(RULE 14A-101)
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Preliminary Copy
December
Fellow Piedmont2018
Listing and Offering
As you know, Piedmont’s Boardon the election of Directors and management team have been monitoringyour board of directors, the equity markets closely in order to find the best opportunity possible to create a liquidity event. Although the commercial real estate market continues to be very challenging and publicly-traded REITs are still valued approximately 50% below their peak in February 2007, the debt and equity capital markets have improved recently. The REIT sector has rallied to the point that it is currently valued above both long-term historic averages, as well as the perceived underlying market value for the assets in its portfolios.As a result, with the assistance of J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated, we are moving towards listing our stock on a publicly-traded national securities exchange and concurrently raising new capital in a public offering, which we expect to occur in the first quarter of 2010 if market conditions allow. We cannot, however, provide you with complete assurance that we will complete the listing or the offering in the first quarter of 2010, or at all.
Conversion and Reverse Stock Split
As partratification of the listing and public offering process, after consultation with J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated, we determined to create a separate class of common stock, which we expect to list on a national securities exchange. If you approve the proposal described in the accompanying proxy statement, a portion of your current shareholdings (25%) will become Class A shares, which we expect will be listed and will become tradable on a national securities exchange immediately upon listing. The remainder of your shares will be unlisted Class B shares, which will convert into Class A shares at predetermined intervals throughout 2010, with all of your shares converting to Class A shares by January 30, 2011 (our currently approved Liquidation Date) whether or not the listing or offering take place. This progressive conversion of allappointment of our current common stock into listed shares is being done in order to minimize the chance that a significant proportion of our shares of common stock are sold immediately after the listing, which could increase the volatility and depress the trading price of the common stock. In addition, our Board of Directors and J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated were concerned that, if we proceed with the offering, this potentialindependent registered public accounting firm for a decline in the price of the common stock immediately following the offering could decrease the price per share that we will be able to obtain in the offering. The conversion of your shares into Class A and Class B shares will also have the effect of a reverse one (1) for three (3) stock split, which will reduce the number of our shares outstanding and we believe will facilitate the offering and listing.
In order to make these changes in our common stock described above, we needfiscal 2018, the approval of our stockholders for an amendment to our Charter. It ischarter to clarify that our belief thatstockholders have the Charter amendment proposedpower to amend our bylaws, and the approval, on an advisory basis, of the compensation of our named executive officers. You will find more detail about these proposals in the accompanying proxy statement will allow our existing stockholders the best opportunity for a strong initial share priceattached documents. We ask that you review these documents thoroughly and submit your vote as soon as possible in the listing while providing partial immediate liquidity to all current stockholders and complete liquidity by the approved Liquidation Date of January 30, 2011.
Example
The following is an example of how these changes will work. If you currently own 12,000 shares of Piedmont common stock, at the timeadvance of the approval of this amendment and resulting changes in our common stock, your shares will convert automatically into 4,000 shares of Piedmont common stock in the following manner:
1,000 shares of Piedmont Class A stock which will become publicly tradable at listing; plus
1,000 shares of unlisted Piedmont Class B-1 stock that will convert into 1,000 Class A shares 180 days after the listing; plus
1,000 shares of unlisted Piedmont Class B-2 stock that will convert into 1,000 Class A shares 270 days after the listing; plus
1,000 shares of unlisted Piedmont Class B-3 stock that will convert into 1,000 Class A sharesannual meeting on January 30, 2011.
If they have not otherwise converted automatically in the manner set forth above, all of your Class B shares will convert into Class A shares on January 30, 2011.
Summary
While the number and classification of your shares will be affected by these changes, this will have no effect on your proportional ownership interest in Piedmont, your voting rights, your right to receive dividends or the total amount of your dividends. In addition, as a result of this conversion of stock, all current stockholders will be treated the same and will have all shares converted in the same proportion, so that each stockholder’s percentage ownership of Piedmont will remain the same. The Class A shares (25% of the total) will be listed on a national securities exchange. The three classes of Class B shares (75% of total) will not be listed on a national securities exchange, but will convert into listed Class A shares as described above. Because our Share Redemption Program will terminate in connection with the listing, and we do not anticipate that the shares of our Class B common stock will be traded on a listed securities market, your options for liquidity with respect to the shares of Class B common stock will initially be very limited.By January 30, 2011, the final conversion date, all of your shares will be our Class A shares, which we expect will be listed on a national securities exchange. In addition, in connection with the offering, all of our directors and executive officers have agreed that they will not sell any of their shares of our common stock until January 30, 2011, the final conversion date on which we expect all of your shares will be listed on a national securities exchange.
It is our desire to lessen the potential for volatile trading activity in the stock after it has been listed; therefore, we believe that it is in the best interest of the current stockholders to approve the Charter amendment. It has been our stated intent to find an opportunity to create a liquidity event at the best possible time in this challenging economic and real estate environment.We believe that the Charter amendment is important to our ability to provide liquidity and long-term value to our stockholders.
We thank you for your continued support of Piedmont.
Regards,
www.piedmontreit.com.
OFFICIAL NOTICE
11695 Johns Creek Parkway, Suite 350
Johns Creek, Georgia 30097
Proxy Statement and
and Proxy Statement
May 15, 2018
|
A proposal to
Copies
WHETHER YOU PLAN TO ATTEND THE MEETING AND VOTE IN PERSON OR NOT, WE URGE YOU TO HAVE YOUR VOTE RECORDED AS EARLY AS POSSIBLE. YOU HAVE THE FOLLOWING THREE OPTIONS FOR SUBMITTING YOUR VOTES BY PROXY: (1) VIA THE INTERNET; (2) BY TELEPHONE; OR (3) BY MAIL, USING THE ENCLOSED PROXY CARD. BECAUSE WE ARE A WIDELY-HELD REIT WITH APPROXIMATELY 107,000 REGISTERED STOCKHOLDERS,YOUR VOTE IS VERY IMPORTANT! YOUR IMMEDIATE RESPONSE WILL HELP AVOID POTENTIAL DELAYS AND MAY SAVE PIEDMONT SIGNIFICANT ADDITIONAL EXPENSES ASSOCIATED WITH SOLICITING STOCKHOLDER VOTES.
2018
BY ORDERwww.envisionreports.com/PDM.
Robert E. Bowers
Chief FinancialSTOCKHOLDERS
Proposal | | | | | | Board Vote Recommendation | | | Page | |
I | | | Elect eight directors nominated by the board of directors for one year terms | | | FOR ALL | | | 10 | |
II | | | Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm | | | FOR | | | 14 | |
III | | | Approve an amendment to our charter to clarify that our stockholders have the power to amend our bylaws | | | FOR | | | 17 | |
IV | | | Approve, on an advisory basis, executive compensation | | | FOR | | | 18 | |
Name | | | Age | | | Occupation | | | Year First Became a Director | | | Independent | | | Board Committees | | |||
Kelly H. Barrett | | | | | 53 | | | | Senior Vice President - Home Services, The Home Depot | | | 2016 | | | Yes | | | Audit Nominating and Governance | |
Wesley E. Cantrell | | | | | 83 | | | | Former President, Chief Executive Officer and Chairman, Lanier Worldwide | | | 2007 | | | Yes | | | Nominating and Governance* Compensation | |
Barbara B. Lang | | | | | 74 | | | | Managing Principal and Chief Executive Officer of Lang Strategies, LLC | | | 2015 | | | Yes | | | Compensation Nominating and Governance | |
Frank C. McDowell | | | | | 69 | | | | Former President, Chief Executive Officer and Director of BRE Properties, Inc. | | | 2008 | | | Yes | | | Compensation* Nominating and Governance | |
Donald A. Miller, CFA | | | | | 55 | | | | President and Chief Executive Officer, Piedmont Office Realty Trust, Inc. | | | 2007 | | | No | | | | |
Raymond G. Milnes, Jr. | | | | | 66 | | | | Former Partner, KPMG LLP | | | 2011 | | | Yes | | | Audit* Capital | |
Jeffrey L. Swope | | | | | 67 | | | | Managing Partner and Chief Executive Officer, Champion Partners Ltd. | | | 2008 | | | Yes | | | Capital* Compensation | |
Dale H. Taysom | | | | | 69 | | | | Former Global Chief Operating Officer, Prudential Real Estate Investors | | | 2015 | | | Yes | | | Audit Capital | |
Atlanta, Georgia
December , 2009
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retain candidates capable of performing at the highest levels of our industry;
| What We Do | | | | | | What We Don’t Do | |
| ✓ DO require stockholder approval in the event a staggered Board is ever proposed | | | | | NO staggered Board | | |
| ✓ DO have a board comprised of a super-majority of independent directors. Seven of our eight directors currently serving are independent in accordance with New York Stock Exchange (“NYSE”) listing standards and our Corporate Governance Guidelines. | | | | | NO compensation or incentives that encourage risks reasonably likely to have a material adverse effect on the Company | | |
| ✓ DO have a separate Chairman and Chief Executive Officer | | | | | NO tax gross ups for any executive officers | | |
| ✓ DO maintain a majority voting policy requiring that, in any uncontested election, as a condition to nomination, each director irrevocably agrees to offer to resign if the director receives a greater number of votes “withheld” than votes “for” such election. | | | | | NO re-pricing or buyouts of underwater stock options | | |
| ✓ DO permit stockholders to amend the bylaws | | | | | NO reportable transactions with any of our directors or current executive officers | | |
| ✓ DO restrict board terms to 15 years | | | | | NO hedging or pledging transactions involving our securities | | |
| ✓ DO require an annual performance evaluation of our Board | | | | | NO guaranteed cash incentive compensation or equity grants with executive officers | | |
| ✓ DO align pay and performance by linking a majority of total compensation to the achievement of a balanced mix of Company and individual performance criteria tied to operational and strategic objectives established at the beginning of the performance period by the Compensation Committee and the Board. | | | | | NO long-term employment contracts with executive officers | | |
| ✓ DO deliver a substantial portion of the value of equity awards in performance shares. For 2017, 50% of our executive officers equity award opportunity was tied to our Company’s total stockholder return relative to our peer group. | | | | | NO supplemental executive benefits to our NEOs | | |
| ✓ DO maintain stock ownership guidelines for directors and executive officers | | | | ||||
| ✓ DO maintain a clawback policy for our CEO, CFO and CAO | | | | ||||
| ✓ DO conduct annual assessments of compensation at risk | | | | ||||
| ✓ DO have an Compensation Committee comprised solely of independent directors | | | | ||||
| ✓ DO retain an independent compensation consultant that reports directly to the Compensation Committee and performs no other services for management | | | | ||||
| ✓ DO cap incentive compensation. Incentive awards include minimum and maximum performance thresholds with funding that is based on actual results measured against the pre-approved goals that are clearly defined. Further, our Compensation Committee ultimately reserves the right to decrease payouts in their discretion. | | | | | |
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and the future conversion of our Class B-1, B-2 and B-3 common stock into our Class A common stock.
statement.
1
Q:
FORthe proposal to approve an adjournment or postponementInternet. The address of the Special Meeting, including, if necessary, to solicit additional proxies in favor of the foregoing proposal if there are not sufficient voteswebsite for the proposal.
We currently intend to complete both the Listing and the Offering. However, we may elect to complete a Listing without the concurrent Offering, in which case we will still effect the amendment to our Charter in connection with the Listing. In addition, we may determine not to complete the Listing or the Offering, in which case we will not effect the amendment to our Charter, even if it is approved by our stockholders.
authorize a proxy over the Internet at the web address shownvoting can be found on your proxy card (if you have access to thecard. Internet we encourage you to authorizevoting is available 24 hours a proxy in this manner);
authorize a proxy
completing
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postal delays will cause your vote to arrive late and, therefore, not be counted. For further instructions on voting, see your enclosed proxy card in this proxy statement or the Notice of Internet Availability of Proxy Statement.
ABSTAIN
The amendment to the Charter
ABSTAIN
This proposal
proxy statement, and how many votes must the proposal receive to pass? A: With respect to this proposal, you may: ➢ vote FOR the approval, on an advisory basis, of the compensation of the named executive officers; ➢ vote AGAINST the approval, on an advisory basis, of the compensation of the named executive officers; or ➢ abstain from voting. Unlike some of the other proposals you are voting on, this is an advisory proposal, which means it is not binding. The |
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authorize a majority of the votes cast at the Annual Meeting. If you sign your proxy card with no further instructions, your shares will be counted as a vote FOR the approval of executive compensation.
properly submit a proxy card (even if you do not provide voting instructions); or
attend the Special Meeting and vote in person.
authorizing another proxy over the Internet or by telephone before 12:00 a.m., Eastern Time, on , 2010;
giving written notice to Robert E. Bowers,Thomas A. McKean, our Secretary;
attending the Special Meeting and voting in person; or
➢
FOR the proposal to amend the Charter; and
FOR the proposal to approve an adjournment or postponement of the Special Meeting, including, if necessary, to solicit additional proxies in favor of the foregoing proposal if there are not sufficient votes for the proposal.
With respect to the proposal to adjourn or postpone the Special Meeting, abstentions will have no effect on the outcome of the vote. With respect to the proposal to amend the Charter, abstentions will have the effect of a vote against the proposal.
If your shares are held in “street name” through a broker, bank, or other nominee, please refer to your broker’s proxy card or instructions for the procedures you need to follow to revoke your vote.
On certain “routine” matters, brokerage firms have authority to vote their customers’ shares if their customersreturn a signed proxy card but do not provide voting instructions. Wheninstructions, your shares will be voted FOR all of the eight nominees to serve on the board of directors; FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2017; FOR the approval of the Charter Amendment Proposal; and FOR the approval, on an advisory basis, of the compensation of the named executive officers.
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to conduct business at the meeting and in determining the number of shares votedfororagainstthe routine matter.
On “non-routine” matters, such as the amendment to the Charter and the proposal to adjourn or postpone the Special Meeting to solicit additional proxies in favor of the foregoing proposal, the brokerage firm cannot vote the shares on that proposal if it has not received voting instructions from the beneficial owner of such shares.
quorum.
such shares.
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SEC free of charge from our website at www.piedmontreit.com or by calling Shareowner Services at 866-354-3485.
Name | | | Age | | | Position(s) | |
Frank C. McDowell | | | 69 | | | Director* and Chairman of the Board of Directors | |
Kelly H. Barrett | | | 53 | | | Director* | |
Wesley E. Cantrell | | | 83 | | | Director* | |
Barbara B. Lang | | | 74 | | | Director* | |
Donald A. Miller, CFA | | | 55 | | | Chief Executive Officer, President and Director | |
Raymond G. Milnes, Jr. | | | 66 | | | Director* | |
Jeffrey L. Swope | | | 67 | | | Director* | |
Dale H. Taysom | | | 69 | | | Director* and Vice-Chairman of the Board of Directors | |
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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This proxy statement contains has served as a director of our company since 2015 and as Vice-Chairman of the Board since 2017. Prior to his retirement in 2013, Mr. Taysom was Global Chief Operating Officer for Prudential Real Estate Investors (“PREI”). During his 36-year career with PREI, Mr. Taysom held various positions including Head of United States Transactions and Global Head of Transactions, among others, prior to completing his tenure as Global Chief Operating Officer (“COO”). Additionally, he was a member of PREI’s domestic and international investment committees and a member of the Global Management Committee. His responsibilities included asset management, acquisitions, sales, development, and portfolio management. He is currently a member of the ULI and a former member of both historicalthe National Multi-Housing Council and forward-looking statements thatthe National Association of Real Estate Investment Managers (“NAREIM”).
| | | 2017 | | | 2016 | | ||||||
Audit Fees | | | | $ | 1,145,000 | | | | | $ | 1,161,000 | | |
Audit-Related Fees | | | | | — | | | | | | — | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | — | | | | | | — | | |
Total | | | | $ | 1,145,000 | | | | | $ | 1,161,000 | | |
Name | | | Age | | | Position(s) | |
Donald A. Miller, CFA | | | 55 | | | Chief Executive Officer, President and Director | |
Robert E. Bowers | | | 61 | | | Executive Vice President and Chief Financial Officer | |
Christopher A. Kollme* | | | 47 | | | Executive Vice President — Finance and Strategy | |
Laura P. Moon | | | 47 | | | Senior Vice President and Chief Accounting Officer | |
Joseph H. Pangburn | | | 57 | | | Executive Vice President — Southwest Region | |
Thomas R. Prescott | | | 60 | | | Executive Vice President — Midwest Region | |
Carroll A. Reddic, IV | | | 52 | | | Executive Vice President — Real Estate Operations, Assistant Secretary | |
C. Brent Smith | | | 42 | | | Executive Vice President — Northeast Region and Chief Investment Officer | |
George M. Wells | | | 55 | | | Executive Vice President — Southeast Region | |
Robert K. Wiberg | | | 62 | | | Executive Vice President — Mid-Atlantic Region and Head of Development | |
Board Committee | | | Chairman | | | Members | |
Audit Committee | | | Raymond G. Milnes, Jr.* | | | Kelly H. Barrett* Dale H. Taysom | |
Compensation Committee | | | Frank C. McDowell | | | Wesley E. Cantrell Barbara B. Lang Jeffrey L. Swope | |
Nominating & Corporate Governance Committee | | | Wesley E. Cantrell | | | Kelly H. Barrett Barbara B. Lang Frank C. McDowell | |
Capital Committee | | | Jeffrey L. Swope | | | Raymond G. Milnes, Jr. Dale H. Taysom | |
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or impliedSEC, all as in the forward-looking statements. Factors that might cause such a difference include:
If current market and economic conditions do not improve or worsen, our business, results of operations, cash flows, financial condition and access to capital may be adversely affected;
Our growth will partially depend upon future acquisitions of properties, and we may not be successful in identifying and consummating suitable acquisitions that meet our investment criteria, which may impede our growth and negatively affect our results of operations;
We depend on tenants for our revenue, and accordingly, lease expirations, terminations and/or tenant defaults particularly by one of our large lead tenants, could adversely affect the income produced by our properties, which may harm our operating performance;
We face considerable competition in the leasing market and may be unable to renew existing leases or re-let space on terms similar to the existing leases, or we may expend significant capital in our efforts to re-let space, which may adversely affect our operating results;
Adverse market and economic conditions may continue to negatively affect us and could cause us to recognize impairment charges or otherwise impact our performance;
We depend on key personnel, each of whom would be difficult to replace;
Our failure to qualify as a REIT could adversely affect our operations and ability to make distributions;
Changes in the economies and other conditions of the office market in general and of the specific markets in which we operate, particularly in Chicago, Washington, D.C., and the New York metropolitan area;
Economic and regulatory changes, including accounting standards, that impact the real estate market generally;
The success of our real estate strategies and investment objectives;
Costs of complying with governmental laws and regulations;
Uncertainties associated with environmental and other regulatory matters; and
Availability of financing and banks’ ability to honor existing line of credit commitments.
Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they are made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements included in this proxy statement or that may be made elsewhereeffect from time to time, as well as the independent director requirements set forth in our Corporate Governance Guidelines. The board of directors has determined that Mr. Milnes and Ms. Barrett both satisfy the requirements of an “audit committee financial expert” as defined by the rules and regulations of the SEC.
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our quarterly reports on Form 10-Q;
The primary responsibilities of the Compensation Committee, as set forth in the committee’s charter include the following:
Experience, Skill, or Characteristic | | | McDowell | | | Barrett | | | Cantrell | | | Lang | | | Milnes | | | Swope | | | Taysom | |
Audit committee financial expert | | | | | | • | | | | | | | | | • | | | | | | | |
Financial/accounting | | | • | | | • | | | | | | • | | | • | | | | | | • | |
CEO, CFO, or COO experience | | | • | | | • | | | • | | | • | | | | | | • | | | • | |
Public company | | | • | | | • | | | • | | | • | | | • | | | | | | | |
Industry specific knowledge | | | • | | | • | | | | | | | | | • | | | • | | | • | |
Strategic planning | | | • | | | • | | | • | | | • | | | | | | • | | | • | |
Experience mentoring top level leaders | | | • | | | | | | • | | | • | | | | | | • | | | • | |
Real estate development/construction | | | • | | | • | | | | | | | | | | | | • | | | • | |
Investment banking experience | | | | | | | | | | | | | | | | | | | | | • | |
Racial and gender diversity | | | | | | • | | | | | | • | | | | | | | | | | |
Risk management expertise | | | | | | • | | | | | | | | | • | | | | | | | |
Marketing expertise | | | | | | • | | | • | | | • | | | | | | • | | | | |
Experience with international buyers or sellers | | | | | | • | | | • | | | | | | | | | | | | • | |
Company | | | Implied Equity Market Capitalization ($) | | | Total Enterprise Value ($) | | | Sector | | ||||||
Brandywine Realty Trust | | | | | 3,184.8 | | | | | | 5,061.3 | | | | Office | |
Columbia Property Trust, Inc. | | | | | 2,636.9 | | | | | | 3,589.9 | | | | Office | |
Corporate Office Properties Trust | | | | | 3,406.0 | | | | | | 5,353.5 | | | | Office | |
Cousins Properties Incorporated | | | | | 3,960.5 | | | | | | 5,022.1 | | | | Office | |
Douglas Emmett, Inc. | | | | | 7,655.9 | | | | | | 11,796.9 | | | | Office | |
Equity Commonwealth | | | | | 3,784.7 | | | | | | 3,040.4 | | | | Office | |
Highwoods Properties, Inc. | | | | | 5,573.9 | | | | | | 7,612.2 | | | | Office | |
Hudson Pacific Properties, Inc. | | | | | 5,288.1 | | | | | | 8,123.8 | | | | Office | |
Kilroy Realty Corporation | | | | | 7,307.2 | | | | | | 9,713.1 | | | | Office | |
Mack-Cali Realty Corporation | | | | | 2,378.3 | | | | | | 5,326.3 | | | | Office | |
Paramount Group, Inc. | | | | | 4,365.5 | | | | | | 7,690.8 | | | | Office | |
Washington Real Estate Investment Trust | | | | | 2,572.8 | | | | | | 3,779.3 | | | | Diversified | |
Median | | | | | 3,872.6 | | | | | | 5,339.9 | | | | | |
Piedmont Office Realty Trust, Inc. | | | | | 2,959.3 | | | | | | 5,004.7 | | | | Office | |
(in thousands) | | | | | | 25th Percentile | | | 50th Percentile | | | 75th Percentile | | | Average | | ||||||||||||
Chief Executive Officer | | | Peer Group | | | | $ | 4,163 | | | | | $ | 4,537 | | | | | $ | 8,725 | | | | | $ | 6,483 | | |
Chief Financial Officer | | | Peer Group | | | | $ | 1,591 | | | | | $ | 2,216 | | | | | $ | 3,476 | | | | | $ | 2,525 | | |
EVP and Chief Investment Officer | | | Peer Group | | | | $ | 1,557 | | | | | $ | 1,967 | | | | | $ | 3,009 | | | | | $ | 2,232 | | |
| Supplemental Position | | | | $ | 703 | | | | | $ | 1,018 | | | | | $ | 1,293 | | | | | $ | 1,047 | | | ||
EVP — Real Estate Operations | | | Peer Group | | | | $ | 1,102 | | | | | $ | 1,229 | | | | | $ | 1,775 | | | | | $ | 1,517 | | |
| Supplemental Position | | | | $ | 548 | | | | | $ | 886 | | | | | $ | 1,144 | | | | | $ | 935 | | | ||
EVP — Mid-Atlantic Region and Head of Development | | | Peer Group | | | | $ | 1,132 | | | | | $ | 1,562 | | | | | $ | 2,388 | | | | | $ | 1,864 | | |
| Supplemental Position | | | | $ | 818 | | | | | $ | 1,058 | | | | | $ | 1,384 | | | | | $ | 1,092 | | |
Name and Position | | | 2017 Annual Base Salary | | | Annual Short-Term Cash Incentive Compensation as a % of Base Salary | | ||||||||||||||||||
| Threshold | | | Target | | | Maximum | | |||||||||||||||||
Donald A. Miller, CFA Chief Executive Officer | | | | $ | 720,000 | | | | | | 75% | | | | | | 120% | | | | | | 200% | | |
Robert E. Bowers Chief Financial Officer | | | | $ | 450,000 | | | | | | 50% | | | | | | 100% | | | | | | 150% | | |
Carroll A. Reddic, IV EVP — Real Estate Operations | | | | $ | 275,000 | | | | | | 35% | | | | | | 70% | | | | | | 105% | | |
C. Brent Smith EVP — Northeast Region and Chief Investment Officer | | | | $ | 300,000 | | | | | | 50% | | | | | | 100% | | | | | | 150%(1) | | |
Robert K. Wiberg EVP — Mid-Atlantic Region | | | | $ | 320,000 | | | | | | 31.25% | | | | | | 62.50% | | | | | | 93.75% | | |
Performance Measure | | | Target Performance Goal | | | Actual Performance | | | Over (Under) Performance | | | Relative Weighting | | ||||||||||||
Core FFO per share | | | | $ | 1.700 | | | | | $ | 1.750 | | | | | | 2.9% | | | | | | 20.00% | | |
Balance Sheet Management: | | | | | | | | | | | | | | | | | | | | | | | | | |
Payoff $140.0 of secured debt (in millions) | | | Achieve or not | | | Achieved | | | Achieved | | | | | 3.33% | | | |||||||||
Maximum Percentage of Debt to Gross Asset Value | | | less than or equal to 40% at end of year | | | | | 34.3% | | | | Achieved | | | | | 3.33% | | | ||||||
Ladder maturities (excludes line of credit) | | | less than or equal to 25% per annum | | | less than or equal to 25% per annum | | | Achieved | | | | | 3.34% | | | |||||||||
Weighted Average Committed Capital Per Square Foot Leased Relative to Budget | | | | $ | 5.92 | | | | | $ | 5.13 | | | | | | 13.3% | | | | | | 10.00% | | |
Leasing Targets (in 000s of square feet): | | | | | | | | | | | | | | | | | | | | | | | | | |
New Leasing | | | | | 1,221 | | | | | | 855 | | | | Below Threshold | | | | | 15.00% | | | |||
Renewal Leasing | | | | | 677 | | | | | | 1,025 | | | | | | 51.4% | | | | | | 10.00% | | |
Capital Allocations/ Markets (in millions) | | | | | | ||||||||||||||||||||
Acquisitions | | | | $ | 325.0 | | | | | $ | 97.3 | | | | Below Threshold | | | | | 10.00% | | | |||
Dispositions | | | | $ | 554.0 | | | | | $ | 395.4 | | | | Below Threshold | | | | | 5.00% | | | |||
Board Discretion/ Individual Performance | | | Qualitative | | | Qualitative | | | Above Target | | | | | 20.00% | | | |||||||||
Total | | | | | | | | | | | | | | | | | | | | | | | 100.00% | | |
Measure | | | Adjustment Factor | | | Incentive Available to be Earned Based on Actual Performance (as a Percentage of Target) | | | Relative Weighting | | ||||||||||||
| Threshold | | | Maximum(1) | | |||||||||||||||||
Core FFO per share | | | Every 1% variance in performance increases or decreases the targeted award by 10%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 20% | | |
Balance Sheet Management | | | Individual metrics are measured as “Achieved” resulting in full target payout or “Not Achieved” resulting in no payout; however, if all metrics are achieved, then the maximum award is deemed earned | | | | | 100% | | | | | | 150% | | | | | | 10% | | |
Weighted Average Committed Capital Per Square Foot Leased Relative to Budget | | | Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 10% | | |
Leasing Targets | | | Every 1% variance in performance increases or decreases the targeted award by 2%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 25% | | |
Capital Allocations/Markets | | | Every 1% variance in performance increases or decreases the targeted award by 2%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 15% | | |
Board Discretion/Individual Performance | | | Qualitative | | | | | | | | | | | | | | | | | 20% | | |
Name | | | 2017 Target Annual Incentive for NEOs ($) | | | 2017 Actual Annual Incentive for NEOs ($) | | ||||||
Mr. Miller | | | | | 864,000 | | | | | | 950,486 | | |
Mr. Bowers | | | | | 450,000 | | | | | | 442,575 | | |
Mr. Reddic | | | | | 192,500 | | | | | | 189,324 | | |
Mr. Smith | | | | | 300,000 | | | | | | 400,000 | | |
Mr. Wiberg | | | | | 200,000 | | | | | | 196,700 | | |
Total | | | | | 2,006,500 | | | | | | 2,179,085 | | |
| | | TSR Percentile Rank as of December 31, 2017 | | | Estimated Payout Percentage of Target Based on Percentile Rank as of December 31, 2017 | | ||||||
2015 – 17 Performance Share Plan | | | | | 47.1% | | | | | | 94.2% | | |
2016 – 18 Performance Share Plan | | | | | 42.9% | | | | | | 85.8% | | |
2017 – 19 Performance Share Plan | | | | | 50.0% | | | | | | 100.0% | | |
| | | 2016 Goal | | | | | | | | | | | | | | |||||||||||||||
Measure | | | Threshold | | | Target | | | Maximum | | | Actual | | | Weight | | |||||||||||||||
Core FFO (per share) | | | | $ | 1.52 | | | | | $ | 1.599 | | | | | $ | 1.68 | | | | | $ | 1.672 | | | | | | 25% | | |
Actual Adjusted Funds From Operations Before Capital Expenditures Relative to Budget (in millions) | | | | $ | 189.6 | | | | | $ | 210.6 | | | | | $ | 231.7 | | | | | $ | 224.9 | | | | | | 25% | | |
Actual General and Administrative Expense Relative to Budget (in millions) | | | | $ | 33.0 | | | | | $ | 30.0 | | | | | $ | 27.0 | | | | | $ | 29.2 | | | | | | 25% | | |
Board Discretion/Individual Performance | | | Qualitative | | | Qualitative | | | Qualitative | | | Achieved Target | | | | | 25% | | |
Background
We were formed as a non-traded REIT in 1997. Our original charter required that we list our common stock on a national securities exchange or over-the-counter market by January 30, 2008 (the “Initial Liquidation Date”) or commence an orderly process of liquidation. On December 13, 2007, our stockholders approved an extensionbeginning of the Initial Liquidation Date until July 30, 2009,performance period, recognizing that the management team exceeded all three metrics.
Measure | | | Adjustment Factor | | | Incentive Available to be Earned Based on Actual Performance (as a Percentage of Target) | | | Relative Weighting | | ||||||||||||
| Threshold | | | Maximum(1) | | |||||||||||||||||
Core FFO per share to Budget | | | Every 1% variance in performance increases or decreases the targeted award by 10%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 25% | | |
Actual Adjusted Funds From Operations Before Capital Expenditures Relative to Budget | | | Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 25% | | |
Actual General and Administrative Expense Relative to Budget | | | Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting | | | | | 50% | | | | | | 150% | | | | | | 25% | | |
Board Discretion/Individual Performance | | | Qualitative | | | | | | | | | | | | | | | | | 25% | | |
| | | Lesser Of: | | |||||||||
| | | Multiple of Salary | | | Shares of Stock | | ||||||
Chief Executive Officer | | | | | 5x | | | | | | 195,000 | | |
Chief Financial Officer | | | | | 3x | | | | | | 75,000 | | |
EVP — Real Estate Operations | | | | | 2x | | | | | | 30,000 | | |
EVP — Northeast Region and Chief Investment Officer | | | | | 2x | | | | | | 30,000 | | |
EVP — Mid-Atlantic Region and Head of Development | | | | | 2x | | | | | | 30,000 | | |
On July 21, 2009, in consultation with J.P. Morgan Securities Inc.Barrett and Morgan Stanley & Co. Incorporated,Mr. Taysom, each of whom recently joined our board of directors determined, in light of market conditions and other relevant factors, that it was inwill have six years from the best interest of our stockholders to further extend the Initial Liquidation Date until January 30, 2011 (the “Current Liquidation Date”). In the months following this extension,date they joined the board ofto meet the requirement.
Name and Principal Position | | | Year | | | Salary ($) | | | Stock Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||||||||
Donald A. Miller, CFA Chief Executive Officer and President | | | | | 2017 | | | | | | 720,000 | | | | | | 3,192,790(2) | | | | | | 950,486 | | | | | | 26,350(5) | | | | | | 4,889,626 | | |
| | | 2016 | | | | | | 720,000 | | | | | | 2,885,893(3) | | | | | | 1,088,044 | | | | | | 26,408 | | | | | | 4,720,345 | | | ||
| | | 2015 | | | | | | 720,000 | | | | | | 2,767,737(4) | | | | | | 1,200,000 | | | | | | 26,408 | | | | | | 4,714,145 | | | ||
Robert E. Bowers Executive Vice President and Chief Financial Officer | | | | | 2017 | | | | | | 450,000 | | | | | | 1,149,412(2) | | | | | | 442,575 | | | | | | 24,248(5) | | | | | | 2,066,235 | | |
| | | 2016 | | | | | | 450,000 | | | | | | 1,038,914(3) | | | | | | 521,690 | | | | | | 24,282 | | | | | | 2,034,886 | | | ||
| | | 2015 | | | | | | 450,000 | | | | | | 1,041,735(4) | | | | | | 560,000 | | | | | | 24,282 | | | | | | 2,076,017 | | | ||
Carroll A. Reddic, IV Executive Vice President — Real Estate Operations | | | | | 2017 | | | | | | 275,000 | | | | | | 446,983(2) | | | | | | 189,324 | | | | | | 24,250(5) | | | | | | 935,557 | | |
| | | 2016 | | | | | | 275,000 | | | | | | 404,034(3) | | | | | | 220,000 | | | | | | 24,282 | | | | | | 923,316 | | | ||
| | | 2015 | | | | | | 275,000 | | | | | | 382,942(4) | | | | | | 230,000 | | | | | | 24,282 | | | | | | 912,224 | | | ||
C. Brent Smith Executive Vice President — Northeast Region and Chief Investment Officer | | | | | 2017 | | | | | | 300,000 | | | | | | 446,983(2) | | | | | | 400,000 | | | | | | 12,190(5) | | | | | | 1,159,173 | | |
| | | 2016 | | | | | | 262,500 | | | | | | 318,973(3) | | | | | | 235,000 | | | | | | 8,056 | | | | | | 824,529 | | | ||
| | | 2015 | | | | | | 253,125 | | | | | | 245,350(4) | | | | | | 250,000 | | | | | | 282 | | | | | | 748,757 | | | ||
Robert K. Wiberg Executive Vice President — Mid-Atlantic Region and Head of Development | | | | | 2017 | | | | | | 320,000 | | | | | | 446,983(2) | | | | | | 196,700 | | | | | | 24,250(5) | | | | | | 987,933 | | |
| | | 2016 | | | | | | 320,000 | | | | | | 404,034(3) | | | | | | 230,000 | | | | | | 18,282 | | | | | | 972,316 | | | ||
| | | 2015 | | | | | | 320,000 | | | | | | 466,745(4) | | | | | | 250,000 | | | | | | 12,282 | | | | | | 1,049,027 | | |
Accordingly, our board of directors determined to amend the Charter to providean estimate for the conversionprobability of forfeiture. The aggregate grant date fair value of the common2015 annual deferred stock as described herein and to recommend that our stockholders voteFORthis proposal.
The Offering and Listing
If this proposal is approved, we plan to effect the Offering and the Listing of shares of our Class A common stock. However, we may elect to complete a Listing without the concurrent Offering,award granted in which case we will still effect the amendment to our Charter in connection with the Listing. If the conversion of our
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common stock is not approved by our stockholders, our board of directors will consider all of its options in connection with the Listing and the Offering, including proceeding with the Offering and/or a Listing or delaying or abandoning the Offering and/or the Listing.
If the proposal to provide for the conversion of the common stock is approved, we intend to effect the conversion in connection with the Listing and the Offering by filing the amendment to our Charter with the SDAT shortly before the Listing. The possibility exists that, subsequent to the filing of the amendment to our Charter, the Listing could fail to take place. If that occurs, pursuant to the terms of the amendment to our Charter, all shares of Class B common stock will convert into shares of our Class A common stock on January 30, 2011. We intend for the Offering to close and the Listing to be effected sometime in the first quarter of 2010; however, we can provide no assurances that either the Offering will close or the Listing be effected during that period of time or at all. We currently intend to effect both the Listing and the Offering. However, we may elect to complete a Listing without the concurrent Offering, in which case we will still effect the amendment to our Charter in connection with the Listing. In addition, we may determine not to complete the Listing or the Offering, in which case we will not effect the amendment to our Charter, even if it is approved by our stockholders.
On November 24, 2009, in anticipation of the Listing and the Offering and anticipation of filing offering documents2016 was based on the following day, our board of directors suspended our Share Redemption Program for redemption requests received after the close of processing for November’s Share Redemption Program payout. The Share Redemption Program will be terminated in connection with the completion of the Listing.
The Amendment to the Charter
The amendment to the Charter will provide that each outstanding shareclosing price of our common stock will be converted intoon the following:
|
|
|
|
In addition, 600,000,000 sharesMay 24, 2016 grant date of our authorized common stock will be classified as Class A common stock, 50,000,000 shares of our authorized common stock will be classified as Class B-1 common stock, 50,000,000 shares of our authorized common stock will be classified as Class B-2 common stock and 50,000,000 shares of our authorized common stock will be classified as Class B-3 common stock. We refer to our Class B-1 common stock, Class B-2 common stock and Class B-3 common stock collectively as “Class B” common stock.$19.91 per share. The conversion will be effected in connection with the Listing, upon the filingaggregate grant date fair value of the amendment2016 Performance Share Program was based on an estimated fair value per share as of the grant date of $23.02 per share utilizing a Monte Carlo valuation model that models the plan’s potential payoff depending on Piedmont’s
Name | | | Matching Contributions to 401(k) ($) | | | Premium for Company Paid Life Insurance ($) | | | Executive Health Physical ($) | | | Total Other Compensation ($) | | ||||||||||||
Donald A. Miller, CFA | | | | | 24,000 | | | | | | 250 | | | | | | 2,100 | | | | | | 26,350 | | |
Robert E. Bowers | | | | | 24,000 | | | | | | 248 | | | | | | — | | | | | | 24,248 | | |
Carroll A. Reddic, IV | | | | | 24,000 | | | | | | 250 | | | | | | — | | | | | | 24,250 | | |
C. Brent Smith | | | | | 11,942 | | | | | | 248 | | | | | | — | | | | | | 12,190 | | |
Robert K. Wiberg | | | | | 24,000 | | | | | | 250 | | | | | | — | | | | | | 24,250 | | |
180 days following the date of listingpay for performance orientation of our Class A commonexecutive compensation program.
270 days following the Listing Date, in the case of our Class B-2 common stock; and
on January 30, 2011, in the case of our Class B-3 common stock.
In addition, if they have not already converted, all shares of our Class B common stock will automatically convert into shares of our Class A common stock on January 30, 2011.
9
Because shares of our Class A and Class B common stock will be identical, except as described above, they will each have the same voting rights and rights to receive dividends.
Effect on Existing Stockholders
The ultimate effect of the amendment to the Charter will be to (i) divide the shares owned by our existing stockholders into four classes and (ii) decrease the total number of shares that each stockholder ownsactually vested during the respective year by a ratioour closing stock price on the vesting date, and adding the value of one-third.The amendmentany dividend equivalents rights that were paid to the Charter will have NO effectNEO in conjunction with the vestings of the stock:
Name and Principal Position | | | Year | | | Salary ($) | | | Stock Awards That Vested ($)(1) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||||||||
Donald A. Miller, CFA Chief Executive Officer and President | | | | | 2017 | | | | | | 720,000 | | | | | | 2,764,374 | | | | | | 950,486(2) | | | | | | 26,350(3) | | | | | | 4,461,210 | | |
| | | 2016 | | | | | | 720,000 | | | | | | 1,787,612 | | | | | | 1,088,044 | | | | | | 26,408 | | | | | | 3,622,064 | | | ||
| | | 2015 | | | | | | 720,000 | | | | | | 1,103,036 | | | | | | 1,200,000 | | | | | | 26,408 | | | | | | 3,049,444 | | | ||
Robert E. Bowers Chief Financial Officer, Executive Vice President | | | | | 2017 | | | | | | 450,000 | | | | | | 1,065,359 | | | | | | 442,575(2) | | | | | | 24,248(3) | | | | | | 1,982,182 | | |
| | | 2016 | | | | | | 450,000 | | | | | | 691,482 | | | | | | 521,690 | | | | | | 24,282 | | | | | | 1,687,454 | | | ||
| | | 2015 | | | | | | 450,000 | | | | | | 433,550 | | | | | | 560,000 | | | | | | 24,282 | | | | | | 1,467,832 | | | ||
Carroll A. Reddic, IV Executive Vice President— Real Estate Operations | | | | | 2017 | | | | | | 275,000 | | | | | | 384,221 | | | | | | 189,324(2) | | | | | | 24,250(3) | | | | | | 872,795 | | |
| | | 2016 | | | | | | 275,000 | | | | | | 249,877 | | | | | | 220,000 | | | | | | 24,282 | | | | | | 769,159 | | | ||
| | | 2015 | | | | | | 275,000 | | | | | | 153,850 | | | | | | 230,000 | | | | | | 24,282 | | | | | | 683,132 | | | ||
C. Brent Smith Executive Vice President — Northeast Region and Chief Investment Officer | | | | | 2017 | | | | | | 300,000 | | | | | | 355,057 | | | | | | 400,000(2) | | | | | | 12,190 | | | | | | 1,067,247 | | |
| | | 2016 | | | | | | 262,500 | | | | | | 232,641 | | | | | | 235,000 | | | | | | 8,056 | | | | | | 738,197 | | | ||
| | | 2015 | | | | | | 253,125 | | | | | | 150,902 | | | | | | 250,000 | | | | | | 282 | | | | | | 654,309 | | | ||
Robert K. Wiberg(1) Executive Vice President — Mid-Atlantic Region and Head of Development | | | | | 2017 | | | | | | 320,000 | | | | | | 536,118 | | | | | | 196,700(2) | | | | | | 24,250(3) | | | | | | 1,077,068 | | |
| | | 2016 | | | | | | 320,000 | | | | | | 361,588 | | | | | | 230,000 | | | | | | 18,282 | | | | | | 929,870 | | | ||
| | | 2015 | | | | | | 320,000 | | | | | | 288,882 | | | | | | 250,000 | | | | | | 12,282 | | | | | | 871,164 | | |
If the Listing occurs, a portion of the shares that are converted from our existing common stock will be tradable on a national securities exchange at the time of the Listing. We expect that the remainder of these shares will become listed over time, with all outstanding shares becoming listed by January 30, 2011, the Current Liquidation Date.
As an example of how existing stockholders will be affectedrespective year multiplied by the amendment to the Charter, consider a hypothetical stockholder who currently owns 12,000 sharesclosing price of our common stock. Uponstock on the filingrespective vesting date and adding the value of any dividend equivalent rights paid out in conjunction with the vestings.
| | | Grant Date | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock | | | Grant Date Fair Value of Stock Awards | | ||||||||||||||||||||||||||||||||||||
| | | Threshold | | | Target | | | Maximum | | | Threshold (Number of Shares) | | | Target (Number of Shares) | | | Maximum (Number of Shares) | | |||||||||||||||||||||||||||||||||
Donald A. Miller, CFA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 STIC Plan | | | | | | | $ | 540,000 | | | | | $ | 864,000 | | | | | $ | 1,440,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 LTIC Plan — 2017 – 19 Performance Share Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | 29,233 | | | | | | 58,466 | | | | | | 116,932 | | | | | | | | | | | $ | 1,780,290 | | |
2016 LTIC Plan — Deferred Stock Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 66,066(3) | | | | | $ | 1,412,491 | | |
Robert E. Bowers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 STIC Plan | | | | | | | $ | 225,000 | | | | | $ | 450,000 | | | | | $ | 675,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 LTIC Plan — 2017 – 19 Performance Share Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | 10,524 | | | | | | 21,048 | | | | | | 42,096 | | | | | | | | | | | $ | 640,912 | | |
2016 LTIC Plan — Deferred Stock Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,783(3) | | | | | $ | 508,481 | | |
Carroll A. Reddic, IV | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 STIC Plan | | | | | | | $ | 96,250 | | | | | $ | 192,500 | | | | | $ | 288,750 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 LTIC Plan — 2017 – 19 Performance Share Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | 4,093 | | | | | | 8,185 | | | | | | 16,370 | | | | | | | | | | | $ | 249,233 | | |
2016 LTIC Plan — Deferred Stock Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,249(3) | | | | | $ | 197,744 | | |
C. Brent Smith | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 STIC Plan | | | | | | | $ | 100,000 | | | | | $ | 200,000 | | | | | $ | 300,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 LTIC Plan — 2017 – 19 Performance Share Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | 4,093 | | | | | | 8,185 | | | | | | 16,370 | | | | | | | | | | | $ | 249,233 | | |
2016 LTIC Plan — Deferred Stock Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,249(3) | | | | | $ | 197,744 | | |
Robert K. Wiberg | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 STIC Plan | | | | | | | $ | 100,000 | | | | | $ | 200,000 | | | | | $ | 300,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2017 LTIC Plan — 2017 – 19 Performance Share Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | 4,093 | | | | | | 8,185 | | | | | | 16,370 | | | | | | | | | | | $ | 249,233 | | |
2016 LTIC Plan — Deferred Stock Component | | | May 18, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,249(3) | | | | | $ | 197,744 | | |
| | | LTIC Stock Awards | | |||||||||||||||||||||
| | | Deferred Stock Component | | | Performance Share Component | | ||||||||||||||||||
Name | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | ||||||||||||
Donald A. Miller, CFA | | | | | | | | | | | | | | | | | | | | | | | | | |
May 1, 2015 plan award(1)(5) | | | | | | | | | | | | | | | | | 66,941 | | | | | $ | 1,500,817 | | |
May 1, 2015 award(2)(5) | | | | | 20,732 | | | | | $ | 464,811 | | | | | | | | | | | | | | |
May 24, 2016 plan award(3)(6) | | | | | | | | | | | | | | | | | 53,993 | | | | | $ | 1,165,169 | | |
May 24, 2016 award(2)(6) | | | | | 36,178 | | | | | $ | 780,721 | | | | | | | | | | | | | | |
May 18, 2017 plan award(4)(7) | | | | | | | | | | | | | | | | | 51,450 | | | | | $ | 1,067,073 | | |
May 18, 2017 award(2)(7) | | | | | 49,549 | | | | | $ | 1,027,646 | | | | | | | | | | | | | | |
Total | | | | | 106,459 | | | | | $ | 2,273,178 | | | | | | 172,384 | | | | | $ | 3,733,059 | | |
Robert E. Bowers | | | | | | | | | | | | | | | | | | | | | | | | | |
May 1, 2015 plan award(1)(5) | | | | | | | | | | | | | | | | | 24,099 | | | | | $ | 540,300 | | |
May 1, 2015 award(2)(5) | | | | | 8,108 | | | | | $ | 181,781 | | | | | | | | | | | | | | |
May 24, 2016 plan award(3)(6) | | | | | | | | | | | | | | | | | 19,438 | | | | | $ | 419,472 | | |
May 24, 2016 award(2)(6) | | | | | 13,024 | | | | | $ | 281,058 | | | | | | | | | | | | | | |
May 18, 2017 plan award(4)(7) | | | | | | | | | | | | | | | | | 18,522 | | | | | $ | 384,146 | | |
May 18, 2017 award(2)(7) | | | | | 17,837 | | | | | $ | 369,939 | | | | | | | | | | | | | | |
Total | | | | | 38,969 | | | | | $ | 832,778 | | | | | | 62,059 | | | | | $ | 1,343,918 | | |
Carroll A. Reddic, IV | | | | | | | | | | | | | | | | | | | | | | | | | |
May 1, 2015 plan award(1)(5) | | | | | | | | | | | | | | | | | 9,371 | | | | | $ | 210,098 | | |
May 1, 2015 award(2)(5) | | | | | 2,838 | | | | | $ | 63,628 | | | | | | | | | | | | | | |
May 24, 2016 plan award(3)(6) | | | | | | | | | | | | | | | | | 7,559 | | | | | $ | 163,123 | | |
May 24, 2016 award(2)(6) | | | | | 5,064 | | | | | $ | 109,281 | | | | | | | | | | | | | | |
May 18, 2017 plan award(4)(7) | | | | | | | | | | | | | | | | | 7,203 | | | | | $ | 149,390 | | |
May 18, 2017 award(2)(7) | | | | | 6,936 | | | | | $ | 143,853 | | | | | | | | | | | | | | |
Total | | | | | 14,838 | | | | | $ | 316,762 | | | | | ��� | 24,133 | | | | | $ | 522,611 | | |
C. Brent Smith | | | | | | | | | | | | | | | | | | | | | | | | | |
January 3, 2014 award(8) | | | | | 4,863 | | | | | $ | 113,989 | | | | | | | | | | | | | | |
May 1, 2015 plan award(1)(5) | | | | | | | | | | | | | | | | | 5,355 | | | | | $ | 120,059 | | |
May 1, 2015 award(2)(5) | | | | | 1,998 | | | | | $ | 44,795 | | | | | | | | | | | | | | |
May 24, 2016 plan award(3)(6) | | | | | | | | | | | | | | | | | 5,939 | | | | | $ | 128,164 | | |
May 24, 2016 award(2)(6) | | | | | 4,018 | | | | | $ | 86,708 | | | | | | | | | | | | | | |
May 18, 2017 plan award(4)(7) | | | | | | | | | | | | | | | | | 7,203 | | | | | $ | 149,390 | | |
May 18, 2017 award(2)(7) | | | | | 6,936 | | | | | $ | 143,853 | | | | | | | | | | | | | | |
Total | | | | | 17,815 | | | | | $ | 389,345 | | | | | | 18,497 | | | | | $ | 397,613 | | |
Robert K. Wiberg | | | | | | | | | | | | | | | | | | | | | | | | | |
January 3, 2014 award(8) | | | | | 4,863 | | | | | $ | 113,989 | | | | | | | | | | | | | | |
May 1, 2015 plan award(1)(5) | | | | | | | | | | | | | | | | | 13,388 | | | | | $ | 300,159 | | |
May 1, 2015 award(2)(5) | | | | | 2,912 | | | | | $ | 65,287 | | | | | | | | | | | | | | |
May 24, 2016 plan award(3)(6) | | | | | | | | | | | | | | | | | 7,559 | | | | | $ | 163,123 | | |
May 24, 2016 award(2)(6) | | | | | 5,064 | | | | | $ | 109,281 | | | | | | | | | | | | | | |
May 18, 2017 plan award(4)(7) | | | | | | | | | | | | | | | | | 7,203 | | | | | $ | 149,390 | | |
May 18, 2017 award(2)(7) | | | | | 6,936 | | | | | $ | 143,853 | | | | | | | | | | | | | | |
Total | | | | | 19,775 | | | | | $ | 432,410 | | | | | | 28,150 | | | | | $ | 612,672 | | |
1,000 shares of our Class A common stock; plus
1,000 shares of our Class B-1 common stock; plus
1,000 shares of our Class B-2 common stock; plus
1,000 shares of our Class B-3 common stock.
All other existing stockholders will also have their shares converted in the same proportion, sothe stockholder’s percentage ownership of Piedmont will remain the same. Initially, 25%three anniversary dates of the stockholder’s shares,grant.
Twenty-five percentgrant. Market value of unearned shares is based on our closing stock price as of December 31, 2017 of $19.61 per share, plus $3.83 per share of dividend equivalent rights that vest upon vesting of the stockholder’sunderlying shares.
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Comparison of our Currently Outstanding Common Stockgranted to our Class A and Class B Common NEOs.
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Listing of Our Common Stock
We intend to apply to list our Class A common stock (including shares of our Class A common stock held by our existing stockholders, shares of our Class A common stock that are converted automatically from shares of our Class B common stock, and shares of our Class A common stock we intend to sell in the Offering) Vested for 2017
| | | Stock Awards | | |||||||||
Name | | | Number of Shares Acquired On Vesting (#) | | | Value Realized on Vesting ($)(1) | | ||||||
Donald A. Miller, CFA | | | | | 117,810 | | | | | | 2,764,374 | | |
Robert E. Bowers | | | | | 45,319 | | | | | | 1,065,359 | | |
Carroll A. Reddic, IV | | | | | 16,376 | | | | | | 384,221 | | |
C. Brent Smith | | | | | 15,192 | | | | | | 355,057 | | |
Robert K. Wiberg | | | | | 22,722 | | | | | | 536,118 | | |
Reasons for the Amendment to the Charter
As described above, our board of directors determined to amend the Charter to provide for the conversion of the common stock and to submit this amendment to stockholders for approval, in connection with the Listing. In preparing for the Listing and the potential Offering, our board of directors and J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated were concerned that a significant number of shares of common stock might be offered for salevesting on each vesting date during 2017 multiplied by our stockholders immediately after the Listing, which would likely depress the trading price of the common stock for other stockholders. In addition, our board of directors and J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated were concerned that this potential for a decline in the price of the
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common stock immediately following the Listing would decrease the price per share that we will be able to obtain in the Offering, if the Offering occurs. This in turn would impact our ability to raise equity capital in the Offering (if the Offering occurs) and in potential future public offerings at attractive prices. The board of directors believes that providing for the conversion of the common stock into shares that we expect will become listed over a period of time may reduce significant sales of our common stock immediately following the Listing. Our board of directors believes this may lessen any related decrease in the tradingclosing price of our common stock on the respective vesting date and adding the value of any dividend equivalent rights paid out in conjunction with the vestings.
| | | Without Cause or For Good Reason | | | Termination in the Event of Change-in-Control, Without Cause, or For Good Reason | | | Non-renewal by Us of Executive’s Employment Agreement | | | Death or Disability | | ||||||||||||
Donald A. Miller, CFA: | | | | | | | | | | | | | | | | | | | | | | | | | |
Accrued Benefits(1) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Pro-rated annual bonus(2) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
2x Annual Salary and Average Bonus(3) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Two years of medical benefits(4) | | | | | X | | | | | | X | | | | | | | | | | | | | | |
One year of medical benefits(4) | | | | | | | | | | | | | | | | | X | | | | | | X | | |
Robert E. Bowers: | | | | | | | | | | | | | | | | | | | | | | | | | |
Accrued Benefits(1) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Pro-rated annual bonus(2) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
2x Annual Salary and Average Bonus(3) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Two years of medical benefits(4) | | | | | X | | | | | | X | | | | | | | | | | | | | | |
One year of medical benefits(4) | | | | | | | | | | | | | | | | | X | | | | | | X | | |
Carroll A. Reddic, IV | | | | | | | | | | | | | | | | | | | | | | | | | |
Accrued Benefits(1) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Pro-rated annual bonus(2) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
1x Annual Salary and Average Bonus(3) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
One year of medical benefits(4) | | | | | X | | | | | | X | | | | | | X | | | | | | X | | |
Name | | | Without Cause/ For Good Reason ($) | | | Change-in-Control (Termination Without Cause/ For Good Reason) ($) | | | Non-renewal by Us of Initial or Subsequent Term ($) | | | Death/ Disability ($) | | ||||||||||||
Donald A. Miller, CFA(1)(6) | | | | | 8,602,881 | | | | | | 8,602,881 | | | | | | 8,574,740 | | | | | | 8,574,740 | | |
Robert E. Bowers(2)(6) | | | | | 3,770,541 | | | | | | 3,770,541 | | | | | | 3,742,400 | | | | | | 3,742,400 | | |
Carroll A. Reddic, IV(3)(6) | | | | | 1,212,231 | | | | | | 1,212,231 | | | | | | 1,212,231 | | | | | | 1,212,231 | | |
C. Brent Smith(4)(6) | | | | | 587,637 | | | | | | 587,637 | | | | | | N/A | | | | | | 587,637 | | |
Robert K. Wiberg(5)(6) | | | | | 834,108 | | | | | | 834,108 | | | | | | N/A | | | | | | 834,108 | | |
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||
Kelly H. Barrett | | | | | 70,000 | | | | | | 80,000 | | | | | | — | | | | | | 150,000 | | |
Michael R. Buchanan(2) | | | | | 67,500 | | | | | | — | | | | | | — | | | | | | 67,500 | | |
Wesley E. Cantrell | | | | | 75,000 | | | | | | 80,000 | | | | | | — | | | | | | 155,000 | | |
Frank C. McDowell | | | | | 112,500 | | | | | | 80,000 | | | | | | — | | | | | | 192,500 | | |
Barbara B. Lang | | | | | 65,000 | | | | | | 80,000 | | | | | | — | | | | | | 145,000 | | |
Raymond G. Milnes, Jr. | | | | | 85,000 | | | | | | 80,000 | | | | | | — | | | | | | 165,000 | | |
Jeffrey L. Swope | | | | | 75,000 | | | | | | 80,000 | | | | | | — | | | | | | 155,000 | | |
Dale H. Taysom | | | | | 70,000 | | | | | | 80,000 | | | | | | — | | | | | | 150,000 | | |
Recommendationdate of grant, of $21.38 per share. Shares granted vest on the earlier of the 2018 Annual Meeting of Stockholders or the one year anniversary of the date of grant.
OurDecember 31, 2017:
Plan category | | | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (#) | | | Weighted-average exercise price of outstanding options, warrants, and rights | | | Number of securities remaining available for future issuance under equity compensation plans (#) | | |||||||||
Equity compensation plans approved by security holders | | | | | — | | | | | $ | — | | | | | | 2,691,232 | | |
Equity compensation plans not approved by security holders | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | | — | | | | | $ | — | | | | | | 2,691,232 | | |
In reaching its conclusion,directors or Compensation Committee of another entity that has one or more executive officers serving on our board of directors consulteddirectors.
the amendment may reduce concentrated sales of our stock at the time of the Listing that could depress the trading price of our common stock;
the amendment may make the shares of our Class A common stock that we offer to the public more attractive (in the event the Offering occurs), which may allow us to obtain a higher public offering price per share and achieve our capital raising objectives; and
the amendment may permit existing stockholders to access liquidity for a portion of their shares at the time of the Listing and for the remainder of their shares over time, with full access to liquidity by January 30, 2011, the Current Liquidation Date.
Our board of directors weighed these advantages and opportunities againsthas discretion to adjust any award that is earned based on achievement of performance goals. If the factCompensation Committee believes that our existing stockholders will not have full access to liquidity with respect to all of their existing shares before January 30, 2011, the Current Liquidation Date. After consideration of this factor, our board of directors determined that this disadvantage was significantly outweighed by the potential benefits to our stockholders of providing for the conversionany of the common stock.
Although this discussion of the information and factors considered by our board of directors is believed to include the material factors considered by our board of directors, it is not intended to be exhaustive and may not include all of the factors considered by our board of directors. In reaching its determination to approve and recommend the amendment to our Charter to provide for the conversion of the common stock, our board of directors did not quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination that the proposal is advisable and in the best interests of Piedmont and our stockholders. Rather, our board of directors based its position and recommendation on the totality of the information presented to, and factors considered by, the board of directors. In addition, individual members of our board of directors may have given differing weights to different factors.
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Proposed Amendments
Our existing Charter is being amended in the Articles of Amendment to:
(1) provide that, immediately upon the acceptance for record of the Articles of Amendment by the SDAT (the “Effective Time”), each Common Share (as defined in the Charter) which was issued and outstanding immediately prior to the Effective Time shall be changed into 1/12th of a share of Class A Common Stock, 1/12th of a share of Class B-1 Common Stock, 1/12th of a share of Class B-2 Common Stock and 1/12th of a share of Class B-3 Common Stock, the Class A Common Stock, Class B-1 Common Stock, Class B-2 Common Stock and Class B-3 Common Stock having the respective preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemptiontargets set forth in the Charter upon the Effective Time; and
(2) add the following paragraphs to Section 7.2 of Article VII:
(vi) CLASSIFICATION. 600,000,000 Common Shares shall be classified as Class A Common Stock (the “Class A Common Stock”), 50,000,000 Common Shares shall be classified as Class B-1 Common Stock (the “Class B-1 Common Stock”), 50,000,000 Common Shares shall be classified as Class B-2 Common Stock (the “Class B-2 Common Stock”) and 50,000,000 Common Shares shall be classified as Class B-3 Common Stock (the “Class B-3 Common Stock” and, togethercompensation plans has been achieved in a manner that is not consistent with the Class B-1 Common Stock and the Class B-2 Common Stock, the “Class B Common Stock”).
(vii) CONVERSION. The Class A Common Stock is not convertible into or exchangeable for any other property or securities of the Company. Each issued and outstanding share of Class B Common Stock shall, automatically and without any action on the part of the holder thereof, convert into one (1) share of Class A Common Stock as follows: (a) one hundred eighty (180) days following the date of the listing of the Class A Common Stock of the Company on a national securities exchange or over-the-counter market (the “Listing Date”), in the case of the Class B-1 Common Stock; (b) two hundred seventy (270) days following the Listing Date, in the case of the Class B-2 Common Stock; and (c) on January 30, 2011, in the case of the Class B-3 Common Stock; provided, however, that each issued and outstanding share of Class B Common Stock shall, automatically and without any action on the part of the holder thereof, convert into one (1) share of Class A Common Stock on January 30, 2011.
(viii) GENERAL. Except as set forth in the immediately preceding subparagraph, the Class A Common Stock and Class B Common Stock shall have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption.
Implementation of Amendments
If approved by our stockholders at the Special Meeting, the amendments reflected in the Articles of Amendment will be effected shortly before the Listing. We intend to effect these amendments by filing the Articles of Amendment with the SDAT, which will become effective upon filing with and acceptance for record by the SDAT. We intend to effect certain other amendments previously approved by our stockholders at our April 11, 2007 special meeting by filing a Third Articles of Amendment and Restatement (which will include such amendments and the amendments contained in the Articles of Amendment) with the SDAT in connection with the Listing. Our stockholders’ approval of the amendments reflected in the Articles of Amendment will also constitute approval of the inclusion of such amendments in the Third Articles of Amendment and Restatement.
Appraisal Rights
Under Maryland law and our Charter, you will not be entitled to rights of appraisal with respect to Amendment No. 3 to our Second Articles of Amendment and Restatement. Accordingly, to the extent that you object to Amendment No. 3 to our Second Articles of Amendment and Restatement, you will not have the right
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to have a court judicially determine (and you will not receive) the fair value for your shares of common stock under the provisions of Maryland law governing appraisal rights.
Vote Required
Approval of this proposal to amend our existing Charter requires the affirmative vote of the holders of at least a majority of our outstanding shares of common stock entitled to vote thereon. If you abstain from voting on the proposal, it will have the effect of a vote against the proposal. Proxies received will be votedFORapproval of this proposal unless stockholders designate otherwise.
Our board of directors has deemed it advisable and in thelong-term best interests of the CompanyCompany’s stockholders, or believes that the overall compensation to be paid under the terms of the plan is not appropriate for any reason, the Compensation Committee may adjust the calculated compensation associated with that plan accordingly;
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PROPOSAL II:
PROPOSAL TO APPROVE AN ADJOURNMENT
OR POSTPONEMENT OF THE SPECIAL MEETING
The second proposal is to consider and vote upon the proposal to approve an adjournment or postponement of the Special Meeting, including, if necessary, to solicit additional proxies in favor of Proposal I if there are not sufficient votes for this proposal.
Vote Required
Approval of the proposal to adjourn or postpone the Special Meeting, including, if necessary, to solicit additional proxies in favor of Proposal I if there are not sufficient votes for the proposal, requires the affirmative vote ofby a majority of the votes cast at the Special Meeting by the holders who are present in person or by proxy and entitled to vote. If you abstain from voting on the proposal, it will have no effect on the outcome of the vote. Proxies received will be votedFORapproval of this proposal unless stockholders designate otherwise.
Recommendation of the Board of Directors
Our board of directors unanimously recommends(including a majority of independent directors) not otherwise interested in the transaction and are fair and
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this consulting agreement.
STOCK OWNERSHIP
Name of Beneficial Owner(1) | | | Common Stock Beneficially Owned | | | Percentage(5) | | ||||||
Directors and Named Executive Officers: | | | | | | | | | | | | | |
Kelly H. Barrett | | | | | 2,705 | | | | | | * | | |
Wesley E. Cantrell | | | | | 32,232 | | | | | | 0.02% | | |
Barbara B. Lang | | | | | 5,050 | | | | | | * | | |
Frank C. McDowell | | | | | 49,380 | | | | | | 0.04% | | |
Raymond G. Milnes, Jr. | | | | | 15,566 | | | | | | 0.01% | | |
Jeffrey L. Swope | | | | | 55,903 | | | | | | 0.04% | | |
Dale H. Taysom | | | | | 6,583 | | | | | | * | | |
Donald A. Miller, CFA | | | | | 570,033 | | | | | | 0.43% | | |
Robert E. Bowers | | | | | 198,936 | | | | | | 0.15% | | |
Carroll A. Reddic | | | | | 74,937 | | | | | | 0.06% | | |
C. Brent Smith | | | | | 37,642 | | | | | | 0.03% | | |
Robert K. Wiberg | | | | | 60,118 | | | | | | 0.05% | | |
5% Stockholders: | | | | ||||||||||
Blackrock, Inc.(2) | | | | | 10,515,155 | | | | | | 7.92% | | |
FMR LLC(3) | | | | | 7,756,828 | | | | | | 5.84% | | |
The Vanguard Group, Inc.(4) | | | | | 23,047,025 | | | | | | 17.36% | | |
All executive officers and directors as a group (16 persons) | | | | | 1,206,085 | | | | | | 0.91% | | |
Name of Beneficial Owner(1) | Existing Ownership | Ownership Following Recapitalization | ||||||||||||||
Common Stock | Percentage | Total | Class A | Class B | ||||||||||||
Shares Beneficially Owned | Percentage | Shares Beneficially Owned | Percentage | |||||||||||||
Michael R. Buchanan | 22,989 | (6) | * | 7,663 | (2) | 1,916 | * | 5,747 | * | |||||||
Wesley E. Cantrell | 11,376 | * | 3,792 | 948 | * | 2,844 | * | |||||||||
William H. Keogler, Jr. | 94,956 | (7) | * | 31,652 | (3) | 7,913 | * | 23,739 | * | |||||||
Frank C. McDowell | 21,489 | * | 7,163 | 1,791 | * | 5,372 | * | |||||||||
Donald S. Moss | 129,018 | (8) | * | 43,006 | (4) | 10,752 | * | 32,254 | * | |||||||
Jeffrey L. Swope | 12,027 | * | 4,009 | 1,002 | * | 3,007 | * | |||||||||
W. Wayne Woody | 21,990 | (9) | * | 7,330 | (5) | 1,833 | * | 5,497 | * | |||||||
Donald A. Miller, CFA | 174,273 | * | 58,091 | 14,523 | * | 43,568 | * | |||||||||
Robert E. Bowers | 65,598 | * | 21,866 | 5,467 | * | 16,399 | * | |||||||||
Laura P. Moon | 29,094 | * | 9,698 | 2,425 | * | 7,273 | * | |||||||||
Raymond L. Owens | 53,745 | * | 17,915 | 4,479 | * | 13,436 | * | |||||||||
Carroll A. Reddic | 28,860 | * | 9,620 | 2,405 | * | 7,215 | * | |||||||||
All officers and directors as a group | 665,415 | * | 221,805 | 55,454 | * | 166,351 | * |
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the reporting process, including the system of internal control over financial reporting. Membership on the Audit Committee does not call for the professional training and technical skills generally associated with career professionals in the field of accounting and auditing. In addition, the independent registered public accounting firm devotes more time and has access to more information than does the Audit Committee. Accordingly, the Audit Committee’s role does not provide any special assurances with regard to the financial statements of Piedmont, nor does it involve a professional evaluation of the quality of the audits performed by the independent registered public accounting firm.
PROPOSALS YOU MAY VOTE ON
WHETHER YOU PLAN TO ATTEND THE MEETING AND VOTE IN PERSON OR NOT, WE URGE YOU TO HAVE YOUR VOTE RECORDED. STOCKHOLDERS HAVE THE FOLLOWING THREE OPTIONS FOR SUBMITTING THEIR VOTES BY PROXY: (1) VIA THE INTERNET, (2) BY TELEPHONE OR (3) BY MAIL, USING THE ENCLOSED PROXY CARD. BECAUSE WE ARE A WIDELY-HELD REIT WITH APPROXIMATELY 107,000 STOCKHOLDERS,YOUR VOTE IS VERY IMPORTANT!YOUR IMMEDIATE RESPONSE WILL HELP AVOID POTENTIAL DELAYS AND MAY SAVE PIEDMONT SIGNIFICANT ADDITIONAL EXPENSES ASSOCIATED WITH SOLICITING STOCKHOLDER VOTES.
STOCKHOLDER PROPOSALS
HOUSEHOLDING
November 21, 2018.
OTHER MATTERS
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APPENDIX A
PRELIMINARY COPY
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CALL TOLL-FREE TO AUTHORIZE YOUR PROXY
DETACH PROXY CARD HERE IF YOU ARE NOT AUTHORIZING YOUR PROXY BY TELEPHONE OR INTERNET
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AUTHORIZE YOUR PROXY ONLINE, AUTHORIZE YOUR PROXYNOW!
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Enclosed in this packet with your proxy card is your Piedmont proxy statement with a concise overview of the proposals, plus a full copy of the proxy statement. Piedmont must cover the costs of sending updates and reminders to any investor who does not vote. To help keep these costs to a minimum, please vote as soon as you can.
And as an extra cost savings, consider authorizing your proxy online or by calling the toll-free voting number.
Read the material to understand the items to be voted on and have your proxy card in hand.
Go to the Web site: or call toll-free to authorize your proxy by phone.
Follow the on-screen or recorded directions.
Do not mail your proxy card if you authorize your proxy by Internet or phone.
Relax. You’ve helped Piedmont save money!
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PIEDMONT OFFICE REALTY TRUST, INC.
SPECIAL MEETING OF STOCKHOLDERS— , 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints Donald A. Miller, CFA and Robert E. Bowers, and each of them, as proxy and attorney-in-fact, each with the power to appoint his substitute, on behalf and in the name of the undersigned, to attend the Special Meeting of stockholders of PIEDMONT OFFICE REALTY TRUST, INC. to be held on , 2010, and any adjournments or postponements thereof, to cast on behalf of the undersigned all votes that the undersigned would be entitled to cast if personally present, as indicated on the reverse side of this card, and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present. The undersigned acknowledges receipt of the notice of the Special Meeting of stockholders and the Proxy Statement, the terms of which are incorporated by reference, and revokes any proxy heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned, when this proxy is properly executed, will be cast in the manner directed herein. If this proxy is executed but no instruction is given, the votes entitled to be cast by the undersigned will be cast “FOR the Amendment to the Charter to provide for the conversion of the common stock into our Class A and Class B-1, B-2 and B-3 common stock and the future conversion of our Class B-1, B-2 and B-3 common stock into Class A common stock” and “FOR an adjournment or postponement of the Special Meeting, including, if necessary, to solicit additional proxies in favor of the foregoing proposal.” The votes entitled to be cast by the undersigned will be cast upon such other matters as may properly come before the meeting or any adjournments or postponements thereof in accordance with the recommendation of the board of directors or, in the absence of such a recommendation, in the proxies’ discretion, including, but not limited to, the power and authority to adjourn the meeting to a date not more than 120 days after the record date in the event that a quorum is not obtained by the , 2010 meeting date.
(Continued, and to be dated and signed on the reverse side.)
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TO VOTE BY MAIL PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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APPENDIX B
OF
PIEDMONT OFFICE REALTY TRUST, INC.
SECOND: The charterassets of the Company, is hereby further amended by adding the following paragraphs toas provided in Section 7.2 of Article VII:
(vi) CLASSIFICATION. 600,000,000 Common Shares shall be classified as Class A Common Stock (the “Class A Common Stock”), 50,000,000 Common Shares shall be classified as Class B-1 Common Stock (the “Class B-1 Common Stock”), 50,000,000 Common Shares shall be classified as Class B-2 Common Stock (the “Class B-2 Common Stock”) and 50,000,000 Common Shares shall be classified as Class B-3 Common Stock (the “Class B-3 Common Stock” and, together with the Class B-1 Common Stock and the Class B-2 Common Stock, the “Class B Common Stock”).
(vii) CONVERSION. The Class A Common Stock is not convertible into or exchangeable for any other property or securitieshereof; (v) amendment of the Company. Each issuedBylaws; and outstanding share of Class B Common Stock(vi) such other matters with respect to which the Directors have adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the stockholders for approval or ratification. Except with respect to the foregoing matters, no action taken by the Stockholders at any meeting shall automatically and withoutin any action onway bind the part of the holder thereof, convert into one (1) share of Class A Common Stock as follows: (a) one hundred eighty (180) days following the date of the listing of the Class A Common Stock of the Company on a national securities exchange or over-the-counter market (the “Listing Date”), in the case of the Class B-1 Common Stock; (b) two hundred seventy (270) days following the Listing Date, in the case of the Class B-2 Common Stock; and (c) on January 30, 2011, in the case of the Class B-3 Common Stock; provided, however, that each issued and outstanding share of Class B Common Stock shall, automatically and without any action on the part of the holder thereof, convert into one (1) share of Class A Common Stock on January 30, 2011.
(viii) GENERAL. Except as set forth in the immediately preceding subparagraph, the Class A Common Stock and Class B Common Stock shall have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption.
Directors.
FOURTH: The amendmentsamendment to the Charter as hereinabove set forth above havehas been duly advised by the Board of Directors and approved by the stockholders of the Company entitled to vote thereonCorporation as required by law.
FIFTH: The total number of shares of stock which the Company had authority to issue immediately prior to the foregoing amendments to the Charter was 1,000,000,000, consisting of 750,000,000 Common Shares, all of
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one class, 100,000,000 Preferred Shares (as defined in the Charter) and 150,000,000 Shares-in-Trust (as defined in the Charter). The aggregate par value of all shares of stock having par value was $7,500,000.
SIXTH: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendments to the Charter is 1,000,000,000, consisting of 750,000,000 Common Shares, of which 600,000,000 are classified as Class A Common Stock, 50,000,000 are classified as Class B-1 Common Stock, 50,000,000 are classified as Class B-2 Common Stock and 50,000,000 are classified as Class B-3 Common Stock, and 100,000,000 Preferred Shares and 150,000,000 Shares-in-Trust. The aggregate par value of all shares of stock having par value was $7,500,000.
SEVENTH: The undersigned acknowledges these Articles of Amendment to be the corporate act of the CompanyCorporation and as to all matters or facts required to be verified under oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties forof perjury.
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| By: | | | | | | | | By: | | | | | ||
| Name: | | | Thomas A. McKean | | | | | | Name: | | | Donald A. Miller, CFA | | |
| Title: | | | Senior Vice President, Associate General | | | | | | Title: | | | Chief Executive Officer and President | | |
| | | | | | |
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