Board Leadership
The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The Board understands that there is no single, generally accepted approach to providing Board leadership and the right Board leadership structure may vary as circumstances warrant. Consistent with this understanding, our independent directors consider the Boards leadership structure on an annual basis.
The Board of Directors will annually elect a Chairman of the Board, who may or may not be the chief executive officer of our company. Since our formation in 2010, Ted W. Rollins has served as our Co-Chairman of the Board and Chief Executive Officer and Michael S. Hartnett has served as our Co-Chairman of the Board and Chief Investment Officer. Messrs. Rollins and Hartnett are involved in both our day-to-day operations and the strategic decision making at the board level. Based on its most recent review of our leadership structure, the Board continues to believe that this leadership structure is optimal for us because it
provides our company with strong and consistent leadership. The Board believes that having Messrs. Rollins and Hartnett serving in these positions provides us with decisive and effective leadership.
In considering its leadership structure, the Board has taken a number of factors into account. The Board, which consists of a majority of independent directors, exercises a strong, independent oversight function. This oversight function is enhanced by the fact that all of the Boards committees audit, compensation and nominating and corporate governance committees are comprised entirely of independent directors. Further, as specified in our corporate governance guidelines (and as discussed in greater detail below), the Board has designated one of its independent directors as the lead
independent director, with significant responsibilities. A number of board and committee processes and procedures, including regular executive sessions of non-management directors and a regular review of our executive officers performance, provide substantial independent oversight of our managements performance. Finally, under our bylaws and corporate governance guidelines, the Board has the ability to change its structure, should that be deemed appropriate and in the best interest of our company and our stockholders. The Board believes that these factors provide the appropriate balance between the authority of those who oversee our company and those who manage it on a day-to-day basis.
The Co-Chairmen of the Board preside at all meetings of the stockholders and of the Board as a whole. The Co-Chairmen perform such other duties, and exercise such powers, as from time to time shall be prescribed in our bylaws or by the Board of Directors. As discussed below, the lead independent director performs such duties as may be specified by the Board and outlined in our corporate governance guidelines.
Lead Independent Director
As stated in our corporate governance guidelines, our Board of Directors annually elects a non-management and independent director to serve in a lead capacity to coordinate the activities of the other non-management and independent directors, and to perform any other duties and responsibilities that the Board of Directors may determine. Although annually elected, it is generally expected that he or she will serve for more than one year. Richard S. Kahlbaugh currently serves as our lead independent director.
The role of the lead independent director may include:
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presiding at executive sessions, including coordinating the agendas for the sessions;
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functioning as principal liaison on sensitive issues between the independent directors and management;
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approving the appropriate provision of information sent to the Board, including agenda items;
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facilitating the Boards approval of the number and frequency of Board meetings, as well as meeting schedules, to assure that there is sufficient time for discussion;
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authorizing the retention of outside advisors and consultants who report directly to the Board of Directors; and
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if requested by stockholders, ensuring that he/she is available, when appropriate, for consultation and direct communication.
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Director Independence
Under the enhanced corporate governance standards of the NYSE, at least a majority of our directors, and all of the members of our audit committee, compensation committee and nominating and corporate governance committee, must meet the test of independence. The NYSE standards provide that to qualify as an independent director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine that a director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company).
Our Board of Directors has affirmatively determined that each of Messrs. Kahlbaugh, McGlynn, Popeo and Simmons satisfies the bright-line independence criteria of the NYSE and that none has a relationship with us that would interfere with such persons ability to exercise independent judgment as a member of the Board of Directors. Our Board of Directors has affirmatively determined that Dr. Coles, who is currently a director, but who will not stand for reelection as a director at the 2013 Annual Meeting, satisfies the bright-line independence criteria of the NYSE. Therefore, we believe that all of these directors, who constitute a majority of our Board of Directors, are independent under the NYSE rules.
We have implemented procedures for interested parties, including stockholders, to communicate directly with our independent directors. We believe that providing a method for interested parties to communicate directly with our independent directors, rather than the full Board of Directors, would provide a more confidential, candid and efficient method of relaying any interested partys concerns or comments. See Communication with the Board of Directors, Independent Directors and the Audit Committee.
Board Meetings
The Board of Directors held eight meetings in 2012, the audit committee held seven meetings in 2012, the compensation committee held three meetings in 2012 and the nominating and corporate governance committee held one meeting in 2012. Each director attended more than 75% of the Board meetings and each directors respective committee meetings in 2012. The Board of Directors does not have a policy with respect to directors attendance at Annual Meetings of Stockholders.
As required by the NYSE rules, the independent directors of our Board regularly meet in executive session, without management present. Generally, these executive sessions follow after each meeting of the Board and each committee meeting. In 2012, the independent directors of the Board met in executive session without management present eight times. Our lead independent director presides over such independent, non-management sessions of the Board.
Board Committees
Our Board of Directors has appointed an audit committee, a compensation committee and a nominating and corporate governance committee and has adopted a written charter for each of these committees. Each of these committees has three directors and is composed exclusively of independent directors, as required by and defined in the rules and listing qualifications of the NYSE and, with respect to the members of the audit committee, Rule 10A-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act). Moreover, to the extent required by Rule 16b-3 of the Exchange Act, our compensation
committee is composed exclusively of non-employee directors who qualify as outside directors for purposes of Section 162(m) of the Internal Revenue Code. Our Board of Directors may from time to time establish other committees to facilitate the management of our company.
Audit Committee
Our audit committee consists of Richard S. Kahlbaugh, Denis McGlynn and William G. Popeo, each of whom is an independent director. Each member of the audit committee is financially literate and able to read and understand fundamental financial statements. William G. Popeo chairs our audit committee and serves as our audit committee financial expert, as that term is defined by the SEC. Our audit committee assists the Board in overseeing, among other things:
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our system of internal controls;
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our accounting and financial reporting processes;
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the integrity and audits of our consolidated financial statements;
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our compliance with legal and regulatory requirements;
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the qualifications and independence of our independent auditors; and
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the performance of our independent auditors and any internal auditors.
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Our audit committee also is responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal controls. The audit committee has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel
for this purpose where appropriate.
Our Board of Directors has adopted a policy for the review and approval of related person transactions requiring disclosure under Rule 404(a) of Regulation S-K. The policy provides that the audit committee is responsible for reviewing and approving or disapproving all interested transactions, including any transaction, arrangement or relationship in which (i) the amount involved may be expected to exceed $120,000 in any fiscal year, (ii) we will be a participant and (iii) a related person has a direct or indirect material interest. A related person is defined as an executive officer, director or nominee for election as
director, or a greater than 5% beneficial owner of our common stock, or an immediate family member of the foregoing.
In addition, we have a written code of business conduct and ethics that covers a wide range of business practices and procedures and that establishes guidelines for our directors, officers and employees, including standards for many situations where potential conflicts of interest may arise. Our code of business conduct and ethics requires all directors, officers and employees to report any transactions or relationships that reasonably could be expected to give rise to a conflict of interest to the chairman of the audit committee or our chief financial officer or through our whistleblower hotline. In addition, our corporate
governance guidelines require that each member of our Board of Directors consult the nominating and corporate governance committee in advance of accepting an invitation to serve on another companys board. Because the facts and circumstances regarding potential conflicts are difficult to predict, the Board of Directors has not adopted a written policy for evaluating conflicts of interests. In the event a conflict of interest arises, the Board will review, among other things, the facts and circumstances of the conflict, our applicable corporate governance policies, the effects of any potential waivers of those policies, applicable state law, and the NYSE continued listing rules and regulations, and will consider the advice of counsel, before making any decisions regarding the conflict.
The audit committee held seven meetings in 2012.
Compensation Committee
Our compensation committee consists of N. Anthony Coles, Denis McGlynn and Daniel L. Simmons, each of whom is an independent director. Denis McGlynn chairs our compensation committee. The principal functions of our compensation committee include:
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evaluating the performance of our officers;
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establishing overall employee compensation policies and recommending, as appropriate or necessary, to our Board of Directors major compensation programs;
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reviewing and approving the compensation payable to our named executive officers, including salary and bonus awards and awards under our 2010 Equity Incentive Compensation Plan;
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administering our 2010 Equity Incentive Compensation Plan and any other compensation plans, policies and programs of ours;
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assisting management in complying with our proxy statement and annual report disclosure requirements; and
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discharging the Boards responsibilities relating to compensation of our directors.
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The compensation committee held three meetings in 2012.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of N. Anthony Coles, Richard S. Kahlbaugh and Daniel L. Simmons, each of whom is an independent director. Richard S. Kahlbaugh chairs our nominating and corporate governance committee. The principal functions of our nominating and corporate governance committee include:
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seeking, considering and recommending to our Board of Directors qualified candidates for election as directors, recommending a slate of nominees for election as directors at the Annual Meeting of Stockholders and verifying the independence of directors;
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recommending to our Board of Directors the appointment of each of our executive officers;
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periodically preparing and submitting to our Board of Directors for adoption the committees selection criteria for director nominees;
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reviewing and making recommendations on matters involving the general operation of our Board of Directors and our corporate governance;
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annually recommending to our Board the nominees for each committee of the Board; and
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annually facilitating the assessment of our Board of Directors performance as a whole and of the individual directors and report thereon to our Board.
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The nominating and corporate governance committee held one meeting in 2012.
The nominating and corporate governance committee charter requires the committee to be comprised of at least three directors. Upon the expiration of Dr. Coles term as a director, the Board will appoint a new independent director to the nominating and corporate governance committee.
Risk Management
Our Board of Directors takes an active and informed role in our risk management policies and strategies. At least annually, our executive officers, who are responsible for our day-to-day risk management practices, present to the Board of Directors a comprehensive report on the material risks to our company, including credit risk, liquidity risk and operational risk. At that time, the management team also reviews with the Board of Directors our risk mitigation policies and strategies specific to each risk that is identified. If necessary, our Board of Directors may delegate specific risk management tasks to management or an
appropriate committee. Throughout the year, management monitors our risk profile and, on a regular basis, updates the Board of Directors as new material risks are identified or the aspects of a risk previously presented to the Board materially change. The nominating and corporate governance committee, subject to the review of the audit committee, also actively monitors risks to our company throughout the year, and with the aid of management, identifies any additional risks that need to be elevated for the full Boards consideration.
Nomination of Directors
Before each Annual Meeting of Stockholders, the nominating and corporate governance committee considers the nomination of all directors whose terms expire at the next Annual Meeting of Stockholders and also considers new candidates whenever there is a vacancy on the Board or whenever a vacancy is anticipated due to a change in the size or composition of the Board, a retirement of a director or for any other reasons. In addition to considering incumbent directors, the nominating and corporate governance committee may identify director candidates based on recommendations from the directors and executive officers. The committee
may in the future engage the services of third-party search firms to assist in identifying or evaluating director candidates.
The nominating and corporate governance committee evaluates annually the effectiveness of the Board as a whole and of each individual director and identifies any areas in which the Board would be better served by adding new members with different skills, backgrounds or areas of experience. The nominating and corporate governance committee and the Board of Directors consider director candidates based on a number of factors including:
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whether the candidate will be independent, as such term is defined by the NYSE listing standards;
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whether the candidate has a general understanding of marketing, finance, corporate strategy and other elements relevant to the operation of a publicly-traded company in todays business environment;
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the candidates character, including whether the candidate possesses high personal and professional ethics, integrity and values;
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the candidates educational and professional background, including whether the candidate has demonstrated leadership ability, with broad experience, diverse perspectives, and the ability to exercise sound business judgment;
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whether the candidate has an understanding of our business, including experience in areas important to the operations of our company; and
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whether the candidate provides a diversity of viewpoints, background, experience and demographics as compared the current members of the Board.
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Candidates are also evaluated based on their understanding of our business and willingness to devote adequate time to carrying out their duties. The nominating and corporate governance committee also monitors the mix of skills, experience and background to assure that the Board has the necessary composition to effectively perform its oversight function. As noted immediately above, diversity characteristics of a candidate are just one of several factors considered by the committee when evaluating director candidates. A candidate will neither be included nor excluded from consideration solely based on his or her diversity
traits. The nominating and corporate governance committee conducts regular reviews of current directors in light of the considerations described above and their past contributions to our Board of Directors. The Board reviews the effectiveness of its director candidate nominating policies annually.
The nominating and corporate governance committee will consider appropriate nominees for directors whose names are submitted in writing by a stockholder of our company. Director candidates submitted by our stockholders will be evaluated by the nominating and corporate governance committee on the same basis as any other director candidates. We did not receive any nominations of directors by stockholders for the 2013 Annual Meeting.
Nominations must be addressed to Campus Crest Communities, Inc., 2100 Rexford Road, Suite 414, Charlotte, North Carolina 28211, Attn: Donald L. Bobbitt, Jr., Corporate Secretary, indicating the nominees qualifications and other relevant biographical information and providing confirmation of the nominees consent to serve as director, if elected. In order to be considered for the next annual election of directors, any such written request must comply with the requirements set forth in our bylaws and below under Stockholder Proposals.
Compensation Committee Interlocks and Insider Participation
The compensation committee consists of N. Anthony Coles, Denis McGlynn and Daniel L. Simmons. None of the members of our compensation committee is or has been employed by us. None of our executive officers currently serves, or in the past three years has served, as a member of the compensation committee of another entity that has one or more executive officers serving on our Board of Directors or compensation and governance committee. No member of the compensation committee has any other business relationship or affiliation with us (other than his service as a director).
Director Compensation for 2012
We pay a $10,000 annual directors fee to each of our independent directors in cash. Each independent director also receives a fee of $2,500 for attendance at every in-person meeting of our Board of Directors and committee of our Board of Directors (unless a committee meeting is on the same day as a Board meeting) and a fee of $1,000 for attendance at every telephonic meeting of our Board of Directors and committee of our Board of Directors (unless a committee meeting is on the same day as a Board meeting). In addition, we pay an additional annual fee of $10,000 to the chair of our audit committee, an additional annual
fee of $6,000 to the chair of each of our compensation committee and our nominating and corporate governance committee, and an additional annual fee of $15,000 to our lead independent director. Our independent directors are also eligible to receive awards under our 2010 Equity Incentive Compensation Plan. Further, all members of our Board of Directors are reimbursed for their reasonable out-of-pocket costs and expenses in attending all meetings of our Board of Directors and its committees.
Communication with the Board of Directors, Independent Directors and the Audit Committee
Our Board of Directors may be contacted by any party via mail at the address listed below.
Board of Directors
Campus Crest Communities, Inc.
2100 Rexford Road, Suite 414
Charlotte, North Carolina 28211
We believe that providing a method for interested parties to communicate directly with our independent directors, rather than the full Board, would provide a more confidential, candid and efficient method of relaying any interested partys concerns or comments. As discussed above, the presiding director of independent, non-management sessions of the directors is the lead independent director. The independent directors can be contacted by any party via mail at the address listed below.
Lead Independent Director
Campus Crest Communities, Inc.
2100 Rexford Road, Suite 414
Charlotte, North Carolina 28211
The audit committee has adopted a process for anyone to send communications to the audit committee with concerns or complaints concerning our companys accounting, audit or internal controls issues, violations of federal securities laws, rules or regulations and retaliation against employees who make allegations of the foregoing. The audit committee can be contacted by any party via mail at the address listed below:
Chairman
Audit Committee
Campus Crest Communities, Inc.
2100 Rexford Road, Suite 414
Charlotte, North Carolina 28211
Alternatively, anyone may report openly, confidentially or anonymously any such matter by calling our ethics hotline at 1-877-208-5982, or communicating by email to
www.reportlineweb.com/campuscrest
, at any time. The toll-free line is managed by an outside, independent service provider and allows anyone to make a report without divulging his or her name. The hotline service provider is required to share the information provided in the report to our outside legal counsel as promptly as practicable. Our outside counsel will review such matters and, where appropriate, will forward to the chairman of the audit committee as
promptly as practicable.
Relevant communications are distributed to the Board, or to any individual director or directors, as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, our Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board should be excluded or redirected, as appropriate, such as: business solicitations or advertisements; junk mail and mass mailings; resumes and other forms of job inquiries; spam; and surveys.
In addition, material that is unduly hostile, threatening, potentially illegal or similarly unsuitable will be excluded; however, any communication that is excluded will be made available to any outside director upon request.
EXECUTIVE OFFICER COMPENSATION
Compensation Discussion and Analysis
The following describes our 2012 compensation program for our named executive officers, which includes Ted W. Rollins, our co-chairman and chief executive officer, Michael S. Hartnett, our co-chairman and chief investment officer, Earl C. Howell, our former president and chief operating officer, Donald L. Bobbitt, Jr., our executive vice president and chief financial officer, and Robert Dann, our current chief operating officer. Mr. Howell relinquished the position of chief operating officer effective October 20, 2012 and relinquished the position of president effective January 5, 2013, and now serves in a part-time capacity
as Director of Special Projects until December 31, 2013. Mr. Dann succeeded Mr. Howell as our chief operating officer effective October 20, 2012. The following discussion and analysis should be read together with the tables and related footnote disclosures detailed below.
Executive Compensation Program Objectives
The primary objectives of our executive compensation program are to attract, motivate and retain talented, high-caliber executives necessary to lead us in achieving business success, and to align their compensation with our short-term and long-term goals. To do this, our compensation program for executive officers is made up of the following components: (i) base salary, designed to compensate our executive officers for work performed during the fiscal year; (ii) annual cash bonuses, designed to reward our executive officers for our yearly performance and for their individual performance during the fiscal year; and (iii)
equity-based awards under our 2010 Equity Incentive Compensation Plan, meant to align our executive officers interests with our long-term performance. For all named executive officers, compensation is intended to be significantly performance-based, with a belief that compensation paid to executive officers should be closely aligned with the performance of our company on both a short-term and long-term basis, in order to create value for stockholders.
In establishing compensation for executive officers, the following summarizes our primary objectives:
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attract and retain individuals of superior ability and managerial talent;
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ensure senior officer compensation is aligned with our corporate strategies and business objectives and the long-term interests of our stockholders;
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increase the incentive to achieve key strategic and financial performance measures by linking incentive award opportunities to the achievement of performance goals in these areas; and
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enhance the officers incentives to provide increased value to stockholders, as well as promote retention of key management personnel, by providing a portion of total compensation opportunities for senior management in the form of ownership in our company in the form of shares of our common stock and other equity and equity-based awards.
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Taking into consideration the foregoing objectives, we structure total compensation for our executives to provide a guaranteed amount of cash compensation in the form of base salaries, while also providing a meaningful amount of annual cash compensation that is at risk and dependent on our performance and the individual performance of the executives, in the form of discretionary annual bonuses. We also seek to provide a portion of total compensation in the form of equity-based awards in order to align the interests of executives and other key employees with those of our stockholders, and for retention purposes.
Role of the Compensation Committee and Management
The compensation committee, pursuant to its charter, determines all performance goals and compensation decisions for the chief executive officer and determines compensation decisions for the other named executive officers, including decisions regarding non-equity compensation and equity awards. In doing so, the compensation committee consults with our chief executive officer, our chief investment officer and our chief operating officer and other officers as appropriate. The compensation committee believes it is valuable to consider the recommendations of our chief executive officer, chief investment officer and chief operating
officer with respect to these matters because, given their knowledge of our operations, the student housing
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industry and the day-to-day responsibilities of our executive officers, they are in a unique position to provide the compensation committee perspective into the performance of our executive officers in light of our business at a given point in time.
The compensation committee is charged with, among other things, the responsibility of reviewing executive officer compensation policies and practices to ensure adherence to our compensation philosophies and that the total compensation paid to our executive officers is fair, reasonable and competitive, taking into account our competitive position within our industry and our named executive officers level of expertise and experience in their positions. The compensation committees primary responsibilities with respect to determining executive compensation are (i) setting performance targets under all annual bonus and
long-term incentive compensation plans, including our 2010 Equity Incentive Compensation Plan; (ii) verifying that performance targets used for any performance-based equity compensation plans have been met before payment of any executive bonus or compensation; (iii) approving all amendments to, and terminations of, all compensation plans and any awards under such plans; (iv) granting any awards under any performance-based annual bonus, long-term incentive compensation and equity compensation plans to executive officers; (v) approving which executive officers and other employees receive awards under our equity and incentive compensation plans; and (vi) conducting an annual review of all compensation plans.
Compensation Committee Consideration of the 2012 Vote on Executive Compensation
In determining our executive compensation program for 2012, the compensation committee generally considered the results of the 2012 advisory vote of our stockholders on executive compensation presented in our 2012 proxy statement. The compensation committee noted that more than 99% of the votes cast approved the compensation of our named executive officers as described in our 2012 proxy statement. The compensation committee considered these voting results as supportive of the committees general executive compensation practices.
Components and Criteria of Executive Compensation
The following narrative discusses the components of our named executive officer compensation program, including annual cash compensation, equity awards, and health and retirement benefits.
Annual Base Salary
Our named executive officers receive an annual base salary based on position-specific responsibilities, taking into account competitive market compensation for similar positions, the skills and experience of the individual, internal equity among executive officers and individual performance. For 2012, pursuant to the terms of each named executive officers employment agreement, we paid each of Messrs. Rollins and Hartnett an annual base salary of $360,000, Mr. Howell an annual base salary of $360,000, Mr. Bobbitt an annual base salary of $290,000, and Mr. Dann an annual base salary of $320,000. In accordance with our
normal executive compensation practices and consistent with the employment agreements with each named executive officer, effective January 1, 2013 we increased Mr. Rollins annual base salary to $400,000, Mr. Hartnetts annual base salary to $380,000, Mr. Bobbitts annual base salary to $320,000 and Mr. Danns annual base salary to $360,000. Mr. Howell relinquished the title and role of Chief Operating Officer effective October 20, 2012 and relinquished the title and roll of President effective January 5, 2013. Pursuant to the terms of Mr. Howells Amended Employment Agreement, Mr. Howell began serving in a part-time capacity as Director of Special Projects effective January 5, 2013 until December 31, 2013, at an annual base salary of $100,000.
Subject to the employment agreements, the compensation committee considers salary levels for our named executive officers annually as part of our performance review process as well as upon any promotion or other change in job responsibility. Changes in salary may reflect changes in the cost of living, changes in compensation paid by other employers, or the compensation committees assessment, in consultation with our chief executive officer and our chief investment officer, of the individuals performance.
Annual Incentive Compensation Program
In addition to an annual base salary, we have an annual incentive compensation program that consists of discretionary cash bonuses and discretionary restricted stock awards. The awards are designed to incentivize our named executive officers at a variable level of compensation based on our and such individuals
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performance. In connection with the annual incentive compensation program, our compensation committee determines annual performance criteria that are flexible and that change with the needs of our business. Our incentive compensation program is designed to reward the achievement of specific financial and operational objectives. Pursuant to the program and their several employment agreements, for 2012, our named executive officers were eligible for a cash bonus of between 50% and 100% of their base salary through December 31, 2012, and a restricted stock award of between 50% and 100% of their base salary through December 31,
2012, depending on their achievement of individualized performance goals and the relative weighting of the applicable goals. In some cases, our incentive compensation program sets a threshold goal for a minimum award and an outperformance goal for a greater award. Achievement in excess of the threshold goal results in a pro rata increase in the amount of the bonus or stock award attributable to that goal, up to the point where achievement equals or exceeds the outperformance goal.
The table below indicates the performance goals for each of our named executive officers and the relative weighting of each officers goal. The footnotes to the table provide additional information about certain of the goals and indicate, if applicable, the threshold goal and the outperformance goal.
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Performance Goal
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Ted W.
Rollins
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Michael S. Hartnett
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Earl C.
Howell
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Donald L. Bobbitt, Jr.
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Robert
Dann
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Achieve budgeted funds from operation (FFO)
(1)
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30
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%
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30
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%
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30
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%
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30
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%
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Incur no more than budgeted general and administrative (G&A) costs
(2)
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10
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%
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10
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%
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10
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%
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10
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%
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Maintain leverage consistent with budget
(3)
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10
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%
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10
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%
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20
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%
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Achieve effective internal control over financial reporting in accordance with Section 404 of Sarbanes-Oxley Act of 2002 without material weakness
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10
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%
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Close corporate and joint venture financings consistent with annual plan
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20
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%
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20
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%
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15
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%
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Achieve budgeted property revenue
(4)
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35
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%
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Incur no more than budgeted property-level expenses
(5)
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10
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%
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Maintain customer collections
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10
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%
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Achieve academic year 2012 2013 pre-leasing goals
(6)
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20
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%
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10
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%
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Deliver construction projects for fall opening consistent with annual plan
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20
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%
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Complete development activities for 2012 projects consistent with annual plan
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30
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%
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30
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%
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Complete development activities for 2013 projects consistent with annual plan
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20
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%
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35
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%
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Obtain project-level construction debt and joint venture investments consistent with annual plan
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15
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%
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Total
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100%
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100%
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100%
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100%
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100%
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(1)
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FFO budget for 2012 was approximately $27.2 million. Outperformance FFO budget for 2012 was approximately $28.3 million. For purposes of our compensation plans, we calculate FFO in accordance with the definition that was adopted by the Board of Governors of NAREIT. FFO, as defined by NAREIT, represents net income (loss) determined in accordance with U.S. GAAP, excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
|
|
(2)
|
G&A costs budget for 2012 was approximately $7.8 million.
|
|
(3)
|
Leverage budget was approximately 46.2% (calculated as the ratio of principal amount of long-term indebtedness outstanding to gross assets costs (including capital expenditures and before depreciation and amortization).
|
|
(4)
|
Property revenue budget for 2012 was approximately $83.8 million.
|
|
(5)
|
Property-level expense budget for 2012 was approximately $38.3 million.
|
|
(6)
|
Pre-leasing goal for academic year 2012-2013 was 86.2% pre-leased by September 30, 2012.
|
22
Annual Incentive Compensation Program Discretionary Cash Bonuses
Based on the compensation committees review and evaluation and achievement of the applicable performance goals, the compensation committee approved annual cash bonuses for the named executive officers for 2012 at the following levels:
|
|
|
Executive
|
|
2012 Cash Bonus
|
Ted W. Rollins
|
|
$
|
146,417
|
|
Michael S. Hartnett
|
|
$
|
146,417
|
|
Earl C. Howell
|
|
$
|
146,417
|
|
Donald L. Bobbitt, Jr.
|
|
$
|
117,947
|
|
Robert Dann
|
|
$
|
139,330
|
|
Annual Incentive Compensation Program Discretionary Equity Awards
Equity awards pursuant to our annual incentive compensation program and the other equity awards noted below are made to our named executive officers pursuant to our 2010 Equity Incentive Compensation Plan. Time-vested equity awards are designed to focus and reward our named executive officers in accordance with our long-term goals and enhance stockholder value. In addition, because vesting is based on continued employment, our equity-based incentives also encourage the retention of our named executive officers through the award vesting period.
Pursuant to our annual incentive compensation program, annual equity grants were approved at a meeting of the compensation committee on January 28, 2013. Based on the compensation committees review and evaluation and achievement of the applicable performance goals, the compensation committee granted the following awards of restricted common stock to our named executive officers. These shares will vest ratably on each of the first, second and third anniversaries of the date of grant.
|
|
|
Executive
|
|
2012 Equity Awards
|
Ted W. Rollins
|
|
|
12,121
|
|
Michael S. Hartnett
|
|
|
12,121
|
|
Earl C. Howell
|
|
|
12,121
|
(1)
|
Donald L. Bobbitt, Jr.
|
|
|
9,764
|
|
Robert Dann
|
|
|
11,534
|
|
|
(1)
|
As a result of an amendment to Mr. Howells employment agreement, these shares will vest ratably on each of April 1, 2013, July 1, 2013 and October 1, 2013.
|
Because these awards for 2012 compensation were made in 2013, pursuant to applicable disclosure rules, such awards will be reflected in the Summary Compensation and Grants of Plan-Based Awards tables in our proxy statement for the 2014 Annual Meeting of Stockholders.
23
Contractually-Required Restricted Stock Awards
On January 28, 2013, the compensation committee approved, pursuant to the terms of each named executive officers employment agreement entered into at the time of our formation transactions and initial public offering and our 2010 Equity Incentive Compensation Plan, we granted the following awards of restricted common stock to our named executive officers. These shares will vest ratably on each of the first, second and third anniversaries of the date of grant.
|
|
|
Executive
|
|
Shares of Restricted Common Stock Granted Pursuant to Employment Agreements
|
Ted W. Rollins
|
|
|
99,078
|
|
Michael S. Hartnett
|
|
|
99,078
|
|
Earl C. Howell
|
|
|
11,110
|
(1)
|
Donald L. Bobbitt, Jr.
|
|
|
10,370
|
|
Robert Dann
|
|
|
|
|
|
(1)
|
As a result of an amendment to Mr. Howells employment agreement, these shares will vest ratably on each of April 1, 2013, July 1, 2013 and October 1, 2013.
|
Benefits and Perquisites
Each of our named executive officers may participate in the standard company benefits that we offer to all full-time employees. These benefits include medical, dental and vision insurance, life insurance, paid time off and a 401(k) retirement plan, to which we make matching contributions. Our senior officers and management may use our leased aircraft for personal travel, provided that they reimburse us for our incremental cost associated with their actual usage. In addition, each of our named executive officers receives an automobile allowance of up to $12,000 per year.
Severance
Under their employment agreements, certain of our named executive officers are entitled to receive severance payments and benefits under certain circumstances in the event that his or her employment is terminated by us without cause or by the executive for good reason, or in the event of a change of control of us (each as defined in the applicable employment agreement). These severance payments and benefits are designed to protect and compensate our named executive officers under those circumstances. These circumstances, payments and benefits are described below under Potential
Payments Upon Termination or Change of Control.
Employment Agreements
In connection with our initial public offering, we entered into employment agreements with certain of our named executive officers. The employment agreements originally provided for Mr. Rollins to serve as our chief executive officer, for Mr. Hartnett to serve as our chief investment officer, for Mr. Howell to serve as our president and chief operating officer and for Mr. Bobbitt to serve as our executive vice president and chief financial officer. In addition, on March 29, 2011, we entered into an employment agreement with Mr. Dann to serve as our executive vice president and division president of each of Campus Crest Real
Estate Management and Campus Crest Development. Pursuant to an amended employment agreement, Mr. Howell relinquished the title and role of chief operating officer effective October 20, 2012, and relinquished the title and role of president effective January 5, 2013. On January 5, 2013, Mr. Howell began serving in a part-time capacity as Director of Special Projects until December 31, 2013. Effective October 20, 2012, Mr. Dann was promoted to the position of chief operating officer. The initial term of the employment agreements was three years for each of Messrs. Rollins and Hartnett and two years for each of Messrs. Howell, Bobbitt and Dann. Each employment agreement provides for automatic one-year extensions after the expiration of its term, unless either party provides at least three months notice of non-renewal.
24
The employment agreements provide for participation in any other employee benefit plans, insurance policies or contracts maintained by us relating to retirement, health, disability, vacation, auto and other related benefits.
None of the employment agreements contains an Internal Revenue Code Section 280G excise tax gross-up provision.
Potential Payments Upon Termination or Change of Control
Under their employment agreements, certain of our named executive officers are entitled to receive severance payments and benefits under certain circumstances in the event that his or her employment is terminated by us without cause or by the executive for good reason, or in the event of a change of control of us (each as defined in the applicable employment agreement). These severance payments and benefits are designed to protect and compensate our named executive officers under those circumstances. The severance terms of Mr. Howells employment agreement are not described below as his
agreement was amended in October 2012. The payments to which Mr. Howell is entitled upon termination pursuant to the amended agreement are described below under Amended Employment Agreement with Mr. Howell.
The employment agreements provide that if the agreement is terminated by us without cause or by the executive for good reason within 24 months following a change in control of us, (i) each of Messrs. Rollins and Hartnett will be entitled to a lump sum cash payment equal to three times the sum of his then current annual base salary plus the bonus paid to him in the prior year (or, if no bonus was paid, 50% of his target bonus for the current year), and (ii) each of Messrs. Bobbitt and Dann will be entitled to a lump sum cash payment equal to two times the sum of his then current annual base salary plus
the bonus paid to him in the prior year (or, if no bonus was paid, 50% of his target bonus for the current year). In the event the agreement is terminated by us without cause or by the executive for good reason and not within 24 months following a change in control of us each of Messrs. Rollins, Hartnett, Bobbitt and Dann will be entitled to a cash payment equal to two times the sum of his then current annual base salary plus the bonus paid to him in the prior year (or, if no bonus was paid, 50% of his target bonus for the current year), payable in equal monthly installments over a period of 24 months after termination.
In addition, the employment agreements provide that if the executive is terminated either by us without cause or by the executive for good reason, with or without a change in control of us, or if the executive retires at or after the age of 63, then any unvested equity awards granted to such named executive officer shall immediately vest.
The employment agreements define cause as the (i) employees act of gross negligence or misconduct that has the effect of injuring the business of us and our affiliates, taken as a whole, in any material respect, (ii) employees conviction or plea of guilty or nolo contendere to the commission of a felony by employee, (iii) commission by the employee of an act of fraud or embezzlement against us or our affiliates or (iv) employees willful breach of any material provision of his or her employment agreement or related confidentiality and non-compete agreement, that will be entered into
contemporaneously with the employment agreement.
The employment agreements for each of Messrs. Rollins, Hartnett, Bobbitt and Dann define good reason as (i) a material involuntary reduction in employees duties or function, (ii) a material reduction in the employees compensation package other than as mutually agreed, (iii) the employees involuntary relocation to a principal place of work more than 30 miles from Charlotte, North Carolina or (iv) a material breach by us of our obligations under the applicable employment agreement
,
provided that the employee gives us notice of his belief that he has good reason to terminate the applicable
employment agreement and we fail to cure the breach within 30 business days of receipt of the employees notice.
Amended Employment Agreement With Mr. Howell
On August 15, 2012, we entered into an Amended Employment Agreement with Mr. Howell. Pursuant to the Amended Employment Agreement, Mr. Howell relinquished the title and role of chief Operating Officer effective October 20, 2012, and relinquished the title and role of president effective January 5, 2013. Effective January 5, 2013, Mr. Howell began serving in a part-time capacity as Director of Special Projects, a role in
25
which he is expected to serve until December 31, 2013. Pursuant to the Amended Employment Agreement, Mr. Howell was or will be entitled to the compensation and other benefits, including (among others):
|
|
A base salary through January 4, 2013, at an annual rate of $360,000.
|
|
|
A car allowance of $1,000 per month through December 31, 2012, and a housing allowance of $1,900 a month through January 11, 2013.
|
|
|
Eligibility to participate in, and receive a cash bonus pursuant to, the Companys 2012 incentive compensation plan.
|
|
|
Eligibility to participate in, and receive an equity grant pursuant to, the Companys equity incentive compensation plan for fiscal year 2012.
|
|
|
A grant of 11,110 share of restricted common stock on January 1, 2013, per the terms of Mr. Howell's original Employment Agreement dated October 19, 2010.
|
|
|
Ratable vesting of existing and any 2012 stock awards over four quarters of 2013.
|
|
|
Eligibility for two, $100,000 cash bonuses relating to successful special projects.
|
|
|
Effective January 5, 2013, for serving as Director of Special Projects, a base salary at an annual rate of $100,000, plus hourly compensation for extraordinary services provided to the Company through December 31, 2013.
|
Mr. Howells Amended Employment Agreement provides that if the Amended Employment Agreement is terminated prior to its expiration on December 31, 2013 either (i) by us without good cause or (ii) by Mr. Howell for good cause, we will pay to Mr. Howell all compensation and benefits that he would have received hereunder had he remained employed through December 31, 2013, and any granted but unvested stock grants shall vest immediately. In addition, if the Amended Employment Agreement is terminated prior to its expiration by us without cause as defined in the Company's Equity Incentive
Compensation Plan (EICP) for 2012 within 24 months following the occurrence of a Change in Control as defined in the EICP for 2012, vesting of grants and/or acceleration thereof shall be governed by the terms of the EICP for 2012.
If the Amended Employment Agreement is terminated prior to its expiration on December 31, 2013 either (i) by us with good cause or (ii) by Mr. Howell without good cause, we will be obligated to pay Mr. Howell only that pro-rata portion of his then current base salary payment which is earned but unpaid as of the termination date, any earned and vested but unpaid incentive compensation, any accrued but unpaid paid time off due to him through the termination date and any unreimbursed expenses. Mr. Howell will not receive any additional payment or benefits and he shall forfeit any remaining unvested grants.
The Amended Employment Agreement defines good cause as used in clause (i) in the paragraphs above as: (1) employee's act of gross negligence or misconduct that has the effect of injuring the business of the Company or its parent, subsidiaries or affiliates, taken as a whole, in any material respect, (2) employee's material violation of the Company's code of business conduct and ethics; (3) a material violation of the employee's fiduciary duties to the Company; (4) employee's conviction or plea of guilty or nolo contendere to the commission of a felony by employee, (5) the commission by employee of an act of fraud
or embezzlement against the Company, its parent, subsidiary or affiliates, or (6) employee's willful breach of any material provision of the Amended Employment Agreement, including his failure to execute any documents, required by the Amended Employment Agreement, or the breach of the existing or any subsequent confidentiality, noncompetition and/or non-solicitation agreements or any other restrictive covenants between employee and the Company.
The Amended Employment Agreement defines good cause as used in clause (ii) in the paragraphs above as a material breach by the Company of its obligations thereunder, provided that, upon the occurrence of any of such breach, employee gives the Company notice of his belief that he has good cause to terminate the Amended Employment Agreement within thirty (30) days of any breach, and the Company fails to cure within thirty (30) business days of receipt of employee's notice, and the employee resigns within thirty (30) days after the end of such thirty (30) day cure period.
26
Pension Benefits
None of our employees, including our named executive officers, participates in or has account balances in qualified or non-qualified defined benefit plans sponsored by us.
Nonqualified Deferred Compensation
None of our employees, including our named executive officers, participates in or has account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us.
27
EXECUTIVE OFFICER COMPENSATION TABLES
Summary Compensation Table
The following table sets forth the information required by Item 402 of Regulation S-K promulgated by the SEC. With respect to equity incentive awards, the dollar amounts indicated in the table under Stock/OP Unit Awards are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
(3)
|
|
Bonus
(4)
|
|
Stock/OP
Unit Awards
(5)
|
|
Non-Equity Incentive Plan Compensation
(4)
|
|
All Other Compensation
(6)
|
|
Total
|
Ted W. Rollins
Co-Chairman of
the Board and
Chief Executive Officer
|
|
|
2012
|
|
|
$
|
360,000
|
|
|
|
|
|
|
$
|
1,170,801
|
|
|
$
|
146,417
|
|
|
$
|
21,208
|
|
|
$
|
1,698,426
|
|
|
|
2011
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
111,660
|
|
|
|
16,561
|
|
|
|
428,221
|
|
|
|
2010
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,909
|
|
|
|
315,909
|
|
Michael S. Hartnett
Co-Chairman of the Board and
Chief Investment Officer
|
|
|
2012
|
|
|
|
360,000
|
|
|
|
|
|
|
|
1,170,801
|
|
|
|
146,417
|
|
|
|
23,290
|
|
|
|
1,700,508
|
|
|
|
2011
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
111,690
|
|
|
|
19,638
|
|
|
|
431,298
|
|
|
|
2010
|
|
|
|
300,000
|
|
|
|
|
|
|
|
1,879,500
|
|
|
|
|
|
|
|
16,229
|
|
|
|
2,195,729
|
|
Earl C. Howell
(1)
President and Chief Operating Officer
|
|
|
2012
|
|
|
|
360,000
|
|
|
|
|
|
|
|
423,495
|
|
|
|
146,417
|
|
|
|
18,350
|
|
|
|
948,262
|
|
|
|
2011
|
|
|
|
260,000
|
|
|
|
|
|
|
|
|
|
|
|
67,164
|
|
|
|
13,740
|
|
|
|
340,904
|
|
|
|
2010
|
|
|
|
260,000
|
|
|
|
150,000
|
|
|
|
417,662
|
|
|
|
|
|
|
|
2,500
|
|
|
|
830,162
|
|
Donald L. Bobbitt, Jr.
Executive Vice President, Chief Financial Officer and Secretary
|
|
|
2012
|
|
|
|
290,000
|
|
|
|
|
|
|
|
334,554
|
|
|
|
117,947
|
|
|
|
22,040
|
|
|
|
764,541
|
|
|
|
2011
|
|
|
|
250,000
|
|
|
|
|
|
|
|
84,507
|
|
|
|
93,050
|
|
|
|
21,034
|
|
|
|
448,591
|
|
|
|
2010
|
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
182,136
|
|
|
|
|
|
|
|
9,726
|
|
|
|
691,862
|
|
Robert Dann
(2)
Executive Vice President and Division President
|
|
|
2012
|
|
|
|
320,000
|
|
|
|
|
|
|
|
168,849
|
|
|
|
139,330
|
|
|
|
20,933
|
|
|
|
649,112
|
|
|
|
2011
|
|
|
|
290,000
|
|
|
|
|
|
|
|
183,023
|
|
|
|
94,916
|
|
|
|
12,318
|
|
|
|
580,257
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr. Howell relinquished the title and role of chief operating officer effective October 20, 2012, and relinquished the title and role of president effective January 5, 2013. Effective January 5, 2013, Mr. Howell began serving in a part-time capacity as Director of Special Projects. See Executive Officer Compensation Amended Employment Agreement With Mr. Howell above for more information.
|
|
(2)
|
Mr. Danns employment with our company started on April 18, 2011. Compensation information is for the period from April 18, 2011 through December 31, 2012. Salary amount is annualized for the convenience of the reader. Effective October 20, 2012, Mr. Dann began serving as our chief operating officer.
|
|
(3)
|
Salary amounts for 2010 reflect the salary paid to each named executive officer for the period from October 19, 2010 (the closing of our initial public offering) through December 31, 2010, annualized for the convenience of the reader.
|
|
(4)
|
The combined amount to be shown in each of the Bonus and Non-Equity Incentive Plan Compensation columns equals the amount of the annual cash incentive bonus for each named executive officer. The amount shown in the Bonus column is the discretionary amount of the annual cash incentive bonus awarded to a named executive officer in excess of the formula-based amount of the annual cash incentive bonus.
|
|
(5)
|
For purposes of this table, each share awarded during 2012 was valued at $10.69, the closing price of our common stock on the NYSE on the date of grant, January 31, 2012.
|
28
|
(6)
|
All other compensation for 2012 represents health, life and disability insurance premiums, 401(k) matching contributions, automobile allowances and bookkeeping services, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Insurance Premiums
|
|
401(K) Matching Contributions
|
|
Automobile Allowances
|
|
Bookkeeping Services
|
|
Total
|
Ted W. Rollins
|
|
$
|
7,458
|
|
|
$
|
|
|
|
$
|
12,000
|
|
|
$
|
1,750
|
|
|
$
|
21,208
|
|
Michael S. Hartnett
|
|
|
7,515
|
|
|
|
2,025
|
|
|
|
12,000
|
|
|
|
1,750
|
|
|
|
23,290
|
|
Earl C. Howell
|
|
|
|
|
|
|
6,350
|
|
|
|
12,000
|
|
|
|
|
|
|
|
18,350
|
|
Donald L. Bobbitt, Jr.
|
|
|
7,333
|
|
|
|
2,707
|
|
|
|
12,000
|
|
|
|
|
|
|
|
22,040
|
|
Robert Dann
|
|
|
7,456
|
|
|
|
1,477
|
|
|
|
12,000
|
|
|
|
|
|
|
|
20,933
|
|
2012 Grants of Plan-Based Awards
The following table sets forth information with respect to plan-based restricted stock and restricted OP unit awards granted in 2012 to the named executive officers. The dollar amounts indicated under the Grant Date Fair Value is the full fair value of each grant, in accordance with the applicable accounting literature. For additional information, see Executive Officer Compensation Compensation Discussion and Analysis Components and Criteria of Executive Compensation.
|
|
|
|
|
|
|
Name
|
|
Date of Grant
|
|
All Other Stock Awards: Number of Shares of Stock and OP Units
(1)
|
|
Grant Date Fair Value of Awards
(2)
|
Ted W. Rollins
|
|
|
January 31, 2012
|
|
|
|
109,523
|
|
|
$
|
1,170,801
|
|
Michael S. Hartnett
|
|
|
January 31, 2012
|
|
|
|
109,523
|
|
|
|
1,170,801
|
|
Earl C. Howell
|
|
|
January 31, 2012
|
|
|
|
39,616
|
|
|
|
423,495
|
|
Donald L. Bobbitt, Jr.
|
|
|
January 31, 2012
|
|
|
|
31,296
|
|
|
|
334,554
|
|
Robert Dann
|
|
|
January 31, 2012
|
|
|
|
15,795
|
|
|
|
168,849
|
|
|
(1)
|
These shares will vest ratably on each of the first, second, and third anniversaries of the date of grant.
|
|
(2)
|
Each share was valued at $10.69, the closing price of our common stock on the NYSE on the date of grant, January 31, 2012.
|
2012 Option Exercise and Stock Vested
The following table sets forth information with respect to the number of shares of common stock and OP units and the value of those shares and OP units that vested in 2012 that were awarded to our named executive officers:
|
|
|
|
|
|
|
Stock Awards
|
Name
|
|
Number of Shares of Stock and OP Units Acquired on Vesting
|
|
Value Realized on Vesting
|
Ted W. Rollins
|
|
|
|
|
|
$
|
|
|
Michael S. Hartnett
|
|
|
50,000
|
|
|
|
540,000
|
(1)
|
Earl C. Howell
|
|
|
|
|
|
|
|
|
Donald L. Bobbitt, Jr.
|
|
|
4,845
|
|
|
|
52,326
|
(1)
|
Robert Dann
|
|
|
4,312
|
|
|
|
48,079
|
(2)
|
|
(1)
|
Each share or OP Unit was valued at $10.80, the closing price of our common stock on the NYSE on the date of vesting, October 19, 2012.
|
|
(1)
|
Each share was valued at $11.15, the closing price of our common stock on the NYSE on the date of vesting, April 18, 2012.
|
29
Outstanding Equity Awards at Fiscal Year-End 2012
The following table sets forth information with respect to outstanding equity awards held by the named executive officers as of December 31, 2012. No option awards were outstanding for the named executive officers as of December 31, 2012.
|
|
|
|
|
|
|
Stock Awards
|
Name
|
|
Number of Restricted Shares and OP Units that Have Not Vested
(2)
|
|
Market Value of Restricted Shares and OP Units that Have Not Vested
(1)
|
Ted W. Rollins
|
|
|
109,523
|
|
|
$
|
1,342,752
|
|
Michael S. Hartnett
|
|
|
159,523
|
|
|
|
1,955,752
|
|
Earl C. Howell
|
|
|
61,838
|
|
|
|
758,134
|
|
Donald L. Bobbitt, Jr.
|
|
|
36,142
|
|
|
|
443,101
|
|
Robert Dann
|
|
|
28,733
|
|
|
|
352,267
|
|
|
(1)
|
Based on our common stock closing price of $12.26 on December 31, 2012.
|
|
(2)
|
The following table summarizes the time-based restricted stock and restricted OP unit awards for which a portion of the common stock or OP units remain unvested. The table also provides information about the applicable vesting periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Time-Based Restricted Shares and OP Units Granted to Named Executive Officers
|
|
|
Grant Date
|
|
Closing Market Price
|
|
Ted W. Rollins
|
|
Michael S. Harnett
|
|
Earl C. Howell
|
|
Donald L. Bobbitt, Jr.
|
|
Robert Dann
|
|
Vesting Periods
|
January 31, 2012
|
|
$
|
10.69
|
|
|
|
109,523
|
|
|
|
109,523
|
|
|
|
39,616
|
(1)
|
|
|
31,296
|
|
|
|
15,795
|
|
|
|
Three equal annual
installments beginning
on January 31, 2013.
|
|
April 18, 2011
|
|
$
|
10.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,250
|
|
|
|
25% on April 18,
2012, 25% on
April 18, 2013, and
50% on April 18, 2014
|
|
October 19, 2010
|
|
$
|
12.53
|
|
|
|
|
|
|
|
150,000
|
|
|
|
33,333
|
(1)
|
|
|
14,536
|
|
|
|
|
|
|
|
Three equal annual
installments beginning
on October 19, 2011
|
|
|
(1)
|
As a result of an amendment to Mr. Howells employment agreement, these shares will vest ratably on each of April 1, 2013, July 1, 2013 and October 1, 2013.
|
Equity Compensation Plan Information
The following table summarizes information, as of December 31, 2012 relating to our equity compensation plans pursuant to which we grant options, restricted common stock, restricted OP units or other rights to acquire shares from time to time.
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans
|
Equity compensation plans approved by security holders
(1)
|
|
|
208,526
|
(2)
|
|
$
|
|
|
|
|
767,926
|
(3)
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
208,526
|
|
|
$
|
|
|
|
|
767,926
|
|
30
|
(1)
|
2010 Equity Incentive Compensation Plan.
|
|
(2)
|
Consists of shares of restricted common stock to be issued in 2013 to our named executive officers and certain other members of our management team pursuant to employment agreements. There is no exercise price associated with the shares of restricted common stock.
|
|
(3)
|
Pursuant to our 2010 Equity Compensation Plan, each share issued pursuant to an award under the plan, other than an option or stock appreciation right, reduces the number of shares available for issuance under the plan by two shares.
|
Change of Control and Termination Payment Table
The following table indicates the cash amounts and accelerated vesting that Messrs. Rollins, Hartnett, Howell, Bobbitt and Dann would be entitled to receive under various circumstances pursuant to the terms of their employment agreements. This table assumes that the change in control or termination of the named executive officer occurred on December 31, 2012.
|
|
|
|
|
|
|
Name and Scenario
|
|
Cash Payment
(1)
|
|
Acceleration of Vesting of Restricted Common Stock/Restricted OP Units
(2)
|
|
Total
|
Ted W. Rollins,
Co-Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
By company without cause or by employee for good reason (after a change in control)
|
|
$
|
1,414,980
|
|
|
$
|
1,342,752
|
|
|
$
|
2,757,732
|
|
By company without cause or by employee for good reason (and without a change in control)
|
|
|
943,320
|
|
|
|
1,342,752
|
|
|
|
2,286,072
|
|
Accelerated vesting of restricted common stock/restricted
OP units upon a change in control
|
|
|
|
|
|
|
1,342,752
|
|
|
|
1,342,752
|
|
Retirement
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael S. Hartnett,
Co-Chairman and Chief Investment Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
By company without cause or by employee for good reason (after a change in control)
|
|
$
|
1,414,980
|
|
|
$
|
1,955,752
|
|
|
$
|
3,370,732
|
|
By company without cause or by employee for good reason (and without a change in control)
|
|
|
943,320
|
|
|
|
1,955,752
|
|
|
|
2,899,072
|
|
Accelerated vesting of restricted common stock/restricted
OP units upon a change in control
|
|
|
|
|
|
|
1,955,752
|
|
|
|
1,955,752
|
|
Retirement
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earl C. Howell,
President and Chief Operating Officer
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
By company without cause or by employee for good reason (after a change in control)
|
|
$
|
102,848
|
|
|
$
|
758,134
|
|
|
$
|
860,982
|
|
By company without cause or by employee for good reason (and without a change in control)
|
|
|
102,848
|
|
|
|
758,134
|
|
|
|
860,982
|
|
Accelerated vesting of restricted common stock/restricted
OP units upon a change in control
|
|
|
|
|
|
|
758,134
|
|
|
|
758,134
|
|
Retirement
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald L. Bobbitt, Jr.,
Executive Vice President and Chief Financial Officer and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
By company without cause or by employee for good reason (after a change in control)
|
|
$
|
766,100
|
|
|
$
|
443,101
|
|
|
$
|
1,209,201
|
|
By company without cause or by employee for good reason (and without a change in control)
|
|
|
766,100
|
|
|
|
443,101
|
|
|
|
1,209,201
|
|
31
|
|
|
|
|
|
|
Name and Scenario
|
|
Cash Payment
(1)
|
|
Acceleration of Vesting of Restricted Common Stock/Restricted OP Units
(2)
|
|
Total
|
Accelerated vesting of restricted common stock/restricted
OP units upon a change in control
|
|
|
|
|
|
|
443,101
|
|
|
|
443,101
|
|
Retirement
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Dann.,
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
By company without cause or by employee for good reason (after a change in control)
|
|
$
|
829,832
|
|
|
$
|
352,267
|
|
|
$
|
1,182,099
|
|
By company without cause or by employee for good reason (and without a change in control)
|
|
|
829,832
|
|
|
|
352,267
|
|
|
|
1,182,099
|
|
Accelerated vesting of restricted common stock/restricted
OP units upon a change in control
|
|
|
|
|
|
|
352,267
|
|
|
|
352,267
|
|
Retirement
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in this column reflect a calculation based on the executive officers 2012 salary and 2012 bonus based on 2011 results.
|
|
(2)
|
Amounts in this column reflect accelerated vesting of shares of restricted common stock and restricted OP units granted pursuant to our 2010 Equity Incentive Compensation Plan. For purposes of this table, each share of restricted common stock and restricted OP unit was valued at $12.26, the closing price of our common stock on the NYSE on December 31, 2012.
|
|
(3)
|
Mr. Howell relinquished the title and role of chief operating officer effective October 20, 2012, and relinquished the title and role of president effective January 5, 2013. Effective January 5, 2013, Mr. Howell began serving in a part-time capacity as Director of Special Projects. See Executive Officer Compensation Amended Employment Agreement With Mr. Howell above for more information. Effective October 20, 2012, Mr. Dann began serving as our chief operating officer.
|
|
(4)
|
Pursuant to the employment agreements with Messrs. Rollins, Hartnett, Howell, Bobbitt and Dann, all previously-granted equity awards to each named executive officer will immediately vest upon the voluntary retirement of the named executive officer subsequent to the attainment of age 63. As of December 31, 2012, none of our named executive officers have met the age requirement to be eligible for vesting under this provision.
|
32