UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 17, 2017 (March 15, 2017)
INVESTORS REAL ESTATE TRUST
(Exact name of Registrant as specified in its charter)
North Dakota |
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001-35624 |
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45-0311232 |
(State or Other Jurisdiction |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
1400 31st Avenue SW, Suite 60
Post Office Box 1988
Minot, ND 58702-1988
(Address of principal executive offices) (Zip code)
(701) 837-4738
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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.
(e) Amendment to the 2015 Incentive Plan
On March 15, 2017, the Board of Trustees approved a technical amendment to the Companys 2015 Incentive Plan to reflect new guidance issued by the Financial Accounting Standards Board (FASB) under it Accounting Standards Update 2016-09 on Topic 718, which, among other things, now allows companies to withhold shares upon settlement of equity awards for tax purposes using rates up to the maximum statutory withholding requirements without triggering variable accounting. Prior guidance permitted withholding only up to the minimum tax rates to avoid variable accounting. In accordance with such change in accounting guidance, Section 12.08 of the 2015 Incentive Plan has been revised to remove the minimum withholding limitation and permit withholding up to the maximum statutory requirements.
The above description of the 2015 Incentive Plan as Amended and Restated effective March 15, 2017 (Plan) is a summary only and is qualified in its entirety by reference to the Plan, which is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
Item 5.03. Amendments in Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a) On March 15, 2017, the Board of Trustees revised the Companys bylaws by adopting the Fifth Restated Trustees Regulations (Bylaws) (Revised Bylaws). The Revised Bylaws permit either the Chief Executive Officer or a majority of the Trustees to call a special shareholder meeting (to coordinate with the Companys Articles of Amendment and Third Restated Declaration of Trust); allow Trustees to participate remotely in Board meetings; remove provisions that are contained in the Companys Governance Guidelines; expand the types of officers and their duties; permit the Board to designate alternative committee members to replace absent or disqualified members; add voting, quorum, written consent and remote participation provisions for committees similar to those for the Board; and replace Company policies with a provision that the Board may adopt, amend and terminate any policies with respect to investments by the Company.
The above description of the Revised Bylaws is a summary only and is qualified in its entirety by reference to the full text of the Revised Bylaws, which is filed with this Current Report on Form 8-K as Exhibit 3.2 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibits are being filed or furnished, as applicable, herewith.
Exhibit |
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Number |
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Description |
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3.2 |
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Fifth Restated Trustees Regulations (Bylaws) of Investors Real Estate Trust, adopted on March 15, 2017. |
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10.1 |
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Investors Real Estate Trust 2015 Incentive Plan, as Amended and Restated Effective March 15, 2017. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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INVESTORS REAL ESTATE TRUST | |
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Date: March 17, 2017 |
By: |
/s/ Timothy P. Mihalick |
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Timothy P. Mihalick |
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Chief Executive Officer |
Exhibit 3.2
INVESTORS REAL ESTATE TRUST
Fifth Restated Trustees Regulations (Bylaws)
(Adopted March 15, 2017)
ARTICLE I - OFFICE AND RECORDS
Section 1. The principal office of Investors Real Estate Trust (the Trust) shall be in Minot, North Dakota. The Trust may also have offices at such other places as the Board of Trustees (the Board) may from time to time designate.
Section 2. The original or a certified copy of these Bylaws, including all amendments, shall be kept at the principal office of the Trust and be available during usual business hours for inspection and copying.
Section 3. The Trust shall keep correct and complete books and records of accounts of its transactions, and minutes and other records of the proceedings or other actions of the Board and of any committees of the Board.
Section 4. The Trust shall maintain at its principal office, or at the office of its transfer agent, an original or duplicate share ledger containing the name and address of each shareholder and the number of shares of each class held by each shareholder.
ARTICLE II - TRUSTEES
Section 1. The number of Trustees shall not be less than 5, nor more than 15, as from time to time determined by the Board.
Section 2. The Board shall elect one of the Trustees as Chairman of the Board, who shall act as chairman at all meetings of the Board, and may perform administrative acts on behalf of the Board except to the extent that the Declaration of Trust or these Bylaws specifically require such acts to be performed by a majority of the Board.
Section 3. The Board may elect one or more Trustees as a Vice Chairman of the Board. The First Vice Chairman shall exercise the power and duties of the Chairman in his or her absence or, in the case of a vacancy in that office, until a new Chairman shall be elected.
Section 4. The Board shall elect a Secretary, who need not be a Trustee, who shall keep minutes and have the usual responsibilities of a secretary.
Section 5. Regular meetings of the Board shall be held at such times as the Board determines, but not less frequently than each quarter.
Section 6. Special meetings of the Board shall be held whenever called by the Chairman, or by any 3 other Trustees, at such time and place as may be designated in the notice of the meeting.
Section 7. At least 24 hour written notice shall be given of the time and place of any regular or special meeting of the Board. If the notice is sent by mail or fax or electronic mail, it shall be deemed to have been given when deposited in the mail or transmitted by fax or by electronic mail directed to an address, telephone number or electronic mail address, as the case may be, which the Trustee has designated for the receipt of such notice. Notice of an adjourned meeting need not be given if the time and place of the adjourned meeting are announced at the meeting at which such adjournment action is taken.
Section 8. A majority of the Trustees in office shall constitute a quorum for the transaction of business. The acts of a majority of the Trustees present at a meeting at which a quorum is present shall be the acts of the Board. The Trustees may, in lieu of a meeting, take any action which would be lawful if done at a meeting by having a certificate describing such action signed by all of the Trustees in office and depositing such certificate in the minute book of the Trust. The Trustees shall be entitled to participate in meetings by telephone conference, video conference, or other communications equipment by which all members participating may simultaneously hear each other. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 9. Trustees must be individuals at least 21 years of age upon the date of the annual shareholder meeting at which such individual is elected as a Trustee.
ARTICLE III - SHAREHOLDERS
Section 1. Meetings of the shareholders shall be held at such place in Minot, North Dakota or elsewhere as may be determined by the Board.
Section 2. Annual Shareholder Meeting. An annual meeting of shareholders for the election of Trustees shall be held within six months of the end of the Trusts fiscal year, at such time and place as the Board shall from time to time fix.
Section 3. Special Shareholder Meeting.
A. A special meeting of shareholders may be called by a majority of the Trustees or by the Chief Executive Officer. Except as provided in Section 3(B) below, a special meeting of shareholders shall be held on the date and at the time and place set by the Chief Executive Officer or the Board, whoever has called the meeting. Subject to Section 3(B) below, a special meeting of shareholders shall also be called by the Secretary of the Trust to act on any matter that may properly be considered at a meeting of shareholders upon the valid written request of one or more shareholders who, in the aggregate, are holders of ten percent or more of the then outstanding common shares entitled to vote on the matter(s) proposed to be voted on at such meeting (Requisite Percentage).
B. Shareholder-Requested Special Meetings.
i. In order for any shareholder(s) to request a special meeting to act on any matter that may properly be considered at a meeting of shareholders:
(a) shareholders holding the Requisite Percentage shall submit a written notice of demand (Special Meeting Request) in proper form to the Secretary of the Trust at the Trusts principal executive offices by registered mail, return receipt requested. Such Special Meeting Request shall be signed by shareholder(s) holding the Requisite Percentage, bearing the date of signature of each such shareholder. In addition, the Special Meeting Request shall include:
(1) the information required by Section 6(A)(i) of Article III in the case of a proposal of business and Section 6(B)(i) of Article III in the case of a nomination of a Trustee as if such special meeting was an annual meeting; and
(2) documentary evidence that the requesting shareholders collectively own, as of the time the Special Meeting Request is submitted to the Secretary, the Requisite Percentage.
(3) A shareholder that has requested the special meeting in response to a solicitation statement filed by another shareholder seeking support from the Requisite Percentage of shareholders for such special meeting pursuant to, and in accordance with, Section 14(a) of the Securities Exchange Act of 1934, as amended (Exchange Act) (Solicited Shareholder) is not required to provide the information under Section 3(B)(i)(a)(1) above except: (A) information under Sections 6(A)(i)(a) and 6(B)(i)(a), as applicable, but only as to the name and address of the Solicited Shareholder, and (B) information under Sections 6(A)(i)(e) and 6(B)(i)(b), as applicable, but only as to the ownership, beneficially and of record, of Trust Securities by the Solicited Shareholder.
(b) If any information submitted as part of a Special Meeting Request pursuant to this Section 3(B) becomes inaccurate in any material respect, the Special Meeting Request may be deemed not to have been provided in accordance with this Section 3(B). For the Special Meeting Request to remain valid, the requesting shareholders must:
(1) promptly notify the Secretary of any inaccuracy or change in the Special Meeting Request (but in any event no later than two business days after any requesting shareholder becomes aware of such inaccuracy or change), including if any requesting shareholders have withdrawn from the Special Meeting Request; and
(2) promptly update and supplement the Special Meeting Request, as necessary, and deliver the revised Special Meeting Request to the Secretary (but in any event no later than five business days after any requesting shareholder becomes aware of such
inaccuracy or change) so that the Special Meeting Request shall continue to be true, accurate and complete from the Delivery Date until the special meeting is held or any adjournment or postponement thereof.
(c) When a Special Meeting Request in compliance with Section 3(B)(i) is received by the Secretary of the Trust for any matter that may properly be considered at a meeting of shareholders, the Secretary shall inform the requesting shareholders of the reasonably estimated costs of preparing and mailing or delivering the notice of the special meeting (including the Trusts proxy materials) (Costs). The Secretary shall not be required to call a special meeting upon shareholder request and such meeting shall not be held unless, in addition to the documents required by paragraphs (a) and (b) above, the Secretary receives payment from the requesting shareholders of such Costs prior to the preparation and mailing or delivery of such notice of the meeting (the date on which the Secretary receives both a valid Special Meeting Request and payment of the Costs is the Delivery Date).
ii. Any requesting shareholder may revoke its participation in any Special Meeting Request at any time prior to the special meeting by delivering a written revocation to the Secretary.
iii. Upon the Trusts determination that: (a) the requesting shareholders own the Requisite Percentage; (b) the requesting shareholders have validly submitted a Special Meeting Request in accordance with these Bylaws, the Declaration of Trust and applicable law, including payment of the Costs; and (c) there is at least one matter proposed in the Special Meeting Request that may properly be considered at a shareholder meeting, the Secretary shall, within 30 days after the Delivery Date, call the special meeting, which shall be held at the place, date and time determined by the Board that is no later than 90 days after the Delivery Date. The business conducted at such special meeting shall be limited to the matters proposed in the Special Meeting Request which are matters that may properly be considered at a meeting of shareholders; provided that the Board may include additional matters to be considered by the shareholders at the meeting by including those matters in the notice of the special meeting of shareholders.
iv. If written revocations of the Special Meeting Request have been delivered to the Secretary pursuant to Section 3(B)(ii), and the result is that the requesting shareholders who have not revoked no longer hold the Requisite Percentage, then the Board shall have the discretion to determine whether or not to proceed with the special meeting.
v. Notwithstanding anything in this Section 3(B) to the contrary, the Secretary shall not be required to call a special meeting if either: (a) the Delivery Date occurs during the period commencing ninety (90) days prior to the first anniversary of the date of the immediately preceding annual meeting of shareholders and ending on the date of the final adjournment of the next annual meeting of shareholders; or (b) the only matter to be voted on at the special meeting is
substantially the same as a matter voted on at any meeting of the shareholders held during the preceding twelve months, except if the matter relates to the election or removal of Trustees.
vi. If neither any of the requesting shareholders is physically present at, nor a qualified representative representing the requesting shareholders at their request is physically present at, the special meeting to present the matters proposed in the Special Meeting Request and included in the Trusts notice of meeting, the Trust is not required to present such matters for a vote at such meeting.
Section 4. Written notice setting forth the date, time and place of each annual meeting and, in the case of a special meeting or as otherwise may be required by law, the purpose(s) for which the meeting is called shall be given to each shareholder of record at least 15 days prior to the date fixed for the meeting. Notice of any meeting of shareholders sent by mail shall be deemed given when it is deposited in the mail addressed to the shareholder at the address appearing on the records of the Trust. Notice of an adjourned meeting need not be given if the time and place of the adjourned meeting is announced at the meeting at which the adjournment action is taken.
Section 5. Order of Business at Shareholder Meetings.
A. Annual Meetings of Shareholders. At any annual meeting of the shareholders, only such nominations of persons for election to the Board shall be made and only such other business shall be conducted or considered, as shall have been properly brought before the meeting. For nominations to be properly made at an annual meeting, and proposals of other business to be properly brought before an annual meeting, nominations and proposals of other business must be: (i) specified in the Trusts notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly made at the annual meeting by or at the direction of the Board, or (iii) otherwise properly requested to be brought before the annual meeting by a shareholder who (x) was a shareholder of record at the time of giving of notice provided for in Section 6 of this Article III and at the time of the annual meeting, (y) is entitled to vote at such annual meeting and (z) has complied with the notice procedures set forth in Section 6 of this Article III, specifically including Section 6(A) in the case of a proposal of other business and Section 6(B) in the case of a nomination of a Trustee. In addition, any shareholder proposal of other business to be voted on at an annual meeting must be a matter that may properly be considered at a meeting of shareholders. For the avoidance of doubt, clause (iii) of this Section 5(A) shall be the exclusive means for a shareholder to make nominations or other business proposals at an annual meeting of shareholders other than business properly included in the Trusts proxy materials pursuant to Rule 14a-8 under the Exchange Act.
B. Special Meetings of Shareholders. At any special meeting of the shareholders, only such nominations of persons for election to the Board shall be made and only such business shall be conducted or considered as shall have been properly brought before the meeting. For nominations to be properly made at a special meeting, and proposals of business to be properly brought before a special meeting, nominations and proposals of business must be (i) specified in the Trusts notice of meeting (or any supplement thereto) given by or at the direction of the Board or other persons who called such meeting in accordance with Article III, Section 3; (ii) otherwise properly brought before
the special meeting by or at the direction of the Board; or (iii) if the Trusts notice of meeting provides for the election of Trustees, shareholder nominations of persons for election to the Board otherwise properly requested to be brought before the special meeting by a shareholder who (x) was a shareholder of record at the time of giving of notice provided for in Section 6 of this Article III and at the time of the special meeting, (y) is entitled to vote at the special meeting and (z) has complied with the notice procedures set forth in Section 6 of this Article III, specifically including Section 6(B) for nomination of Trustees. For the avoidance of doubt, this Section 5(B) of Article III shall be the exclusive means for a shareholder to make nominations or other business proposals at a special meeting of shareholders other than business properly included in the Trusts proxy materials pursuant to Rule 14a-8 under the Exchange Act.
C. General. Except as otherwise provided by law, the Declaration of Trust or these Bylaws, the chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before an annual or special meeting was made or proposed, as the case may be, in accordance with these Bylaws and, if any proposed nomination or other business is not in compliance with these Bylaws, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded.
Section 6. Shareholder Proposals and Nominations.
A. Shareholder Proposals. For shareholder proposals for other business to be properly brought before an annual meeting pursuant to Section 5(A)(iii) of Article III, the shareholder, or beneficial owner on whose behalf the proposal is made (Requesting Shareholder), shall submit a timely written notice (Proposal Notice) in proper form to the Secretary of the Trust at the Trusts principal executive offices by registered mail, return receipt requested. Such Proposal Notice shall be signed by a shareholder entitled to submit a Proposal Notice under these Bylaws, bearing the date of signature of such shareholder. The date on which the Secretary receives a valid and complete Proposal Notice is referred to as the Proposal Delivery Date. The requirements of the Proposal Notice shall be as follows:
i. Proposal Notice. The written Proposal Notice shall include:
(a) the name and address of such shareholder as it appears on the Trusts books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith (collectively referred to as Shareholder Group), and the name of each nominee or similar custodian which holds any such shares or other securities of the Trust on behalf of such Shareholder Group (Custodian);
(b) a brief description of the business desired to be brought before the meeting, the reason(s) for conducting such business at the meeting and any material interest of the Shareholder Group in the proposal of such business;
(c) a description of all agreements, arrangements and understandings between the Shareholder Group and any other person(s)
(including their names) in connection with the proposal of such business by the Requesting Shareholder;
(d) the text of the proposal or business (including the text of any resolutions proposed for consideration);
(e) the class, series and number of all shares of beneficial interest and other securities of the Trust and its subsidiaries (collectively referred to as Trust Securities) which are, directly or indirectly, owned beneficially and of record by the Shareholder Group and by each Custodian, or any other agreement relating to the Trust Securities, including any of the following:
(1) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any Trust Securities or with a value derived in whole or in part from the value of any Trust Securities, or any derivative or synthetic arrangement having the characteristics of a long position in any Trust Securities, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any Trust Securities, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any Trust Securities, whether or not such instrument, contract or right shall be subject to settlement in the underlying Trust Securities, through the delivery of cash or other property, or otherwise, and without regard of whether the Shareholder Group may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of Trust Securities (any of the foregoing, a Derivative Instrument) directly or indirectly owned beneficially by such Shareholder Group;
(2) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), contract, arrangement or understanding pursuant to which the Shareholder Group has a right to vote any Trust Securities;
(3) any agreement, arrangement, understanding or otherwise, including any repurchase or similar so-called stock borrowing agreement or arrangement, engaged in, directly or indirectly, by the Shareholder Group, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any Trust Securities by, manage the risk of share price changes for, or increase or decrease the voting power of, such Shareholder Group with respect to any Trust Securities, or which
provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any Trust Securities;
(4) any rights to dividends or other distributions on any Trust Securities owned beneficially by the Shareholder Group that are separated or separable from the underlying Trust Securities;
(5) any proportionate interest in any Trust Securities or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which the Requesting Shareholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;
(6) any performance-related fees (other than an asset-based fee) to which the Requesting Shareholder is entitled based on any increase or decrease in the value of Trust Securities or Derivative Instruments, if any; and
(7) any direct or indirect interest of the Requesting Shareholder in any contract with the Trust or any affiliate of the Trust (including any collective bargaining agreement); and
(f) any other information relating to the Requesting Shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for the proposal pursuant to Regulation 14A of the Exchange Act and the rules and regulations promulgated thereunder.
(ii) Timely Notice. For the Proposal Notice to be timely:
(a) the Proposal Delivery Date of the Proposal Notice shall be no earlier than the close of business on the 120th day and no later than the close of business on the 90th day prior to the first anniversary of the preceding years annual meeting.
(b) Notwithstanding the above, in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, the Proposal Delivery Date of the Proposal Notice must be no earlier than the close of business on the 120th day prior to the date of such annual meeting and no later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, no later than by the 10th day following the day on which public announcement of the date of such meeting is first made by the Trust.
(c) In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a Proposal Notice.
(iii) Update Requirement. If any information submitted as part of a Proposal Notice pursuant to this Section 6(A) becomes inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 6(A). For a Proposal Notice to remain valid, the Requesting Shareholder must:
(a) promptly notify the Secretary of any inaccuracy or change in the Proposal Notice (but in any event no later than two business days after the Requesting Shareholder becomes aware of such inaccuracy or change); and
(b) promptly update and supplement the Proposal Notice, as necessary, and deliver the revised Proposal Notice to the Secretary (but in any event no later than five business days after the Requesting Shareholder becomes aware of such inaccuracy or change) so that the Proposal Notice shall continue to be true, accurate and complete from the Notice Delivery Date until the meeting is held or any adjournment or postponement thereof.
(iv) Present at the Meeting. If neither the Requesting Shareholder who has given proper and timely notice as required herein is physically present at, nor a qualified representative representing the Requesting Shareholder at its request is physically present at, the meeting to present the business proposal proposed in the Proposal Notice, the Trust is not required to present such business proposal for a vote at such meeting. If the Requesting Shareholder who has given proper and timely notice as required herein intends to authorize another person to act for the Requesting Shareholder as a proxy to present the business proposal at the meeting, the Requesting Shareholder shall give notice of such authorization in writing to the Secretary not less than three business days before the date of the meeting, including the name and contact information for such person.
B. Shareholder Nominations. For a shareholder nomination of a person for election to the Board to be properly brought before an annual meeting pursuant to Section 5(A)(iii) of Article III or before a special meeting pursuant to Section 5(B)(iii) of Article III, the Requesting Shareholder shall submit a timely written notice (Nomination Notice) in proper form to the Secretary of the Trust at the Trusts principal executive offices by registered mail, return receipt requested. Such Nomination Notice shall be signed by a shareholder entitled to submit a Nomination Notice under these Bylaws, bearing the date of signature of such shareholder. The date on which the Secretary receives a valid and complete Nomination Notice is referred to as the Nomination Delivery Date. The requirements of the Nomination Notice shall be as follows:
i. Nomination Notice. The written Nomination Notice shall include:
(a) the same information as specified under Section 6(A)(i)(a) for the Shareholder Group submitting the Nomination Notice and Custodian to such Shareholder Group,
(b) and same information as specified under Section 6(A)(i)(e) for the Shareholder Group submitting the Nomination Notice;
(c) as to each person whom the Requesting Shareholder proposes to nominate for election or reelection to the Board (Nominee), all information relating to such Nominee that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Trustees in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(d) as to each Nominee, a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the Shareholder Group on the one hand and each Nominee, and the Nominees respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the Shareholder Group were the registrant for purposes of such rule and the Nominee were a Trustee or executive officer of such registrant;
(e) as to each Nominee, the Nominees written consent to being named in the Trusts proxy statement as a nominee and to serving as a Trustee if elected;
(f) a questionnaire completed, signed and dated by each Nominee with respect to the Nominees background and qualifications (which questionnaire shall be provided to the Requesting Shareholder by the Secretary upon written request);
(g) written representations signed and dated by each Nominee, whereby each Nominee shall represent that Nominee: (1) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Nominee, if elected as a Trustee, will act or vote on any issue or question (a Voting Commitment) that has not been disclosed to the Trust therein or (B) any Voting Commitment that could limit or interfere with the Nominees ability to comply, if elected as a Trustee, with the Nominees fiduciary duties under applicable law; (2) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Trust with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Trustee that has not been disclosed to the Trust therein; and (3) in Nominees individual capacity and on behalf of any person or entity on whose behalf the
nomination is being made, would be in compliance if elected as a Trustee of the Trust and will comply with all applicable corporate governance, conflict of interest, resignation, confidentiality, share ownership and trading policies and guidelines of the Trust publicly disclosed from time to time; and
(h) any other information that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for the election of Trustees in a contested election (even if an election contest is not involved) pursuant to Regulation 14A of the Exchange Act and the rules and regulations promulgated thereunder.
(ii) Timely Notice. For the Nomination Notice to be timely:
(a) in regards to an annual meeting, the Nomination Delivery Date of the Nomination Notice must be by the time frames as provided under Section 6(A)(ii) above; provided, however, in the event that the number of Trustees to be elected to the Board at such annual meeting is increased by the Board, and there is no public announcement by the Trust naming all of the nominees for Trustee or specifying the size of the increased Board at least 100 days prior to the first anniversary of the preceding years annual meeting, then the Nomination Notice shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary not later than the close of business on the 10th day following the day on which such public announcement is first made by the Trust.
(b) in regards to a special meeting, the Nomination Delivery Date of the Nomination Notice shall be no earlier than the close of business on the 100th day prior to the date of such special meeting and no later than the close of business on the later of the 60th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 70 days prior to the date of such special meeting, no later than by the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.
(c) In no event shall any adjournment or postponement of annual or special meeting, or the public announcement thereof, commence a new time period for the giving of a Nomination Notice as described above.
(iii) Update Requirement. If any information submitted as part of a Nomination Notice pursuant to this Section 6(B) becomes inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 6(B). For a Nomination Notice to remain valid, the Requesting Shareholder must:
(a) promptly notify the Secretary of any inaccuracy or change in the Nomination Notice (but in any event no later than two business days after
the Requesting Shareholder becomes aware of such inaccuracy or change); and
(b) promptly update and supplement the Nomination Notice, as necessary, and deliver the revised Nomination Notice to the Secretary (but in any event no later than five business days after the Requesting Shareholder becomes aware of such inaccuracy or change) so that the Nomination Notice shall continue to be true, accurate and complete from the Delivery Date until the meeting is held or any adjournment or postponement thereof.
(iv) The Trust may require any proposed Nominee to furnish such other information as may be reasonably required by the Trust or the Board to determine the eligibility of such proposed Nominee to serve as an independent Trustee of the Trust or that could be material to a reasonable shareholders understanding of the independence, or lack thereof, of such Nominee.
(v) Present at the Meeting. If neither a Requesting Shareholder who has given proper and timely notice as required herein is physically present at, nor a qualified representative representing the Requesting Shareholder at its request is physically present at, the meeting to present the Nominee(s) as proposed in the Nominee Notice, the Trust is not required to present such Nominees for election at such meeting. If a Requesting Shareholder who has given proper and timely notice as required herein intends to authorize another person to act for the Requesting Shareholder as a proxy to present the nomination at the meeting, the Requesting Shareholder shall give notice of such authorization in writing to the Secretary not less than three business days before the date of the meeting, including the name and contact information for such person.
C. Notwithstanding Sections 6(A) and (B) of this Article III, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 6; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to shareholder nominations or proposals under these Bylaws.
D. Any shareholder proposal for other business made pursuant to a Proposal Notice under Section 6(A) must be a matter that may properly be considered at a meeting of shareholders.
E. Notwithstanding the disclosure requirements of Sections 6(A) and (B) of this Article III, disclosures with respect to ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a shareholder solely as a result of being the shareholder of record or nominee directed to prepare and submit the notice required by Sections 6(A) and (B) of this Article III, as the case may be, on behalf of a beneficial owner will not be required.
F. Nothing in this Article III shall be deemed to affect any (1) rights of shareholders to request inclusion of proposals in, or the right of the Trust to omit a proposal from, the Trusts proxy statement pursuant to Rule 14a-8 under the Exchange Act or (2)
rights of the holders of any series of preferred shares of the Trust if and to the extent provided for under law, the Declaration of Trust or these Bylaws.
Section 7. Every annual and special meeting of shareholders shall be conducted by an individual appointed by the Board to be chairman of the meeting or, in the absence of such appointment, by the Chairman of the Board or, in the case of a vacancy in the office or absence of the Chairman of the Board, by one of the following officers present at the meeting: the Vice Chairman of the Board, if there be one, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the President, the Executive Vice Presidents and the Senior Vice Presidents in their order of rank and seniority, or, in the absence of such officers, a chairman chosen by the shareholders by the vote of a majority of the votes cast by shareholders present in person or by proxy. The Secretary, or, in the Secretarys absence, an assistant secretary, or in the absence of both the Secretary and assistant secretaries, an individual appointed by the Board or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. The Board may adopt rules, regulations and procedures governing any meeting of shareholders. The order of business and all other matters of procedure at any meeting of shareholders shall be determined by the chairman of the meeting. The chairman of the meeting may, to the extent not inconsistent with any rules, regulations and procedures adopted by the Board, prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to shareholders of record of the Trust, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to shareholders of record of the Trust entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) determining when the polls should be opened and closed; (f) maintaining order and security at the meeting; (g) removing any shareholder or any other individual who refuses to comply with meeting rules, regulations or procedures as set forth by the Board or the chairman of the meeting; and (h) concluding the meeting or recessing or adjourning the meeting to a later date and time and place announced at the meeting. Unless otherwise determined by the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 8. Thirty-three and one-third percent (33 1/3%) of the outstanding shares entitled to vote at any meeting represented in person or by proxy shall constitute a quorum at such meeting.
Section 9. Proxies shall be executed in writing and filed with such officer or office of the Trust as may be designated in the notice of the meeting. No revocation of a proxy, whether by voluntary action, death or incapacity of the shareholder granting it or otherwise, shall be effective until notice thereof has been received by the Trust.
Section 10. The Board may appoint one or more judges of election, who need not be shareholders, to act at meetings of shareholders. If a judge of election fails to appear or refuses to act at a meeting, the Chairman or other person designated to preside at the meeting of the shareholders shall appoint a substitute judge of election. The judge of
election shall determine the number of outstanding shares of the Trust as of the applicable record date, the number of shares represented at the meeting, the existence of a quorum, and all questions relating to voting, and shall count the votes and shall determine the results of any voting.
Section 11. For any lawful purpose, including, but without being limited thereto, the determination of the shareholders who are entitled to (a) receive notice of and vote at a meeting of the shareholders; (b) receive payment of a distribution; and (c) participate in the execution of written approvals, the Board may fix a record date which shall not be earlier than the date on which the record date is fixed, and shall not be more than 90 days preceding the meeting, payment, final date of written approvals or waivers, or other event to which the record date relates. If no record date is fixed, the record date for determining the shareholders who are entitled to receive notice of or to vote at a meeting of the shareholders shall be the close of business on the twentieth day prior to the date of the meeting.
Section 12. Only to the extent authorized by the Declaration of Trust and permitted by applicable law, action required or permitted to be taken at any annual or special meeting of shareholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares entitled to vote having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
In the event of the delivery, as required by law, to the Trust of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Trust shall engage independent inspectors of election for the purpose of performing promptly a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent without a meeting shall be effective until the date as the independent inspectors certify to the Trust that the consents properly delivered to the Trust represent at least the minimum number of votes that would be necessary to take the corporate action. Nothing contained in this Section 12 shall in any way be construed to suggest or imply that the Trust, the Board or any shareholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after the certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in the litigation).
Every written consent shall bear the date of signature of each shareholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent received in accordance with applicable law, a written consent or consents signed by a sufficient number of holders to take such action are delivered to the Trust as required by law.
ARTICLE IV - OFFICERS
Section 1. The officers of the Trust may consist of a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, one or more Vice Presidents
(including Vice Presidents of varying degrees, such as Executive, Senior, or Regional Vice Presidents), and a Secretary. The Board may also appoint such other officers as the business of the Trust may require, each of whom shall have such authority and perform such duties as may be prescribed by the Board or the Chief Executive Officer from time to time. The officers of the Trust shall be appointed annually by the Board at the first meeting of the Board held after each annual meeting of shareholders, or as soon thereafter as may be convenient. Any two or more offices may be held by the same person.
Section 2. Chief Executive Officer. The Chief Executive Officer shall have general responsibility for implementation of the policies of the Trust, as determined by the Board, and for the management of the business and affairs of the Trust. The Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer, and such other duties as may be prescribed by the Board from time to time.
Section 3. President. The President shall in general supervise and control all of the business and affairs of the Trust. The President shall perform all duties incident to the office of President, and such other duties as may be prescribed by the Board or the Chief Executive Officer from time to time.
Section 4. Chief Operating Officer. The Chief Operating Officer shall supervise the operations of the Trust. The Chief Operating Officer shall perform all duties incident to the office of Chief Operating Officer, and such other duties as determined by the Board or the Chief Executive Officer from time to time.
Section 5. Chief Financial Officer. The Chief Financial Officer shall supervise the finance, treasury and accounting functions of the Trust. The Chief Financial Officer shall perform all duties incident to the office of Chief Financial Officer, and such other duties as determined by the Board or the Chief Executive Officer from time to time. The Chief Financial Officer shall be the Treasurer of the Trust unless the Board designates another person to be the Treasurer.
Section 6. Vice Presidents. Vice Presidents shall perform all duties incident to the office of Vice President, and such other duties as may be prescribed by the Board or the Chief Executive Officer from time to time.
Section 7. Secretary. The Secretary shall (a) keep the minutes of the proceedings of the shareholders, the Board, and the committees in appropriate minute books, (b) see that all notices are duly given in accordance with these Bylaws or as required by law, (c) be the custodian of the corporate records of the Trust, and (d) perform all duties incident to the office of Secretary, and such other duties as may be prescribed by the Board or the Chief Executive Officer from time to time.
Section 8. Unless prohibited by a resolution of the Board or these Bylaws, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, any Vice President, and the Secretary may execute any contracts, leases, or other documents requiring execution by the Trust.
Section 9. All officers and agents of the Trust, as between themselves and the Trust, have such authority and must perform such duties in the management of the Trust as
may be provided in the Bylaws, or as may be determined by the Board not inconsistent with the Bylaws.
Section 10. Each officer shall serve until the officers successor is appointed and qualifies, or until the officers death, resignation, or removal in the manner hereinafter provided. An officer may resign at any time by giving written notice to the Trust. The resignation is effective without acceptance when the notice is given to the Trust, unless a later effective date is specified in the notice. The Board may remove an officer at any time, with or without cause. A vacancy in an office because of death, resignation, removal, disqualification, or other cause may be filled, if at all, in any manner by the Board.
Section 11. The appointment of a person as an officer or agent does not, of itself, create contract rights. However, the Trust may enter into a contract with an officer or agent. The resignation or removal of an officer or agent is without prejudice to any contractual rights or obligations.
Section 12. Unless prohibited by a resolution of the Board, an officer appointed by the Board may, without the approval of the Board, delegate some or all of the duties and powers of an office to other persons. An officer who delegates the duties or powers of an office remains subject to the standard of conduct for an officer with respect to the discharge of all duties and powers so delegated.
ARTICLE V - COMMITTEES
Section 1. Executive Committee. The Board may annually appoint an Executive Committee consisting of at least 3 Trustees. The Executive Committee shall have the authority and duties prescribed in these Bylaws and such other authority and duties as may be prescribed by the Board. The Board may designate one or more Trustees as an alternative member of the Executive Committee, who may replace any absent or disqualified member at any meeting of the committee. The Board may also appoint other agents for the performance of the business of the Trust, and each shall have such authority and duties as the Board prescribes. The Executive Committee may act on behalf of the Board.
Section 2. Audit Committee. At least annually, the Board shall appoint an Audit Committee consisting of at least 3 Trustees, all of whom shall be Independent Trustees. The Board may designate one or more Trustees as an alternative member of the Audit Committee, who may replace any absent or disqualified member at any meeting of the committee. The Audit Committee shall perform all duties as set forth in the written Audit Committee Charter as amended by the Board from time to time, and such other duties and tasks as the Board may prescribe.
Section 3. Nominating and Governance Committee. At least annually, the Board shall appoint a Nominating and Governance Committee consisting of at least 3 Trustees, all of whom shall be Independent Trustees. The Board may designate one or more Trustees as an alternative member of the Nominating and Governance Committee, who may replace any absent or disqualified member at any meeting of the committee. The Nominating and Governance Committee shall perform all duties as set forth in the written Nominating and
Governance Committee Charter as amended by the Board from time to time, and such other duties and tasks as the Board may prescribe.
Section 4. Compensation Committee. At least annually, the Board shall appoint a Compensation Committee consisting of at least 3 Trustees, all of whom shall be Independent Trustees. The Board may designate one or more Trustees as an alternative member of the Compensation Committee, who may replace any absent or disqualified member at any meeting of the committee. The Compensation Committee shall perform all duties as set forth in the written Compensation Committee Charter as amended by the Board from time to time, and such other duties and tasks as the Board may prescribe.
Section 5. Other Committees. The Board may appoint such other standing or special committees, each consisting of one or more Trustees, as the Board may from time to time deem advisable, to perform such general or special duties as the Board may delegate to any such committee. The Board may designate one or more Trustees as an alternative member of any committee appointed pursuant to this Section 5, who may replace any absent or disqualified member at any meeting of such committee.
Section 6. Quorum and Voting. Subject to such terms as may appear in the delegation of authority to such committee (which may be contained in the charter for such committee), a majority of the members of any committee shall constitute a quorum for the transaction of business by such committee, and the act of a majority of the committee members present at a meeting shall constitute the act of the committee.
Section 7. Action by Committee Without a Meeting. Subject to such terms as may appear in the delegation of authority to such committee (which may be contained in the charter for such committee), any action required or permitted to be taken at any meeting of a committee may be taken without a meeting if all members of the committee consent to taking such action without a meeting, and the action is approved by the affirmative vote of the number of committee members that would be necessary to authorize or take such action at a meeting.
Section 8. Meetings by Electronic Communications Equipment. Members of any committee shall be entitled to participate in meetings of such committee by telephone conference, video conference, or other communications equipment by which all members participating may simultaneously hear each other. Participation in a meeting by these means shall constitute presence in person at the meeting.
ARTICLE VI - SHARES
Section 1. The interests of shareholders in the Trust shall be divided into shares of beneficial interest, which may be certificated or uncertificated. Any certificate representing shares shall state (a) that it represents shares in the Trust; (b) the name of the registered owner of the shares represented thereby; and (c) the number of shares which the certificate represents. The interest of a shareholder in the Trust also may be evidenced by registration in the holders name in uncertificated, book-entry form on the books of the Trust in accordance with a direct registration system approved by the Securities and Exchange
Commission and by any securities exchange or automated quotation system on which the Trusts shares may from time to time be quoted or listed.
Section 2. Each share certificate shall be signed by a duly authorized agent of the Trust provided, however, that such signature may be a facsimile signature on any certificate which contains the manual signature of a person authorized to sign on behalf of a transfer agent acting for the Trust.
Section 3. Shares may be transferred only by the registered owner of the shares as reflected on the Share Ledger of the Trust, or by an attorney duly authorized in writing by the registered owner. If such shares are issued in certificated form, then those shares may be transferred only upon surrender of the share certificate properly endorsed, which certificate shall be canceled at the time of transfer, and the Trust shall issue a new certificate or evidence of the issuance of uncertificated shares to the shareholder entitled thereto, and shall record the transaction upon the books of the Trust. If the shares are issued in uncertificated form, then upon the receipt of proper transfer instructions from the registered owner of the shares or an attorney duly authorized in writing by the registered owner, such uncertificated shares shall be canceled, and the issuance of new equivalent uncertificated shares or certificated shares shall be made to the shareholder entitled thereto and the transaction shall be recorded upon the books of the Trust. The Board may prescribe the requirements for any transfer of shares otherwise than by an assignment validly executed by the registered owner or his attorney duly authorized as herein provided.
Section 4. The Board may establish transfer offices each in the charge of a transfer agent appointed by the Board, where the shares of the Trust shall be transferable, and a registry office in the charge of a registrar appointed by the Board where the shares shall be registered. If a transfer agent shall be appointed, no certificate for a share will be valid unless countersigned by such transfer agent.
Section 5. The holder of any share certificate shall immediately notify the Trust or its transfer agent of any mutilation, loss, or destruction thereof, whereupon the Trust may issue (i) a new certificate or certificates or (ii) uncertificated shares in place of any certificate or certificates previously issued by the Trust and alleged to have been mutilated, lost or destroyed, upon surrender of the mutilated certificate, or in the case of loss or destruction of a certificate, upon satisfactory proof of such loss or destruction of certificate and the deposit of indemnity by way of a bond or otherwise in such form and amount and with such surety as the Board may require, to indemnify the Trust against loss or liability by reason of the issuance of such new certificate or certificates or uncertificated shares.
Section 6. The share certificates issued hereunder shall contain any Legend required by the Declaration of Trust and shall be in such form as the Board prescribes.
ARTICLE VII - MISCELLANEOUS
Section 1. The fiscal year of the Trust shall begin on May 1 of each year and shall end on April 30th of each year.
Section 2. No Trustee, representative, or agent of the Trust shall have power or authority to borrow money on the Trusts behalf, to pledge its credit or to buy, sell, or mortgage its real property or securities except within the scope and to the extent of authority expressly delegated by resolution of the Board. Authority given by the Board for any of the above purposes may be general in scope or limited to specific instances.
Section 3. The Board may, by resolution, designate the representative or representatives of the Trust who shall be authorized to act as signatory or signatories on the Trusts bank accounts and shall designate the number of signatures required. Any such signatory may, but need not, be a Trustee.
Section 4. Subject to the provisions of the Declaration of Trust, the Board of Trustees may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Company as it shall deem appropriate in its sole discretion.
Section 5. Whenever any written notice is required to be given to the Trustees or the shareholders, a waiver thereof in writing signed by a person entitled to such notice, shall be deemed equivalent to the giving of such notice. Attendance of a person either in person or by proxy at a meeting shall constitute a waiver of notice of the meeting unless such person attends such meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.
Section 6. All capitalized terms not otherwise defined in these Bylaws shall have the meanings ascribed to them in the Declaration of Trust.
Section 7. In the event that any provision in these regulations shall be construed to be inconsistent with the provision of the Declaration of Trust, the provisions of the Declaration of Trust shall control.
ARTICLE VIII - AMENDMENTS
These Bylaws may be amended at any regular or special meeting of the Board if notice of the proposed amendment is contained in the notice of meeting. Amendments to these Bylaws may be made by the Board with or without a meeting, by written instrument signed by all of the Trustees and lodged among the records of the Trust.
Exhibit 10.1
INVESTORS REAL ESTATE TRUST
2015 INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE MARCH 15, 2017
Table of Contents
Table of Contents |
i | |
ARTICLE I DEFINITIONS |
1 | |
1.01. |
Administrator |
1 |
1.02. |
Affiliate |
1 |
1.03. |
Award Agreement |
1 |
1.04. |
Board |
1 |
1.05. |
Change in Control |
1 |
1.06. |
Code |
3 |
1.07. |
Committee |
3 |
1.08. |
Common Stock |
3 |
1.09. |
Company |
3 |
1.10. |
Consultant |
3 |
1.11. |
Control Change Date |
3 |
1.12. |
Exchange Act |
3 |
1.13. |
Fair Market Value |
3 |
1.14. |
Incentive Award |
4 |
1.15. |
Non-employee Trustee |
4 |
1.16. |
Participant |
4 |
1.17. |
Partnership |
4 |
1.18. |
Performance Goal |
4 |
1.19. |
Plan |
5 |
1.20. |
Stock Award |
5 |
1.21. |
Stock Unit |
5 |
1.22. |
Stock Unit Award |
5 |
ARTICLE II PURPOSES |
5 | |
ARTICLE III ADMINISTRATION |
6 | |
ARTICLE IV ELIGIBILITY |
7 | |
4.01. |
General |
7 |
4.02. |
Grants |
7 |
ARTICLE V STOCK SUBJECT TO PLAN |
7 | |
5.01. |
Shares Issued |
7 |
5.02. |
Aggregate Limit |
7 |
5.03. |
Individual Limitations |
7 |
5.04. |
Share Add-Backs |
8 |
ARTICLE VI STOCK AWARDS |
8 | |
6.01. |
Awards |
8 |
6.02. |
Vesting |
8 |
6.03. |
Shareholder Rights |
8 |
6.04. |
Disposition of Shares |
9 |
ARTICLE VII STOCK UNIT AWARDS |
9 | |
7.01. |
Awards |
9 |
7.02. |
Earning the Award |
9 |
7.03. |
Payment |
9 |
7.04. |
Shareholder Rights |
9 |
7.05. |
Dividend Equivalents |
10 |
7.06. |
Disposition of Shares |
10 |
ARTICLE VIII INCENTIVE AWARDS |
10 | |
8.01. |
Awards |
10 |
8.02. |
Terms and Conditions |
10 |
8.03. |
Settlement |
10 |
8.04. |
Shareholder Rights |
10 |
8.05. |
Disposition of Shares |
11 |
ARTICLE IX ADJUSTMENT UPON CHANGE IN COMMON STOCK |
11 | |
ARTICLE X CHANGE IN CONTROL |
11 | |
10.01. |
Impact of Change in Control |
11 |
10.02. |
Assumption Upon Change in Control |
12 |
10.03. |
Cash-Out Upon Change in Control |
12 |
10.04. |
Certain Reduction of Parachute Payments |
12 |
ARTICLE XI COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES |
13 | |
ARTICLE XII GENERAL PROVISIONS |
14 | |
12.01. |
Effect on Employment or Service |
14 |
12.02. |
Unfunded Plan |
14 |
12.03. |
Transferability |
14 |
12.04. |
REIT Status |
14 |
12.05. |
Section 83(b) Elections |
15 |
12.06. |
Rules of Construction |
15 |
12.07. |
Employee Status |
15 |
12.08. |
Withholding Taxes |
15 |
12.09. |
Return of Awards; Repayment |
16 |
INVESTORS REAL ESTATE TRUST
2015 INCENTIVE PLAN
ARTICLE I
DEFINITIONS
1.01. ADMINISTRATOR.
Administrator means the Board with respect to awards to Non-employee Trustees and in all other instances means the Committee.
1.02. AFFILIATE.
Affiliate means, with respect to any entity, any other entity, whether now or hereafter existing, which controls, is controlled by or is under common control with the first entity (including, but not limited to, joint ventures, limited liability companies and partnerships). For this purpose, the term control means the ownership, directly or indirectly, of more than 50% of the total combined voting power or value of all classes of shares or interests in an entity or the power to direct the management and policies of an entity, by contract or otherwise.
1.03. AWARD AGREEMENT.
Award Agreement means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and conditions of a Stock Award, a Stock Unit Award or an Incentive Award granted to such Participant.
1.04. BOARD.
Board means the Board of Trustees of the Company.
1.05. CHANGE IN CONTROL.
Change in Control shall mean the occurrence of any of the following events:
(a) the acquisition, directly or indirectly, by any person or group (as those terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and the rules thereunder) of beneficial ownership (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the election of trustees (voting securities) of the Company that represent 35% or more of the combined voting power of the Companys then outstanding voting securities, other than
(i) an acquisition of securities by a trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or
(ii) an acquisition of securities by the Company or a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the securities of the Company, or
(iii) an acquisition of securities pursuant to a transaction described in clause (c) below that would not be a Change in Control under clause (c).
Notwithstanding the foregoing, the following event shall not constitute an acquisition by any person or group for purposes of this clause (a): an acquisition of the Companys securities by the Company which causes the Companys voting securities beneficially owned by a person or group to represent 35% or more of the combined voting power of the Companys then outstanding voting securities; provided, however, that if a person or group shall become the beneficial owner of 35% or more of the combined voting power of the Companys then outstanding voting securities by reason of share acquisitions by the Company as described above and shall, after such share acquisitions by the Company, become the beneficial owner of any additional voting securities of the Company, then such acquisition shall constitute a Change in Control;
(b) individuals who, as of the effective date of this Plan, constitute the Board (the Incumbent Board) cease for any reason to constitute at least a majority of the Board, provided, however, that any individual becoming a trustee subsequent to the date hereof whose election by the Companys shareholders, or nomination for election by the Board, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;
(c) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Companys assets or (z) the acquisition of assets or stock of another entity, in each case, other than a transaction
(i) which results in the Companys voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Companys assets or otherwise succeeds to the business of the Company (the Company or such person, the Successor Entity)) directly or indirectly, at least 50% of the combined voting power of the Successor Entitys outstanding voting securities immediately after the transaction; and
(ii) after which no person or group beneficially owns voting securities representing 35% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (c)(ii) as beneficially owning 35% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or
(d) approval by the Companys shareholders of a liquidation or dissolution of the Company.
For purposes of clause (a) above, the calculation of voting power shall be made as if the date of the acquisition were a record date for a vote of the Companys shareholders, and for purposes of clause (c) above, the calculation of voting power shall be made as if the date of the consummation of the transaction were a record date for a vote of the Companys shareholders.
In addition, if a Change in Control (as defined in clauses (a), (b), (c) and (d) above) constitutes a payment event with respect to any Stock Award, Stock Unit award or Incentive Award that provides for the deferral of compensation and is subject to Section 409A of the Code, no payment will be made under that award on account of a Change in Control unless the event described in clause (a), (b), (c) or (d) above, as applicable, constitutes a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5).
1.06. CODE.
Code means the Internal Revenue Code of 1986, and any amendments thereto.
1.07. COMMITTEE.
Committee means the Compensation Committee of the Board.
1.08. COMMON STOCK.
Common Stock means the common shares of beneficial ownership of the Company, no par value per share.
1.09. COMPANY.
Company means Investors Real Estate Trust, a North Dakota real estate investment trust.
1.10. CONSULTANT.
Consultant means any individual who (a) renders bona fide services to the Company, the Partnership or an Affiliate of the Company or the Partnership, (b) is not providing those services in connection with the offer or sale of securities in a capital raising transaction and is not directly or indirectly promoting or maintaining a market for the Companys securities and (c) the individual is a natural person who has contracted directly with the Company, the Partnership or an Affiliate of the Company or the Partnership to render such services.
1.11. CONTROL CHANGE DATE.
Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions.
1.12. EXCHANGE ACT.
Exchange Act means the Securities Exchange Act of 1934, as amended.
1.13. FAIR MARKET VALUE.
Fair Market Value means, on any given date, the closing price of a share of Common Stock as reported in the Wall Street Journal (or such other source as the Administrator selects) for such date, or if the Common Stock was not traded on such day, then on the next preceding day that the Common Stock was traded on such exchange.
1.14. INCENTIVE AWARD.
Incentive Award means an award granted to a Participant under Article VIII, subject to such terms and conditions as may be prescribed by the Administrator.
1.15. NON-EMPLOYEE TRUSTEE.
Non-employee Trustee means a member of the Board who is not an employee of the Company or an Affiliate of the Company.
1.16. PARTICIPANT.
Participant means an individual: (a) who is either (i) an employee of the Company, an Affiliate of the Company, the Partnership or an Affiliate of the Partnership, (ii) a member of the Board or (iii) a Consultant; (b) who, in each case, satisfies the requirements of Article IV; and (c) who is selected by the Administrator to receive a Stock Award, a Stock Unit Award or an Incentive Award or a combination thereof.
1.17. PARTNERSHIP.
Partnership shall mean IRET Properties, a North Dakota Limited Partnership.
1.18. PERFORMANCE GOAL.
Performance Goal shall mean the goals established by the Committee, which may be a condition to the vesting or settlement of all or a portion of an award. Such goals may be based on one or more of the following with respect to the Company, the Partnership, and any Affiliate or any division or operating unit thereof: (1) funds from operations and funds from operations per share and unit; (2) United States generally accepted accounting principles (GAAP) earnings per share; (3) improvement in economic vacancy or other operational targets; (4) asset growth; (5) pre-tax or after-tax income (before or after allocation of corporate overhead and bonus); (6) net income (before or after taxes); (7) reduction in expenses; (8) pre-tax or after-tax operating income; (9) earnings (including earnings before taxes, earnings before interest and taxes, or earnings before interests, taxes, depreciation and amortization); (10) gross revenue; (11) working capital; (12) profit margin or gross profits; (13) Fair Market Value; (14) cash flow or cash flow per share (before or after dividends); (15) cash flow return on investment; (16) return on capital (including return on total capital or return on invested capital); (17) return on assets or net assets; (18) market share; (19) pre-tax or after-tax earnings per share; (20) pre-tax or after-tax operating earnings per share; (21) total stockholder return; (22) growth measures, including revenue growth, as compared with a peer group or other benchmark; (23) economic value-added models or equivalent metrics; (24) comparisons with various stock market indices; (25) improvement in or attainment of expense levels or working capital levels; (26) operating margins, gross margins or cash margins; (27) year-end cash; (28) debt reductions; (29) stockholder equity; (30) regulatory achievements; (31) implementation, completion or attainment of measurable objectives with respect to research, development, products or projects, production volume levels, acquisitions and divestitures and recruiting and maintaining personnel; (32) customer satisfaction; (33) operating efficiency, productivity ratios; or (34) strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, geographic business expansion goals (including accomplishing regulatory approval for projects), cost or cost savings targets, accomplishing critical milestones for projects, and goals relating to acquisitions or divestitures, or any combination thereof (in each case before or after such objective
income and expense allocations or adjustments as the Committee may specify within the applicable period). Each such goal may be expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, division and/or operating units) and/or the past or current performance of other companies, and in the case of earnings-based measures, may use or employ comparisons relating to capital (including, but limited to, the cost of capital), stockholders equity and/or shares outstanding, or to assets or net assets. The performance criteria may be stated to satisfy any applicable requirements under Treas. Reg. Sec. 1.162-27(e)(2) (as amended from time to time). To the extent applicable, the measures used in setting performance criteria set under the Plan for any given performance period shall be determined in accordance with GAAP and in a manner consistent with the methods used in the Companys audited financial statements, without regard to: (i) extraordinary items as determined by the Companys independent public accountants in accordance with GAAP; (ii) changes in accounting, unless, in each case, the Administrator decides otherwise within the applicable period; or (iii) non-recurring acquisition expenses and restructuring charges. Notwithstanding the foregoing, in calculating operating earnings or operating income (including on a per share basis), the Administrator may provide that such calculation shall be made on the same basis as reflected in a release of the Companys earnings for a previously completed period as specified by the Administrator.
1.19. PLAN.
Plan means the Investors Real Estate Trust 2015 Incentive Plan.
1.20. STOCK AWARD.
Stock Award means an award of shares of Common Stock granted to a Participant under Article VI, subject to such terms and conditions as may be prescribed by the Administrator. For the avoidance of doubt, the term Stock Award does not include shares of Common Stock issued in settlement of a Stock Unit Award or an Incentive Award.
1.21. STOCK UNIT.
Stock Unit represents the right to receive one share of Common Stock or an amount based on the value of one share of Common Stock, or a combination of both.
1.22. STOCK UNIT AWARD.
Stock Unit Award means an award of Stock Units granted to a Participant under Article VII, subject to such terms and conditions as may be prescribed by the Administrator.
ARTICLE II
PURPOSES
The Plan is intended to (a) assist the Company and its Affiliates in recruiting and retaining key employees, members of the Board and Consultants; (b) authorize the grant of incentive compensation opportunities for such persons; and (c) encourage such persons to align their interests with those of the Company and its shareholders by enabling such persons to participate in the future success of the Company and its Affiliates. The Plan is
intended to permit the grant of Stock Awards, Stock Unit Awards and the grant of Incentive Awards.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Administrator. The Administrator shall have authority to grant Stock Awards, Stock Unit Awards and Incentive Awards upon such terms (not inconsistent with the provisions of this Plan) as the Administrator may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the transferability or forfeitability of a Stock Award, Stock Unit Award or an Incentive Award, including by way of example and not limitation, conditions on which Participants may defer receipt of benefits under the Plan, requirements that the Participant complete a specified period of employment or service with the Company or an Affiliate of the Company or that the Company achieve a specified level of financial performance. Notwithstanding any such conditions or any provision of the Plan (a) the Committee may accelerate the time at which a Stock Award may become transferable or nonforfeitable or the time at which a Stock Unit Award or an Incentive Award may be settled (i) in connection with a termination of employment or service (including but not limited to death, disability, retirement or involuntary termination) or (ii) if the award has been outstanding for at least one year; and (b) up to 150,000 shares of Common Stock may be issued under the Plan without regard to the preceding clause (a) or the minimum vesting requirements of Sections 6.02, 7.02 or 8.02 (either pursuant to the original terms of the award or acceleration). In addition, the Administrator shall have complete authority to interpret all provisions of this Plan and any award granted under the Plan; to prescribe the form of Award Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final and conclusive. Neither the Administrator nor any member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Award Agreement, Stock Award, Stock Unit Award or Incentive Award. All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers of the Company all or part of the Committees authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. The Committee may revoke or amend the terms of a delegation at any time, but such action shall not invalidate any prior actions of the Committees delegate or delegates that were consistent with the terms of the Plan.
ARTICLE IV
ELIGIBILITY
4.01. GENERAL.
Any Participant is eligible to participate in this Plan if the Administrator, in its sole discretion, determines that such individual has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or an Affiliate of the Company.
4.02. GRANTS.
The Administrator will designate Participants to whom Stock Awards, Stock Unit Awards and Incentive Awards are to be granted and will specify the number of shares of Common Stock subject to each award or grant. In the sole discretion of the Administrator, awards granted under this Plan may be evidenced by Award Agreements which shall be subject to the applicable provisions of this Plan and to such other provisions as the Administrator may adopt, except that Incentive Awards payable solely in cash need not be evidenced by an Award Agreement.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01. SHARES ISSUED.
Upon the award of shares of Common Stock pursuant to a Stock Award or the settlement of a Stock Unit Award or an Incentive Award, the Company may issue shares of Common Stock from its authorized but unissued Common Stock.
5.02. AGGREGATE LIMIT.
The maximum aggregate number of shares of Common Stock that may be issued under this Plan is 4,250,000 shares. The maximum aggregate number of shares of Common Stock that may be issued under this Plan shall be subject to adjustment as provided in Article IX and Section 5.04. The grant of a Stock Unit Award shall reduce the shares of Common Stock that remain available for issuance under this Plan on a one-for-one basis but the issuance of Common Stock in settlement of a Stock Unit Award and any related dividend equivalents shall not further reduce the shares of Common Stock that remain available for issuance under the Plan.
5.03. INDIVIDUAL LIMITATIONS.
Subject to the limitation set forth in the preceding sections, no individual may, in any calendar year, be granted or awarded (i) Stock Awards and Stock Unit Awards covering more than 500,000 shares of Common Stock or (ii) Incentive Awards that provide for a total payment value (in cash or Common Stock) exceeding $2,000,000. Notwithstanding the preceding sentence, no Participant who is a Non-employee Trustee may, in any calendar year, be granted (i) Stock Awards and Stock Unit Awards covering more than 25,000 shares of Common Stock or (ii) Incentive Awards that provide for a total payment value (in cash or Common Stock) exceeding $200,000. The limitations set forth in this Section 5.03 shall be subject to adjustment as provided in Article IX.
5.04. SHARE ADD-BACKS.
If any shares of Common Stock subject to Stock Unit Awards or Stock Awards granted under the Plan are cancelled, forfeited, expire or otherwise terminate without the issuance of such shares of Common Stock, or if any award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such award, the shares of Common Stock subject to the award shall, to the extent of such cancellation, forfeiture, expiration, termination, cash settlement or non-issuance, again be available for issuance under the Plan.
In the event that any withholding tax liabilities resulting from an award granted under the Plan are satisfied by the withholding of shares of Common Stock, then the number of shares tendered or withheld shall not be available for future grants of awards. Furthermore, shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards by a company acquired by the Company or an Affiliate of the Company, or with which the Company or an Affiliate of the Company combines, shall not reduce the maximum aggregate number of shares of Common Stock available for issuance under the Plan.
ARTICLE VI
STOCK AWARDS
6.01. AWARDS.
In accordance with the provisions of Article IV, and subject to the limitations set forth in Plan Section 5.03, the Administrator shall, on the grant date of the award, designate Participants to whom a Stock Award is to be granted and specify the number of shares of Common Stock covered by such award as well as any terms, conditions and restrictions applicable to such award.
6.02. VESTING.
Except as provided in Article III, the Administrator, on the grant date of the award, shall specify to what extent a Participants rights in the Stock Award shall be forfeitable or otherwise restricted for a stated term or subject to such other terms, conditions and restrictions as set forth in the Award Agreement. By way of example and not of limitation, the restrictions may postpone transferability, vesting or both of the shares until the attainment of performance objectives prescribed by Administrator, including objectives stated with respect to Performance Goals, or may provide that the shares will be forfeited if the Participant separates from the service of the Company and its Affiliates before the expiration of a stated term. Except as provided in Article III, the period of restriction until full vesting shall be at least one year.
6.03. SHAREHOLDER RIGHTS.
Prior to their forfeiture (in accordance with the terms of the Award Agreement and while the shares of Common Stock granted pursuant to the Stock Award may be forfeited), a Participant will have all rights of a shareholder with respect to a Stock Award, including the right to receive dividends and to vote the shares; provided, however, that (i) dividends payable on shares of Common Stock subject to a Stock Award that do not become nonforfeitable solely on the basis of continued employment or service shall be accumulated and paid, without interest, when and to the extent that the
shares underlying the Stock Award become nonforfeitable; (ii) a Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of Common Stock granted pursuant to a Stock Award; (iii) the Company shall retain custody of any certificates evidencing shares of Common Stock granted pursuant to a Stock Award; and (iv) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares of Common Stock granted under the Stock Award are no longer forfeitable.
6.04. DISPOSITION OF SHARES.
A Participant may not sell or otherwise dispose of the shares of Common Stock acquired under a Stock Award except in compliance with the Companys Policy Regarding Share Ownership and Retention, as may be subsequently amended or replaced by a similar policy.
ARTICLE VII
STOCK UNIT AWARDS
7.01. AWARDS.
In accordance with the provisions of Article IV and subject to the limitations set forth in Section 5.03, the Administrator shall, on the grant date of the award, designate Participants to whom a Stock Unit Award is to be granted and shall specify the number of Stock Units covered by the award as well as any terms, conditions and restrictions applicable to such award, including whether the Stock Unit Award includes the right to receive dividend equivalents.
7.02. EARNING THE AWARD.
Except as provided in Article III, the Administrator, on the grant date of an award, shall specify to what extent the Stock Unit Award will be earned upon the satisfaction of certain requirements as set forth in the Award Agreement. By way of example and not of limitation, the requirements may postpone transferability, vesting or both of the Stock Unit Award until the attainment of performance objectives prescribed by the Administrator, including objectives stated with respect to Performance Goals, or may provide that the Stock Unit Award will be forfeited if the Participant separates from the service of the Company and its Affiliates before the expiration of a stated term. Except as provided in Article III, the period for determining whether such requirements are satisfied shall be at least one year.
7.03. PAYMENT.
In the discretion of the Administrator, the amount payable when a Stock Unit Award is earned may be settled in cash, in shares of Common Stock or a combination thereof. A fractional share shall not be deliverable when a Stock Unit Award is earned, but a cash payment will be made in lieu thereof.
7.04. SHAREHOLDER RIGHTS.
No Participant shall, as a result of receiving a Stock Unit Award, have any rights as a shareholder of the Company until, and then only to the extent that, the Stock Unit Award is earned and Common Stock is issued in settlement of the Stock Unit Award. After a Stock Unit Award is earned and settled by the issuance of Common Stock, a
Participant will have all the rights of a shareholder as to such shares of Common Stock as described in Section 6.03.
7.05. DIVIDEND EQUIVALENTS.
The Administrator may, at the time of grant of any Stock Unit Award, include as a part of such award an entitlement to receive a payment (in cash, Common Stock, or combination thereof) equal to the ordinary cash dividends that are payable with respect to the number of shares of Common Stock covered by the award, subject to such terms, conditions, restrictions and/or limitations, if any, as the Administrator may establish. Notwithstanding the preceding sentence, dividend equivalents payable on a Stock Unit Award that does not become nonforfeitable solely on the basis of continued employment or service shall be accumulated and paid, without interest, when and to the extent that the Stock Units underlying the Stock Unit Award become nonforfeitable.
7.06. DISPOSITION OF SHARES.
A Participant may not sell or dispose of the shares of Common Stock issued in settlement of a Stock Unit Award except in compliance with the Companys Policy Regarding Share Ownership and Retention, as may be subsequently amended or replaced by a similar policy.
ARTICLE VIII
INCENTIVE AWARDS
8.01. AWARDS.
In accordance with the provisions of Article IV and subject to the limitations set forth in Section 5.03, the Administrator shall designate Participants to whom an Incentive Award is to be granted for incentive compensation opportunities, and shall specify any terms, conditions and restrictions applicable to such award.
8.02. TERMS AND CONDITIONS.
Except as provided in Article III, the Administrator, on the grant date of an award, shall specify the terms and conditions which govern the award. Such terms and conditions may include, by way of example and not of limitation, requirements that the Participant complete a specified period of employment with the Company or an Affiliate of the Company or that the Company, an Affiliate of the Company, or the Participant attain stated objectives or goals, including objectives stated with respect to Performance Goals, as a condition to earning an Incentive Award. Except as provided in Article III, the period for determining whether such terms and conditions are satisfied shall be at least one year.
8.03. SETTLEMENT.
An Incentive Award that is earned shall be settled with a single lump sum payment which may be in cash, shares of Common stock or a combination of both, as determined by the Committee.
8.04. SHAREHOLDER RIGHTS.
No Participant shall, as a result of receiving an Incentive Award, have any rights as a shareholder of the Company until the date that the Incentive Award is settled and
then only to the extent that the Incentive Award is settled by the issuance of Common Stock.
8.05. DISPOSITION OF SHARES.
A Participant may not sell or dispose of the shares of Common Stock issued in settlement of an Incentive Award except in compliance with the Companys Policy Regarding Share Ownership and Retention, as may be subsequently amended or replaced by a similar policy
ARTICLE IX
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares as to which Stock Awards, Stock Unit Awards and Incentive Awards may be granted under this Plan, the individual grant limitations set forth in Section 5.03, and the terms of outstanding Stock Awards, Stock Unit Awards and Incentive Awards shall be adjusted as the Board shall determine to be equitably required in the event that (a) the Company (i) effects one or more nonreciprocal transactions between the Company and its shareholders such as stock dividends, stock split-ups, subdivisions or consolidations of shares or extraordinary dividend; or (ii) engages in a transaction to which Section 424 of the Code applies; or (b) there occurs any other event which, in the judgment of the Board is equitably required. Any determination made under this Article IX by the Board shall be final and conclusive.
The issuance by the Company of shares of any class, or securities convertible into shares of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Stock Awards, Stock Unit Awards and Incentive Awards may be granted, the terms of outstanding Stock Awards, Stock Unit Awards or Incentive Awards, or the individual limitations set forth in Section 5.03.
The Administrator may grant Stock Awards and Stock Unit Awards in substitution for performance shares, phantom shares, stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or an Affiliate of the Company in connection with a transaction described in the first paragraph of this Article IX. Notwithstanding any provision of the Plan, the terms of such substituted Stock Awards and Stock Unit Awards shall be as the Administrator, in its discretion, determines is appropriate.
ARTICLE X
CHANGE IN CONTROL
10.01. IMPACT OF CHANGE IN CONTROL.
Unless an outstanding award is assumed in accordance with Section 10.02, and notwithstanding Sections 6.02, 7.02 and 8.02 to the contrary, upon a Control Change Date, the Administrator is authorized to provide that (i) a Stock Award shall be transferable and nonforfeitable; (ii) a Stock Unit Award shall be earned in its entirety and converted into a transferable and nonforfeitable shares of Common Stock; and (iii) an
Incentive Award shall be earned, in whole or in part, in accordance with the terms of the applicable Award Agreement.
10.02. ASSUMPTION UPON CHANGE IN CONTROL.
In the event of a Change in Control, the Administrator, in its discretion and without the need for a Participants consent, may provide that an outstanding Stock Award, Stock Unit Award or Incentive Award shall be assumed by, or a substitute award shall be granted by, the surviving entity in the Change in Control. Such assumed or substituted award shall be of the same type of award as the original Stock Award, Stock Unit Award or Incentive Award being assumed or substituted. The assumed or substituted award shall have a value, as of the Control Change Date, that is substantially equal to the value of the original award as the Administrator determines is equitably required and such other terms and conditions as may be prescribed by the Administrator.
10.03. CASH-OUT UPON CHANGE IN CONTROL.
Unless an outstanding award is assumed in accordance with Section 10.02, and notwithstanding Sections 6.02, 7.02 and 8.02 to the contrary, in the event of a Change in Control, the Administrator, in its discretion and without the need of a Participants consent, may provide that each Stock Award and Stock Unit Award shall be cancelled in exchange for a payment. The medium of payment shall be cash, shares of Common Stock or other securities as received by Company shareholders in the Change in Control transaction. The amount of the payment for each share of Common Stock subject to the Stock Award or Stock Unit Award shall be an amount that is equal to the price per share received by shareholders for each share of Common Stock in the Change in Control transaction.
10.04. CERTAIN REDUCTION OF PARACHUTE PAYMENTS.
In connection with a Change in Control, the benefits that a Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as Payments), may constitute Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section 10.04, the Parachute Payments will be reduced pursuant to this Section 10.04 if, and only to the extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than a Participant would receive absent a reduction.
The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine the Net After Tax Amount attributable to the Participants total Parachute Payments.
The Accounting Firm will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax under Code Section 4999 (the Capped Payments). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.
The Participant will receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount. If the Participant will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any benefits under this Plan or any other plan, agreement or arrangement that are not subject to Section 409A of the Code (with the source of the reduction to be directed by the Committee) and then by reducing the
amount of any benefits under this Plan or any other plan, agreement or arrangement that are subject to Section 409A of the Code (with the source of the reduction to be directed by the Committee) in a manner that results in the best economic benefit to the Participant (or, to the extent economically equivalent, in a pro rata manner). The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.
As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 12.09, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed under this Section 10.04 (Overpayments), or that additional amounts should be paid or distributed to the Participant under this Section 10.04 (Underpayments). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay the Overpayment to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant promptly by the Company.
For purposes of this Section 10.04, the term Accounting Firm means the independent accounting firm engaged by the Company immediately before the Control Change Date. For purposes of this Section 10.04, the term Net After Tax Amount means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 10.04, the term Parachute Payment means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.
Nothing in this Section 10.04 shall limit or otherwise supersede the provisions of any other agreement or plan which provides that a Participant cannot receive Payments in excess of the Capped Payments.
ARTICLE XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance
with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Companys shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock when a Stock Award is granted or a Stock Unit Award or Incentive Award is settled may bear such legends and statements as the Administrator may deem advisable to assure compliance with federal and state laws and regulations. No Stock Award shall be granted, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Administrator may deem advisable from regulatory bodies having jurisdiction over such matters.
ARTICLE XII
GENERAL PROVISIONS
12.01. EFFECT ON EMPLOYMENT OR SERVICE.
Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any individual any right to continue in the employ or service of the Company or an Affiliate of the Company or in any way affect any right and power of the Company or an Affiliate of the Company to terminate the employment or service of any individual at any time with or without assigning a reason therefor.
12.02. UNFUNDED PLAN.
The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.
12.03. TRANSFERABILITY.
Except as set forth in the applicable Award Agreement, all awards under the Plan shall be nontransferable except by will or the laws of descent and distribution. No right of a Participant in any award under the Plan shall be liable for, or subject to, any lien, obligation or liability of such Participant.
12.04. REIT STATUS
The Plan shall be interpreted and construed in a manner consistent with the Companys status as a real estate investment trust within the meaning of Sections 856 through 860 of the Code (a REIT). No award shall be granted or awarded, and with respect to any award granted under the Plan, such award shall not vest or be settled (i) to the extent that the grant, vesting or settlement would cause the Participant or any other person to be in violation of the stock ownership limit or any other limitation on ownership or transfer prescribed by the Companys charter or other governing documents; or (ii) if in the discretion of the Administrator, the grant, vesting or settlement of the award could impair the Companys status as a REIT.
12.05. SECTION 83(b) ELECTIONS
No Participant may make an election under Section 83(b) of the Code with respect to the grant, vesting or settlement of an award under the Plan without the written consent of the Company, which consent may be granted or withheld in the sole discretion of the Company.
12.06. RULES OF CONSTRUCTION.
Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.
All awards made under this Plan are intended to comply with, or otherwise be exempt from, Section 409A of the Code (Section 409A), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12). This Plan and all Award Agreements shall be administered, interpreted and construed in a manner consistent with Section 409A. If any provision of this Plan or any Award Agreement is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the Committee and without requiring the Participants consent, in such manner as the Committee determines to be necessary or appropriate to comply with, or effectuate an exemption from, Section 409A. Each payment under an award granted under this Plan shall be treated as a separate identified payment for purposes of Section 409A.
If a payment obligation under an award or an Award Agreement arises on account of the Participants termination of employment and such payment obligation constitutes deferred compensation (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)), it shall be payable only after the Participants separation from service (as defined under Treasury Regulation section 1.409A-1(h)); provided, however, that if the Participant is a specified employee (as defined under Treasury Regulation section 1.409A-1(i)), any such payment that is scheduled to be paid within six months after such separation from service shall accrue without interest and shall be paid on the first day of the seventh month beginning after the date of the Participants separation from service or, if earlier, within fifteen days after the appointment of the personal representative or executor of the Participants estate following the Participants death.
12.07. EMPLOYEE STATUS.
In the event that the terms of any Stock Award, Stock Unit Award or Incentive Award provide that Common Stock may be issued or the Common Stock underlying the award becomes transferable and nonforfeitable thereunder or the payment of such award becomes payable thereunder only if the Participant completes a stated period of employment or continued service, the Administrator shall decide in each case to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service.
12.08. WITHHOLDING TAXES.
Each Participant shall be responsible for satisfying any income and employment tax withholding obligations attributable to participation in the Plan. Unless otherwise provided by the Award Agreement, any such withholding tax obligations may be satisfied
in cash (including from any cash payable in settlement of a Stock Unit Award or Incentive Award) or a cash equivalent acceptable to the Committee. Except to the extent prohibited by Treasury Regulation Section 1.409A-3(j), any withholding tax obligations may also be satisfied by surrendering shares of Common Stock to the Company, by withholding or reducing the number of shares of Common Stock otherwise issuable to the Participant upon the settlement of a Stock Unit Award or the grant or vesting of a Stock Award, up to the maximum statutory withholding requirement, or by any other method as may be approved by the Committee. If shares of Common Stock are used to pay all or part of such withholding tax obligation, the Fair Market Value of the shares surrendered, withheld or reduced shall be determined as of the date the Stock Award vests or the date the Stock Unit Award or Incentive Award is earned, as applicable.
12.09. RETURN OF AWARDS; REPAYMENT.
Each Stock Award, Stock Unit Award and Incentive Award granted under this Plan is subject to the condition that the Company may require that such award be returned, and that any payment made with respect to such award must be repaid, if such action is required under the terms of any Company recoupment or clawback policy as in effect on the date that the payment was made, on the date the award was granted or the date the Stock Award, Stock Unit Award or Incentive Award became vested or earned.
ARTICLE XIII
AMENDMENT
The Board may amend or terminate this Plan from time to time; provided, however, that no amendment may become effective until shareholder approval is obtained if (i) the amendment materially increases the aggregate number of shares of Common Stock that may be issued under the Plan (other than an adjustment pursuant to Article IX), (ii) the amendment materially increases the benefits accruing to Participants under the Plan, (iii) the amendment materially changes the class of individuals eligible to become Participants or (iv) the amendment is required to be approved by shareholders by the requirements of applicable law or under the New York Stock Exchanges shareholder approval rules. No amendment shall, without a Participants consent, adversely affect any rights of such Participant under any Stock Award, Stock Unit Award or Incentive Award outstanding at the time such amendment is made.
ARTICLE XIV
DURATION OF PLAN
No Stock Award, Stock Unit Award or Incentive Award may be granted under this Plan after June 23, 2025. Awards granted on or before such date shall remain subject to their terms notwithstanding the expiration of the Plan.
ARTICLE XV
EFFECTIVE DATE OF PLAN
Stock Awards, Stock Unit Awards and Incentive Awards may be granted under this Plan upon the Plans approval by a majority of the votes cast by the Companys