Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, on October 22, 2021, Kite Realty Group Trust (the
"Company") completed its merger transaction with Retail Properties of
America, Inc. ("RPAI") pursuant to which RPAI merged with and into KRG Oak, LLC,
a wholly owned subsidiary of the Company ("Merger Sub"), with Merger Sub
continuing as the surviving entity and a wholly owned subsidiary of the Company
(the "Merger"), and immediately following the closing of the Merger, Merger Sub
merged with and into Kite Realty Group, L.P., the operating partnership of the
Company (the "Operating Partnership"), so that all of the assets of the Company
continue to be owned at or below the Operating Partnership level.
Following the Merger and in recognition of its transformational aspects, the
Compensation Committee (the "Compensation Committee") of the Board of Trustees
of the Company reviewed the Company's executive compensation policies, with a
view toward incentivizing the achievement of certain integration and
value-creation goals that are a critical component to the ultimate success of
the Merger. As a result of that review, on January 14, 2022, the Compensation
Committee approved a grant to each of John A. Kite, Thomas K. McGowan and Heath
R. Fear (the "Grantees") of a special long-term equity award (the "Special
Award") under the Company's 2013 Equity Incentive Plan (as it has been amended
and/or restated from time to time, the "Plan") in the form of 202,157, 80,863
and 80,863 LTIP units of the Operating Partnership ("LTIP Units") for the
Grantees, respectively, which LTIP Units are subject to both performance and
service conditions. The performance and service period of the Special Award is
the approximate three-year period from October 23, 2021 (the day following the
consummation of the Merger) through December 31, 2024, and the pre-set
performance components are: (i) cumulative annualized net operating income for
executed new leases from October 1, 2021 to December 31, 2024, which will be
weighted at 60%; (ii) post-Merger cash general and administrative expense
synergies achieved as of the end of the performance period, which will be
weighted at 20%; and (iii) same property net operating income margin improvement
over the performance period, which will be weighted at 20%. Overall performance
is further subject to an absolute total shareholder return modifier which has
the ability to increase (or decrease) the total number of LTIP Units eligible to
vest by 25% (not to exceed the maximum number of LTIP Units). Distributions will
accrue during the performance period and will be paid only on LTIP Units that
vest at the conclusion of the performance period, and any accrued distributions
on vested LTIP Units will be settled in cash at such time.
The number of LTIP Units subject to each Special Award reflects the maximum
number of LTIP Units that may vest pursuant thereto. If the defined minimum
targets are not met, then no LTIP Units will vest. LTIP Units are eligible to
vest at target level (one-third of maximum), at high level (two-thirds of
maximum) or at maximum level subject to performance achievement. Performance
between target level and high level as well as between high level and maximum
level will result in an interpolated number of LTIP Units being eligible to
vest, from 0 LTIP Units up to the maximum number of LTIP Units.
Generally, subject to a Grantee's continued service through the end of the
performance period, eligible LTIP Units will vest on the date performance
achievement is certified by the Compensation Committee. In the event of a
Grantee's termination of service due to death or disability, upon an involuntary
termination without cause, or upon a voluntary resignation for good reason prior
to the end of the performance period, a pro-rata portion of LTIP Units will vest
based upon the number of complete months worked during the performance period
contingent upon the attainment of the performance hurdles. The Special Award is
forfeitable in its entirety if a Grantee is terminated or resigns for any other
reason prior to the end of the performance period. In the event of a Corporate
Transaction (as defined in the Plan) prior to the end of the performance period
in which LTIP Units are not assumed or continued, and conditioned on the
continued service of the Grantee through such Corporate Transaction, the Grantee
will vest in the greatest number of LTIP Units determined in accordance with:
(i) actual performance though such Corporate Transaction based on the pro-rated
performance goals; (ii) 50% of the maximum number of LTIP Units subject to the
Special Award; or (iii) the number of LTIP Units as determined by the
Compensation Committee.
The Special Award is subject to an additional two-year "no sell" restriction
period following vesting.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the Inline XBRL document)
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