UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Effective February 7, 2024, the Compensation Committee of the Board of Directors of CBL & Associates Properties, Inc. (herein the “Company” or “CBL”) approved the 2024 Annual Incentive Compensation Plan (the “2024 AIP”) that will be applicable to determine annual bonus compensation for performance during the Company’s fiscal year 2024 for those individuals who currently qualify as “named executive officers” of the Company pursuant to Item 402(a)(3) of Securities and Exchange Commission (“SEC”) Regulation S-K (such individuals, collectively, the “Named Executive Officers”). Also effective February 7, 2024, the Compensation Committee approved the 2024 Long Term Incentive Compensation Program (“LTIP”) applicable to the Named Executive Officers, all as described below.
Approval of 2024 Annual Incentive Compensation Plan
The 2024 AIP, similar to the Annual Incentive Compensation Plans adopted for prior years beginning with fiscal year 2015, is designed to reward the Named Executive Officers for the achievement of annual Corporate Goals and Individual Performance Goals, as assessed by the Compensation Committee. For the Chief Executive Officer (“CEO”), 70% of the total 2024 AIP opportunity will be based on the Corporate Goals, which are generally quantitative, and the remaining 30% will be based on qualitative Individual Performance Goals. For the other Named Executive Officers, 60% of the total award will be based on Corporate Goals and the remaining 40% will be based on Individual Performance Goals.
The Corporate Goals portion of the 2024 AIP awards will be allocated between the two categories of performance measures described below, with (A) the Financial Goals weighted 42% for the CEO and 36% for the other Named Executive Officers and (B) the Operational Goals weighted 28% for the CEO and 24% for the other Named Executive Officers:
(1) Financial Goals, including goals related to (i) Funds From Operations (“FFO”), as adjusted, as reported in the Company’s periodic reports (Forms 10‑K and 10‑Q) filed with the SEC (the “Periodic Reports”), (ii) Net Operating Income (“NOI”), as reported in the Periodic Reports and (iii) addressing property level mortgage maturities; and
(2) Operational Goals, including goals related to (i) square footage of new and renewal leases signed, (ii) achievement of targets related to new development and redevelopment project openings, as well as anchor and junior anchor transactions at the Company’s properties and (iii) successful completion of designated Environmental, Social and Governance (“ESG”) Goals.
The target cash bonus award levels were set by the Compensation Committee under the 2024 AIP for each of the Company’s Named Executive Officers as specified below:
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Total |
Quantitative/ |
Qualitative/ |
Stephen D. Lebovitz, Chief Executive Officer |
$1,403,216 |
70% |
30% |
Benjamin W. Jaenicke, Executive Vice President – Chief Financial Officer and Treasurer |
$604,900 |
60% |
40% |
Michael I. Lebovitz, President |
$462,337 |
60% |
40% |
Katie A. Reinsmidt, Executive Vice President and Chief Operating Officer |
$447,288 |
60% |
40% |
Jeffery V. Curry, Chief Legal Officer and Secretary |
$332,683 |
60% |
40% |
Based on consideration by the Compensation Committee and management of recommendations from the Company’s independent compensation consultant, Ferguson Partners Consulting, L.P., these target cash bonus award levels for the 2024 AIP reflect (i) a 5% increase from the target bonus levels set under the Company’s 2023 Annual Incentive Plan (the “2023 AIP”) and (ii) a reallocation of certain amounts from the 2024 Long Term Incentive Program discussed below, in order to better align the Company’s cash versus equity compensation pay mix for its Named Executive Officers with the pay mix of similarly situated officers at companies included in the executive compensation peer group identified in the Company’s annual proxy statement. The resulting portion of incentive compensation value reallocated from the LTIP to the 2024 AIP for each Named Executive Officer was as follows: Stephen D. Lebovitz - $300,000; Benjamin W. Jaenicke - $250,000; Michael I. Lebovitz - $100,000; Katie A. Reinsmidt - $100,000; and Jeffery V. Curry - $100,000.
Achievement of target performance for a performance measure under the 2024 AIP will result in 100% payout of the portion of the award based on that performance measure. Performance that meets threshold requirements will result in 50% (of target) payout of the portion of the award based on that performance measure and achievement of the stretchperformance for a performance measure will result in 150% (of target) payout. Performance achieved between thresholdand stretch level for either metric will result in a prorated bonus payout. There will be no payout for the portion of any award that is based on a performance measure for which less than the threshold level of performance is achieved. The Compensation Committee has the ability to adjust each metric, if appropriate, to account for significant unbudgeted transactions or events, such as acquisitions, dispositions, joint ventures, equity or debt issuances and other capital markets activities, mark-to-market adjustments and certain one-time extraordinary charges for purposes of determining the portion of any Corporate Goals AIP Bonus Award payment based on these metrics.
The Individual Performance Goals established by the Compensation Committee for each Named Executive Officer under the qualitative portion of the 2024 AIP are outlined below:
Named |
2024 Individual Performance Goals |
Stephen D. Lebovitz |
(1) Refine, enhance and execute the Company’s strategic and business plans. (2) Progress Executive Team capabilities and responsibilities. (3) Coordinate closely with the Board Chairman and regularly communicate with other members of the Board. (4) Maintain and enhance key retailer, financial and other important relationships. |
Benjamin W. Jaenicke |
(1) Refine the Company’s Capital and Business Plan including managing future debt maturities, both secured loans and the term loan, expanding the Company’s lending relationships and managing the Company’s disposition program (2) Effectively lead the financial services team and manage the accounting function including relationship with outside auditors. Growing interaction with other internal departments including leasing, management, development and financial operations. (3) Maintain and improve key financial stakeholder and joint venture partner relationships. Ongoing involvement with investors and shareholders. (4) Effectively oversee cash management, insurance, real estate taxes and other key responsibilities of the CFO. |
Michael I. Lebovitz |
(1) Supervise redevelopment projects with a focus on managing capital investment as well as achieving approved pro forma returns and scheduled openings. (2) Manage and enhance anchor/department store and joint venture partner relationships. (3) Effectively oversee the Company’s Technology Solutions (IT) and People & Culture (HR) functions including the implementation of technology and organizational initiatives. (4) Ongoing involvement with the leasing, marketing and management divisions of the Company. |
Katie A. Reinsmidt |
(1) Successfully manage the Company’s operations as COO, including enhanced leadership of leasing, management and operations. Focus on developing external relationships and interactions to support effectiveness as the Company’s COO. (2) Ongoing involvement in capital markets programs as well as coordinate development of certain required disclosures and public filings. (3) Effectively manage and oversee the Company’s ESG, corporate communications and investor relations programs. (4) Continuing involvement in Board material preparation and Board support. |
Jeffery V. Curry |
(1) Oversee and pursue favorable resolution of disputes/litigation (2) Effectively manage and oversee the legal department and manage spend on outside counsel. (3) Continued involvement in Board material preparation and Board support as necessary. (4) Maintain and enhance relationships with key business/legal representatives of CBL’s major vendors, joint venture partners and other key business relationships. |
The additional terms of the 2024 AIP are substantially similar to those of the 2023 AIP for the Company’s Named Executive Officers, as described in the proxy statement for the Company’s 2023 Annual Meeting of Stockholders previously filed with the SEC. The 2024 AIP is an unfunded arrangement and any compensation payable thereunder may be evaluated, modified or revoked at any time in the sole discretion of the Compensation Committee, which is responsible for administering the plan.
The foregoing summary description of the 2024 AIP is not complete and is qualified in its entirety by reference to the full text of the 2024 AIP, which is filed as an exhibit to this report.
Approval of 2024 Long Term Incentive Compensation Program
Effective February 7, 2024, the Compensation Committee also approved the 2024 LTIP for the Named Executive Officers, consisting of the following elements:
Named Executive Officer Grants under 2024 LTIP
The following table illustrates the Long Term Incentives approved by the Compensation Committee on February 7, 2024 for the Company’s 2024 year and the 2024 – 2026 performance cycle with respect to the PSUs:
Plan Participants – |
Target Value of Long Term Incentive Award |
Target Value of PSU Award |
Target Number of Performance Stock Units |
Value of Annual Restricted Stock Award (1) |
Number of Shares of Annual Restricted Stock Awarded (3) |
Stephen D. Lebovitz, ChiefExecutive Officer |
$1,556,500 |
$1,089,550 |
46,612 |
$466,950 |
19,977 |
Ben Jaenicke, Executive Vice President, Chief Financial Officer and Treasurer |
$1,288,000 |
$772,800 |
33,061 |
$515,200 |
22,041 |
Michael I. Lebovitz, President |
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
Katie Reinsmidt, Executive Vice President and Chief Operating Officer |
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
Jeffery V. Curry, ChiefLegal Officer |
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
As described above, based on consideration by the Compensation Committee and management of recommendations from the Company’s independent compensation consultant, Ferguson Partners Consulting, L.P., the final target values for 2024 LTIP awards shown above reflect a reallocation of the following target amounts for each Named Executive Officer from the 2024 LTIP targets to the 2024 AIP targets to better align the Company’s cash versus equity compensation pay mix for its Named Executive Officers with the pay mix of similarly situated officers at companies included in the executive compensation peer group identified in the Company’s annual proxy statement: Stephen D. Lebovitz - $300,000; Benjamin W. Jaenicke - $250,000; Michael I. Lebovitz - $100,000; Katie A. Reinsmidt - $100,000; and Jeffery V. Curry - $100,000.
Performance Stock Unit Awards Component of the 2024 LTIP
Structure of Designated Index Measure Component of PSU Awards
As noted above, 30% of the number of shares issuable to a Named Executive Officer upon conclusion of the 3-year performance period will depend on the Company’s achievement of at least a “Threshold” level of TSR performance as compared to the TSR for the Designated Index over the same time period. The level of achievement will be determined based on how the Company’s TSR ranks among the constituents that comprise the Designated Index.
The “Threshold,” “Target,” and “Maximum” benchmarks established for the TSR achieved by the Company over the relevant 3-year performance period in comparison to the Designated Index, the resulting impact on the number of shares of Restricted Common Stock earned by each Named Executive Officer for the 30% of the award based on the Designated Index Measure upon the maturity of PSUs at the conclusion of the 3-year performance period, and the additional service-based vesting schedule applicable to any shares earned is summarized in the following table:
Performance Benchmark Achieved |
Number of Shares Awarded |
Vesting Schedule |
Below “Threshold” Level |
No performance stock earned |
The number of shares of Restricted Common Stock earned by (and then issued to) a Named Executive Officer for each rolling 3-year performance cycle is equal to the multiple indicated in the preceding column of the number of PSUs issued to each Named Executive Officer at the beginning of the 3-year performanceperiod.
Such shares, when issued at the conclusion of the 3-year performance cycle, will then vest in full on the firstanniversary date following the date of issuance of such shares. |
“Threshold” No less than 30th Percentile of the Designated IndexTSR |
Shares issued equal to 0.5 x 30% of the PSUs issued for Such 3-year Cycle, |
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“Target” No less than 50th Percentile of the Designated IndexTSR |
Shares issued equal to 1.0 x 30% of the Performance issued for Such 3-year Cycle, with excess over Target Benchmark pro-rated between Target and Maximum levels |
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“Maximum” At least75th Percentile of the Designated IndexTSR |
Shares issued equal to 2.0 x 30% of the Performance Issued for Such 3-yearCycle |
If the calculated comparison is between Threshold and Maximum for any performance period, then the number of Performance Stock Units earned will be prorated as indicated in the preceding table.
Structure of Company Absolute Return Measure Component of PSU Awards
As noted above, 70% of the number of shares issuable to a Named Executive Officer upon conclusion of the 3-year performance period will depend on the Company’s achievement of at least a “Threshold” level of absolute TSR for holders of the Company’s Common Stock over the same time period.
The “Threshold,” “Target,” and “Maximum” benchmarks established for the absolute TSR achieved by the Company over the relevant 3-year performance period, the resulting impact on the number of shares of Restricted Common Stock earned by each Named Executive Officer for the 70% of the award based on the Company Absolute Return Measure upon the maturity of PSUs at the conclusion of the 3-year performance period, and the additional service-based vesting schedule applicable to any shares earned is summarized in the following table:
Performance |
Number of Shares Awarded |
Vesting Schedule |
Below “Threshold” Level |
Noperformance stock earned |
The number of shares of Restricted Common Stockearned by (and then issued to) a participating officer for eachrolling 3‑year performance cycle is equal to the multiple indicated in the preceding column of the number of Performance Stock Units issued to each participating officer at the beginning of the 3‑year performance period.
Such shares, when issued at the conclusion of the 3-year performance cycle, will then vest in full on the firstanniversary date following the date of issuance of such shares.
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“Threshold” Annualized Company TSR of 6% |
Shares issued equal to 0.5 x 70% of the Performance StockUnits issued for Such 3-year Cycle, with excess over Threshold Benchmark pro-rated between Threshold |
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“Target” Annualized Company TSR of 12% |
Shares issued equal to 1.0 x 70% of thePerformance Stock Units issued for Such 3-year Cycle, with excess over Target Benchmark pro- rated between Target |
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“Maximum” Annualized Company TSR |
Shares issued equal to 2.0 x 70% of the Performance StockUnits Issued for Such3-year Cycle |
If the calculated basis point comparison is between benchmarks as noted above for the 3-year performance period, then the number of PSUs earned will be prorated as indicated in the preceding table.
As reflected above, once issued, the shares of Restricted Common Stock issued in connection with performance under either the Designated Index Measure or the Company Absolute Return Measure components of the PSUs will then vest one (1) year after the date of issuance. Upon vesting, the shares will not be subject to forfeiture.
Additional terms and conditions of the PSU component of the LTIP Awards to the Named Executive Officers may be summarized as follows:
The foregoing description of the PSU awards is qualified in its entirety by reference to the full text of the Company’s EIP, the 2024 LTIP and the Form of Performance Stock Unit Award Agreement for such awards, each of which is filed or incorporated by reference as an exhibit to this report.
Annual Restricted Stock Awards Component of the 2024 LTIP
As referenced above, each LTIP Award includes a target value amount (40% for Named Executive Officers other than the CEO and 30% in the case of the CEO) that a grantee will receive in the form of an Annual Restricted Stock Award. The terms and conditions of the Annual Restricted Stock Awards to the Named Executive Officers may be summarized as follows:
The foregoing description of such restricted stock awards is qualified in its entirety by reference to the full text of the EIP, the 2024 LTIP and the form of award agreement, each of which is filed or incorporated by reference as an exhibit to this report.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number |
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10.1 |
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10.2 |
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10.3 |
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2024 Long Term Incentive Plan under CBL & Associates Properties, Inc. 2021 Equity Incentive Plan. |
10.4 |
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10.5 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
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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CBL & ASSOCIATES PROPERTIES, INC. |
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Date: |
February 13, 2024 |
By: |
/s/ Jeffery V. Curry |
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Jeffery V. Curry |