Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Long-Term Equity Incentive Awards
On February 17, 2021, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Resource REIT, Inc. (the “Company”) approved performance-based long-term equity incentive awards pursuant to the Company’s 2020 Long-Term Incentive Plan to Alan F. Feldman, the Company’s Chief Executive Officer and President; Thomas C. Elliott, the Company’s Executive Vice President, Chief Financial Officer and Treasurer; Marshall Hayes, the Company’s Senior Vice President and Chief Investment Officer; Michele R. Weisbaum, the Company’s Senior Vice President and Chief Legal Officer; and Steven R. Saltzman, the Company’s Vice President and Chief Accounting Officer.
The awards were granted effective February 17, 2021 (the grant date), and the number of shares of the Company’s common stock (the “Common Stock”) underlying the awards (that is, the number of shares corresponding to the dollar amounts described below) were determined based on the most recently approved estimated value per share of the Common Stock of $9.08 as approved by the Board on March 19, 2020. For a full description of the methodologies used to calculate the Company’s estimated value per share as of December 31, 2019, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Market Information” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
The Committee approved awards of restricted stock to Mr. Feldman in a target amount of $547,500, to Mr. Elliott in a target amount of $307,500, to Mr. Hayes in a target amount of $153,750, to Ms. Weisbaum in a target amount of $105,000 and to Mr. Saltzman in a target amount of $45,000. The actual amount of each award will be determined after a three-year measuring period and will depend on the “same store relative NOI growth” of the Company and the “average net debt to average EBIDTA” of the Company over the measuring period. Each officer may receive as few as zero shares and up to 125% of the target amount of shares. Half of the award will be based on the Company’s same store average net operating income growth compared to the same store average net operating income growth of companies in a designated peer group. The other half of the award will be based on the ratio of the Company’s net debt (debt less all reported cash balances) to EBITDA compared to an average net debt to average EBITDA goal.
After the actual amount of the performance-based award is determined (or earned) on the determination date, the earned shares will be fully vested and generally transferable. Dividends will be deemed to have accrued on all of the earned shares during the measuring period until the determination date. Such accrued dividends on earned shares will be paid to the awardee on the determination date. Thereafter, the awardee is entitled to receive dividends as declared and paid on the earned shares. The awardee will be entitled to vote the shares from the grant date.
The awards were designed to align the executive officers’ interests with those of the Company’s shareholders and are a significant component of overall executive officer compensation.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
