SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

 

Check the appropriate box:

LEXINGTON REALTY TRUST

(Name of Registrant as Specified In Its Organizational Documents)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

TABLE OF CONTENTS

LEXINGTON REALTY TRUST
One Penn Plaza, Suite 4015
New York, New York 10119-4015
(212) 692-7200

 

TABLE OF CONTENTS

LEXINGTON REALTY TRUST
One Penn Plaza, Suite 4015
New York, New York 10119-4015
(212) 692-7200

PROXY STATEMENT
FOR THE 2017 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2017

The Board of Trustees of Lexington Realty Trust, a Maryland real estate investment trust, is soliciting proxies to be voted at the 2017 Annual Meeting of Shareholders, which we refer to herein as the Annual Meeting. The Annual Meeting will be held Tuesday, May 16, 2017, at 10:00 a.m., Eastern time, at the New York offices of Paul Hastings LLP, 200 Park Avenue, New York, New York 10166. This proxy statement summarizes the information you need to know to vote by proxy or in person at the Annual Meeting. You do not need to attend the Annual Meeting in person in order to have your shares voted at the Annual Meeting.

All references to the “Company,” “we,” “our” and “us” in this proxy statement mean Lexington Realty Trust. All references to “Shareholder” and “you” refer to a holder of shares of beneficial interest, par value $0.0001 per share, of the Company, classified as common stock, which we refer to as common shares or shares, as of the close of business on March 7, 2017, which we refer to as the Record Date.

TABLE OF CONTENTS

		Page
QUESTIONS AND ANSWERS			2
SHARE OWNERSHIP OF PRINCIPAL SECURITY HOLDERS, TRUSTEES, AND EXECUTIVE OFFICERS			7
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			9
PROPOSAL NO. 1 ELECTION OF TRUSTEES			10
MANAGEMENT AND CORPORATE GOVERNANCE			13
COMPENSATION OF EXECUTIVE OFFICERS			22
PROPOSAL NO. 2 ADVISORY RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			42
PROPOSAL NO. 3 ADVISORY RECOMMENDATION ON THE FREQUENCY OF FUTURE VOTES ON EXECUTIVE COMPENSATION			42
PROPOSAL NO. 4 THE AMENDED AND RESTATED LEXINGTON REALTY TRUST 2011 EQUITY-BASED AWARD PLAN			43
PROPOSAL NO. 5 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			50
OTHER MATTERS			52
Annex A			A-1

TABLE OF CONTENTS

QUESTIONS AND ANSWERS

Why did you send me a Notice Regarding the Internet Availability of Proxy Materials?

We sent you the Notice Regarding the Internet Availability of Proxy Materials, or the Notice, regarding this proxy statement because we are holding the Annual Meeting and our Board of Trustees is asking for your proxy to vote your shares at the Annual Meeting. We have summarized information in this proxy statement that you should consider in deciding how to vote at the Annual Meeting. You do not have to attend the Annual Meeting in order to have your shares voted. Instead, you may simply authorize a proxy to vote your shares electronically via the Internet, by telephone or by completing and returning the proxy card if you requested paper proxy materials. Voting instructions are provided in the Notice. If you requested printed materials, the instructions are printed on your proxy card and included in the accompanying proxy statement.

Why did I receive the Notice instead of a paper copy of proxy materials?

The United States Securities and Exchange Commission, or SEC, has approved “Notice and Access” rules relating to the delivery of proxy materials over the Internet. These rules permit us to furnish to Shareholders proxy materials related to the Annual Meeting, including this proxy statement and our related annual report, by providing access to such documents on the Internet instead of mailing printed copies. Most Shareholders will not receive printed copies of the proxy materials unless they properly request them. Instead, the Notice, which was mailed to Shareholders, will provide notice of the Annual Meeting and instruct you as to how you may access and review all of the proxy materials on the Internet or by telephone. The Notice also instructs you as to how you may submit your proxy on the Internet or by telephone. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice. Any request to receive proxy materials by mail or email will remain in effect until you properly revoke it.

Can I vote my shares by filling out and returning the Notice?

No. The Notice identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to authorize your proxy by Internet or by telephone, by requesting and returning a paper proxy card, or by submitting a ballot in person at the meeting.

Who is entitled to vote?

All Shareholders of record as of the close of business on the Record Date are entitled to vote at the Annual Meeting. There was no other class of voting securities of the Company outstanding at the Record Date other than common shares.

What is the quorum for the Annual Meeting?

In order for any business to be conducted at the Annual Meeting, the holders entitled to cast a majority of the votes entitled to be cast at the Annual Meeting must be present, either in person or represented by proxy. For the purpose of determining the presence of a quorum, abstentions and broker non-votes will be counted as present. Broker votes occur when a broker or nominee who has not received voting instructions from the beneficial owner on a “routine” matter (as defined by the New York Stock Exchange, which we refer to as the NYSE) casts a discretionary vote. In contrast, broker non-votes occur when a broker or nominee has not received voting instructions from the beneficial owner on a “non-routine” matter, as defined by the NYSE and, therefore, is not permitted under NYSE rules to cast a discretionary vote on that matter. As of the Record Date, 240,365,475 common shares were issued and outstanding representing an equal number of votes entitled to be cast. Therefore, in order for a quorum to be present, at least 120,182,738 common shares must be present, either in person or represented by proxy.

Will my shares be voted if I do not provide my proxy?

Depending on the proposal, your shares may be voted if they are held in the name of a brokerage firm, even if you do not provide the brokerage firm with voting instructions, which are broker votes discussed above. The proposal to ratify the appointment of Deloitte & Touche LLP as our independent auditors is considered a “routine” matter for which brokerage firms may vote shares without receiving voting

TABLE OF CONTENTS

instructions. The election of trustees, the advisory resolution on the compensation of our named executive officers, the advisory recommendation on the frequency of future advisory votes and the approval of the Lexington Realty Trust Amended and Restated 2011 Equity-Based Award Plan are considered “non-routine matters” and if you do not provide the brokerage firm with voting instructions on these proposals, your shares will not be voted on these proposals and will be broker non-votes.

How many votes do I have?

Each common share outstanding on the Record Date is entitled to one vote for each trustee to be elected at the Annual Meeting and to cast one vote on each other item properly submitted for consideration at the Annual Meeting. If a Shareholder is a participant in our Direct Share Purchase Plan with our transfer agent, Computershare, the proxy card enclosed herewith represents shares in the participant’s account of record, as well as shares held of record in the participant’s name as part of such plan.

How do I vote or authorize a proxy to vote my shares that are held of record by me?

By Mail:		If you request paper proxy materials, complete, sign and date your proxy card and mail it in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
In Person:		Vote at the Annual Meeting.
By Telephone:		Call toll-free 1-800-690-6903 and follow the instructions. You will be prompted for certain information that can be found on your proxy card or Notice.
Via Internet:		Log on to www.proxyvote.com and follow the on-screen instructions. You will be prompted for certain information that can be found on your proxy card or Notice.

How do I vote or authorize a proxy to vote my shares that are held by my broker?

If you have shares held by a broker (which is also known as holding shares in “street name”), you may instruct your broker to vote your shares by following the instructions that the broker provides to you. Most brokers offer voting instructions by mail, telephone and on the Internet. If you would like to vote in person at the Annual Meeting, you must contact your broker and follow your broker’s instructions, including the instructions on how to obtain a proxy.

What am I voting on?

You will be voting on the following proposals:

Will there be any other items of business on the agenda?

The Board of Trustees is not presently aware of any other items of business to be properly presented for a vote at the Annual Meeting other than the proposals noted above. Nonetheless, in case there is an

TABLE OF CONTENTS

unforeseen need, your proxy gives discretionary authority to Joseph S. Bonventre and Patrick Carroll, or either of them, with respect to any other matters that might be brought before the meeting or any postponement or adjournment thereof.

Why am I being asked to vote on executive compensation?

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which we refer to as the Dodd-Frank Act, requires us, as a public company, to seek a non-binding advisory vote from our Shareholders to approve the compensation awarded to our named executive officers, as disclosed in this proxy statement. Based on the non-binding advisory recommendation selecting an annual frequency of such non-binding advisory votes at the 2011 Annual Meeting of Shareholders, we are currently seeking a vote from Shareholders on an advisory resolution to approve the compensation awarded to our named executive officers on an annual basis. This advisory vote is non-binding, but the Board of Trustees considers our Shareholders’ concerns and takes them into account in determinations concerning our executive compensation program. See “Compensation of Executive Officers,” below. We are also seeking a recommendation on the frequency of such non-binding advisory votes at the Annual Meeting.

How many votes are required to act on the proposals?

Assuming a quorum is present at the Annual Meeting, the affirmative vote of a majority of the votes cast by holders of common shares at the Annual Meeting will be sufficient for (1) the election of a trustee (because the number of nominees equals the number of trustees to be elected), (2) the approval of the Amended and Restated 2011 Equity-Based Award Plan, (3) the advisory resolution to approve the compensation of our named executive officers, (4) the advisory, non-binding recommendation on the frequency of future advisory votes on executive compensation and (5) the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017.

If you abstain or your shares are treated as broker non-votes, your abstention or broker non-votes will not be counted as votes cast and will have no effect on the result of the vote on (1) the election of trustees, (2) the resolution to approve, on an advisory, non-binding basis, the compensation of our named executive officers, (3) the advisory, non-binding recommendation for the frequency of future advisory votes on executive compensation, (4) the approval of the Amended and Restated 2011 Equity-Based Award Plan or (5) the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. As noted above, the proposal to ratify the appointment of Deloitte & Touche LLP as our independent auditors is considered a “routine” matter for which brokerage firms may vote shares without receiving voting instructions. The election of trustees, the advisory, non-binding resolution on the compensation of our named executive officers and the advisory, non-binding recommendation on the frequency of votes on the compensation of our named executive officers are considered “non-routine matters” and if you do not provide the brokerage firm with voting instructions on these proposals, your shares will not be voted on these proposals and will be “broker non-votes.”

For purposes of the election of trustees, a majority of votes cast means the number of shares voted “FOR” a nominee must exceed the number of shares as to which the holders elected to “WITHHOLD” votes with respect to a nominee. If a nominee that is already serving as a trustee is not elected, such trustee is required to offer to tender his resignation to our Board of Trustees. The Nominating and Corporate Governance Committee will make a recommendation to our Board of Trustees on whether to accept or reject the resignation, or whether other action should be taken. Our Board of Trustees is required to act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The trustee who tenders his resignation will not participate in our Board of Trustee’s decision.

For purposes of the advisory, non-binding recommendation for the frequency of future advisory votes on executive compensation, the option of one year, two years or three years that receives a majority of all the votes cast will be the frequency for the advisory vote on executive compensation that has been approved and recommended by Shareholders. In the event that none of these options receives a majority of all of the votes cast, we will consider the option that receives the most votes to be the option recommended by Shareholders.

The votes on (1) the advisory resolution to approve the compensation of our named executive officers, (2) the advisory recommendation on the frequency of future advisory votes on executive compensation and (3) the

TABLE OF CONTENTS

ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, are non-binding and serve only as recommendations to the Board of Trustees and the Audit Committee, as applicable.

What happens if I authorize my proxy without voting on all proposals?

When you return a properly executed proxy card or authorize your proxy telephonically or by the Internet, the shares that the proxy card or authorization represents will be voted in accordance with your directions. If you return the signed proxy card with no direction on a proposal, other than in the case of broker non-votes, the shares represented by your proxy will be voted in favor of (FOR) each of the nominees for trustee in Proposal No. 1, in favor of (FOR) Proposals No. 2, No. 4 and No. 5 and for a frequency vote of 1 year for No. 3 and will be voted in the discretion of the proxy holder on any other matter that properly comes before the Annual Meeting.

What if I want to change my vote after I return my proxy?

If you are a Shareholder of record, you may revoke your proxy at any time before its exercise by:

provided, however, that no such revocation under clause (1) or (2) shall be effective until written notice of revocation or a later dated proxy card is received by our Secretary at or before the Annual Meeting, and no such revocation under clause (3) shall be effective unless received on or before 11:59 p.m., Eastern time, on May 15, 2017.

Attendance at our Annual Meeting will not constitute a revocation of a proxy unless you affirmatively indicate at our Annual Meeting that you intend to vote your shares in person by completing and delivering a written ballot.

If you have shares held by a broker, you must follow the instructions given by your broker to change or revoke your voting instructions.

Will anyone contact me regarding this vote?

It is contemplated that brokerage houses will forward the proxy materials to Shareholders at our request. In addition to the solicitation of proxies by use of the mail, our trustees, officers, and other employees may solicit proxies by telephone, facsimile, e-mail, or personal interviews without additional compensation. We may, from time to time, engage and pay outside proxy solicitation firms, although we have not engaged an outside firm at this time.

Who has paid for this proxy solicitation?

We will bear the cost of preparing, printing, assembling and mailing the proxy card, proxy statement, and other materials that may be sent to Shareholders in connection with this solicitation. We may also reimburse brokerage houses and other custodians, nominees, and fiduciaries for their expenses incurred in forwarding solicitation materials to the beneficial owners of shares held of record by such persons, the cost of which is expected to be nominal.

How do I submit a proposal for the 2018 Annual Meeting of Shareholders?

If you wish to submit a shareholder proposal pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or a trustee nominee under the “proxy access” provisions of our Bylaws for inclusion in our proxy statement and proxy card for our 2018 Annual Meeting of Shareholders, you must submit the proposal to our Secretary no later than December 5, 2017, in accordance with Rule 14a-8. In addition, any shareholder who wishes to propose a nominee to our Board of Trustees or submit any other matter to a vote at the 2018 Annual Meeting of Shareholders (other than a shareholder

TABLE OF CONTENTS

proposal included in our proxy materials pursuant to Rule 14a-8 under the Exchange Act) must deliver such information to our Secretary no later than December 5, 2017 (or as otherwise provided by applicable laws and in our bylaws, which are on file with the SEC and may be obtained from our Secretary upon request).

Our Board of Trustees will review any shareholder proposals that are timely submitted and will determine whether such proposals meet the criteria for inclusion in the proxy solicitation materials or for consideration at the 2018 Annual Meeting of Shareholders.

What does it mean if I receive more than one proxy card?

It means that you have multiple accounts at the transfer agent and/or with brokers. Please complete and return all proxy cards to ensure that all your shares are voted.

Can I find additional information on the Company’s web site?

Yes. Our web site is located at www.lxp.com. Although the information contained on our web site is not part of this proxy statement, you can view additional information on the web site, such as our code of business conduct and ethics, corporate governance guidelines, charters of board committees, and reports that we file and furnish with the SEC. Copies of our code of business conduct and ethics, corporate governance guidelines, and charters of board committees also may be obtained by written request addressed to Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention: Investor Relations.

Important Notice Regarding the Internet Availability of Proxy Materials for the Shareholder Meeting to be Held on May 16, 2017 — This proxy statement and the Annual Report to Shareholders are available at www.proxyvoting.com.

We have elected to provide access to our proxy materials to our Shareholders on the Internet. Accordingly, a Notice of Meeting and Notice Regarding the Internet Availability of Proxy Materials was or will be mailed on or about April 4, 2017 to our Shareholders of record as of the close of business on the Record Date. If you wish to receive a hard copy of the proxy materials, please visit or contact:

1) By Internet: www.proxyvote.com

2) By Telephone: 1-800-579-1639

3) By E-Mail*: sendmaterial@proxyvote.com

Please make the requests as instructed above on or before May 2, 2017 to facilitate timely delivery.

How do I obtain a copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 from the Company?

Upon written request to Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, NY 10119-4105, Attention: Investor Relations, we will provide any shareholder, without charge, a hardcopy of our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC, including our financial statements and schedule, but without exhibits. You may also obtain our Annual Report to Shareholders, which includes our Annual Report on Form 10-K, at www.proxyvote.com.

What is “householding”?

“Householding” allows companies to deliver only one copy of notices and other proxy materials to multiple shareholders who share the same address (if they appear to be members of the same family) unless the company has received contrary instructions from an affected shareholder. We do not offer “householding” for shareholders of record. Please contact your broker if you are not a shareholder of record to find out if your broker offers “householding.”

TABLE OF CONTENTS

SHARE OWNERSHIP OF PRINCIPAL SECURITY HOLDERS,
TRUSTEES, AND EXECUTIVE OFFICERS

The following table indicates, as of the close of business on March 7, 2017, (a) the number of common shares of the Company beneficially owned by each person known by us to own in excess of five percent of the outstanding common shares and (b) the percentage such shares represent of the total outstanding common shares. All shares were owned directly on such date with sole voting and investment power unless otherwise indicated, calculated as set forth in footnote 1 to the table.

Name and Address of Beneficial Owner		Number of Common Shares Beneficially Owned (1)				Percentage of Class
The Vanguard Group, Inc. (2)			38,490,884				16.0	%
BlackRock, Inc. (3)			29,686,751				12.4	%
Vornado Realty Trust (4)			18,468,969				7.7	%
Vanguard Specialized Funds – Vanguard REIT Index Fund (5)			16,195,479				6.7	%

The following table indicates, as of the close of business on March 7, 2017, (a) the number of common shares beneficially owned by each trustee and each executive officer, and by all trustees and executive officers as a group, and (b) the percentage such shares represent of the total outstanding common shares. All shares were owned directly on such date with sole voting and investment power unless otherwise indicated,

TABLE OF CONTENTS

calculated as set forth in footnotes 1 and 2 to the table. The address for each trustee and named executive officer listed below is c/o Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, NY 10119-4015.

Name and Address of Beneficial Owner		Number of Common Shares Beneficially Owned (1)				Percentage of Class (2)
E. Robert Roskind			2,594,028	(3)			1.1	%
T. Wilson Eglin			2,247,421	(4)				*
Richard J. Rouse			642,709	(5)				*
Patrick Carroll			1,005,972	(6)				*
Joseph S. Bonventre			496,007	(7)				*
Harold First			101,099	(8)				*
Richard S. Frary			92,147	(9)				*
Lawrence L. Gray			18,586					*
Claire A. Koeneman			28,618					*
Jamie Handwerker			0	(10)				*
All trustees and executive officers as a group (11 persons) (11)			7,447,492				3.1	%

TABLE OF CONTENTS

As of the Record Date, no common shares were held by our executive officers or trustees in margin accounts or pledged as collateral for a loan.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our trustees, executive officers, and beneficial owners of more than 10 percent of the total outstanding common shares to file initial reports of ownership and reports of changes in ownership of common shares and other equity securities with the SEC and the NYSE. Trustees, executive officers, and beneficial owners of more than 10 percent of the total outstanding common shares are required to furnish us with copies of all Section 16(a) forms they file. Based on a review of the copies of such reports furnished to us and written representations from our trustees and executive officers, we believe that during the 2016 fiscal year our trustees, executive officers and beneficial owners of more than 10 percent of the total outstanding common shares complied with all Section 16(a) filing requirements applicable to them.

TABLE OF CONTENTS

TABLE OF CONTENTS

The following information, as of March 7, 2017, relates to the nominees for election as our trustees:

Name		Business Experience
E. ROBERT ROSKIND Age 71		Mr. Roskind, our Chairman since March 2008, previously served as Co-Vice Chairman from December 2006 to March 2008, Chairman from October 1993 to December 2006, and Co-Chief Executive Officer from October 1993 to January 2003. He founded The LCP Group, L.P., a real estate advisory firm, in 1973 and has been its Chairman since 1976. Mr. Roskind also serves as Chairman of Crescent Hotels and Resorts and Live In America Financial Services LLC. Mr. Roskind, as our Chairman and our founder, provides our Board of Trustees with deep knowledge of our history and strategies and vast experience in net-lease real estate investing.
T. WILSON EGLIN Age 52		Mr. Eglin has served as our Chief Executive Officer since January 2003, our President since April 1996, and as a trustee since May 1994. He served as one of our Executive Vice Presidents from October 1993 to April 1996 and our Chief Operating Officer from October 1993 to December 31, 2010. Mr. Eglin, as our Chief Executive Officer, provides our Board of Trustees with extensive experience in net-lease investing, real estate operations and capital markets having led us through various cycles of growth.
HAROLD FIRST Independent Age 80 Tenure > 9 years		Mr. First has served as a trustee since November 2007. Mr. First has been a financial consultant since 1993. From December 1990 through January 1993, Mr. First served as Chief Financial Officer of Icahn Holding Corp., a privately held holding company. Mr. First is currently a director and chairman of the audit committee of American Railcar Industries, Inc. (NASDAQ: ARII). Mr. First has served as a director of numerous public and private companies, including XO Holdings, Inc., WestPoint International, Inc., Panaco, Inc., GB Holdings Inc. (Sands Casino), and Newkirk Realty Trust, Inc. Mr. First is a CPA. Mr. First provides our Board of Trustees with extensive public accounting experience, including knowledge of generally accepted accounting principles and public company reporting requirements, and experience as a director and audit committee chair for numerous companies, including real estate investment companies.
RICHARD S. FRARY Independent Age 69 Tenure > 9 years		Mr. Frary has served as a trustee since December 2006. Mr. Frary has been the founding partner and majority shareholder of Tallwood Associates, Inc., a private real estate investment firm, since 1990 and a partner of Brookwood Financial Partners, L.P., a private equity firm that acquires real estate and invests in private companies, since 1993. Mr. Frary also co-owns a portfolio of office, multifamily, retail and community development assets. He serves as a director of Nexus BSP, Inc., a private oil and gas exploration company. Mr. Frary has been chair of the Advisory Board to the Sheridan Libraries at The Johns Hopkins University since 2000. He previously served as a director of Newkirk Realty Trust, Inc. and a trustee of The Johns Hopkins University. Mr. Frary is a CPA and provides our Board of Trustees with extensive real estate investment and corporate finance experience.

TABLE OF CONTENTS

Name		Business Experience
LAWRENCE L. GRAY Independent Age 52 Tenure < 9 years		Mr. Gray has served as a trustee since December 2015. He is the Chief Executive Officer of GrayCo, Inc., a private real estate company that owns and manages apartment communities, master planned community investments and timberlands located throughout the Southeast region of the United States. Prior to joining GrayCo in 2010, Mr. Gray spent seventeen years in the investment banking business, most recently with Wachovia Corporation where he had direct responsibility for the Real Estate Investment Banking, Corporate Banking, Private Equity, Homebuilder Finance and Structured Finance groups. Prior to Wachovia, Mr. Gray worked in the real estate investment banking groups at J.P. Morgan and Morgan Stanley. Mr. Gray provides our Board of Trustees with extensive real estate investment and corporate finance experience.
CLAIRE A. KOENEMAN Independent Age 47 Tenure < 9 years		Ms. Koeneman has served as a trustee since September 2015. She is an Executive Vice President for Hill+Knowlton Strategies, Inc., a global public relations company. Additionally, she manages the U.S. Central Region and is the U.S. Financial Communications Practice Leader. Prior to joining Hill+Knowlton Strategies, Inc., Ms. Koeneman served as president of Financial Relations Board, a financial communications company. Ms. Koeneman serves as a diplomat to the Principality of Monaco in its Honorary Consular Corps. Ms. Koeneman has many years of expertise in corporate communications and, as a strategic advisor to CEOs and boards of directors on all types of communications, provides our Board of Trustees with public and investor relations knowhow.
JAMIE HANDWERKER Independent Age 56 Tenure < 9 years		Ms. Handwerker has served as a trustee since March 2017. She is a partner of KSH Capital, providing real estate entrepreneurs with capital and expertise to seed or grow their platform. Ms. Handwerker is also a member of the Board of Directors of Benefit Street Partners Realty Trust, Inc., a member of the University of Pennsylvania School of Arts & Sciences Board of Overseers and is the Founder and Chairperson of Penn Arts & Sciences Professional Women’s Alliance. Prior to joining KSH Capital in May 2016, Ms. Handwerker was a Senior Vice President and Principal of Cramer Rosenthal McGlynn LLC, a New York-based asset management firm, where Ms. Handwerker continued to manage the CRM Windridge Partners hedge funds. Prior to joining Cramer Rosenthal McGlynn LLC in 2002, Ms. Handwerker was a Managing Director and Portfolio Manager with ING Furman Selz Asset Management LLC (ING FSAM), a New York based subsidiary of ING Group, where she created, launched and managed Windridge Partners, L.P. From 1994 to 2000, Ms. Handwerker was a Managing Director and Senior Equity Research Analyst (Sell-Side) at the international corporate and investment bank ING Barings and its predecessor, Furman Selz, LLC. Ms. Handwerker has extensive experience analyzing and investing in real estate investment trusts and provides our Board of Trustees with related insight.

Required Vote and Recommendation

Election of each trustee requires the affirmative vote of a majority of the votes cast with respect to each nominee at the Annual Meeting.

TABLE OF CONTENTS

MANAGEMENT AND CORPORATE GOVERNANCE

Our Board of Trustees

Our Board of Trustees held four meetings during the fiscal year ended December 31, 2016. Each individual that was a trustee at the time of such meetings attended at least 75% of the aggregate of the total number of meetings of our Board of Trustees and all committees of the Board of Trustees on which he or she served during his or her tenure.

We expect all trustees to attend each annual meeting of shareholders, but from time to time other commitments prevent all trustees from attending each meeting. All trustees that were trustees at such time attended the 2016 Annual Meeting of Shareholders, which was held on May 17, 2016.

Upon attaining the age of 75 and annually thereafter, each trustee is required to tender a letter of resignation from our Board of Trustees to the chairperson of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee reviews the trustee’s continuation on our Board of Trustees, and recommends to our Board of Trustees whether, in light of all the circumstances, our Board of Trustees should accept such proposed retirement or request that the trustee continue to serve on the Board of Trustees. In 2017, Mr. First tendered a letter of resignation under the policy described above, which was rejected by our Board of Trustees. Our Board of Trustees believes that Mr. First’s strong leadership of the Audit Committee warrants his continuation as a trustee despite this retirement policy.

Trustee Independence

Our Board of Trustees has adopted the following categorical standards under our Corporate Governance Guidelines, under which a trustee may not be deemed independent:

TABLE OF CONTENTS

For purposes of these categorical standards:

Pursuant to our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee, on behalf of our Board of Trustees, undertook its annual review of trustee independence in the first quarter of 2017. During this review, our Board of Trustees, in light of the categorical standards set forth above (which are also documented in our Corporate Governance Guidelines, which is available on our web site at www.lxp.com ), considered transactions and relationships between each trustee or any member of his or her immediate family and us and our subsidiaries and affiliates, including those under “Certain Relationships and Related Transactions,” below. Our Board of Trustees also considered whether there were any transactions or relationships between any of our trustees or any member of his or her immediate family (or any entity of which a trustee or an immediate family member is an executive officer, general partner or significant equity holder) and members of our senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with the determination that a trustee is independent.

As a result of this review, our Board of Trustees affirmatively determined that all of the trustees nominated for election at the Annual Meeting, other than Messrs. Roskind and Eglin, are independent of us and our management under applicable regulations, the NYSE listing standards and the standards set forth in our Corporate Governance Guidelines. Messrs. Roskind and Eglin are not considered independent because of their employment as executive officers of the Company. Mr. Roskind additionally is not considered independent because of certain related party relationships described below in “Certain Relationships and Related Party Transactions.”

As a result of the Board of Trustees’ affirmative determination, following the Annual Meeting, the Board of Trustees will consist of a majority of independent members.

Committees of our Board of Trustees

Our Board of Trustees has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Executive Committee.

Audit Committee .  The Audit Committee of our Board of Trustees was established in accordance with Section 10A-3 of the Exchange Act. The principal functions of the Audit Committee are described below under the heading “Audit Committee Report” and are contained in a written charter, which is available on our web site at www.lxp.com . As of December 31, 2016, the Audit Committee members were Messrs. First (Chairperson) and Frary and Kevin W. Lynch, each of whom was determined by our Board of Trustees to be “independent” for audit committee purposes as that term is used in applicable listing standards of the NYSE. Mr. Lynch passed away in February 2017. On February 6, 2017, Mr. Gray was appointed to the Audit Committee and was determined to be “independent” for audit committee purposes as that term is used in applicable listing standards of the NYSE. Our Board of Trustees has determined that Messrs. First and Frary each qualify as an “Audit Committee Financial Expert” in accordance with Item 407(d)(5) of Regulation S-K. None of the current Audit Committee members serves on the audit committees of more than three publicly registered companies.

During the fiscal year ended December 31, 2016, the Audit Committee met eight times in-person and telephonically, including quarterly in-person meetings with management, an internal audit consulting firm and our independent registered public accounting firm, to discuss matters concerning, among other matters,

TABLE OF CONTENTS

financial accounting matters, the audit of our consolidated financial statements for the year ended December 31, 2016, the adequacy of our internal controls over financial reporting, and internal audit matters. In addition, at each quarterly in-person Board of Trustees meeting, the Chairman of the Audit Committee updated the Board of Trustees with respect to matters discussed at the Audit Committee meetings.

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation for and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm.

During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered public accounting firm.

Pursuant to the Audit Committee charter, the Audit Committee is responsible for the pre-approval of all auditing services and, to the extent permitted under applicable law, non-audit services to be provided to the Company by the independent registered public accounting firm engaged by the Company. The Chairperson of the Audit Committee is delegated the authority to grant such pre-approvals. The decisions of the Chairperson to pre-approve any such activity are presented to the Audit Committee at its next scheduled meeting. In accordance with the foregoing, the retention by management of the independent registered accounting firm engaged by the Company for tax consulting services for specific projects is pre-approved, provided, that the cost of any such retention does not exceed $20,000 and the annual cost of all such retentions does not exceed $50,000.

The Audit Committee previously adopted an Internal Audit Charter, which formalizes the internal audit function of the Company. For the year ended December 31, 2016, the Audit Committee retained CohnReznick LLP to provide internal audit assistance.

TABLE OF CONTENTS

In connection with these responsibilities, the Audit Committee met with management and the independent registered public accounting firm to review and discuss the December 31, 2016 audited consolidated financial statements. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the PCAOB Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380) as adopted by the PCAOB in Rule 3200T. The Audit Committee also received written disclosures and the letter from the independent registered public accounting firm, as required by the applicable requirements of the PCAOB regarding such independent registered public accounting firm’s communications with the Audit Committee concerning indpendence, and discussed with the independent registered public accounting firm that firm’s independence.

Based upon the Audit Committee’s discussions with management and the independent registered public accounting firm referred to above, and the Audit Committee’s review of the representations of management, the Audit Committee recommended that the Board of Trustees of the Trust include the December 31, 2016 audited consolidated financial statements in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the United States Securities and Exchange Commission on March 1, 2017.

Audit Committee of the Board of Trustees
 
/s/ Harold First, Chairperson
Richard S. Frary
Lawrence L. Gray

Compensation Committee .  The functions of the Compensation Committee are set forth in a written charter, which is available on our web site at www.lxp.com . Primary among these functions are to determine the compensation for our executive officers and non-employee trustees and to administer and review our compensation plans and programs. As of December 31, 2016, the Compensation Committee members were Messrs. Frary (Chairperson), Gray, and Lynch. Ms. Koeneman was appointed to the Compensation Committee on February 6, 2017 upon Mr. Lynch’s passing. Each member of the Compensation Committee during 2016 and Ms. Koeneman was determined by our Board of Trustees to be “independent” as defined by the applicable listing standards of the NYSE. During the fiscal year ended December 31, 2016, the Compensation Committee met five times.

The Compensation Committee charter reflects various responsibilities, and the Compensation Committee periodically reviews and revises its charter. To assist in carrying out its responsibilities, the Compensation Committee regularly receives reports and recommendations from our executive officers, primarily our Chief Executive Officer, and from an outside compensation consultant it selects and retains. In addition and as appropriate, the Compensation Committee consults with its own legal or other advisors, all in accordance with the authority granted to it under its charter. During 2016, the Compensation Committee retained FPL Associates Compensation, a division of FPL Associates L.P., a nationally known executive compensation and benefits consulting firm, which we refer to as FPL. FPL charged $53,750 for these services. Other than reviewing and advising with respect to executive and trustee compensation, FPL does not provide any non-executive compensation or other services for us. As a result, FPL is an independent compensation consultant. Management does not retain any executive compensation consultant.

The Compensation Committee has the authority to determine and approve the individual elements of total compensation paid to our executive officers and certain other senior officers. The Compensation Committee reviews the performance and compensation of our executive officers, including the executive officers named in this proxy statement. Our Chief Executive Officer assists in the annual review of the compensation of our other executive officers and certain other senior officers. Our Chief Executive Officer makes recommendations with respect to salary adjustments and annual cash incentive opportunities, annual long-term incentive opportunities and any other long-term incentive awards based on his review and on market data compiled by the Compensation Committee’s compensation consultant or industry associations.

TABLE OF CONTENTS

TABLE OF CONTENTS

recommendation to our Board of Trustees as to the persons who should be nominated by our Board of Trustees, and our Board of Trustees determines the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee.

To the extent there is a vacancy on our Board of Trustees, the Nominating and Corporate Governance Committee will either identify individuals qualified to become trustees through relationships with our trustees or executive officers or by engaging a third party. The Nominating and Corporate Governance Committee has not engaged a third party to identify, evaluate or assist in identifying or evaluating potential nominees.

Executive Committee .  The principal function of the Executive Committee is to exercise the authority of our Board of Trustees regarding routine matters performed in the ordinary course of business or specific authority as authorized and approved by our Board of Trustees. As of December 31, 2016, the Executive Committee was comprised of Messrs. Lynch (Chairman), Frary, Eglin, and Roskind. Mr. Lynch passed away in February 2017. The Executive Committee does not meet regularly, but meets as necessary or as directed by our Board of Trustees.

Board Leadership Structure and Strategy and Risk Oversight

Our board leadership structure currently consists of an independent Lead Trustee, an executive Chairman and a Chief Executive Officer. While we have separated the Chairman and Chief Executive Officer roles, both positions are held by executive officers. We believe that these positions are appropriate as our Chairman is also our founder and is active in our management. As a result of our Chairman and our Chief Executive Officer not being independent of us, our Board of Trustees determined that a Lead Trustee, who is independent, was necessary and appropriate. The Lead Trustee acts as a liaison between the independent trustees and management and presides at all regularly-scheduled executive sessions of the non-management members or independent members of our Board of Trustees. As of December 31, 2016, Mr. Lynch was our Lead Trustee. Upon Mr. Lynch’s passing, Mr. Frary was appointed as our Lead Trustee.

Strategy and risk are an integral part of our Board of Trustees and Committee deliberations throughout the year. Management regularly performs, and reports to our Board of Trustees with respect to, our business plan. Management also performs a quarterly risk assessment as part of our enterprise risk management program, which is reported to our Board of Trustees. The quarterly risk assessment assesses the critical risks we face (e.g., strategic, operational, financial, legal/regulatory, and reputational), their relative magnitude and management’s actions to mitigate these risks. In addition, the Audit Committee assists our Board of Trustees with the oversight of our risk management program, including its oversight of our internal audit function.

Best Practices

We are mindful of the concerns of our shareholders and of proxy advisory groups. Within reason, we strive to implement best governance practices. In that regard, and in addition to the items disclosed elsewhere, we have implemented the following corporate governance practices.

TABLE OF CONTENTS

Shareholder Communications

Parties wishing to communicate directly with our Board of Trustees, an individual trustee, the Lead Trustee or the non-management members of our Board of Trustees as a group should address their inquiries to our General Counsel by mail sent to our principal office located at One Penn Plaza, Suite 4015, New York, New York 10119-4015. The mailing envelope should contain a clear notification indicating that the enclosed letter is an “Interested Party/Shareholder-Board Communication,” “Interested Party/Shareholder-Trustee Communication,” “Interested Party/Shareholder-Lead Trustee Communication” or “Interested Party/Shareholder-Non-Management Trustee Communication,” as the case may be.

Periodic Reports, Code of Ethics, Committee Charters and Corporate Governance Guidelines

Our Internet address is www.lxp.com . We make available free of charge through our web site our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, other filings with the SEC, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such materials with the SEC. We also have made available on our web site copies of our current Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or the guidelines, updated copies will also be made available on our web site.

TABLE OF CONTENTS

You may request a copy of any of the documents referred to above, without charge to you, by contacting us at the following address, email or telephone number:

Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, NY 10119-4015
Attention: Investor Relations
ir@lxp.com
(212) 692-7200

TABLE OF CONTENTS

not recorded any liability as it relates to this guaranty. The maximum amount of funds that would be subject to the guaranty obligation is $18.0 million.

In addition, in connection with efforts, on a non-binding basis, to procure non-recourse mezzanine financing from an affiliate of Mr. Roskind, pursuant to the terms of the EB-5 visa program administered by the USCIS, for an investment in Charlotte, North Carolina, we agreed to reimburse Mr. Roskind’s affiliate up to $6,500 for its expenses. As of the date of this proxy statement, such reimbursement has not occurred.

Charitable and Political Contributions

During 2016, we did not make any charitable contribution to any tax-exempt organization in which any independent trustee serves as an executive officer. As a general policy, we do not make a charitable contribution unless there is an express business purpose. We did not make any direct political contributions during 2016 and we do not intend to make any direct political contributions during 2017.

TABLE OF CONTENTS

COMPENSATION OF EXECUTIVE OFFICERS

Compensation Discussion and Analysis

Executive Summary.

This Compensation Discussion and Analysis section discusses the compensation policies and programs for our named executive officers.

Named Executive Officers .  Our named executive officers are:

Name		Title
T. Wilson Eglin		Chief Executive Officer and President
Patrick Carroll		Executive Vice President, Chief Financial Officer, and Treasurer
E. Robert Roskind		Chairman
Richard J. Rouse		Vice Chairman and Chief Investment Officer
Joseph S. Bonventre		Executive Vice President, General Counsel and Secretary

Compensation Committee Responsibility and Philosophy.   The Compensation Committee administers the compensation policies and programs for our named executive officers and regularly reviews and approves our compensation strategy and principles to ensure that they are aligned with our business strategy and objectives, encourage high performance, promote accountability and assure that management’s interests are aligned with the interests of our shareholders. The Compensation Committee believes that the compensation program should further both short-term and long-term business goals and strategies while enhancing shareholder value. In keeping with this philosophy, the compensation program’s objectives are to:

•

maintain a transparent compensation program that is easy for all of our shareholders to understand;

•

further align the interests of our named executive officers with those of our shareholders;

•

strengthen the relationship between pay and performance; and

•

retain key members of management.

The Compensation Committee believes that the business judgment of its members is necessary to properly evaluate and design an executive compensation program.

2016 “Say on Pay” Advisory Vote.

In 2015, the Compensation Committee restructured our executive compensation program and approximately 98% of our shareholders voted “FOR” the compensation of our named executive officers in the proxy statement for 2015. In 2016, approximately 97% of our shareholders voted “FOR” the compensation of our named executive officers as disclosed in the proxy statement in 2016. Based on such approvals, the Compensation Committee has largely maintained the compensation framework approved in 2015 and 2016 for 2017 with modifications for our 2017 business plan objectives.

Executive Compensation Best Practices.

In addition to the items discussed elsewhere in this proxy statement, our executive compensation programs contain the following best practices:

•

Clawback :  Our 2011 Equity-Based Award Plan provides, and our Amended and Restated 2011 Equity-Based Award Plan will provide, for the recoupment or clawback of awards under circumstances involving materially inaccurate results or misconduct.

•

Performance Driven :  A majority of the annual cash incentive target opportunity and the long-term incentive target opportunity for executive compensation is based on annual pre-defined objective performance measures which will be disclosed with sufficient detail to allow shareholders to calculate performance.

•

Independent Compensation Consultant :  The Compensation Committee uses an independent compensation consultant that does not perform any work directly for our management.

TABLE OF CONTENTS

Determining the Amount of Each Element of Compensation.

The Compensation Committee reviews the performance of each of our named executive officers, including our Chief Executive Officer, on an annual basis. The Compensation Committee considers, among other things, (1) the scope of the individual’s responsibilities, including the demands and profile of the positions held by the individual, (2) the individual’s experience and tenure with us, (3) the individual’s performance and contribution to our performance, (4) our performance against annual objectives set forth in management’s business plan, and (5) competitive salaries. The Compensation Committee retains an independent compensation and benefits consultant, FPL, and considers the results of compensation studies prepared for it by such consultant or industry and trade associations.

No formal internal pay equity study is done, but our Compensation Committee retains the discretion to reduce certain payouts to align payouts with individual responsibilities and performance. Our Chief Executive Officer assists in the annual review of our named executive officers and makes recommendations to the Compensation Committee. However, the Compensation Committee makes all determinations with respect to the actual compensation of our named executive officers, including our Chief Executive Officer.

The independent compensation consultant provides the following services to the Compensation Committee:

We are always competing for the best talent with our direct industry peers and with the broader market. Accordingly, the Compensation Committee regularly reviews the market data, pay practices and ranges of our “peer” companies and the broader market to ensure that we continue to offer a relevant and competitive executive pay program each year. Throughout this Compensation Discussion and Analysis, we refer to two distinct peer groups, as described below, which were established by the independent compensation consultant, the Compensation Committee and our Chief Executive Officer in 2016.

TABLE OF CONTENTS

Communications Sales & Leasing, Inc.
EPR Properties
Getty Realty Corp.
Gramercy Property Trust, Inc.
National Retail Properties, Inc.
One Liberty Properties, Inc.
Realty Income Corporation
Spirit Realty Capital, Inc.
STAG Industrial, Inc.
STORE Capital Corporation
VEREIT, Inc.
W.P. Carey Inc.

This competitor peer group helped the Compensation Committee understand how each named executive officer’s total compensation compares with the total compensation for reasonably similar positions at our most direct REIT competitors.

Acadia Realty Trust
Apple Hospitality REIT, Inc.
Brandywine Realty Trust
Columbia Property Trust, Inc.
CoreSite Realty Corporation
Corporate Office Properties Trust
CyrusOne Inc.
First Industrial Realty Trust, Inc.
Kite Realty Group Trust
LaSalle Hotel Properties
Mack-Cali Realty Corporation
National Health Investors, Inc.
Piedmont Office Realty Trust, Inc.
PS Business Parks, Inc.
Rayonier, Inc.
RLJ Lodging Trust
Urban Edge Properties

The size-based peer group helped the Compensation Committee compare our overall compensation practices against a broader mix of REITs to ensure that our compensation practices are reasonable in light of the size of our organization. Although the two peer groups are comprised solely of REITs, we also compete with other public and private companies in the New York metropolitan marketplace for talent. Therefore, we also consider other information regarding market trends in compensation in addition to the data derived from these peer group reviews.

TABLE OF CONTENTS

Reported, Realizable and Realized Pay for CEO.

A more complete view of total direct compensation (base salary, annual incentive opportunity and long-term incentive opportunity) requires a breakdown of “reported,” “realizable” and “realized” pay. A significant portion of the compensation reported in the Summary Compensation Table below is “realizable” pay, some of which may never be “realized” pay. However, the fair value of the “realizable” pay on the grant date is “reported” pay. Fair value is computed in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 718, as follows:

The following sets forth the reported, realizable and realized pay for Mr. Eglin, our Chief Executive Officer, for 2016, 2015 and 2014:

Year		Reported (1)				Realizable (2)				Realized (3)				Percentage of Reported Pay Realized in Period
2016		$	3,341,304			$	1,454,161			$	1,887,143				56	%
2015		$	3,139,719			$	1,731,345			$	1,408,374				45	%
2014		$	1,592,126			$	0			$	1,592,126				100	%
Three-Year Total		$	8,073,149			$	3,185,506			$	4,887,643				61	%

Elements of Compensation Program Applicable to Named Executive Officers for 2017.

The Compensation Committee retained FPL as its independent compensation consultant to perform an analysis of our compensation practices for our named executive officers with those of our peers and to make recommendations with respect to the compensation program applicable to our named executive officers for 2017.

Base Salary .  The Compensation Committee believes that base salaries provide our named executive officers with a degree of financial certainty and stability and are essential in attracting and retaining highly qualified individuals. Base salaries, which were increased as of January 1, 2017 for the first time since January 1, 2014, are as follows:

Officer		2017 Base Salary				2016 Base Salary				% Change
T. Wilson Eglin		$	665,000			$	640,000				4	%
Patrick Carroll		$	425,000			$	410,000				4	%
E. Robert Roskind		$	525,000			$	520,000				1	%
Richard J. Rouse		$	530,000			$	520,000				2	%
Joseph S. Bonventre		$	320,000			$	305,000				5	%

Annual Cash Incentive Opportunity .  The annual cash incentive opportunity is designed to supplement the cash compensation of our named executive officers so that cash compensation is competitive within our industry and peer groups and properly rewards our named executive officers for their performance and their

TABLE OF CONTENTS

efforts for meeting specified objectives. The annual cash incentive opportunity for the 2017 executive compensation program for our named executive officers will be a percentage of base salary as follows:

Officer		Threshold								Target								Maximum
T. Wilson Eglin			56.25	%		$	374,063				112.5	%		$	748,125				225	%		$	1,496,250
Patrick Carroll			50	%		$	212,500				100	%		$	425,000				200	%		$	850,000
E. Robert Roskind			40	%		$	210,000				80	%		$	420,000				160	%		$	840,000
Richard J. Rouse			40	%		$	212,000				80	%		$	424,000				160	%		$	848,000
Joseph S. Bonventre			50	%		$	160,000				100	%		$	320,000				200	%		$	640,000

Our Chief Executive Officer’s target total cash compensation (base salary plus target annual cash incentive) of $1,413,125 is approximately 6% less than the median target total cash compensation in the 2016 size-based peer group.

Seventy percent of the annual cash incentive opportunity will be determined by the following predefined objective performance measures derived from our business plan for the period commencing January 1, 2017 and ending December 31, 2017. The Compensation Committee believes the targets for the annual cash incentive opportunity are reasonable and rigorous. The Compensation Committee’s determination of whether an item was met will be disclosed in the proxy statement for the 2018 Annual Meeting of Shareholders.

Item		Weighting		Target		Rationale
Investments						External growth is an important component of our strategy and the acquisition volume target is in excess of commitments at the beginning of 2017. The weightings for investments and target investment volume have been increased over last year’s investment weightings due to our focus on growth. The lease term target is lower than last year due to our expanded efforts to acquire industrial assets, including those with leases as short as seven years. The target yield is lower than last year’s target due to the competition in the acquisition market. We still expect management to remain a disciplined investor while adding assets that improve our long-term cash flows and portfolio quality.
Volume (1)		15%		$400 million
Lease Term (2) (3)		7.5%		12.5 years
Initial Cash Yield (3) (4)		10%		6.5%

TABLE OF CONTENTS

Item		Weighting		Target		Rationale
Dispositions		30%		$300 million		Dispositions allow us to recycle capital into its most accretive use in support of our portfolio strategy. In a competitive investment environment, dispositions are an excellent source of capital and a means to strengthen our portfolio. The weighting for dispositions has been decreased over last year’s weightings due to the strong focus on dispositions in 2016, including the disposition of our New York City ground leases. Our business plan contemplates continuing the trend of recycling capital and repositioning our portfolio to capture the value of our multi-tenant and retail properties and to reduce our exposure to the suburban office sector. We believe that as our portfolio improves and our operations become more efficient, dispositions will play a smaller role in the compensation program.
Portfolio Management						Successful portfolio management safeguards income and supports internal growth. The total weighting for portfolio management increased year over year, which is reflective of the importance of managing our assets. Maintaining target occupancy levels takes into account tenant retention or replacement for expected vacancies. We place significant emphasis on tenant retention and often work with the tenant prior to the year of expiration to ensure continued tenancy. Sustaining the weighted-average term is an important measure of cash flow stability; however, monetizing investments through dispositions may result in a year-over-year decrease in weighted-average lease term within an acceptable range. Due to the volume of dispositions in 2016 and our acquisitions of industrial assets with leases as short as seven years, our targets have remained the same, but are just as rigorous.
Occupancy		10%		>96%
Tenant Retention (5)		10%		70%
Weighted-Average Term		10%		>8.5 years

TABLE OF CONTENTS

Item		Weighting		Target		Rationale
Balance Sheet						A strong balance sheet with moderate leverage provides us with financial flexibility while supporting our credit ratings. In 2016, we completed a multi-year effort to enhance and strengthen our balance sheet. We expect management to remain disciplined with respect to balance sheet management and maintenance of our investment-grade credit ratings. However, we believe that reducing the number of balance sheet metrics to just our credit rating is sufficient to achieve this objective.
Credit Rating		7.5%		Maintain current ratings

Beginning in 2016, the Compensation Committee eliminated total shareholder returns from the annual cash incentive opportunity because the Compensation Committee believes that the focus of the annual cash incentive opportunity should be short-term operating objectives and that total shareholder return should be a long-term objective. In support of that belief, sixty percent of the long-term incentive opportunity granted in 2017 at the target level is subject to the achievement of shareholder return goals.

The Compensation Committee has the ability, in its sole discretion, to clawback any amounts, as appropriate, if audited financial results would provide for lower incentive payouts. The Compensation Committee will also have the right to modify the measurements and lower payouts to account for unusual and nonrecurring items or if any potential payouts are inappropriate in light of other circumstances, such as overall company or individual performance or unique market conditions.

The remaining thirty percent of the annual cash incentive opportunity is entirely subjective and will be based on individual and company performance. Individual performance will be specific to the duties and responsibilities of the named executive officer.

Long-Term Incentive Opportunity .  The long-term incentive opportunity is designed to increase the ownership of us by our named executive officers, while motivating long-term performance, encouraging long-term dedication to us and operating as a retention mechanism.

The long-term incentive opportunity for the 2017 executive compensation program is a long-term incentive award consisting of a mix of performance-based non-vested shares and service-based non-vested shares. Vesting for performance-based non-vested shares is tied to our total shareholder return relative to other REITs for the three-year period beginning January 1, 2017 and ending December 31, 2019, subject to the named executive officer’s continued employment and, as applicable, any employment agreement or written severance policy that is in effect.

TABLE OF CONTENTS

Type:		Performance-Based Non-Vested Shares				Service-Based Non-Vested Shares
Amount of Target Award:		30%		30%		40%
Comparator Group:		SNL US Equity REIT Index		Competitor peer group, initially consisting of: Communications Sales & Leasing, Inc. (UNIT) EPR Properties (EPR) Getty Realty Corp. (GTY) Gramercy Property Trust, Inc. (GPT) Monmouth Real Estate Investment Corporation (MNR) National Retail Properties, Inc. (NNN) Realty Income Corporation (O) Select Income REIT (SIR) Spirit Realty Capital, Inc. (SRC) STAG Industrial, Inc. (STAG) VEREIT (VER) W.P. Carey Inc. (WPC)		N/A
Vesting Conditions:		Cliff-based vesting after three year performance period commencing January 1, 2017. Threshold performance is set at the 33 rd percentile, target performance at the 50 th percentile, and maximum performance at the 75 th percentile versus the respective group. No performance-based shares are earned for results below the threshold level. Straight-line interpolation is used to determine awards for results between performance levels.				Pro-rata vesting annually over three years.
Dividends		Accrue and are only payable if and to the extent the shares vest.				Currently paid.
Rationale		Performance assessments within our applicable industry group and competitor peer group similar to shareholder comparison when making an investment decision.				Enhance retention and promote longer-term equity ownership in us.

The long-term incentive opportunity is as follows:

Officer		Performance-Based Opportunity												Service-Based Award				Total Target Opportunity				Change from 2016
		Threshold				Target				Maximum
T. Wilson Eglin		$	534,000			$	1,068,000			$	2,136,000			$	712,000			$	1,780,000				38.6	%
Patrick Carroll		$	180,000			$	360,000			$	720,000			$	240,000			$	600,000				5.1	%
E. Robert Roskind		$	96,000			$	192,000			$	384,000			$	128,000			$	320,000				-22.7	%
Richard J. Rouse		$	139,200			$	278,400			$	556,800			$	185,600			$	464,000				-17.4	%
Joseph S. Bonventre		$	108,600			$	217,200			$	434,400			$	144,800			$	362,000				-13.8	%

While our Chief Executive Officer’s target long-term incentive opportunity for 2017 is meaningfully higher than last year’s target opportunity, the target long-term incentive opportunity of $1,780,000 is approximately 11% less than the median target long-term incentive opportunity in the 2016 size-based peer group. In addition, the Compensation Committee decreased the weighting of performance versus service from 70/30 to 60/40. In 2016, our total shareholder return on an absolute basis was 45%. The Compensation Committee believes 60/40 represents an appropriate balance between performance-and service-based awards for the performance period commencing in 2017.

The number of performance-based non-vested shares (calculated using maximum opportunity level for accounting purposes) and service-based non-vested shares granted and issued was based on the closing price

TABLE OF CONTENTS

of our common shares on January 10, 2017 (the date approved by the Compensation Committee), which was $10.74 per share; with the number of performance-based non-vested shares rounded to the nearest share and the number of service-based non-vested shares rounded up to the nearest 10 shares to avoid fractional shares when vesting. We fully expect to disclose the amount of performance-based non-vested shares that vest in our definitive proxy statement for the 2020 Annual Meeting of Shareholders.

At Risk Compensation .  Fifty-seven percent (57%) of 2017 total compensation to our Chief Executive Officer at the target level is “at risk” and subject to performance (subjective and pre-defined objective) measures, including 33% of the 2017 total compensation to our Chief Executive Officer at the target level that is subject to future pre-defined performance measures. The following illustrates our Chief Executive Officer’s 2017 total compensation at target level.

CEO Target Direct Compensation

Recap of 2016 Executive Compensation Program.

2016 Executive Compensation Program .  The 2016 executive compensation program consisted of (1) base salary (disclosed above), (2) annual cash incentive opportunity, and (3) annual long-term opportunity.

Annual Cash Incentive Awards .  The annual cash incentive award under the 2016 executive compensation program was as follows:

Officer		2016 Award				% of Target
T. Wilson Eglin		$	1,080,000				150	%
Patrick Carroll		$	615,000				150	%
E. Robert Roskind		$	510,000				98	%
Richard J. Rouse		$	566,000				109	%
Joseph S. Bonventre		$	458,000				150	%

Seventy percent (70%) of the annual cash incentive opportunity was based on pre-defined objective measures (from January 1, 2016 to December 31, 2016) and 30% was based on subjective measures as disclosed in definitive proxy statement for the 2016 Annual Meeting of Shareholders.

TABLE OF CONTENTS

In January 2017, the Compensation Committee evaluated the Company’s performance on the objective and subjective measures and made the determinations as detailed below.

Item

Weighting

Target

Actual

Determination

Balance Sheet

Debt to Total Assets (1)

7.5%

42.5%

40.4%

Target/Maximum

Credit Rating

7.5%

Maintain

(7)

Increase

(7)

Target/Maximum

Investments

Volume (2)

5%

$

325 million

$

362.9 million

Target

Lease Term (3) (4)

5%

15 years

18.1 years

Maximum

Initial Cash Yield (4) (5)

5%

7.0%

6.8%

Threshold/Target

GAAP Yield (4) (5)

5%

8.0%

7.6%

Threshold/Target

Dispositions

New York, NY Land Leases

20%

$

335 million

$

375.7

Maximum

Other dispositions

20%

$

265 million

$

294 million

Target/Maximum

Portfolio Management

Occupancy

7.5%

>96%

>96%

Target

Tenant Retention (6)

7.5%

70%

77.2%

Target/Maximum

Weighted-Average Term

10%

>8.5 years

8.6 years

Target

Weightings of Threshold/Target and Target/Maximum are interpolations at the discretion of the Compensation Committee and not necessarily the midpoint. The determination of the objective measurements resulted in each named executive officer being entitled to 140% of the target objective portion of the 2016 annual incentive opportunity:

With respect to the subjective portion of the annual incentive opportunity, the Compensation Committee determined that Messrs. Eglin, Carroll and Bonventre were eligible for close to the maximum subjective portion, while Messrs. Roskind and Rouse were eligible for a nominal subjective portion. The primary drivers behind the determinations for Messrs. Roskind and Rouse were not individual performance, but rather an effort by the Compensation Committee to award Messrs. Roskind and Rouse within an acceptable range of the benchmarking analysis.

TABLE OF CONTENTS

The factors considered for the subjective portion of the annual incentive opportunity for each of Messrs. Eglin, Carroll and Bonventre were:

Subsequent to awarding annual incentive awards, our management determined that a $7.7 million lease termination payment received by us in the quarter ended June 30, 2016 should have been fully taken in as income in such quarter as opposed to our initial accounting of amortizing such payment over a replacement lease. This immaterial error resulted in a restatement of certain line items in our quarterly financial statements for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2017 (see Note 20 to our condensed consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016, or our Annual Report). Our management also determined that we had a material weakness in our internal controls over financial reporting as described in further detail in Item 9A of our Annual Report. Our Compensation Committee determined not to clawback any awards with respect to 2016, but will take into account such material weakness and management’s remediation plan when determining the subjective portion of the annual incentive opportunity for 2017 as discussed above.

Annual Long-Term Incentive Award .  The 2016 annual long-term incentive award was disclosed in the proxy statement for the 2016 Annual Meeting of Shareholders. The 2016 awards are similar to the 2017 long-term incentive awards described above, but with a performance period of January 1, 2016 to December 31, 2018. The awards granted were as follows:

Officer		Performance-Based Opportunity												Service-Based Award				Total Target Opportunity
		Threshold				Target				Maximum
T. Wilson Eglin		$	449,400			$	898,800			$	1,797,600			$	385,200			$	1,284,000
Patrick Carroll		$	199,850			$	399,700			$	799,400			$	171,300			$	571,000
E. Robert Roskind		$	144,900			$	289,800			$	579,600			$	124,200			$	414,000
Richard J. Rouse		$	196,700			$	393,400			$	786,800			$	168,600			$	562,000
Joseph S. Bonventre		$	147,000			$	294,000			$	588,000			$	126,000			$	420,000

Performance-Based Opportunity of Outstanding Long-Term Incentive Awards.

The following is a summary of the performance-based opportunity portion of the long-term incentive awards granted in 2015 and 2016 assuming the performance period for each award ended on December 31, 2016:

Performance Period Start Date		Peer Group Percentile Ranking				Index Percentile Ranking
1/1/2015			36.36	%			49.28	%
1/1/2016			100.00	%			97.35	%

TABLE OF CONTENTS

This strong performance would have resulted in the following awards:

Officer		Year of Grant				Expected Performance-Based Realized Amount (1)				Percentage of Performance-Based Target Opportunity
T. Wilson Eglin			2015			$	804,492				79	%
			2016			$	2,534,479				200	%
Patrick Carroll			2015			$	361,093				79	%
			2016			$	1,127,088				200	%
E. Robert Roskind			2015			$	244,266				79	%
			2016			$	817,193				200	%
Richard J. Rouse			2015			$	403,572				79	%
			2016			$	1,109,322				200	%
Joseph S. Bonventre			2015			$	260,197				79	%
			2016			$	829,030				200	%

The actual payouts for the 2015 awards will be disclosed in the proxy statement for the 2018 Annual Meeting of Shareholders and the actual payouts for the 2016 awards will be disclosed in the proxy statement for the 2019 Annual Meeting of Shareholders.

Companywide Retirement and Health and Welfare Benefits.

General .  In addition to the executive compensation programs outlined in this proxy statement, our named executive officers participate in retirement and health and welfare benefits that are available to all employees with no distinction made among any groups of employees other than as required by applicable tax rules.

Executive Life Insurance Policies .  In 2001, our Board of Trustees approved individual/portable term life insurance policies for our named executive officers who were employed by us at the time, which are in addition to the benefits set forth above. We pay the premiums under these policies each year that the insured is one of our employees. The premiums for 2016 were: $1,314 for Mr. Eglin; $712 for Mr. Carroll; and $2,727 for Mr. Rouse. Each policy provides for a maximum benefit of $700,000, with the exception of Mr. Rouse’s policy, which provides for a maximum benefit of $1,000,000, but Mr. Rouse pays the additional premium for the benefit over $700,000. Mr. Roskind no longer receives this benefit because his policy expired in 2012 and was not renewed. Mr. Bonventre does not receive this benefit because he was not employed by us in 2001. Mr. Rouse will no longer receive this benefit in 2017 because his policy expires in 2017.

[Remainder of page intentionally left blank]

TABLE OF CONTENTS

Summary Compensation Table

The following table sets forth summary information concerning the compensation earned by our named executive officers for the fiscal years ended December 31, 2016, 2015 and 2014.

Name and Principal Position		Fiscal Year				Salary ($) (1)				Bonus ($)				Share Awards ($) (2)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($) (3)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4)				All Other Compensation ($) (5)				Total ($)
T. Wilson Eglin Chief Executive Officer and President			2016				640,000				—				1,454,161				—				1,080,000				—				167,143				3,341,304
			2015				640,000				—				1,731,345				—				576,000				—				192,374				3,139,719
			2014				640,000				—				—				—				720,000				—				232,126				1,592,126
Patrick Carroll Chief Financial Officer, Treasurer and Executive Vice President			2016				410,000				—				646,714				—				615,000				—				50,245				1,721,959
			2015				410,000				—				777,115				—				369,000				—				75,309				1,631,424
			2014				410,000				—				—				—				410,000				—				109,984				929,984
E. Robert Roskind Chairman			2016				520,000				—				468,904				—				510,000				—				41,338				1,540,242
			2015				520,000				—				525,676				—				416,000				—				59,157				1,520,833
			2014				520,000				—				—				—				520,000				—				98,157				1,138,157
Richard J. Rouse Vice Chairman and Chief Investment Officer			2016				520,000				—				636,540				—				566,000				—				56,877				1,779,417
			2015				520,000				—				868,564				—				468,000				—				97,995				1,954,559
			2014				520,000				—				—				—				520,000				—				139,259				1,179,259
Joseph S. Bonventre Executive Vice President, General Counsel and Secretary			2016				305,000				—				475,658				—				458,000				—				37,164				1,275,822
			2015				305,000				—				559,942				—				275,000				—				44,787				1,184,729
			2014				305,000				—				—				—				305,000				—				63,944				673,944

TABLE OF CONTENTS

Executive		Dividends Paid on Service Based- Non-Vested Common Shares (1)				Company- Paid Life Insurance Premiums				401(k) Company Contributions				Total
T. Wilson Eglin		$	152,579			$	1,314			$	13,250			$	167,143
Patrick Carroll		$	36,283			$	712			$	13,250			$	50,245
E. Robert Roskind		$	28,088				—			$	13,250			$	41,338
Richard J. Rouse		$	40,900			$	2,727			$	13,250			$	56,877
Joseph S. Bonventre		$	23,914				—			$	13,250			$	37,164

Grants of Plan-Based Awards

The following table sets forth summary information concerning all grants of plan-based awards made to the named executive officers during the fiscal year ended December 31, 2016.

Name		Grant Date				Estimated Future Payouts Under Non-Equity Incentive Plan Awards (CASH) ($)												Estimated Future Payouts Under Equity Incentive Plan Awards (SHARES) (#)												All Other Share Awards; Number of Shares				All Other Option Awards; Number of Shares Underlying Option Awards				Exercise Price of Option Awards ($)				Grant Date Fair Value of Share and Option Awards ($)
						Threshold				Target				Maximum				Threshold				Target				Maximum
T. Wilson Eglin			1/8/16				—				—				—				58,669				117,337				234,674				50,290				—				—				1,454,161
			3/25/16	(1)			360,000				720,000				1,440,000				—				—				—				—				—				—				—
Patrick Carroll			1/8/16				—				—				—				26,090				52,180				104,360				22,370				—				—				646,714
			3/25/16	(1)			205,000				410,000				820,000				—				—				—				—				—				—				—
E. Robert Roskind			1/8/16				—				—				—				18,917				37,833				75,666				16,220				—				—				468,904
			3/25/16	(1)			260,000				520,000				1,040,000				—				—				—				—				—				—				—
Richard J. Rouse			1/8/16				—				—				—				25,679				51,358				102,715				22,020				—				—				636,540
			3/25/16	(1)			260,000				520,000				1,040,000				—				—				—				—				—				—				—
Joseph S. Bonventre			1/8/16				—				—				—				19,191				38,381				76,762				16,450				—				—				475,658
			3/25/16	(1)			152,500				305,000				610,000				—				—				—				—				—				—				—

TABLE OF CONTENTS

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth summary information concerning outstanding equity awards held by each of the named executive officers as of December 31, 2016.

		Option Awards																Share Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units That Have Not Vested (#)				Market Value of Shares or Units That Have Not Vested ($) (1)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1)
T. Wilson Eglin			—				—				—				—				857,277	(2)			9,258,592				2,599	(6)			28,069
			—				—				—				—				—				—				94,435	(7)			1,019,898
			—				—				—				—				—				—				234,674	(8)			2,534,479
Patrick Carroll			—				—				—				—				234,483	(5)			2,532,416				1,299	(6)			14,029
			—				—				—				—				—				—				42,387	(7)			457,780
			—				—				—				—				—				—				104,360	(8)			1,127,088
E. Robert Roskind			—				—				—				—				24,413	(9)			263,660				—				—
			—				—				—				—				—				—				28,673	(7)			309,668
			—				—				—				—				—				—				75,666	(8)			817,193
Richard J. Rouse			—				—				—				—				35,560	(10)			384,048				2,598	(6)			28,058
			—				—				—				—				—				—				47,373	(7)			511,628
			—				—				—				—				—				—				102,715	(8)			1,109,322
Joseph S. Bonventre			38,000				—				6.39				(3)				125,177	(11)			1,351,912				—				—
			57,000				—				7.95				(4)				—				—				30,543	(7)			329,864
			—				—				—				—				—				—				76,762	(8)			829,030

TABLE OF CONTENTS

Option Exercises and Stock Vested

The following table sets forth summary information concerning option exercises and vesting of stock awards for each of the named executive officers during the year ended December 31, 2016.

		Option Awards								Share Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($) (1)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($) (2)
T. Wilson Eglin			190,585				466,977				85,127				770,328
Patrick Carroll			134,932				268,721				27,291				275,660
E. Robert Roskind			388,764				1,384,989				23,697				242,496
Richard J. Rouse			126,888				407,640				32,104				325,234
Joseph S. Bonventre			—				—				17,097				171,158

Pension Benefits

Other than our 401(k) Plan, which is discussed above, we do not provide any pension benefits to the named executive officers.

Non-Qualified Deferred Compensation

The following table sets forth summary information concerning non-qualified deferred compensation for each of the named executive officers during the year ended December 31, 2016. Non-qualified deferred compensation consists solely of a trust established for the benefit of certain of our executive officers in which in previous years such persons had the option to place non-vested common share awards. Dividends on these shares are the same as all those paid on all common shares and are paid by us to the trust, which makes a corresponding distribution to the participant. Earnings on the participant accounts consist of dividends paid

TABLE OF CONTENTS

and the change in market value of the common shares in the trust. None of the earnings were above-market. As a result, the earnings are not included in the Summary Compensation Table above.

Name		Executive Contributions in 2016 ($)				Registrants Contributions in 2016 ($)				Aggregate Earnings in 2016 ($)				Aggregate Withdrawals/ Distributions in 2016 ($)				Aggregate Balance at December 31, 2016 ($) (1)
T. Wilson Eglin			—				—				456,058				89,642				1,413,320
Patrick Carroll			—				—				—				—				—
E. Robert Roskind			—				—				584,933				114,973				1,812,704
Richard J. Rouse			—				—				429,436				84,409				1,330,819
Joseph S. Bonventre			—				—				—				—				—

Potential Payments upon Termination or Change in Control

As of December 31, 2016, each of the named executive officers had the right to receive severance compensation upon the occurrence of certain termination events. None of our named executive officers will be entitled to any payments in the event of a change of control without a termination of employment.

On September 11, 2014, we entered into new employment agreements with each of Messrs. Eglin, Carroll, Roskind and Rouse, each of which has a three year term that commenced on January 15, 2015 and ends on January 14, 2018 and none of which automatically renew. Our Compensation Committee does not expect to renew any of these employment agreements, but currently intends to implement a severance policy for these individuals similar to the severance policy applicable to Mr. Bonventre and described below.

Mr. Bonventre is eligible to participate in our severance policy applicable to executive officers without employment agreements. The executive employment agreements and executive severance policy provide that the executive officer will be entitled to receive severance payments upon termination by us without “cause”, termination by the executive officer with “good reason”, including if either occurs within 12 months of a “change in control” (as defined in the employment agreement or severance policy, as applicable).

Upon certain terminations, (x) all non-vested time-based long-term incentive awards, including long-term retention awards, and all non-vested but earned performance-based long-term incentive awards shall accelerate, become fully earned and vested, (y) the end of the performance period for all non-vested but unearned performance-based long-term incentive awards shall be the date of such termination and a pro rata amount of any of such awards then deemed to be earned awards (determined by the number of completed days of the performance period for such award divided by the total number of days in such performance period) shall accelerate, become fully earned and vested, and (z) all unexercised share option awards shall terminate within six months of such termination of employment.

We believe that the executive employment agreements and the executive severance policy are appropriate in this market as they do not contain: (1) a high multiple, (2) any long-term incentive award component of the severance formula, (3) vesting of all non-vested performance-based awards regardless of whether the performance targets were met, and (4) a “gross-up” of the severance payment to cover the excise taxes imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, on the benefits, thereby providing such benefits to the employee on a net basis, after payment of excise tax.

With the exception of E. Robert Roskind’s employment agreement, the employment agreements with the named executive officers provide that the named executive officer will serve us faithfully and to the best of his ability and will devote substantially all of his business time, energy, experience and talents to our business and the business of our affiliates. This restriction does not prevent the named executive officer from managing his personal or family investments, or serving on civic or charitable boards or committees, so long as any such activities do not interfere with the performance of the named executive officer’s responsibilities as one of our employees. Mr. Roskind’s employment agreement permits Mr. Roskind to spend approximately one third of

TABLE OF CONTENTS

his business time on the affairs of The LCP Group L.P. and its affiliates, which includes service on the boards of other companies; however, Mr. Roskind must prioritize his business time to address our needs ahead of The LCP Group L.P.

The tables below estimate the payments and benefits to each of the named executive officers assuming they were terminated on December 31, 2016. Continuation of benefits, which may be paid monthly if the named executive officer is eligible for, and elects, continued coverage under such plans, are assumed to be paid by a lump-sum payment at termination based on annualized December 2016 premiums. Bonus portion of severance payment is based on the average of the 2016 and 2015 actual annual incentive awards. Value of accelerated equity awards (1) is based on the closing price of our common shares on the NYSE on December 30, 2016 of $10.80 per share, and (2) consists of non-vested shares set forth in Outstanding Equity Awards at Fiscal Year-End table above and a pro rata amount of Expected Performance-Based Realized Amount, disclosed above, based on the number of days completed in the period.

T. Wilson Eglin		Without Cause or With Good Reason ($)				Upon a Change in Control (“Single Trigger”) ($)				Death or Disability ($)				With Cause or Without Good Reason ($)
Base salary portion of severance payment			1,600,000				—				640,000				—
Bonus portion of severance payment			2,070,000				—				—				—
Welfare benefits			75,988				—				—				—
Group health care benefits			—				—				72,596				—
Value of accelerated equity awards			10,639,746				—				10,639,746				—
Total Payments and Benefits			14,385,734				—				11,352,342				—

Patrick Carroll		Without Cause or With Good Reason ($)				Upon a Change in Control (“Single Trigger”) ($)				Death or Disability ($)				With Cause or Without Good Reason ($)
Base salary portion of severance payment			820,000				—				410,000				—
Bonus portion of severance payment			984,000				—				—				—
Welfare benefits			60,790				—				—				—
Group health care benefits			—				—				58,077				—
Value of accelerated equity awards			3.148,841				—				3,148,841				—
Total Payments and Benefits			5,013,631				—				3,616,918				—

E. Robert Roskind		Without Cause or With Good Reason ($)				Upon a Change in Control (“Single Trigger”) ($)				Death or Disability ($)				With Cause or Without Good Reason ($)
Base salary portion of severance payment			1,040,000				—				520,000				—
Bonus portion of severance payment			926,000				—				—				—
Welfare benefits			44,000				—				—				—
Group health care benefits			—				—				41,832				—
Value of accelerated equity awards			696,742				—				696,742				—
Total Payments and Benefits			2,706,742				—				1,258,574				—

TABLE OF CONTENTS

Richard J. Rouse		Without Cause or With Good Reason ($)				Upon a Change in Control (“Single Trigger”) ($)				Death or Disability ($)				With Cause or Without Good Reason ($)
Base salary portion of severance payment			1,040,000				—				520,000				—
Bonus portion of severance payment			1,034,000				—				—				—
Welfare benefits			44,000				—				—				—
Group health care benefits			—				—				41,832				—
Value of accelerated equity awards			1,022,874				—				1,022,874				—
Total Payments and Benefits			3,140,874				—				1,584,706				—

Joseph S. Bonventre		Without Cause ($)				Upon a Change in Control (“Single Trigger”) ($)				Death or Disability ($) (1)				With Cause or Without Good Reason ($)
Base salary portion of severance payment			610,000				—				305,000				—
Bonus portion of severance payment			733,000				—				—				—
Welfare benefits			60,790				—				—				—
Group health care benefits			—				—				58,077				—
Value of accelerated equity awards			1,801,719				—				1,801,719				—
Total Payments and Benefits			3,205,509				—				2,164,796				—

Trustee Compensation

None of our employees receives or will receive any compensation for serving as a member of our Board of Trustees or any of its committees. Our non-employee trustees received the following aggregate amounts of compensation for the year ended December 31, 2016.

Name		Fees Earned or Paid in Cash ($)				Share Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Harold First			58,750				86,435				—				—				—				—				145,185
Richard S. Frary			50,000				77,685				—				—				—				—				127,685
Lawrence L. Gray			50,000				77,685				—				—				—				—				127,685
Claire A. Koeneman			—				127,685				—				—				—				—				127,685
Kevin W. Lynch (1)			50,000				77,685				—				—				—				—				127,685

As of December 31, 2016, non-employee trustee compensation consisted of an annual retainer of $100,000 for each non-employee trustee except the Chairperson of the Audit Committee, who receives an annual retainer of $117,500. The retainer is paid quarterly in arrears and, to the extent common shares are available under the then current equity-based award plan, at least 50% of the quarterly amount must be taken in common shares based on the average closing price over the applicable quarter. In January 2014, the Compensation Committee authorized an annual grant of 3,500 vested common shares to each non-employee trustee in addition to the annual retainer. In addition, non-employee trustees receive reimbursement of their out-of-pocket travel costs to attend meetings.

In connection with the filing of this proxy statement, the Compensation Committee approved (1) an increase in the annual grant to non-employee trustees from 3,500 vested common shares to 4,500 vested common shares starting on January 1, 2018, (2) an additional $15,000 annual retainer for the Lead Trustee, (3) an additional $10,000 annual retainer for the Chairperson of the Compensation Committee, and (4) an

TABLE OF CONTENTS

additional $5,000 annual retainer for the Chairperson of the Nominating and Corporate Governance Committee, with such additional retainers to be retroactive to January 1, 2017.

Any initial equity award for a newly appointed or elected trustee will be decided by the Compensation Committee on a case-by-case basis. On March 28, 2017, Ms. Handwerker was granted an initial equity award consisting of 5,000 vested common shares.

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

compensation” exemption from this limitation, a plan that retains flexibility for the administrator to develop compensation formulas from among stockholder-approved performance goals must be re-approved by the stockholders every five years. The approval of the Amended 2011 Plan is intended in part to permit (but not to require that) incentive compensation awards issued under the Amended 2011 Plan to continue to be structured to qualify as “qualified performance-based compensation” under Section 162(m) of the Code. Shareholder approval of the Amended 2011 Plan will constitute shareholder approval of the share and dollar limitations as well as of the qualifying performance criteria for purposes of Section 162(m) of the Code and will enable us to make awards that qualify as performance-based compensation that is exempt from the deduction limitation set forth under Section 162(m) of the Code.

The Compensation Committee monitors the burn rate and dilution of our equity-based compensation. The following sets forth our calculation of the burn rate for the last three years:

Year		Options				Full Value Awards				Options/Stock SARs + Adjusted Full Value Awards (1)				Weighted Total Shares Outstanding				Adjusted Burn Rate
2016			—				1,034,019				3,102,057				233,633,058				1.33	%
2015			—				812,679				2,438,037				233,455,056				1.04	%
2014			—				—				—				228,966,253				0.00	%
3-Year Average Adjusted Burn Rate:																			0.79	%

Summary of the Amended 2011 Plan

Purpose .  The purpose of the Amended 2011 Plan is to continue to attract, retain and motivate select Eligible Persons, and to provide incentives and rewards for superior performance.

Shares Subject to the Amended 2011 Plan .  The Amended 2011 Plan provides that, from the Effective Date, a total of 5,329,790 Shares will be available for issuance under the Amended 2011 Plan. These Shares shall be authorized but unissued Shares, or Shares that we otherwise hold in treasury or in trust. The number of Shares available for Awards, as well as the terms of outstanding Awards, is subject to adjustment as provided in the Amended 2011 Plan for stock splits, stock dividends, recapitalizations and other similar events. If an Award expires or becomes un-exercisable without having been exercised in full or, with respect to Restricted Shares, Restricted Share Units, or Performance Units, is forfeited to us, the unpurchased Shares (or for Awards other than Options or SARs, the forfeited Shares) which were subject thereto will become available for future grant or sale under the Amended 2011 Plan, unless the Amended 2011 Plan has terminated. With respect to SARs, all of the Shares covered by the Award (that is, Shares actually issued pursuant to a SAR, as well as the Shares that represent payment of the exercise price therefor) will cease to be available under the Amended 2011 Plan. Shares: (i) used to pay the exercise price of an Award, (ii) used to satisfy the Withholding Tax obligations related to an Award, or (iii) re-acquired by us on the open market or otherwise using cash proceeds from the exercise of Options will be deemed used under the Amended 2011 Plan and will not become available for future grant or sale under the Amended 2011 Plan. To the extent that an Award under the Amended 2011 Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Amended 2011 Plan.

Administration .  The Compensation Committee will administer the Amended 2011 Plan; provided, that our Board of Trustees may act in lieu of the Compensation Committee on any matter. Our Board of Trustees and the Compensation Committee, when exercising discretion under the Amended 2011 Plan from time to time, are referred to herein as the “Committee.”

Subject to the terms of the Amended 2011 Plan, the Committee has express authority to determine the Eligible Persons who will receive Awards, the number of Shares, units or dollars to be covered by each Award, and the terms and conditions of Awards. The Committee has broad discretion to prescribe, amend, and rescind rules relating to the Amended 2011 Plan and its administration, to interpret and construe the terms of the Amended 2011 Plan and the terms of all Award agreements, and to take all actions necessary or advisable

TABLE OF CONTENTS

to administer the Amended 2011 Plan. Within the limits of the Amended 2011 Plan, the Committee may accelerate the vesting of any Award, allow the exercise of unvested Awards, and may modify, replace, cancel or renew them.

The Amended 2011 Plan provides that we and our affiliates will indemnify members of the Committee and their delegates against any claims, liabilities or costs arising from the good faith performance of their duties under the Amended 2011 Plan. The Amended 2011 Plan releases these individuals from liability for good faith actions associated with the Amended 2011 Plan’s administration.

Eligibility .  Grants of Awards may be made to Trustees, Employees, Consultants, and persons to whom an offer of employment has been or is being extended, all of whom constitute Eligible Persons. The Committee may grant Options that are intended to qualify as Incentive Stock Options, or ISOs, only to Employees, and may grant all other Awards to Eligible Persons. The Amended 2011 Plan and the discussion below use the term “Participant” to refer to an Eligible Person who has received an Award. The Amended 2011 Plan provides that, during each year of the Amended 2011 Plan, no Participant may receive Options and SARs under the Amended 2011 Plan that relate to more than twenty percent (20%) of the total number of Shares reserved for Awards under the Amended 2011 Plan as of the Effective Date. As of March 27, 2017, there were approximately five Trustees, 50 Employees, and zero Consultants eligible to receive Awards under the Amended 2011 Plan.

Types of Awards.

Options .  Options granted under the Amended 2011 Plan provide Participants with the right to purchase Shares at a predetermined exercise price. The Committee may grant Options that are intended to qualify as ISOs or Options that are not intended to so qualify, referred to herein as Non-ISOs. The Amended 2011 Plan also provides that ISO treatment may not be available for Options that become first exercisable in any calendar year to the extent the value of the underlying Shares that are the subject of the Option exceed $100,000 (based upon the fair market value of the Shares on the Option Grant Date).

Share Appreciation Rights (SARs) .  A Share Appreciation Right generally permits a Participant who receives it to receive, upon exercise, cash and/or Shares equal in value to an amount determined by multiplying (a) the excess of the fair market value, on the date of exercise, of the Shares with respect to which the SAR is being exercised, over the exercise price of the SAR for such Shares by (b) the number of Shares with respect to which the SARs are being exercised. The Committee may grant SARs in tandem with Options or independently of them.

Exercise Price for Options and SARs .  The exercise price of ISOs, Non-ISOs, and SARs may not be less than 100% of the fair market value on the grant date of the Shares subject to the Award (110% of fair market value for ISOs granted to employees who, on the grant date, own stock representing more than 10% of the combined voting power of all classes of our Shares). Conditions of exercise of such ISOs, Non-ISOs, and SARs may be set forth in the applicable Award agreements.

Exercise of Options and SARs .  To the extent exercisable in accordance with the agreement granting them, an Option or SAR may be exercised in whole or in part, and from time to time during its term; subject to earlier termination relating to a holder’s termination of employment or service. Unless otherwise specified in an Award Agreement, the exercise price of Options held by any Participant will be satisfied through a net exercise by surrendering to the Company Shares otherwise receivable upon exercise of the Option. The term over which Participants may exercise Options and SARs may not exceed ten years from the date of grant (five years in the case of ISOs granted to employees who, on the date of grant, own stock representing more than 10% of the combined voting power of all classes of our Shares).

Subject to the terms of the agreement evidencing an Option grant, Options and SARs may be exercised during the six-month period after the Optionee retires, during the six-month period after the Optionee’s termination of service due to death or permanent Disability, and during the 90-day period after the Optionee’s termination of employment without cause (but in no case later than the termination date of the Option). The agreements evidencing the grant of an Option may, in the discretion of the Committee, set forth additional or different terms and conditions applicable to such Option upon a termination or change in status of the employment or service of the Option holder.

TABLE OF CONTENTS

Restricted Shares, Restricted Share Units, and Unrestricted Shares .  Under the Amended 2011 Plan, the Committee may grant Restricted Shares that are forfeitable until certain vesting requirements are met, may grant Restricted Share Units which represent the right to receive Shares after certain vesting requirements are met, and may grant unrestricted Shares as to which the Participant’s interest is immediately vested.

Performance Awards .  The Amended 2011 Plan authorizes the Committee to grant performance-based awards in the form of Performance Units that the Committee may or may not designate as “Performance Compensation Awards” that are intended to be exempt from Code Section 162(m) limitations. In either case, Performance Awards vest and become payable based upon the achievement, within the specified period of time, of specified objective Performance Measures applicable to the individual, us or any affiliate. Performance Awards are payable in Shares, cash or some combination of the two; subject to an individual Participant limit of, during any Performance Period, no more than twenty percent (20%) of the total number of Shares reserved for Awards under the Amended 2011 Plan as of the first day of such three-year period (or, for Performance Units to be settled in cash, the equivalent Fair Market Value of those twenty percent of such Shares). The Committee decides the length of Performance Periods, but the periods may not be less than one fiscal year of the Company.

The Committee may, unless otherwise provided in the Award Agreement, reduce or eliminate the amount payable pursuant to a Performance Compensation Award through the use of Negative Discretion in the event that exceptional circumstances arise which, in the judgment of the Committee, would result in payouts not consistent with the intentions of the Committee at the inception of the Plan or the Award or would otherwise cause the Amended 2011 Plan to operate in a manner inconsistent with the best interests of the Company.

Under the Amended 2011 Plan, the term “Performance Measure” is defined as a performance measure selected by the Committee to measure Company, Affiliate, and/or business unit performance for a Performance Period, whether in absolute or relative terms and includes a broad range of objective financial and operational measures, including, without limitation, funds from operations or adjusted company funds from operations as defined by the National Association of Real Estate Investment Trusts (or a similar measure as defined by the Company in its filings with the Securities and Exchange Commission); earnings before interest, taxes, depreciation and amortization and any related ratio to debt, same store results, funds available for distribution; net operating income; investment volume; credit rating; earnings per share; growth in revenues; internal rate of return; net income; return on assets; return on capital (including initial cash yield and generally accepted accounting principle yield for investments or dispositions); weighted-average lease term; disposition volume; occupancy; tenant retention; refinancing savings; return on stockholder equity; return on investment; return on sales; stock price; strategic transactions; total stockholder return (whether absolute or relative to a peer or other objective index); ratio of debt to debt plus equity; ratio of debt to total assets; maximum leverage; fixed charge coverage; recourse secured indebtedness ratio; secured indebtedness ratio; unsecured debt service coverage; unencumbered leverage; unencumbered assets to unsecured debt; and other objective financial or other metrics relating to the progress of the Company or to a Subsidiary, division or department thereof. For a full listing of measures that may be used as Performance Measures, see the definition of that term in the Amended 2011 Plan attached as Annex A to this Proxy Statement.

Dividend Equivalent Rights (DERs) .  The Committee may grant DERs to any Eligible Person, and may do so either pursuant to an Agreement that is independent of any other Award, or through a provision in another Award (other than an Option or SAR) that DERs attach to the Shares underlying the Award.

Minimum Vesting for Awards .  Awards granted pursuant to the Amended 2011 Plan that are subject to vesting shall become vested on a pro rata basis over a period of not less than one year following the grant date of such Award; provided, however, such Awards that result in the issuance of an aggregate of up to 5% of the maximum number of Shares available at any time pursuant to the Amended 2011 Plan may be granted without respect to such minimum vesting provision.

Forfeiture .  Unless otherwise provided in an agreement granting an Award, we may terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards, rescind any exercise, payment or delivery pursuant to the Award, or Recapture any common stock (whether restricted or unrestricted) or proceeds from the Participant’s sale of Shares issued pursuant to the Award if granted, vested or settled during a period affected by a Participant’s fraud or misconduct, or a financial restatement.

TABLE OF CONTENTS

Income Tax Withholding .  As a condition for the issuance of Shares pursuant to Awards, the Amended 2011 Plan requires satisfaction of any applicable federal, state, local, or foreign Withholding Tax obligations that may arise in connection with the award or the issuance of Shares. The Amended 2011 Plan provides for Withholding Tax to be satisfied through the withholding and cancelling by the Company of the number of Shares that would otherwise be delivered to the Participant pursuant to the Award and that have aggregate fair market value as of the date of withholding equal to the Withholding Tax, and, thereafter, to the extent necessary to satisfy the Withholding Tax.

Non-Transferability of Awards .  Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of other than by will or the laws of descent and distribution, except to the extent the Committee permits lifetime transfers in the form of a Non-ISO, SAR, Restricted Shares, or Performance Shares to charitable institutions, certain family members or related trusts, or as otherwise approved by the Committee.

Certain Corporate Transactions .  The Committee shall equitably adjust the number of Shares covered by each outstanding Award, and the number of Shares that have been authorized for issuance under the Amended 2011 Plan but as to which no Awards have yet been granted or that have been returned to the Amended 2011 Plan upon cancellation, forfeiture or expiration of an Award, as well as the price per Share covered by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by us.

In addition, in the event of a Change in Control (as defined in the Amended 2011 Plan but subject to the terms of any Award agreements or any employment or other similar agreement between us or any of our affiliates and a Participant then in effect), each outstanding Award shall be assumed or a substantially equivalent award shall be substituted by the surviving or successor corporation or a parent or subsidiary of such surviving or successor corporation. However, that to the extent outstanding Awards are neither being assumed nor replaced by the successor corporation, the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of our shareholders or any Participant with respect to outstanding Awards, take one or more of the following actions: (a) accelerate the vesting of Awards for any period so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise would have been unvested and provide that our repurchase rights with respect to Shares issued pursuant to an Award shall lapse; (b) arrange or otherwise provide for payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation of outstanding Awards; or (c) terminate all or some Awards upon the consummation of the transaction, provided that the Committee shall provide for vesting of such Awards in full as of a date immediately prior to consummation of the Change in Control. If an Award is not exercised prior to consummation of a transaction in which the Award is not being assumed or substituted, such Award shall terminate upon such consummation.

Notwithstanding the above, in the event a Participant holding an Award assumed or substituted by the successor corporation in a Change in Control is Involuntarily Terminated by the successor corporation in connection with, or within 12 months (or other period either set forth in an Award Agreement, or as increased thereafter by the Committee to a period longer than 12 months) following consummation of, the Change in Control, then any assumed or substituted Award held by the terminated Participant at the time of termination shall accelerate and become fully vested (and exercisable in full in the case of Options and SARs), and any repurchase right applicable to any Shares shall lapse in full.

If we dissolve or liquidate, subject to the terms of any Award Agreements or employment-related agreements between the Company or any of its Affiliates and any Participant, all Awards will terminate immediately prior to such dissolution or liquidation, subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.

Term of the Amended 2011 Plan; Amendments or Termination .  The term of the Amended 2011 Plan is ten years from March 27, 2017. Our Board of Trustees may from time to time, amend, alter, suspend, discontinue or terminate the Amended 2011 Plan; provided that no amendment, suspension or termination of the Amended 2011 Plan shall materially and adversely affect Awards already granted. Any amendment to the

TABLE OF CONTENTS

Amended 2011 Plan or any Award Agreement that results in the repricing of an Option or SAR issued under Amended 2011 Plan shall not be effective without prior approval of the shareholders of the Company.

Expected Tax Consequences.

The following is a brief summary of certain tax consequences of certain transactions under the Amended 2011 Plan. This summary is not intended to be complete and does not describe state or local tax consequences.

Under the Code, we will generally be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the ordinary income, if any, that Participants recognize pursuant to Awards (subject to the Participant’s overall compensation being reasonable, and to the discussion below with respect to Code Section 162(m)). For Participants, the expected U.S. federal income tax consequences of Awards are as follows:

Non-ISOs .  A Participant will not recognize income at the time a Non-ISO is granted. At the time a Non-ISO is exercised, the Participant will recognize ordinary income in an amount equal to the excess of (a) the Fair Market Value of the Shares issued to the Participant on the exercise date, over (b) the exercise price paid for the Shares. At the time of sale of Shares acquired pursuant to the exercise of a Non-ISO, the appreciation (or depreciation) in value of the Shares after the date of exercise will be treated either as short-term or long-term capital gain (or loss) depending on how long the Shares have been held.

ISOs .  A Participant will not recognize income upon the grant of an ISO. There are generally no tax consequences to the Participant upon exercise of an ISO (except the amount by which the fair market value of the Shares at the time of exercise exceeds the Option exercise price is a tax preference item possibly giving rise to an alternative minimum tax). If the Shares are not disposed of within two years from the date the ISO was granted or within one year after the ISO was exercised, any gain realized upon the subsequent disposition of the Shares will be characterized as long-term capital gain and any loss will be characterized as long-term capital loss. If both of these holding period requirements are not met, then a “disqualifying disposition” occurs and (a) the Participant recognizes ordinary income gain in the amount by which the Fair Market Value of the Shares at the time of exercise exceeded the exercise price for the ISO and (b) any remaining amount realized on disposition (except for certain “wash” sales, gifts or sales to related persons) will be characterized as capital gain or loss.

Share Appreciation Rights .  A Participant to whom a SAR is granted will not recognize income at the time of grant of the SAR. Upon exercise of a SAR, the Participant must recognize taxable compensation income in an amount equal to the value of any cash or Shares that the Participant receives.

Restricted Shares, Restricted Share Units, Performance Awards, and DERs .  In general, a Participant will not recognize income at the time of grant of Restricted Shares, Restricted Share Units, Performance Awards, or DERs, unless the Participant elects with respect to Restricted Shares to accelerate income taxation to the date of the Award. In this event, a Participant would recognize ordinary income equal to the excess of the market value of the Restricted Shares over any amount the Participant pays for them (in which case subsequent gain or loss would be capital in nature). In the absence of an election to accelerate income taxation to the date of an Award, a Participant must recognize taxable compensation income equal to the value of any cash or Shares that the Participant receives when the Award vests. Similar tax consequences apply to Performance Awards and DERs.

Unrestricted Shares .  A Participant will recognize income at the time of grant of Unrestricted Shares, in an amount equal to the excess of the market value of the Unrestricted Shares over any amount the Participant pays for them (in which case subsequent gain or loss would be capital in nature).

Special Tax Provisions .  Under certain circumstances, the accelerated vesting, cash-out or accelerated lapse of restrictions on Awards in connection with a Change in Control of us might be deemed an “excess parachute payment” for purposes of the golden parachute tax provisions of Code Section 280G, and the Participant may be subject to a 20% excise tax and we may be denied a tax deduction. Furthermore, we may not be able to deduct the aggregate compensation in excess of $1,000,000 attributable to Awards that are not “performance-based” within the meaning of Code Section 162(m) in certain circumstances.

TABLE OF CONTENTS

Income Taxes and Deferred Compensation .  The Amended 2011 Plan provides that Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including any taxes arising under Section 409A of the Code), and that we will not have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes. Nevertheless, the Amended 2011 Plan authorizes the Committee to organize any deferral program, to require deferral election forms, and to grant or to unilaterally modify any Award in a manner that (i) conforms with the requirements of Section 409A of the Code, (ii) that voids any Participant election to the extent it would violate Section 409A of the Code, and (iii) for any distribution election that would violate Section 409A of the Code, to make distributions pursuant to the Award at the earliest to occur of a distribution event that is allowable under Section 409A of the Code or any distribution event that is both allowable under Section 409A of the Code and is elected by the Participant, with the Committee’s consent, in accordance with Section 409A.

General Tax Law Considerations .  The preceding paragraphs are intended to be merely a summary of certain important tax law consequences concerning a grant of Options under the Amended 2011 Plan and the disposition of Shares issued thereunder in existence as of the date of this Proxy Statement. Special rules may apply to our officers, trustees or greater than ten percent shareholders. Participants in the Amended 2011 Plan should review the current tax treatment with their individual tax advisors at the time of grant, exercise or any other transaction relating to an Award or the underlying Shares.

Plan Benefits.

The Committee will grant Awards under the Amended 2011 Plan at its discretion. Consequently, it is not possible to determine at this time the amount or dollar value of Awards to be provided under the Amended 2011 Plan under future grants. On January 10, 2017, the Compensation Committee approved Performance Awards to certain executive officers, as outlined below, that are contingent on stockholder approval of the Amended 2011 Plan in order to qualify for exemption from the Code Section 162(m) limit on compensation deductibility described above. If the Amended 2011 Plan is approved at the Annual Meeting, these Awards will remain outstanding and will vest in accordance with their terms. If the Amended 2011 Plan is not approved at the Annual Meeting, these Awards will be immediately and unconditionally forfeited and returned to the Company.

Contingent Performance Compensation Awards

Name and Position		Per Share Value on Grant Date				Number of Shares (1)
T. Wilson Eglin, Chief Executive Officer and President		$	10.74				198,883
E. Robert Roskind, Chairman		$	10.74				35,755
Richard J. Rouse, Vice Chairman and Chief Investment Officer		$	10.74				51,844
Joseph S. Bonventre, Executive Vice President, General Counsel, and Secretary		$	10.74				40,447

TABLE OF CONTENTS

Required Vote and Recommendation

The approval of the Amended 2011 Plan requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting.

TABLE OF CONTENTS

Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by KPMG LLP for the audit of our annual financial statements for each of 2016 and 2015, and fees billed for other services rendered by KPMG LLP.

		2016				2015
Audit fees (accrual basis) (1)		$	1,275,000			$	1,100,000
Audit-related fees			130,150				—
Total audit and audit related fees			1,405,150				1,100,000
Tax fees (accrual basis) (2)			273,532				242,115
All other fees			—				—
Total fees		$	1,678,682			$	1,342,115

The Audit Committee has determined that the non-audit services provided by the independent registered public accounting firm are compatible with maintaining the accounting firm’s independence. None of the services set forth above in the categories “Audit-related fees,” “Tax fees” and “All other fees” were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) of the Exchange Act after the fact but before completion of the audit.

The Audit Committee of the Board of Trustees must pre-approve the audit and non-audit services performed by our independent registered public accounting firm, and has adopted appropriate policies in this regard. With regard to fees, annually, the independent registered public accounting firm provides the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be performed during the fiscal year. Upon the Audit Committee’s acceptance of and agreement to the engagement letter, the services within the scope of the proposed audit services are deemed pre-approved pursuant to this policy. The Audit Committee must pre-approve any change in the scope of the audit services to be performed by the independent registered public accounting firm and any change in fees relating to any such change. Specific audit-related services and tax services are pre-approved by the Audit Committee, subject to limitation on the dollar amount of such fees, which dollar amount is established annually by the Audit Committee. Services not specifically identified and described within the categories of audit services, audit-related services and tax services must be expressly pre-approved by the Audit Committee prior to us engaging any such services, regardless of the amount of the fees involved. The Chairperson of the Audit Committee is delegated the authority to grant such pre-approvals. The decisions of the Chairperson to pre-approve any such activity shall be presented to the Audit Committee at its next scheduled meeting. In accordance with the foregoing, the retention by management of our independent registered public accounting firm for tax consulting services for specific projects is pre-approved, provided, that the cost of any such retention does not exceed $20,000 and the annual cost of all such retentions does not exceed $50,000. The Audit Committee does not delegate to management its responsibilities to pre-approve services to be performed by our independent registered public accounting firm.

Required Vote and Recommendation

Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting.

TABLE OF CONTENTS

TABLE OF CONTENTS

Annex A
 
LEXINGTON REALTY TRUST
 
AMENDED AND RESTATED 2011 EQUITY-BASED AWARD PLAN

 

Plan Document

 

1. Introduction .

(a) Purpose.   By resolution of the Compensation Committee of its Board of Trustees approved on March 27, 2017 (the “ Committee Approval Date ”), Lexington Realty Trust (the “ Company ”) hereby establishes this amended and restated equity-based incentive compensation plan to be known as the “Lexington Realty Trust Amended and Restated 2011 Equity-Based Award Plan” (the “ Plan ”). The 2011 Equity-Based Award Plan was originally established on March 28, 2011 by the Company’s Board of Trustees for the following purposes: (i) to enhance the Company’s ability to attract highly qualified personnel; (ii) to strengthen its retention capabilities; (iii) to enhance the long-term performance and competitiveness of the Company; and (iv) to ensure that the interests of Plan participants align with those of the Company’s shareholders. This Plan, as amended and restated, is intended to continue to achieve such purposes and to serve as the sole source for all future equity-based awards to those eligible for Plan participation.

(b) Effective Date .  This Plan shall become effective on the date (the “ Effective Date ”) upon which it has received approval by a vote of a majority of the votes cast at a duly held meeting of the Company’s shareholders (or by such other shareholder vote that the Committee determines to be sufficient for the issuance of Shares and Awards according to the Company’s governing documents and Applicable Law).

(c) Definitions .  Terms used herein and in Appendix I that begin with an initial capital letter shall have the meanings set forth in Appendix I or elsewhere in this Plan, unless the context of their use clearly indicates a different meaning.

(d) Effect on Other Plans, Awards, and Arrangements .  This Plan is not intended to affect, and shall not affect, any share options, equity-based compensation, or other benefits that the Company or its Affiliates may have provided, or may provide in the future, pursuant to any agreement, plan, or program that is independent of this Plan.

2. Types of Awards .  The Plan permits, but does not require, the granting of the following types of Awards according to the Sections of the Plan listed below:

Section 5		Share Options
Section 6		Shares Appreciation Rights (“ SARs ”)
Section 7		Restricted Share, Restricted Share Unit (“ RSUs ”) and Unrestricted Share Awards
Section 8		Performance Compensation Awards
Section 9		Dividends Equivalent Rights