Delaware | 1-12494 | 62-1545718 | ||
Delaware | 333-182515-01 | 62-1542285 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421 | ||||
(Address of principal executive office, including zip code) | ||||
423.855.0001 | ||||
(Registrant's telephone number, including area code) | ||||
N/A | ||||
(Former name, former address and former fiscal year, if changed since last report) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Named Executive Officer | Total 2018 Target Cash Bonus Award | Quantitative Allocation | Qualitative/ Individual Allocation |
Stephen D. Lebovitz, President and Chief Executive Officer | $1,015,875 | 70% | 30% |
Charles B. Lebovitz, Chairman of the Board | $846,563 | 60% | 40% |
Farzana Khaleel, Executive Vice President - Chief Financial Officer and Treasurer | $338,625 | 60% | 40% |
Augustus N. Stephas, Executive Vice President - Chief Operating Officer | $395,063 | 60% | 40% |
Michael I. Lebovitz, Executive Vice President - Development and Administration | $338,625 | 60% | 40% |
Named Executive Officer | 2018 Individual Performance Objectives |
Stephen D. Lebovitz | (1) refining, enhancing and executing the Company’s strategic and business plans (2) effective communications and interactions with the investment community (3) regular communication and interaction with the Board (4) maintain and enhance key retailer, financial and other relationships (5) effective corporate and executive team communication, motivation and management |
Charles B. Lebovitz | (1) effective Board management (2) maintain and enhance key retailer and other relationships (3) broad involvement and stewardship of the Company’s strategic objectives and business performance (4) support the CEO in implementing organizational changes (5) support the CEO in developing and executing the Company’s strategic and business plans |
Farzana Khaleel | (1) successful execution of the Company’s balance sheet strategy including maintaining/improving key credit metrics and effective interactions with rating agencies, banks and other financial entities (2) effective management and oversight of the financial services and accounting divisions (3) maintain and improve key financial and joint venture partner relationships (4) improve interactions with the investment community through earnings calls, presentations and investor conferences/meetings (5) general involvement in improving the Company’s overall financial performance, i.e., NOI and FFO (6) support the CEO in implementing organizational changes as well as developing and executing the Company’s strategic and business plans |
Named Executive Officer | 2018 Individual Performance Objectives |
Augustus N. Stephas | (1) improvement in overall portfolio operations including oversight of leasing and management (2) successful preparation of Board materials (including pursuing opportunities for improvement) (3) expense containment and oversight of general and administrative costs (4) support and assist CEO in implementing organizational changes (5) support the CEO in developing and executing the Company’s strategic and business plans |
Michael I. Lebovitz | (1) supervision of new development and redevelopment projects (with particular focus on department store redevelopments) to achieve approved pro forma returns and scheduled openings (2) manage and enhance joint venture partner relationships and greater involvement with financial institutions and the investment community (3) effective oversight of the implementation of technology and organizational initiatives including supporting the CEO in implementing organizational changes (4) effective management and team building for the Development, Human Resources and Information Technology divisions of the Company and closer working relationships with other areas of the Company (5) support the CEO in developing and executing the Company’s strategic and business plans |
• | “Performance Stock Unit Awards” - 60% of the value of each named executive officer’s annual Long Term Incentive Award (65% for the CEO) consists of a performance stock unit (“PSU”) award authorized by the Compensation Committee under the Company’s 2012 Stock Incentive Plan. The number of shares of the Company’s Common Stock that each named executive officer may receive upon the conclusion of the three-year performance period applicable to each such award will be determined by two measures: (i) a portion (66.67%) of the number of shares issued will be determined based on the Company’s achievement of specified levels of long-term relative Total Stockholder Return (“TSR”) performance versus the NAREIT Retail Index, provided that at least a “Threshold” level must be attained for any shares to be received, and (ii) a portion (33.33%) of such number of shares issued will be determined based on the Company’s absolute TSR performance over such period, provided again that at least a “Threshold” level must be attained for any shares to be received, as described below. |
• | “Annual Restricted Stock Awards” - 40% of the value of each named executive officer’s Long Term Incentive Awards (35% for the CEO) will consist of a grant of shares of time-vesting restricted stock, awarded based on the Compensation Committee’s subjective evaluation of the performance of the Company and the officer |
Named Executive Officer | Target Value of Long Term Incentive Award | Target Value of Performance Based Award | Number of Performance Stock Units Issued (1) | Target Value of Time- Vested Award | Number of Shares Issued for Time- Vested Award |
Stephen D. Lebovitz, President and Chief Executive Officer | $2,031,750 | $1,320,638 | 307,841 | $711,113 | (2) |
Charles B. Lebovitz, Chairman of the Board | $1,410,938 | $846,563 | 197,334 | $564,375 | (2) |
Farzana Khaleel, Executive Vice President - Chief Financial Officer and Treasurer | $564,375 | $338,625 | 78,934 | $225,750 | (2) |
Augustus N. Stephas, Executive Vice President - Chief Operating Officer | $564,375 | $338,625 | 78,934 | $225,750 | (2) |
Michael I. Lebovitz, Executive Vice President - Development and Administration | $564,375 | $338,625 | 78,934 | $225,750 | (2) |
(1) | The number of Performance Stock Units granted for the initial 2018 - 2020 performance period in relation to the target value of the performance based award was determined by dividing such value by $4.29, the average of the high and low prices reported for the Company’s Common Stock on the New York Stock Exchange (“NYSE”) on the initial date of grant. As noted above, the ultimate number of shares issued upon the maturity of these PSUs at the conclusion of the performance period (and the amount of cash, if any, paid in lieu of the issuance of a portion of the shares earned at the conclusion of the performance period) is subject to a new provision included in the Revised Form of Performance Stock Unit Award Agreement adopted this year to ensure compliance with the annual equity grant limit under the Company’s 2012 Stock Incentive Plan. |
(2) | The number of shares of Common Stock issued in relation to each time-vested stock award will be determined by dividing the amount of the targeted value of each such award that the Compensation Committee ultimately determines that each named Executive officer has earned, based on the Compensation Committee’s subjective evaluation of the Company’s performance during 2018, by the average of the high and low prices reported for the Company’s Common Stock on the NYSE on the date in early 2019 that the Compensation Committee makes such determination. |
Exhibit Number | Description |
CBL & ASSOCIATES PROPERTIES, INC. | |
/s/ Andrew F. Cobb | |
Andrew F. Cobb | |
Senior Vice President - | |
Director of Accounting | |
CBL & ASSOCIATES LIMITED PARTNERSHIP | |
By: CBL HOLDINGS I, INC., its general partner | |
/s/ Andrew F. Cobb | |
Andrew F. Cobb | |
Senior Vice President - | |
Director of Accounting |
CBL & ASSOCIATES PROPERTIES, INC. | |
By: | |
Stephen D. Lebovitz | |
President and Chief Executive Officer | |
EMPLOYEE: | |
[Name] |
Performance Benchmark Achieved at end of 20[__]-[__] Performance Period | Number of Performance Stock Units Earned by the Employee |
Below “Threshold” Level | No Performance Stock Units earned |
“Threshold” 3rd Quartile No less than 26th Percentile of the NAREIT Retail Index TSR, pro-rated for ranking within the quartile | 0.5 - .99 x 66.67% of Target Award |
“Target” 2nd Quartile No less than 51st Percentile of the NAREIT Retail Index TSR, pro-rated for ranking within the quartile | 1.0 – 1.49 x 66.67% of Target Award |
“Maximum” 1st Quartile At least 76th Percentile of the NAREIT Retail Index TSR, pro-rated for ranking within the quartile | 1.5 - 2.0 x 66.67% of Target Award |
Performance Benchmark Achieved | Number of Shares Awarded at Payout of Performance Share Units |
Below “Threshold” Level | No performance shares earned |
“Threshold” Cumulative Company TSR of 48% | Shares issued equal to 0.5 x 33.33% of the Target Award, with excess over Threshold Benchmark pro-rated between Threshold and Target levels |
“Target” Cumulative Company TSR of 62% | Shares issued equal to 1.0 x 33.33% of the Target Award, with excess over Target Benchmark pro-rated between Target and High levels |
“High” Cumulative Company TSR of 73% | Shares issued equal to 1.5 x 33.33% Target Award, with excess over High Benchmark pro-rated between High and Maximum levels |
“Maximum” Cumulative Company TSR of 88% or greater | Shares issued equal to 2.0 x 33.33% of the Target Award |
CBL & ASSOCIATES PROPERTIES, INC. | |
By: | |
Stephen D. Lebovitz | |
President and Chief Executive Officer | |
EMPLOYEE: | |
[NOE] |
• | for achieving and exceeding specified levels of Company performance with respect to quantitative metrics selected by the Compensation Committee that it believes are important drivers in the creation of shareholder value; and |
• | for individual performance in relation to qualitative criteria established by the Compensation Committee for each such Named Executive Officer. |
• | Awards under this AIP are dependent upon accomplishment of the Company’s goals and objectives and the individual goals and objectives specified by the Compensation Committee. Payments will be based on performance criteria established for each fiscal year beginning January 1 and ending December 31. |
• | Management may develop recommendations for consideration by the Compensation Committee as to the criteria to be utilized in determining awards to each Named Executive Officer, but the Compensation Committee shall have the sole and final authority to decide all such matters. |
• | Overall AIP payments (aggregate) made under this plan require approval of the Compensation Committee. |
• | The Compensation Committee will set forth annually a target cash bonus award level (the “Target Cash Bonus Award”) for each Named Executive Officer under the AIP. |
• | Target Cash Bonus Awards shall consist of two parts as set forth below: Quantitative Bonus Awards and Qualitative Bonus Awards. |
• | “Quantitative Bonus Awards” - the Quantitative Bonus Award component of any Target Cash Bonus Award that may be earned by each Named Executive Officer will be determined based on 60% of the Target Cash Bonus Award for each Named Executive Officer other than the Chief Executive Officer (“CEO”) (70% in the case of the CEO), to be determined by the Company’s performance relative to specified objective criteria established by the Compensation Committee as set forth herein. The actual Quantitative Bonus Award earned by a Named Executive Officer may range from 0% to 150% of target based on actual performance. |
• | “Qualitative Bonus Awards” - the Qualitative Bonus Award component of any Target Cash Bonus Award to be earned by each Named Executive Officer will be determined based on 40% of the Target Cash Bonus Award for each Named Executive Officer other than the CEO (30% in the case of the CEO), to be determined based on the Compensation Committee’s subjective evaluation of such Named Executive Officer’s performance relative to specified individual criteria established by the Compensation Committee for each such Named Executive Officer as set forth herein. |
Named Executive Officer | Total 2018 Target Cash Bonus Award | 2018 Quantitative Bonus Target | 2018 Qualitative Bonus Target |
Stephen D. Lebovitz, President and Chief Executive Officer | $1,015,875 | $711,113 | $304,763 |
Charles B. Lebovitz, Executive Chairman of the Board | $846,563 | $507,938 | $338,625 |
Augustus N. Stephas, Executive Vice President and Chief Operating Officer | $395,063 | $237,038 | $158,025 |
Farzana Khaleel – Executive Vice President, Chief Financial Officer and Treasurer | $338,625 | $203,175 | $135,040 |
Michael I. Lebovitz, Executive Vice President – Development and Administration | $338,625 | $203,175 | $135,450 |
• | Funds From Operations (“FFO”), as adjusted, per diluted share, as reported in the Company’s periodic reports (Forms 10-K and 10-Q) filed with the SEC pursuant to the requirements of the Exchange Act (the “Periodic Reports”); and |
• | Growth in Same-Center Net Operating Income (“SC NOI Growth”), as reported in the Company’s Periodic Reports. |
Quantitative Metric | Weighting | Range | Resulting Cash Payout |
FFO per diluted share, as adjusted | 50% | Threshold | 50% |
Target | 100% | ||
Maximum | 150% | ||
SC NOI Growth | 50% | Threshold | 50% |
Target | 100% | ||
Maximum | 150% |
Named Executive Officer | 2018 Individual Performance Objectives | |
Stephen D. Lebovitz | (1) | refining, enhancing and executing the Company’s strategic and business plans |
(2) | effective communications and interactions with the investment community | |
(3) | regular communication and interaction with the Board | |
(4) | maintain and enhance key retailer, financial and other relationships | |
(5) | effective corporate and executive team communication, motivation and management | |
Charles B. Lebovitz | (1) | effective board management |
(2) | maintain and enhance key retailer and other relationships | |
(3) | broad involvement and stewardship of the Company’s strategic objectives and business performance | |
(4) | support the CEO in implementing organizational changes | |
(5) | support the CEO in developing and executing the Company's strategic and business plans | |
Augustus N. Stephas | (1) | improvement in overall portfolio operations including oversight of leasing and management |
(2) | successful preparation of Board materials (including pursuing opportunities for improvement) | |
(3) | expense containment and oversight of general and administrative costs | |
(4) | support and assist CEO in implementing organizational changes | |
(5) | support the CEO in developing and executing the Company's strategic and business plans |
Named Executive Officer | 2018 Individual Performance Objectives | |
Farzana Khaleel | (1) | successful execution of the Company’s balance sheet strategy including maintaining/improving key credit metrics and effective interactions with rating agencies, banks and other financial entities |
(2) | effective management and oversight of the financial services and accounting divisions | |
(3) | maintain and improve key financial and joint venture partner relationships | |
(4) | Improve interactions with the investment community through earnings calls, presentations and investor conferences/meetings | |
(5) | general involvement in improving the Company’s overall financial performance, i.e., NOI and FFO | |
(6) | support the CEO in implementing organizational changes as well as developing and executing the Company's strategic and business plans | |
Michael I. Lebovitz | (1) | supervision of new development and redevelopment projects (with particular focus on department store redevelopments) to achieve approved pro forma returns and scheduled openings |
(2) | manage and enhance joint venture partner relationships and greater involvement with financial institutions and the investment community | |
(3) | effective oversight of the implementation of technology and organizational initiatives including supporting the CEO in implementing organizational changes | |
(4) | effective management and team building for the Development, Human Resources and Information Technology divisions of the Company and closer working relationships with other areas of the Company | |
(5) | support the CEO in developing and executing the Company's strategic and business plans |
• | The amount of a Named Executive Officer’s Target Cash Bonus Award (consisting of the Quantitative Bonus Awards portion and Qualitative Bonus Awards portion and after the determination of the amount of each such portion) that is to be paid to a Named Executive Officer hereunder is referred to as the “AIP Bonus Payment”. |
• | All AIP Bonus Payments will be made in the year following the completion of the annual performance period to which the AIP Bonus Payment relates. The actual payment to each Named Executive Officer will be made as soon as practical after final certification of the underlying performance results and approval of such payment by the Compensation Committee; provided, however, that in no event will any such payment be made later than March 15 of such year. |
• | To be eligible to receive an AIP Bonus Payment, a Named Executive Officer must have been actively employed by the Management Company during the annual performance period with respect to which the payment relates. |
• | Any Named Executive Officer whose employment is terminated prior to the conclusion of the annual performance period with respect to which an applicable AIP Bonus Payment relates will not receive an AIP Bonus Payment, except as stipulated below: |
◦ | In the event of such Named Executive Officer’s death or disability (defined as the complete and permanent disability of the Named Executive Officer as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time) prior to the end of the annual performance period, an otherwise eligible Named Executive Officer shall receive an AIP Bonus Payment in the amount of such Named Executive Officer’s full Target Cash Bonus Award, as determined by the Compensation Committee, provided a Target Cash Bonus Award was approved for such Named Executive Officer for the applicable annual performance period. |
◦ | In the event of the termination of such Named Executive Officer’s employment, other than voluntarily or for Cause (as defined in the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan as currently stated and as may amended in the future (the “Stock Incentive Plan”)), following a Change of Control (as defined in the Stock Incentive Plan) prior to end of the annual performance period, an otherwise eligible Named Executive Officer shall receive an AIP Bonus Payment in the amount of such Named Executive Officer’s full Target Cash Bonus Award, as determined by the Compensation Committee, provided a Target Cash Bonus Award was approved for such Named Executive Officer for the applicable annual performance period. |
• | A Named Executive Officer, who becomes such pursuant to applicable SEC rules after the beginning of an applicable annual incentive period, may be considered for a pro-rated participation in this plan in the discretion of the Compensation Committee. |
• | AIP Bonus Payments will be paid-out on a one-time basis as a lump-sum, in cash, as such are considered compensation and reportable income for all tax reporting purposes. |
• | AIP Bonus Payments are included in total annual earnings and may be taken into account under the Company’s other benefit programs in accordance with their terms. |