or attempted Transfers in violation of Article X(2) shall automatically result in the designation and treatment described in Article X(3), irrespective of any national securities exchange or system upon which Shares are then listed or traded, and any blue sky or state securities laws.
SECTION 6STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants at any time and from time to time as determinedaction (or non-action) by the Committee. The Committee shall determine the numberBoard of Directors.
6.2 Award Agreement. Each Optionresult under Article X(3), shall be evidenced by an Award Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, whether
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the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option, any conditions on exercise of the Option and such other terms and conditions as the Committee shall determine, including terms regarding forfeiture of Awards or continued exercisability of Awards in the event of termination of employment by the Participant.
6.3 Exercise Price. The Exercise Price for each Option shall be determined by the Committee and shall be provided in each Award Agreement; provided, however, the Exercise Price for each Option may not be less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. In the case of an Incentive Stock Option, the Exercise Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of a Share if the Participant (together with persons whose stock ownership is attributed to the Participant pursuant to section 424(d) of the Code) owns on the Grant Date stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries.
6.4 Expiration of Options. Except as provided in Section 6.7(c) regarding Incentive Stock Options, each Option shall terminate upon the earliest to occur of (i) the date(s) for termination of the Option set forth in the Award Agreement or (ii) the expiration of ten (10) years from the Grant Date. Subject to such limits, the Committee shall provide in each Award Agreement when each Option expires and becomes un-exercisable. Except as set forth in an Award Agreement or as provided by the Committee, upon Retirement of a Participant, an Option may be exercised by such Participant to the extent it was exercisable on the effective date of the Retirement and shall be exercisable for a period of six months from the effective date of such Retirement, but not later than the expiration of the maximum term such Option. The Committee may not, after an Option is granted, extend the maximum term of the Option.
6.5 Exercisability of Options. Options granted under the Plan shall be exercisable, in whole or in part, at such times and be subject to such restrictions and conditions as the Committee shall determine. After an Option is granted, the Committee may accelerate or waive any condition constituting a substantial risk of forfeiture applicable to the Option.
6.6 Payment. Options shall be exercised by a Participant’s delivery of aimmediately give written notice of exercise to the Secretary of the Company (or his or her designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. Upon the exercise of an Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Committee may permit exercise (a) by the Participant tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price, (b) the Participant tendering a combination of cash and previously acquired Shares equal to total Exercise Price (the Shares tendered being valued at Fair Market Value at the time of exercise), or (c) by any other means which the Committee determines to provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. As soon as practicable after receipt of a written notification of exercise and full payment for the Shares purchased, the Company shall deliver, or cause to be delivered, to the Participant, evidence of such Participant’s ownership of such Shares. No right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares as to which the Option has been exercised until the records of the Company or its transfer agent reflect the issuance of such Shares. No adjustment will be made for a dividend or other rights for which a record date is established prior to the date the records of the Company or its transfer agent reflect the issuance of the Shares upon exercise of the Options.
6.7 Certain Additional Provisions for Incentive Stock Options.
(a) Exercisability. The aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company, any parent and its Subsidiaries) shall not exceed $100,000. The portion of the Option which is in excess of the $100,000 limitation shall be treated as a Non-Qualified Option pursuant to Section 422(d)(1) of the Code.
(b) Company and Subsidiaries Only. Incentive Stock Options may be granted only to Participants who are officers or employees of the Company or a Subsidiary on the Grant Date.
(c) Expiration. No Incentive Stock Option may be exercised after the expiration of ten (10) years from the Grant Date. In the case of an Incentive Stock Option that is granted to a Participant who (together with persons whose stock ownership is attributed to the Participant pursuant to Section 424(d)
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of the Code) owns on the Grant Date stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the term of such Incentive Stock Option shall be no more than five years from the Grant Date.
6.8 Restriction on Transfer. Except as otherwise determined by the Committee or as set forth in the Award Agreement, no Option may be transferred, gifted, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily. Upon the death or Disability of a Participant, an Option may be exercised by the duly appointed personal representative of the deceased Participant or, in the event of a Disability byproposed or attempted Transfer, give at least 15 days prior written notice to the ParticipantCorporation of such event. Such person shall also provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or attempted Transfer on the duly appointed attorney-in-fact, guardian or custodianCorporation’s status as a REIT and shall execute and deliver such instruments and provide such further cooperation and assistance as the Board of Directors deems advisable to preserve the status of the Disabled ParticipantCorporation as a REIT.
6.9 Repricing of Options. Without stockholder approval, (i) the Company will not reprice, replace or regrant an outstanding Option either in connection with the cancellationaddress of such Option or by amending an Award Agreement to lower the exercise price of such Option, and (ii) the Company will not cancel outstanding Options in exchange for cash or other Awards.
6.10 Voting Rights. A Participant shall have no voting rights with respect to any Options granted hereunder.
SECTION 7RESTRICTED STOCK AND RESTRICTED STOCK UNITS
7.1 Grant of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or RSUs to Participants in such amounts as the Committee shall determine. The Committee shall determineBeneficial Owner, the number of Shares of Restrictedsuch class or series of Common Stock and/or RSUsPreferred Stock Beneficially Owned, and a description of how such Shares are held. Each such Beneficial Owner shall provide to be grantedthe Corporation such additional information as the Corporation may reasonably request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with such Person’s Ownership Limit.
7.2 Restricted Stock and RSU Agreements. Each Award of Restricted Stock and RSUs shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the numberPerson who is a Beneficial Owner of Shares and each Person (including the stockholder of Restricted Stock granted, the number ofrecord) who is holding Shares subject to an RSU, any applicable Performance Goals and Performance Cycle, and such other terms and conditions as the Committeefor a Beneficial Owner shall determine, including terms regarding forfeiture of Awards in the event of termination of employment by the Participant or termination of the Participant’s relationship with the Company as a director, officer or consultant.
7.3 Transferability. Except as otherwise determined by the Committee or as set forth in the Award Agreement, Shares of Restricted Stock and RSUs (including Shares underlying RSUs) may not be sold, transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily, until the end of the applicable Period of Restriction and the satisfaction, in whole or in part, of any applicable Performance Goals within the applicable Performance Cycle. Except as otherwise determined by the Committee or as set forth in the Award Agreement, in the event of the death, Disability or Retirement of a Participant, all unvested Restricted Stock and unvested RSUs shall not vest on the date of death or Disability or the effective date of Retirement. Without stockholder approval, the Company will not, except as otherwise provided for in the Plan, repurchase outstanding unvested Restricted Stock or unvested RSUs in exchange for cash or accelerate the vesting of outstanding unvested Shares of Restricted Stock or RSUs.
7.4 Other Restrictions. The Committee may impose such other restrictions on Shares of Restricted Stock and RSUs (including Shares underlying RSUs) as it may deem advisable or appropriate in accordance with this Section 7.4.
(a) General Restrictions. The Committee may set one or more restrictions based upon (a) the achievement of specific Performance Goals, (b) applicable Federal or state securities laws, (c) time-based restrictions, or (d) any other restrictions determined by the Committee.
(b) Methods of Implementing Restrictions. The Committee may take such action as it, in its sole discretion, deems appropriate to give noticeprovide to the Participant of, and implement, the restrictions imposed pursuant to Section 7.
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7.5 Removal of Restrictions. After the end of the Period of Restriction, the Shares(including the Shares underlying the RSUs) shall be freely transferable by the Participant, subject to any other restrictions on transfer (including without limitation, limitations imposed pursuant to the Company’s organizational documents) which may apply toCorporation in writing such Shares.
7.6 Voting Rights. Except as otherwise determined by the Committee and set forth in the Award Agreement, Participants holding (a) Shares of Restricted Stock shall have voting rights during the Period of Restriction and (b) RSUs shall not have voting rights during the Period of Restriction.
7.7 Dividends and Other Distributions. Except as otherwise determined by the Committee and set forth in the Award Agreement, Participants holding (a) Shares of Restricted Stock shall be entitled to receive all dividends and other distributions paidinformation with respect to direct, indirect and constructive ownership of Shares as the Shares during the PeriodBoard of Restriction and (b) exceptDirectors deems reasonably necessary to the extent a Dividend Equivalent Right is granted in tandem with an RSU, RSUs shall not be entitled to receive any dividends or other distributions paid with respect to the underlying Shares during the Period of Restriction.
SECTION 8PERFORMANCE-BASED AWARDS
8.1 Performance-Based Awards. Participants selected by the Committee may be granted one or more Performance Awards in the form of Options, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights or Performance Share Awards payable upon the attainment of Performance Goals that are established by the Committee and related to one or more of the Performance Criteria, in each case on a specified date or dates or over a Performance Cycle as determined by the Committee. The Committee shall define the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an individual. The Committee, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (iii) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; provided, however, that the Committee may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Participant. Each Performance-Based Award shall comply with the provisions set forth below. Performance Awards, other than Dividend Equivalent Rights, shall be paid in Shares.
8.2 Grant of Performance-Based Awards. With respect to each Performance-Based Award granted to a Participant, the Committee shall select, within the first 180 days of the beginning of a Performance Cycle, the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including, if applicable, a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The Performance Criteria established by the Committee may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Participants.
8.3 Payment of Performance-Based Awards. Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle.
8.4 Maximum Award Payable. The maximum Performance-Based Award payable to any one Participant under the Plan for a Performance Cycle is 100,000 Shares (subject to adjustment as provided in Section 5.3 hereof).
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SECTION 9DIVIDEND EQUIVALENT RIGHTS
9.1 Dividend Equivalent-Rights. A Dividend Equivalent Right may be granted hereunder to any Participant only in tandem with an Award of RSUs or a Performance Based Award (other than an Award of Restricted Stock or Options). The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Agreement which shall provide that such Dividend Equivalent Right, except to the extent otherwise provided in the related Award Agreement, shall (i) not be sold, transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily, until the end of the applicable Period of Restriction and the satisfaction, in whole or in part, of any applicable Performance Goals within the applicable Performance Cycle, and (ii) be settled upon settlement or payment of, or lapse of restrictions on, the Award to which it relates, and such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such Award.
SECTION 10AMENDMENT, TERMINATION, AND DURATION
10.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason; provided, however, that if and to the extent required by law or to maintain the Plan’s compliance with the Code, the rules of any national securities exchange (if applicable), or any other applicable law, any such amendment shall be subject to stockholder approval. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan.
10.2 Duration of the Plan. The Plan shall become effective in accordance with Section 1.1, and subject to Section 10.1, shall remain in effect until the tenth anniversary of the effective date of the Plan.
SECTION 11TAX WITHHOLDING
11.1 Withholding Requirements. Prior to the delivery of any Shares pursuant to an Award (or the exercise thereof), the Company shall have the power and the right to deduct or withhold from any amounts due to the Participant from the Company, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the Participant’s FICA obligation) required or appropriate to be withheld with respect to such Award (or the exercise or vesting thereof).
11.2 Withholding Arrangements. The Company, pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part, by (a) electing to have the Company withhold otherwise deliverable Shares, or (b) delivering to the Company, Shares then owned by the Participant. The amount of the withholding requirement shall be deemed to include any amount that the Company agrees may be withheld at the time any such election is made, not to exceed the amount determined by using the maximum federal, state and local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are required to be withheld.
SECTION 12CHANGE IN CONTROL
12.1 Change in Control. For purposes of the Plan, a Change in Control means any of the following:
(a) the acquisition (other than from the Company) in one or more transactions by any person (as such term is used in Section 13(d) of the 1934 Act) of the beneficial ownership (within the meaning of Rule 13d-3 under the 1934 Act) of 25% or more of (i) the then outstanding Shares or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Company Voting Stock”); provided, however, the provision of this Section 12.1(a) is not applicable to acquisitions made individually, or as a group, by Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould, and their respective spouses, lineal descendants and Affiliates;
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(b) individuals who, as of the date of the Award, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date of such Award whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Regulation 14A promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board;
(c) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or
(d) the effective time of any merger, share exchange, consolidation, or other business combination involving the Company if immediately after such transaction persons who hold a majority of the outstanding voting securities entitled to vote generally in the election of directors of the surviving entity (or the entity owning 100% of such surviving entity) are not persons who, immediately prior to such transaction, held the Company’s voting Shares.
12.2 Effect of Change of Control. On the effective date of any Change in Control, unless the applicable Award Agreement provides otherwise: (i) in the case of an Option, each such outstanding Option shall become exercisable in full in respect of the aggregate number of Shares covered thereby; and (ii) in the case of Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights and Performance Share Awards, the Period of Restriction applicable to each such Award shall be deemed to have expired. Notwithstanding the foregoing, unless otherwise provided in the applicable Award Agreement, the Committee may, in its discretion, determine that any or all outstanding Awards of any or all types granted pursuant to the Plan will not become exercisable on an accelerated basis nor will the Restriction Period expire in connection with a Change of Control if effective provision has been made for the taking of such action which, in the opinion of the Committee, is equitable and appropriate to substitute a new Award for such Award or for the assumption of such Award and to make such new or assumed Award, as nearly as may be practicable, equivalent to the old Award (before giving effect to any acceleration of the exercisability or the expiration of the Restriction Period), taking into account, to the extent applicable, the kind and amount of securities, cash, or other assets into or for which the Shares may be changed, converted, or exchanged in connection with such Change of Control.
SECTION 13MISCELLANEOUS
13.1 Deferrals. To the extent consistent with the requirements of section 409A of the Code the Committee may provide in an Award Agreement or another document thatapplicable to a Participant is permitted or required to defer receipt of the delivery of Shares that would otherwise be due to such Participant under an Award, other than an Option, any such deferral shall be subject to such rules and procedures as shall be determined by the Committee.
13.2 Termination for Cause. If a Participant’s employment or relationship with the Company or a Subsidiary shall be terminated for cause by the Company or such Subsidiary during the Restriction Period or prior to the exercise of any Option (for these purposes, cause shall have the meaning ascribed thereto in any employment agreement or Award Agreement to which such Participant is a party or, in the absence thereof, shall include, but not be limited to, insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform his duties and responsibilities for any reason (other than illness or incapacity) and other misconduct of any kind, as determined by the Committee), then, (i) all Options (whether or not then vested and exercisable) shall immediately terminate and (ii) such Participant’s rights to all Restricted Stock, RSUs, Dividend Equivalent Rights and Performance Share Awards shall be forfeited immediately.
13.3 No Effect on Employment or Service. Nothing in the Plan, any Award or any Award Agreement, and no action of the Committee, shall confer or be construed to confer on any Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or limit in any way the right of
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the Company or any Subsidiary to terminate any Participant’s employment or service at any time, with or without cause. Employment with the Company or any Subsidiary is on an at-will basis only, unless otherwise provided by an applicable employment or service agreement between the Participant and the Company or any Subsidiary, as the case may be.
13.4 Successors. All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation or otherwise, or the purchase of all or substantially all of the business or assets of the Company.
13.5 No Rights as Stockholder. Except to the limited extent provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary thereof) shall have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or the exercise or vesting thereof), unless and until the issuance of such Shares shall have been recorded on the records of the Company or its transfer agents or registrars.
13.6 Uncertificated Shares. Notwithstanding any provision of the Plan to the contrary, the ownership of Shares issued under the Plan may be evidenced in such a manner as the Committee, in its sole discretion, deems appropriate, including by book-entry or direct registration (including transaction advices) or the issuance of one or more share certificates, and to the extent that the Plan, applicable law or the Company’s organizational documents, require or contemplate the imposition of a legend or other notation on one or more certificates evidencing Shares or an Award, the Committee shall have the sole discretionREIT, to determine the manner in which such legend or notation is implemented.
13.7 Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, or Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.
13.8 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforcedCorporation’s status as if the illegal or invalid provision had not been included.
13.9 Requirements of Law; Claw-Back Policies. The grant of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required from time to time, and shall be subject to the applicable provisions of any claw-back policy implemented by the Company, whether implemented prior to or after the grant of such Award, including without limitation, any claw-back policy adopteda REIT, to comply with the requirements of applicable law (includingany taxing authority or governmental agency or to determine any such compliance.
13.10 Securities Law Compliance. To the extent anyREIT; provided, however, that no provision of this subsection 7 shall preclude the Plan, Award Agreement or action bysettlement of any transaction entered into through the Committee failsfacilities of the New York Stock Exchange.
13.11 Real Estate Investment Trust. No Award shall be granted or awarded and,provisions of this Article X with respect to any Award granted undersituation based on the Plan,facts known to it. In the event this Article X requires or permits an action by the Board of Directors and the Restated Articles of Incorporation of the Corporation, as amended, fails to provide specific guidance with respect to such Awardaction, the Board of Directors shall have the power to determine the action to be taken so long as such action is not vest,contrary to the provisions of Article X.
13.12 Governing LawInternal Revenue Code of 1986, as amended. Except as otherwise provided pursuant to the Restated Articles of Incorporation of the Corporation, as amended, no Person may Beneficially Own Shares in excess of the Ownership Limit (as defined in the Restated Articles of Incorporation, as amended) or such greater percentage as may be determined by the Board of Directors of the Corporation, of the number or value of the outstanding Shares of any class or series of the Common Stock or Preferred Stock of the Corporation. Any Person who attempts or proposes to Beneficially Own Shares in excess of the above limitations must notify the Corporation in writing at least 15 days prior to such proposed or attempted Transfer. All capitalized terms in this legend have the meanings defined in the Restated Articles of Incorporation of the Corporation, as amended, a copy of which, including the restrictions on transfer, will be furnished to each stockholder on request and without charge. If the restrictions on transfer are violated, the securities represented hereby which are in excess of the above limitations will be designated and treated as Excess Shares which will be held in trust by the Excess Share Trustee for the benefit of the Charitable Beneficiary.”
(a) | It shall be the duty of the Board of Directors to ensure that the purchase, sale, retention and disposal of Corporation assets and the investment policies of the Corporation and the limitations thereon or amendment thereto are at all times in compliance with the restrictions applicable to real estate investment trusts pursuant to the Internal Revenue Code of 1986, as amended and as may be hereafter amended (the "Code"). |
(b) | The Corporation may invest in any type of real property, mortgage loans (and, in both cases, in interests therein) and in other investments of any nature whatsoever; provided that the investment does not adversely affect the Corporation's ability to continue to qualify as a real estate investment trust under the Code; and provided further that the investment does not necessitate that the Corporation register as an investment company under the Investment Company Act of 1940 as amended and as may be hereafter amended. |
(c) | The Corporation may finance and refinance its investments in whatever manner the Directors determine to be in the best interests of the stockholders. The method of financing and refinancing may include short, intermediate or long-term borrowings, whether secured or unsecured, subject to the limitations set forth below. Borrowings may be in the form of bank borrowings, including unsecured borrowings or borrowings secured by a mortgage on the Corporation's current properties and/or the properties acquired, the issuance of commercial paper, or the issuance in public or private transactions of senior or subordinated notes or debentures, including notes or debentures convertible into shares of the Corporation's Common Stock. The Corporation may also, in public or private transactions, issue additional shares of its Common Stock, and may, in the discretion of the Board of Directors, combine any two or more of such financing methods. |
(d) | The cash proceeds of a sale or other disposition of the Corporation's assets may be reinvested in long-term investments, if such reinvestment can be made without adversely affecting the Corporation's ability to qualify as a real estate investment trust under the Code. |
(e) | The Corporation shall not (i) invest in the securities of other issuers for the purpose of exercising control (except where real property is the principal asset of a corporation and the acquisition of such property can best be effected by the acquisition of the stock of the corporation), nor (ii) underwrite securities of other issuers. The Corporation may purchase or otherwise reacquire its outstanding shares of Common Stock whenever necessary to maintain qualification as a real estate investment trust under the Code and also at any time and for such prices as the Directors deem appropriate without adversely affecting the ability of the Corporation to qualify as a real estate investment trust under the Code. |
(f) | The provisions of this Section 17 of Article III of these By-Laws are not subject to alteration, modification or repeal by the Board of Directors and may be altered, modified or repealed only by majority vote of the stockholders. |
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