I am pleased to invite you to attend the 2014 Annual Meeting of Stockholders of Ryman Hospitality Properties, Inc., which will be held
at 10:00 a.m. local time on Thursday, May 8, 2014 at the Gaylord Palms Resort and Convention Center in Kissimmee, Florida. The doors will open at 9:30 a.m. local time. Our directors and management team will be available to answer questions.
We describe in detail the proposals to be introduced at the annual meeting in the attached Notice of Annual Meeting, Proxy Statement and proxy
card. Our 2013 Annual Report to Stockholders, which is not a part of our proxy solicitation materials, is also enclosed. We encourage you to read our Annual Report.
We hope you will be able to join us. Whether or not you plan to attend, you can ensure your shares are represented and voted at the meeting by promptly
voting and submitting your proxy by telephone, by Internet or by completing, signing, dating and returning the enclosed proxy card. Voting instructions are included on the enclosed proxy card. If you attend the meeting, you may continue to have your
shares voted as instructed in the proxy, or you may withdraw your proxy at the meeting and vote your shares in person.
Thank you for your continued
interest in Ryman Hospitality Properties, Inc., and we look forward to seeing you at the meeting.
Colin V. Reed
Proposal 3 (Ratification of Independent Registered Public Accounting
Firm)
Proposal 3 asks that our stockholders vote to ratify the Audit Committees appointment of Ernst & Young LLP as the independent registered
public accounting firm to audit our financial statements for the 2014 fiscal year. You can find more information about our relationship with Ernst & Young LLP on page 57 of this proxy statement.
Proposal 3 asks that our stockholders vote to ratify the Audit Committees appointment of Ernst & Young LLP
as the independent registered public accounting firm to audit our financial statements for the 2014 fiscal year. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. The Audit Committee,
in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee
determines that such a change would be in our and our stockholders best interests.
Ernst &
Young LLP has served as our independent registered public accounting firm since 2002. Representatives of Ernst & Young LLP will be present at the meeting. They will be available to respond to your questions and may make a statement if they
desire.
Proposal 3 (Ratification of Independent Registered Public Accounting Firm) Voting Recommendation
Approval of this proposal requires the affirmative vote of a majority of the shares represented in person or by proxy and entitled to vote on the matter. If you abstain
from voting on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm, your abstention will have the same effect as a vote against the proposal.
The Board and the Audit Committee unanimously recommend that the stockholders vote FOR the ratification of the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2014.
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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Company Information
Corporate Governance
Our business is managed under the direction of our Board of Directors. The Board delegates the conduct of the business to our senior management team. The Board held five
meetings during 2013. All directors attended at least 75% of the total number of meetings of the Board and those committees of which the director was a member during the period in which he or she served as a director in the aggregate.
We have adopted Corporate Governance Guidelines governing the conduct of our Board. The charters of our Audit Committee, Human Resources Committee and Nominating and
Corporate Governance Committee, as well as our Corporate Governance Guidelines, are all posted on our website at
www.rymanhp.com
(under Corporate Governance on the Investor Relations page).
We have also adopted a Code of Business Conduct and Ethics which is applicable to all employees, officers and directors, including the principal executive officer, the
principal financial officer and the principal accounting officer. The Code of Business Conduct and Ethics is available on our web site at
www.rymanhp.com
(under Corporate Governance on the Investor Relations page). We intend to
post amendments to or waivers from our Code of Business Conduct and Ethics (to the extent applicable to our directors, principal executive officer, principal financial officer or principal accounting officer) at this location on our website.
We will provide a copy of our Corporate Governance Guidelines, our committee charters or our Code of Business Conduct and Ethics (and any amendments or waivers) to any
stockholder or other person upon receipt of a written request addressed to:
Ryman Hospitality Properties, Inc.
Attn: Corporate Secretary
One Gaylord Drive
Nashville, Tennessee 37214
Board Leadership Structure
The Board believes that Mr. Reeds service as both Chairman of the Board and CEO is in the best
interests of the company and its stockholders. Mr. Reed possesses a detailed knowledge of our industry as well as an understanding of both the opportunities and challenges we face. The Board
thus believes that Mr. Reed is best positioned to develop agendas that ensure that the Boards time and attention are focused on the most important matters facing the company. The Board also believes that Mr. Reeds combined role
ensures clear accountability, enhances our ability to articulate our strategy and message to our employees, stockholders and business partners and enables decisive overall leadership.
The Board has determined that it is also important to have an independent Lead Director who will play an active role and oversee many of the functions that an
independent chair would otherwise perform. The Board has adopted a description of the duties of the Lead Director, which is posted on our website at
www.rymanhp.com
(under Corporate Governance on the Investor Relations page).
Pursuant to this job description, the Chairman of the Nominating and Corporate Governance Committee serves as the companys Lead Director, and that individual is currently D. Ralph Horn. Some of the primary functions of our Lead Director are:
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To call, convene and chair meetings of the non-management directors or independent directors and other meetings as may be necessary from time to time and, as appropriate, provide prompt feedback to the CEO;
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To coordinate and develop the agenda for and chair executive sessions of the independent directors;
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To coordinate feedback to the CEO on behalf of independent directors regarding business issues and management;
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To be available, as appropriate, for direct communication with major stockholders who request such a communication; and
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To perform such other duties as may be necessary for the Board to fulfill its responsibilities or as may be requested by the Board as a whole, by the non-management directors, or by the Chairman of the Board.
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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Each of the directors other than Mr. Reed is independent, and the Board believes that the independent directors
coupled with the Lead Director provide effective oversight of management. Our non-management directors meet regularly in scheduled executive sessions, and the Lead Director presides at these executive sessions. Following an executive session of our
non-management directors, the Lead Director acts as a liaison between the non-management directors and the Chairman regarding any specific feedback or issues, provides the Chairman with input regarding agenda items for Board and committee meetings
and coordinates with the Chairman regarding information to be provided to the our non-management directors in performing their duties. The Board believes that this approach appropriately and effectively complements the combined CEO/Chairman
structure.
Although we believe that the combination of the Chairman and CEO roles is appropriate in the current circumstances, the Board retains the authority to
modify our current combined CEO/Chairman structure to best address our circumstances, if and when appropriate.
Board Attendance at Annual Meeting
We strongly encourage each member of the Board to attend the Annual Meeting of Stockholders. All of our directors attended the 2013 Annual Meeting of Stockholders.
Independence of Directors
Pursuant to our Corporate Governance Guidelines, the
Board undertook its annual review of director independence in February 2014. Our Board determines the independence of its members through a broad consideration of all relevant facts and circumstances, including an assessment of the materiality of
any relationship between the company and a director. In making this assessment, the Board looks not only at relationships from the directors standpoint, but also from the standpoint of persons or organizations with which the director has an
affiliation. In making its determination, the Board adheres to the requirements of, and applies both the objective and subjective standards set forth by, the NYSE (as set forth in Section 303A.02 of the listed company manual), as well as the
requirements and standards of the SEC and other applicable laws and regulations.
During this review, the Board considered whether there are or have been any transactions and relationships between each
director, or any member of his or her immediate family, and the company and its subsidiaries and affiliates. The Board also examined whether there are or have been any transactions and relationships between directors, or their affiliates, and
members of the companys senior management or their affiliates. The purpose of this review was to determine whether any of these relationships or transactions were inconsistent with a determination that the director is independent. The Board
concluded that no such transactions existed during the relevant period. As a result of this review, the Board affirmatively determined that, with the exception of Colin Reed, all of our directors are independent of the company and its management.
Committees of the Board
The Board maintains
three standing committees, an Audit Committee, Human Resources Committee and Nominating and Corporate Governance Committee, to facilitate and assist the Board in the execution of its responsibilities.
Audit Committee
The members of the Audit Committee are Michael J. Bender
(Chair), E. K. Gaylord II, Robert S. Prather, Jr. and Michael D. Rose (Financial Expert).
The committee is a separately designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The committee is responsible for, among other things:
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overseeing the integrity of our financial information, the performance of our internal audit function and system of internal controls and compliance with legal and regulatory requirements relating to preparation of
financial information;
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appointing, compensating, retaining and overseeing our independent registered public accounting firm;
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evaluating the qualifications, independence and performance of our independent registered public accounting firm;
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meeting with our independent registered public accounting firm and with our director of internal audit concerning, among other things, the scope of audits and
reports;
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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reviewing the work programs of our independent registered public accounting firm and the results of its audits; and
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assessing our risk assessment and risk management policies.
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The Board has determined that all the members of the
committee are financially literate pursuant to the NYSE rules. The Board also has determined that Mr. Rose is an audit committee financial expert within the meaning stipulated by the SEC.
In 2013, the committee met nine times.
Human Resources Committee
The members of the Human Resources Committee are Michael I. Roth (Chair), D. Ralph Horn and Ellen Levine.
The committee is responsible for, among other items:
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reviewing and approving all compensation policies and programs that benefit employees, including employment and severance agreements, incentive programs, benefits and retirement programs;
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reviewing and approving annually the corporate goals and objectives relative to the CEOs compensation, evaluating the CEOs performance in light of those objectives, and determining and approving the
CEOs compensation level based on this evaluation;
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reviewing, approving and administering, and granting awards under, cash- and equity- incentive plans; and
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reviewing and approving compensation for executive officers and directors (subject to, in the case of director compensation, approval by the full Board).
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The committee has also delegated to the CEO the authority to make limited equity grants to new members of our management team to allow such grants to be made in a timely
manner, as the committee generally only meets on a quarterly basis. Equity grants under this delegation of authority may only be made as initial equity grants to newly hired executives (other than officers subject to Section 16 of the
Securities Exchange Act of 1934) and on the same terms and conditions as were applied by the committee in its most recent prior equity grants. In addition, equity grants under this
delegation of authority to any one executive are limited to 6,250 RSUs.
Effective as of January 1, 2013,
the committee engaged AonHewitt as its compensation consultant. The committee has determined that no conflict of interest exists between AonHewitt and the company (including the companys Board members and company management) pursuant to
Item 407(e)(3)(iv) of SEC Regulation S-K. Neither AonHewitt nor any affiliate provided additional services to the company or its affiliates in excess of $120,000 during fiscal 2013.
AonHewitt assisted the committee in determining if its strategies and plans were advisable based on our current financial position and strategic goals, as well as
developments in corporate governance and compensation design. At the committees request, AonHewitt also performed several analyses, including updates to the executive salary structure and modeling of executive compensation levels at different
levels of company performance, to assist the committee in its review.
For additional information regarding the committees processes and procedures for
considering and determining executive compensation, including the role of executive officers in determining the amount or form of executive compensation, see
Compensation Discussion and Analysis
below.
In 2013, the committee met five times.
Compensation Committee Interlocks and
Insider Participation
The Human Resources Committee (which functions as our compensation committee) is comprised entirely of independent directors. In addition,
there are no relationships among our executive officers, members of the committee or entities whose executives serve on the Board or the committee that require disclosure under applicable regulations of the SEC.
Nominating and Corporate Governance Committee
The members of the Nominating
and Corporate Governance Committee are D. Ralph Horn (Chair), Michael Roth and Ellen Levine.
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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The committee is responsible for, among other things:
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developing and recommending criteria for the selection of new directors and recommending to the Board nominees for election as directors and appointment to committees;
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developing and recommending changes and modifications to our corporate governance guidelines and a code of conduct to the Board;
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monitoring and enforcing compliance with our corporate governance guidelines, certain provisions of our code of conduct and other policies; and
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advising the Board on corporate governance matters, including obtaining updates on corporate governance developments from professional advisors.
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In 2013, the committee met five times.
A formal Board evaluation covering Board
operations and performance, with a written evaluation from each Board member, is conducted annually by the committee to enhance Board effectiveness. Recommended changes are considered by the full Board. In addition, each Board committee conducts an
annual self-evaluation.
The committee annually reviews with the Board the companys Statement of Expectations of Directors. This review includes an
assessment of independence, diversity, age, skills, experience and industry backgrounds in the context of the needs of the Board and the company, as well as the ability of current and prospective directors to devote sufficient time to performing
their duties in an effective manner. Directors are expected to actively participate in Board discussions and exemplify the highest standards of personal and professional integrity. In particular, the committee seeks directors with established strong
professional reputations and expertise in areas relevant to the strategy and operations of our businesses.
While our Corporate Governance Guidelines do not
prescribe specific diversity criteria for selection of directors, as a matter of practice, the committee considers diversity in the context of the Board as a whole and takes into account diversity, including the personal characteristics (such as
gender, ethnicity or age) and experience (such as industry, professional
or public service) of current and prospective directors, when selecting new directors to facilitate Board deliberations that reflect a broad range of viewpoints. The committees charter
gives it responsibility to develop and recommend criteria for the selection of new directors to the Board, including but not limited to diversity, age, skills, experience, time availability and such other criteria as the committee shall determine to
be relevant at the time.
The committee also considers the impact of any changes in the employment of existing directors. In this regard, if a director changes
employment, the director is required to submit a letter of resignation to the committee. The committee then reviews the directors change of employment and determines whether the directors continued service on the Board would be advisable
as a result of such change. After completing this evaluation and interview, the committee makes a recommendation to the full Board as to whether to accept the directors resignation, and the Board makes a final determination of whether to
accept the directors resignation.
The committee considers candidates for Board membership recommended by its members and other Board members, as well as by
management and stockholders. To date, the committee has not engaged a third party to identify prospective nominees. The committee will only consider stockholder nominees for Board membership submitted in accordance with the procedures set forth
below in
Submitting Stockholder Proposals and Nominations for 2015 Annual Meeting
.
Once the committee has identified a prospective nominee, the committee
makes an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the committee with the recommendation of the prospective candidate, as well as the
committees own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill
vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below. If the committee determines, in consultation with the Chairman of the Board and other Board members as
appropriate, that additional consideration is warranted, it may request
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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additional information about the prospective nominees background and experience. The committee then evaluates the prospective nominee against the following standards and qualifications:
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the ability of the prospective nominee to represent the interests of our stockholders;
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the prospective nominees standards of integrity, commitment and independence of thought and judgment;
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the prospective nominees ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominees service on other boards; and
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the extent to which the prospective nominee contributes to the range of knowledge, diversity, skill and experience appropriate for the Board.
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The committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board and the evaluations of other prospective
nominees. In connection with this evaluation, the committee determines whether to interview the prospective nominee, and if warranted, one or more members of the committee, and others as appropriate, will interview the prospective nominee in person
or by telephone. After completing this evaluation and interview, the committee makes a recommendation to the full Board as to whether this prospective nominee and any other prospective nominees should be nominated by the Board, and the Board
determines the nominees after considering the recommendation and report of the committee.
New directors participate in an orientation program that includes
discussions with senior management, their review of background materials on our strategic plan, organization and financial statements and visits to our facilities. We encourage each director to participate in continuing educational programs that are
important to maintaining a directors level of expertise to perform his or her responsibilities as a Board member.
Majority
Voting Standard for Director Elections
Our Corporate Governance Guidelines and Bylaws provide for a majority voting standard in uncontested director elections.
Under these provisions, any director nominee in an uncontested election will be
elected to the Board if the votes cast for such nominees election exceed the votes cast against such nominees election at any meeting for the election of directors at which a quorum
is present (with abstentions and broker non-votes not counted as votes cast either for or against such election). In addition, under our Corporate Governance Guidelines, each director agrees, by serving as a director or by accepting nomination
for election as a director, that if while serving as a director he or she fails to receive the required majority vote in a director election, he or she will tender his or her resignation as a director for consideration by the Nominating and
Corporate Governance Committee and, ultimately, the Board, as described below. Any director nominee who is not an incumbent director who does not receive a majority vote will not be elected to the Board.
In the event any incumbent director nominee does not receive the requisite majority vote, our Corporate Governance Guidelines provide that our Nominating and Corporate
Governance Committee will evaluate the circumstances of the failed election, and will make a recommendation regarding the directors resignation to the full Board and will evaluate the resignation in light of the best interests of the company
and its stockholders in determining whether to recommend accepting or rejecting the tendered resignation, or whether other action should be taken. Thereafter, the Board will act upon the resignation, taking into account the recommendation of the
Nominating and Corporate Governance Committee, and will publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the
decision within 90 days of the certification of the election results. In such event, if the Board accepts the resignation, the nominee will no longer serve on the Board, and if the Board rejects the resignation, the nominee will continue to serve
until his or her successor has been duly elected and qualified or until his or her earlier disqualification, death, resignation or removal.
Compensation Clawback
We expect that the SEC, in accordance with the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Dodd-Frank Act), will issue regulations regarding clawback policies in the near future. Following the
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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adoption of such regulations in accordance with the Dodd-Frank Act, every public company will be required to adopt a clawback policy for the recovery of certain incentive-based
compensation from its executive officers in the event the company is required to restate its financials as a result of material noncompliance with reporting requirements. In order to ensure full compliance with the SECs regulations, we intend
to adopt our own formal clawback policy that will apply to our executive officers once such regulations have been implemented by the SEC. In the interim, Section 304 of the Sarbanes-Oxley Act of 2002 requires the recovery of incentive awards in
certain circumstances. If we are required to restate our financials due to material noncompliance with any financial reporting requirements as a result of misconduct, our CEO and CFO will be required under Section 304 of the Sarbanes-Oxley Act
to reimburse us for (1) any bonus or other incentive- or equity-based compensation received during the 12 months following the first public issuance of the non-complying document, and (2) any profits realized from the sale of our
securities during such 12 month period.
Boards Role in Risk Oversight
The Board as a whole has responsibility for oversight of the companys enterprise risk management function, with reviews of certain areas being conducted by the
relevant Board committees that report on their deliberations to the Board. The oversight responsibility of the Board and its committees is made possible by a management report process that is designed to provide both visibility and transparency to
the Board about the identification, assessment and management of critical risks and managements risk mitigation strategies. In this regard, each committee meets in executive session with key management personnel and representatives of outside
advisors (for example, our director of internal audit meets in executive session with the Audit Committee).
The areas of focus of the Board and its committees include competitive, economic, operational, financial (accounting,
credit, liquidity and tax), legal, compliance, political and reputational risks. The Board and its committees oversee risks associated with their respective principal areas of focus, as outlined below:
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Board/
Committee
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Primary Areas
of Risk Oversight
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Board of
Directors:
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Enterprise risk management, including strategic, financial and execution risks associated with the annual operating plan and the long-term plan; major litigation and regulatory exposures; acquisitions and divestitures; senior
management succession planning; and other current matters that may be material risks to the company.
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Audit Committee:
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Risks and exposures associated with financial matters, including financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, investment guidelines and credit and
liquidity.
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Nominating and CG Committee:
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Risks and exposures relating to corporate governance and director succession planning.
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Human Resources Committee:
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Risks and exposures associated with leadership assessment, management succession planning and executive compensation programs.
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We believe that the Boards role in risk oversight is facilitated by the leadership structure of the Board. In this regard, we
believe that, by combining the positions of Chairman of the Board and CEO, the Board gains a valuable perspective that combines the operational experience of a member of management with the oversight focus of a member of the Board. We also believe
that the division of risk management-related roles among the companys full Board, Audit Committee, Nominating and Corporate Governance Committee and Human Resource Committee as noted above fosters an atmosphere of significant involvement in
the oversight of risk at the Board level and complements our risk management policies.
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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The Board, in executive sessions of non-management directors (which are presided over by the companys independent
Lead Director), also considers and discusses risk-related matters. This provides a forum for risk-related matters to be discussed without management or the Chairman of the Board and CEO present. The companys Lead Director acts as a liaison
between the companys Chairman of the Board and CEO and the companys independent directors to the extent that any risk-related matters discussed at these executive sessions require additional feedback or action.
In setting compensation, the Human Resources Committee also considers the risks to our stockholders that may be inherent in our compensation programs. We believe that
our compensation programs are appropriately structured and provide for a suitable balance between long-term and short-term compensation and have an appropriate performance-based and at risk component. We also believe that our
compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company.
Recent Changes in Company Policies
In 2014 the
Board amended our executive and non-employee director stock ownership guidelines to provide that any executive or non-employee director who has not achieved the applicable guideline level of share ownership (regardless of the grace period for
compliance applicable to the executive) is required to maintain 50% of the net shares (after taking into account shares sold or surrendered to pay any applicable exercise price and to satisfy any tax obligations) received in connection with the
exercise, vesting or payment of any equity incentive award. At that time, the Board also amended our insider trading policy to prohibit executive officers and directors from engaging in any transactions designed to hedge or otherwise offset any
decrease in the fair
market value of our equity securities. At that time the Board also amended our insider trading policy to prohibit executive officers and directors from pledging or otherwise encumbering a
significant amount of equity securities (generally defined as the lesser of 0.50% of our outstanding equity securities or 10% of the equity securities owned by the individual) without prior approval of the Human Resources Committee.
Communications with the Board of Directors
Stockholders, employees and others interested in communicating with the Board (including non-management directors) may write to:
Corporate Secretary
Ryman Hospitality Properties, Inc.
One Gaylord Drive
Nashville, Tennessee 37214
The Corporate Secretary reviews all such correspondence and regularly forwards to the Board a summary of all such correspondence and copies of all correspondence
that, in the opinion of our corporate secretary, deals with the functions of the Board or committees thereof or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by us that
is addressed to members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal audit department and handled in
accordance with procedures established by the Audit Committee with respect to such matters. In addition, stockholders, employees and other interested parties may communicate directly with our independent Lead Director (D. Ralph Horn), individual
independent directors or the independent directors as a group by e-mail at
boardofdirectors@rymanhp.com
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2014 NOTICE OF MEETING AND PROXY STATEMENT
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Stock Ownership
The table below lists the beneficial ownership of our common stock as of March 19, 2014 (unless otherwise noted) by all directors, each of our NEOs, and the
directors and executive officers as a group. The table also lists all institutions and individuals known to hold more than 5% of our common stock, as obtained from SEC filings. The percentages shown are based on outstanding shares of common stock as
of March 19, 2014. Unless otherwise noted, the address for each person listed in the table is our principal office.
Beneficial Stock Ownership of
Directors, Executive Officers and Large Stockholders Table
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Name
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Shares
Owned
(1)
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Director
Deferred
Restricted
Stock
Units
(2)
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Stock Options
Exercisable on
or Prior to
May 19, 2014
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Total
Shares
Owned
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% of Total
Outstanding
(3)
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Colin V. Reed, NEO and Director
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1,015,810
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(4)
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-
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173,194
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1,189,004
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2.3%
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Michael J. Bender, Director
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3,395
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14,395
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21,343
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39,133
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*
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E. K. Gaylord II, Director
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155,556
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40,946
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18,294
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214,796
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*
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D. Ralph Horn, Director
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51,316
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56,851
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6,098
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114,265
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*
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Ellen Levine, Director
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16,831
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(5)
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-
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24,392
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41,223
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*
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Robert S. Prather, Jr., Director
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3,960
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12,528
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|
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-
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|
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16,488
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*
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Michael D. Rose, Director
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95,354
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|
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17,949
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|
|
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12,196
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|
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125,499
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*
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Michael I. Roth, Director
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19,870
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(5)
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-
|
|
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30,490
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|
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50,360
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*
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Mark Fioravanti, NEO
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111,204
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|
-
|
|
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|
-
|
|
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111,204
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*
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Bennett Westbrook, NEO
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18,529
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|
|
|
-
|
|
|
|
-
|
|
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18,529
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*
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Patrick Chaffin, NEO
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5,686
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(5)
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|
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-
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|
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6,646
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12,332
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*
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Scott Lynn, NEO
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4,551
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-
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5,183
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|
9,734
|
|
|
|
*
|
|
All directors and executive officers (as a group)
|
|
|
1,489,380
|
|
|
|
142,669
|
|
|
|
273,931
|
|
|
|
1,905,980
|
|
|
|
3.8%
|
|
Vanguard Inc.
|
|
|
6,051,754
|
(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
6,051,754
|
|
|
|
11.9%
|
|
GAMCO Investors, Inc.
|
|
|
5,862,335
|
(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
5,862,335
|
|
|
|
11.6%
|
|
Sterling Capital Management LLC
|
|
|
3,923,406
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,923,406
|
|
|
|
7.7%
|
|
BlackRock, Inc.
|
|
|
3,271,324
|
(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,271,324
|
|
|
|
6.4%
|
|
(1)
|
This column does not include shares of common stock issuable upon the vesting of RSUs held by our NEOs and non-employee directors that will not vest on or prior to May 19, 2014. For a listing of the RSUs held by
NEOs, see
Outstanding Equity Awards at 2013 Fiscal
Year End
below. For a listing of the RSUs held by non-employee directors, see
Director Compensation
below.
|
(2)
|
Represents RSUs awarded to directors which have vested but receipt has been deferred. Also includes RSUs issued to each participating director pursuant to the
termination of the director deferred compensation plan effective as of December 31, 2013, as well as RSUs issued in lieu of cash director fees to participating directors in 2014. Directors may elect to defer receipt of RSUs awarded under our
equity
|
23
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
|
incentive plan until either a specified date or the directors retirement or resignation from the Board. This column reflects shares issuable to each director at the end of the applicable
deferral period.
|
(3)
|
In calculating the percentages of outstanding stock, each persons stock options that are or will be exercisable prior to May 19, 2014 and each persons RSUs that will vest on or prior to May 19,
2014 have been added to the total outstanding shares for such persons calculation.
|
(4)
|
Includes 477,149 shares credited to Mr. Reeds SERP, as defined in
Nonqualified Deferred Compensation
below. Mr. Reed does not have voting or investment power with respect to these shares, and his
sole right is to receive these shares upon termination of employment in accordance with the terms of his employment agreement.
|
(5)
|
For Ms. Levine and Mr. Roth, includes 1,754 shares each issuable upon the vesting of time-based RSUs on May 9, 2014. For Mr. Chaffin, includes 1,867 shares issuable upon the vesting of time-based RSUs on
May 6, 2014.
|
(6)
|
Based on information in: Schedule 13G filed with the SEC on February 4, 2014 by Vanguard Specialized FundsVanguard REIT Index Fund, which has sole voting and dispositive power with respect to 3,076,789
shares; and Amendment No. 1 to Schedule 13G filed with the SEC on February 12, 2014 by The Vanguard Group, Inc., which has sole voting power with respect to 66,719 shares, sole dispositive power with respect to 5,998,185 shares and shared
dispositive power with respect to 63,569 shares. The address for the reporting persons is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
|
(7)
|
Based on information in Amendment No. 41 to Schedule 13D filed with the SEC on April 22, 2013 jointly by GAMCO Investors, Inc. (GBL) and the following entities: GGCP, Inc. (GGCP); GGCP
Holdings LLC (Holdings); Gabelli Funds, LLC (Funds); GAMCO Asset Management Inc. (GAMCO); Teton Advisors, Inc. (Teton); Gabelli Securities, Inc. (GSI); Gabelli & Company
(GC); MJG Associates (Associates); Gabelli Foundation, Inc. (Foundation); MJG-IV Limited Partnership (MJG-IV); and Mario Gabelli. GGCP (which had sole voting and dispositive power with respect to
14,712 shares of common stock) makes investments for its own account and is the manager and member of Holdings, which is the controlling shareholder of GBL. GBL, a public company listed on the NYSE, is the parent company for a variety of companies
engaged in the securities business, including those named below. GAMCO (which had sole voting power with respect to 4,496,423 shares of common stock and sole dispositive power with respect to 4,733,852 shares of common stock), a wholly-owned
subsidiary of GBL, is an investment adviser registered under the Investment Advisers Act of 1940. GSI (which had sole voting and dispositive power with respect to 3,960 shares of
|
|
common stock), a majority-owned subsidiary of GBL, is an investment adviser registered under the Investment Advisers Act of 1940 and serves as a general partner or investment manager to limited
partnerships and offshore investment companies and other accounts. Funds, a wholly owned subsidiary of GBL, is a limited liability company. Funds (which had sole voting power with respect to 27,800 shares of common stock and dispositive power with
respect to 1,028,518 shares of common stock) is an investment adviser registered under the Investment Advisers Act of 1940 which provides advisory services for registered investment companies. Teton (which had sole voting and dispositive power with
respect to 6,790 shares of common stock) is an investment adviser registered under the Investment Advisers Act of 1940 which provides discretionary advisory services to registered investment companies. Associates provides advisory services to
private investment partnerships and offshore funds. Mario Gabelli is the sole shareholder, director and employee of Associates. The Foundation (which had sole voting and dispositive power with respect to 12,500 shares of common stock) is a private
foundation. Mario Gabelli is the Chairman, a Trustee and Investment Manager of the Foundation. Elisa M. Wilson is President of the Foundation. Mario Gabelli is the controlling stockholder, Chief Executive Officer and a director of GGCP and Chairman
and Chief Executive Officer of GBL. Mario Gabelli is also a member of Holdings. Mario Gabelli is the controlling shareholder of Teton. MJG-IV (which had sole voting and dispositive power with respect to 19,238 shares of common stock) is a family
partnership in which Mario Gabelli is the general partner. Mario Gabelli has less than a 100% interest in MJG-IV. MJG-IV makes investments for its own account. Mario Gabelli disclaims ownership of the securities held by MJG-IV beyond his pecuniary
interest. Mario Gabelli has sole voting and dispositive power with respect to 42,765 shares of common stock. The above reporting persons do not admit that they constitute a group. The address for all of the above reporting persons is One Corporate
Center, Rye, New York 10580.
|
(8)
|
Based on information in Schedule 13G filed with the SEC on January 25, 2014 by Sterling Capital Management LLC, which has sole voting and dispositive power with respect to 3,923,406 shares. Sterling Capital
Management LLC is an investment adviser registered under the Investment Advisers Act of 1940. The address for the reporting person is 227 Two Morrocroft Centre, 4064 Colony Road, Suite 300, Charlotte, North Carolina 28211.
|
(9)
|
Based on information in Amendment No. 2 to Schedule 13G filed with the SEC on January 30, 2014 by BlackRock, Inc., which has sole voting power with respect to 3,122,176 shares and sole dispositive power with
respect to 3,271,324 shares. The address for the reporting person is 40 East 2
nd
Street, New York, New York 10022.
|
24
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
Executive Summary
Overview
Our executive
compensation programs are designed to attract, retain and motivate qualified, knowledgeable executives who are capable of performing their responsibilities. In designing our executive compensation programs, our goals are to ensure that:
|
|
A significant portion of the total compensation paid to each named executive officer, or NEO, is in the form of at risk pay in order to
create proper incentives
for our executives to achieve
corporate and individual objectives and
maximize stockholder value
over the long-term;
|
|
|
A strong
pay-for-performance
philosophy synchronizes incentive payments with actual financial and business results relative to performance expectations;
|
|
|
Our pay decisions must be
transparent
to all stakeholders and tethered to
sound governance measures
; and
|
|
|
Total compensation opportunity throughout our organization should be
market competitive
to support recruitment and retention.
|
Our corporate objectives are to continue to increase funds available for distribution to our stockholders and to create long-term stockholder value. Consistent with
these goals and objectives, the Human Resources Committee, which acts as our compensation
committee, has developed and approved an executive compensation program providing for a range of compensation levels for our NEOs with the intent of rewarding strong performance and reducing
compensation when our performance objectives are not achieved. Key components of our executive compensation program are:
|
|
Base Salary
Determined for each executive based on the executives experience and responsibilities.
|
|
|
Short-Term Cash Incentive Compensation
An annual cash incentive program designed to reward achievement of specific previously established financial (and in the case of our CEO, strategic) goals.
|
|
|
Long-Term Equity Incentive Compensation
Restricted stock unit, or RSU, awards designed to align the interests of our executives with our stockholders, consisting of a mix of:
|
|
|
|
performance-based RSUs
that are earned based on a meaningful level of achievement of our total stockholder return, or TSR, performance over a designated performance cycle, relative to our peers; and
|
|
|
|
time-based RSUs
that vest ratably over a designated vesting period.
|
|
|
Executive-Level Perquisites.
We provide modest executive-level perquisites not generally payable to all employees.
|
Company Highlights
We have delivered significant value to our stockholders over the last one, three and five years, based on TSR. During 2013 we focused on returning capital to our
stockholders in the form of dividends and repurchases of our common stock.
25
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
The following graph shows how a $100 investment in our common stock on December 31, 2008 would
have grown to $494.21 on December 31, 2013, with dividends reinvested quarterly. The graph also compares the TSR of our common stock to the same investment in the S&P 500 Index and the FTSE NAREIT Equity REITs Index over the same period,
with dividends reinvested quarterly.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/08
|
|
|
12/09
|
|
|
12/10
|
|
|
12/11
|
|
|
12/12
|
|
|
12/13
|
|
Ryman Hospitality Properties, Inc.
|
|
|
100.00
|
|
|
|
182.20
|
|
|
|
331.55
|
|
|
|
222.69
|
|
|
|
432.28
|
|
|
|
494.21
|
|
S&P 500
|
|
|
100.00
|
|
|
|
126.46
|
|
|
|
145.51
|
|
|
|
148.59
|
|
|
|
172.37
|
|
|
|
228.19
|
|
FTSE NAREIT Equity REITs
|
|
|
100.00
|
|
|
|
127.99
|
|
|
|
163.78
|
|
|
|
177.36
|
|
|
|
209.39
|
|
|
|
214.56
|
|
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
26
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Operating highlights in 2013 include:
|
|
Following a series of restructuring transactions in 2012 (including the sale of management rights to our Gaylord Hotels properties to Marriott International), we began operating as a real estate investment trust, or
REIT, on January 1, 2013.
|
|
|
We faced a particularly challenging operating environment in 2013 due to an overall weakness in the large group hospitality sector in which we focus, as well as difficulties relating to the management transition of our
hotel properties. During the year we spent a great deal of time and effort working jointly with Marriott to improve performance in key areas such as sales and cost savings initiatives.
|
|
|
Despite these difficulties, in 2013 we achieved the following:
|
|
|
|
Adjusted Funds From Operations, or AFFO
(1)
, of $174.8 million, or AFFO per basic share of $3.42.
|
|
|
|
AFFO excluding REIT conversion costs
(1)
of $190.2 million, or AFFO excluding REIT conversion costs per basic share of $3.72.
|
|
|
As outlined above, we returned approximately $200 million of capital to our stockholders in 2013 by:
|
|
|
|
paying approximately $100 million of dividends on our common stock (including the fourth quarter dividend paid in early 2014 to holders of record as of December 27, 2013); and
|
|
|
|
repurchasing approximately $100 million in shares of our common stock during 2013.
|
|
|
We successfully refinanced our $1.0 billion credit facility, which now expires in 2017, and issued $350 million in 5% senior notes, maturing in 2021. We also repurchased approximately $100 million in fair market value
of our convertible senior notes (approximately $55 million in principal amount) and redeemed approximately $150 million of our previously outstanding 6.75% senior notes.
|
|
|
We believe that, as a result of our efforts in 2013, we are better able to meet our corporate objectives of increasing funds available for distribution to our stockholders and creating long-term stockholder value.
|
27
(1)
|
AFFO, AFFO per basic share, AFFO excluding REIT conversion costs and AFFO excluding REIT conversion costs per basic share are non-GAAP financial measures. For a definition of these non-GAAP financial measures and why we
believe these non-GAAP financial measures present useful information to investors, as well as a reconciliation of these non-GAAP measures to the most comparable GAAP measures, see Appendix A.
|
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Summary
The following table shows the 2013 compensation elements for our CEO:
The following table shows the 2013 compensation elements for our other NEOs (average):
28
(1)
|
Percentage of total compensation as calculated above is based on the 2013 base salary and the value of executive-level perquisites paid to the NEO which were not paid generally to all employees, the 2013 short-term
incentive compensation award (assuming achievement at the target level (such award was ultimately paid at 92.5% of the target payout level for Mr. Reed and at 90% of the target payout level for the other NEOs, and
additional discretionary awards were made to certain NEOs for their efforts in helping us to meet our strategic objectives), as more fully described below)), the grant date fair value of the performance-based RSU award granted on February 14,
2013 (assuming vesting at the target achievement level), and the grant date fair value of the time-based RSU award granted on February 14, 2013. Each compensation element is outlined in more detail in the
2013 Summary Compensation Table
set forth on page 40 below.
|
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Our Compensation Program
The key elements of the compensation program for our executive officers are:
|
|
|
|
|
|
|
|
|
Compensation
Element
|
|
Key
Characteristics
|
|
Why We Pay
This Element
|
|
How We Determine
the Amount
|
|
2013
Decisions
|
Base Salary
|
|
Fixed compensation.
Payable in cash.
Reviewed annually and adjusted when appropriate.
|
|
Necessary to attract and retain qualified executives.
Compensate for roles and responsibilities.
|
|
Level of responsibility.
Individual skills, experience and performance.
|
|
No NEO received a base salary increase in 2013. See page 30.
|
Short-Term
Cash
Incentive
Compensation
|
|
Variable compensation.
Payable in cash based on performance against annually established performance objectives.
|
|
Motivate and reward executives.
Reviewed annually and adjusted from year to year when appropriate.
|
|
For 2013, AFFO was the financial goal for the plan and the only goal for all NEOs except Mr.
Reed.
Mr. Reeds goals were based 75% on the AFFO financial goal and 25% on designated strategic objectives,
as described below.
|
|
Based on performance relative to the financial goal (and, in the case of our CEO, performance relative to designated strategic objectives), the committee approved a payout at 92.5% (for Mr. Reed) and 90% (for the other NEOs) of the
target payout level (with additional discretionary awards made to certain NEOs for their efforts in helping us to meet our strategic objectives). See page 31.
|
Long-Term
Equity
Incentive
Compensation
|
|
Variable compensation.
Performance-based RSUs vesting over a three-year performance period.
Time-based RSUs vesting ratably over a designated period.
|
|
Motivate and reward executives.
Aligns the interests of executives and stockholders and focuses the executives on long-term objectives over a
multi-year period.
Encourages retention through long-term vesting.
|
|
Performance-Based Awards
RSUs vest based on TSR relative to designated peer groups over a 3-year performance period.
Awards pay out at a range from 0% to 150% of target with no shares earned for performance below 50% of financial
target.
Time-Based Awards
RSUs which vest in 25%
increments over 4 years.
|
|
The mix of long-term equity incentive awards granted to NEOs in 2013 was 50% performance-based RSUs and 50% time-based RSUs. See page 33.
|
Other Benefits
|
|
Fixed compensation.
Participation in broad-based plans at same cost as other employees.
Modest executive-level perquisites paid to our NEOs and other senior executives.
|
|
Allow senior executives to participate in broad-based employee benefit programs.
Provide competitive benefits to promote the health and well-being of our executive officers.
|
|
Level of benefits provided to all employees.
Market practice.
|
|
No material changes were made to the NEOs benefits in 2013. See page 34.
|
29
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
2013 Compensation Decisions
Our Human Resources Committee (which functions as our compensation committee) annually reviews our executive compensation program to determine how well actual
compensation targets and levels meet our overall compensation philosophy and to compare our compensation programs to our peers. The committee also oversees our compensation programs.
Compensation Peer Group
For 2013, the committee used a compensation peer group
of the following 11 companies:
|
|
|
American Campus
Communities, Inc.
|
|
Mid-America Apartment
Communities, Inc.
|
Ashford Hospitality Trust, Inc.
|
|
Post Properties, Inc.
|
Colonial Properties Trust
|
|
RLJ Lodging Trust
|
Diamondrock Hospitality Co.
|
|
Strategic Hotels & Resorts, Inc.
|
Kilroy Realty Corp.
|
|
Sunstone Hotel Investors, Inc.
|
LaSalle Hotel Properties
|
|
|
These companies were selected based on their industry focus and their status as a REIT, enterprise value, revenue size and debt to
capital ratio. The companies included in the peer group used by the committee as set forth above are different from the companies included in our peer group in 2012 as disclosed in last years proxy statement as a result of our conversion to a
REIT effective January 1, 2013.
The committee annually determines whether our overall executive compensation program is consistent with our business strategy
and promotes our compensation philosophy. In determining target total annual compensation for each NEO, the committee relies on its general experience and subjective considerations of various factors, including our strategic business goals,
information with respect to the peer group set forth above, proprietary and publicly available compensation surveys and data with respect to REITs and other public companies provided by AonHewitt, and each executive officers position,
experience, level of responsibility, individual job performance, contributions to our corporate performance, job tenure and future potential.
The committee does not
set specific targets or benchmarks for overall compensation or for allocations between fixed and performance-based compensation, cash and non-cash compensation or short-term and long-term compensation. In addition, the committee uses the factors set
forth above to obtain a general understanding
of current compensation practices, including to confirm that the target total compensation opportunity for our executive officers provides for a reasonable range of compensation within which each
executives total compensation would be considered competitive. The committee does not specifically target or benchmark any element of compensation or the total compensation payable to NEOs based on these factors.
Base Salary
Base salary is designed to compensate our NEOs for their roles
and responsibilities and to provide a secure level of guaranteed cash compensation. We have agreements with Mr. Reed, Mr. Fioravanti and Mr. Westbrook that provide for a minimum base salary. We also have severance agreements with
Mr. Chaffin and Mr. Lynn that do not provide for any minimum base salary.
Each NEOs base salary was set based on:
|
|
the executives roles and responsibilities; and
|
|
|
the executives skills, experience and performance.
|
In 2013, base salary represented approximately 18% of our
CEOs total compensation package and (on average) approximately 40% of our other NEOs total compensation package (calculated in the manner described on page 28). The committee annually reviews the base salaries of each NEO. Adjustments
are made based on individual performance and changes in roles and responsibilities.
At its February 14, 2013 meeting, the committee reviewed the existing base
salaries and perquisites for our NEOs. Specifically, the committee considered the meaningful reductions in base salary (a 26.4% reduction for Mr. Reed, a 1.2% reduction for Mr. Fioravanti and a 1% reduction for Mr. Westbrook) and cash
perquisites (a reduction of $29,400 per year for Mr. Reed and a reduction of $15,000 per year for Mr. Fioravanti and for Mr. Westbrook) that these NEOs voluntarily initiated, which became effective as of January 1, 2013, in
connection with our REIT conversion.
The committee also considered the fact that Mr. Chaffin and Mr. Lynn were newly appointed to their positions
effective as of January 1, 2013 in connection with our REIT restructuring and that they received new base salaries, effective as of such date, of $250,000 and $240,000, respectively, in connection with such appointments.
30
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Based on its review of the factors described above, the committee determined that the base salary amounts for all NEOs,
implemented effective as of January 1, 2013, should continue unchanged for the remainder of 2013 at the following levels:
|
|
|
Name
|
|
2013 Base
Salary
($)
|
Colin Reed
|
|
670,000
|
Mark Fioravanti
|
|
425,000
|
Bennett Westbrook
|
|
305,000
|
Patrick Chaffin
|
|
250,000
|
Scott Lynn
|
|
240,000
|
Short-Term Cash Incentive Compensation
We
provide annual cash incentive compensation designed to reward achievement of specific previously established short-term financial and strategic goals.
2013
Performance Goals
For 2013, the committee determined that the NEOs would have the opportunity to earn the following percentage of their base salary based on the
achievement of the financial performance goals (and, in the case of Mr. Reed, designated strategic objectives) described below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
Level
|
|
|
Target
Level
|
|
Stretch
Level
|
|
Mr. Reed
|
|
|
75%
|
|
|
150%
|
|
|
300%
|
|
Mr. Fioravanti
|
|
|
50%
|
|
|
100%
|
|
|
200%
|
|
Mr. Westbrook
|
|
|
37.5%
|
|
|
75%
|
|
|
150%
|
|
Mr. Chaffin
|
|
|
25%
|
|
|
50%
|
|
|
100%
|
|
Mr. Lynn
|
|
|
25%
|
|
|
50%
|
|
|
100%
|
|
The percentage of salary award for performance falling between the threshold and target achievement levels and the target and stretch
achievement levels was to be based on AFFO using straight-line interpolation. In 2013, assuming performance at the target level of achievement, short-term cash incentive compensation represented approximately 27% of our CEOs total compensation
package and (on average) approximately 26% of our other NEOs total compensation package (calculated in the manner described on page 28).
In 2013, the performance targets, measured using AFFO, were:
|
|
Threshold Performance Goal:
AFFO of $188.1 million.
|
|
|
Target Performance Goal:
AFFO of $216.8 million.
|
|
|
Stretch Performance Goal:
AFFO of $245.4 million.
|
The committee selected AFFO as the performance metric because
it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items which we believe are not indicative of the performance of our
underlying hotel properties, and as such AFFO is one of the principal tools used by our management and the investment community in evaluating our financial performance as a REIT. These performance levels were set by the committee at the beginning of
2013 after thorough discussion with management regarding our anticipated financial performance. In choosing this goal, the committee considered the general economic climate expected in 2013, the expected conditions in the hospitality industry and
our expected financial performance. The committee intended the target performance goal to be a challenging level of achievement. The committee attempted to set the threshold, target and stretch performance goals to ensure that the relative level of
difficulty of achieving these performance levels would be generally consistent with prior years.
The awards to the NEOs (other than Mr. Reed) were based solely
on our level of achievement of AFFO. The award to Mr. Reed was based 75% on our achievement of AFFO and 25% on our achievement of the strategic objective, approved in advance by the committee, of achieving effective capital allocation and
balance sheet management, specifically including refinancing our existing indebtedness with near-term maturities.
At the time the committee established these
targets, it made a determination to adjust the actual AFFO for the year to exclude losses or expense related to certain extraordinary, non-recurring events or occurrences as set forth in our stockholder approved omnibus incentive plan before
exercising any negative discretion in determining the final amounts of the cash incentive awards to ensure that such
31
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
awards accurately reflect our actual performance. The committee also had the option of lowering the amount of, or not awarding, annual cash incentive compensation otherwise payable to an
executive under the plan for 2013 if the executive did not attain a minimum-level annual performance rating under the companys employee evaluation program, which is a prerequisite to receiving cash incentive compensation under the plan.
2013 Short-Term Cash Incentive Compensation Awards
In analyzing our results
for purposes of determining the level of achievement under the short-term cash incentive compensation plan, the committee reviewed our operating and financial results.
In making its determination, the committee noted:
|
|
We faced a particularly challenging operating environment in 2013 due to an overall weakness in the large group hospitality sector in which we focus, as well as difficulties relating to the management transition of our
hotel properties. During the year we spent a great deal of time and effort working jointly with Marriott to improve performance in key areas such as sales and cost savings initiatives.
|
|
|
Despite these difficulties, in 2013 we achieved the following:
|
|
|
|
AFFO of $174.8 million, or AFFO per basic share of $3.42.
|
|
|
|
AFFO excluding REIT conversion costs of $190.2 million, or AFFO excluding REIT conversion costs per basic share of $3.72.
|
|
|
As outlined above, we returned approximately $200 million of capital to our stockholders in 2013 by:
|
|
|
|
paying approximately $100 million of dividends on our common stock (including the fourth quarter dividend paid in early 2014 to holders of record as of December 27, 2013); and
|
|
|
|
repurchasing approximately $100 million in shares of our common stock during 2013.
|
|
|
We successfully refinanced our $1.0 billion credit facility, which now expires in 2017, and
|
|
|
issued $350 million in 5% senior notes, maturing in 2021. We also repurchased approximately $100 million in fair market value of our convertible senior notes (approximately $55 million in
principal amount) and redeemed approximately $150 million of our previously outstanding 6.75% senior notes.
|
Based on its review, the committee
determined that it would be appropriate to (as required by the terms of the plan) adjust the calculation of AFFO to take into account certain extraordinary, non-recurring transactions, including but not limited to: our REIT conversion costs; the
costs associated with the refinancing of our indebtedness, the repurchase of our common stock and the redemption of our convertible senior notes; and certain other unforeseen expenses incurred during the year, including the acceleration of our
Gaylord Texan rooms refurbishment program and additional sales commissions relating to group bookings in the fourth quarter of 2013 (as these commissions exceeded our projections).
After taking into account the items described above, the committee concluded that our AFFO was, for purposes of the plan, $211.9 million, which exceeded our
threshold performance goal but was less than our target performance goal. The resulting payout, using interpolation, was at a payout level equal to 90% of the target payout level (which was the payout level for
all NEOs other than Mr. Reed). The committee also determined that Mr. Reed had satisfied the individual strategic performance objectives described above, which combined with the AFFO achievement level described above resulted in a payout
level equal to 92.5% of the target payout level.
The committee also determined that certain of the NEOs should receive additional discretionary cash
incentive compensation, in an amount listed below, due to their substantial contributions to the companys debt refinancings and equity and debt repurchase transactions in 2013, as well as their efforts to improve the operating performance of
our hotel properties in 2013. The committee also reviewed the annual performance rating of each NEO and determined that each NEO met the minimum level performance rating.
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2014 NOTICE OF MEETING AND PROXY STATEMENT
|
As a result, the committee approved the following short-term cash incentive compensation awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Calculated
Short-Term
Cash
Incentive
Compen-
sation
($)
|
|
|
Discretion-
ary Short-
Term Cash
Incentive
Compen-
sation
($)
|
|
|
Total
Short-
Term Cash
Incentive
Compen-
sation(1)
($)
|
|
Mr. Reed
|
|
|
929,625
|
|
|
|
70,375
|
|
|
|
1,000,000
|
|
Mr. Fioravanti
|
|
|
382,500
|
|
|
|
50,000
|
|
|
|
432,500
|
|
Mr. Westbrook
|
|
|
205,875
|
|
|
|
-
|
|
|
|
205,875
|
|
Mr. Chaffin
|
|
|
112,500
|
|
|
|
25,000
|
|
|
|
137,500
|
|
Mr. Lynn
|
|
|
108,000
|
|
|
|
25,000
|
|
|
|
133,000
|
|
(1)
|
The total short-term cash incentive compensation awarded to each NEO listed in this column is equal to the following percentage of the target payout level for each NEO established under the short-term cash
incentive compensation plan for 2013: Mr. Reed99.5%; Mr. Fioravanti101.8%; Mr. Westbrook90%; Mr. Chaffin110%; and Mr. Lynn$110.8%. The estimated threshold, target and
stretch payout levels for each NEO established under the short-term cash incentive compensation plan for 2013 are listed in
Grants of Plan-Based Awards
below.
|
Long-Term Equity Incentive Compensation
Our long-term equity incentive
compensation plan is designed to align the interests of our NEOs and stockholders and focus our NEOs on long-term objectives over a multi-year period. Long-term equity incentive awards are also intended to attract and retain our NEOs through
long-term vesting. In 2013, long-term equity incentive compensation represented approximately 54% of our CEOs total compensation package and (on average) approximately 32% of our other NEOs total compensation package (calculated in the
manner described on page 28).
Long-Term Equity Incentive Compensation Plan Components
Our long-term equity incentive plan components are:
Performance-Based RSUs:
|
|
Vest over a three-year period based on our TSR over the award cycle, as compared to our peers.
|
|
|
Awards settled in stock, with cash dividends on RSUs being paid only upon RSUs that ultimately vest upon the achievement of performance goals.
|
|
|
Granted only to the NEOs and senior executives.
|
Time-Based RSUs:
|
|
Vest in equal amounts over four years, beginning on the first anniversary of the grant date.
|
|
|
Awards settled in stock, with dividends on RSUs held by our NEOs being paid in additional RSUs only upon RSUs that ultimately vest.
|
|
|
Granted to the NEOs, as well as to other eligible employees.
|
2013 Long-Term Equity Incentive Compensation Awards
For 2013, the committee discussed with AonHewitt the most appropriate way to motivate and retain our executives. The committee felt it was important to provide
for continuity of management during the period immediately following our REIT conversion, especially in light of the difficult operating environment in the group hospitality sector during 2013. The committee also believed it was important to use RSU
awards instead of stock options to better align the interests of our executives with our stockholders and to conform to compensation practices in the REIT industry.
As a result of these discussions, the committee decided to structure long-term equity incentive awards in 2013 as a combination of performance-based RSUs and time-based
RSUs.
On February 14, 2013, the committee made the following long-term incentive compensation awards to the NEOs:
|
|
|
|
|
|
|
|
|
Name
|
|
Performance-
Based RSU
Awards(1)
(#)
|
|
|
Time-
Based RSU
Awards(2)
(#)
|
|
Mr. Reed
|
|
|
23,000
|
|
|
|
23,000
|
|
Mr. Fioravanti
|
|
|
8,000
|
|
|
|
8,000
|
|
Mr. Westbrook
|
|
|
3,000
|
|
|
|
3,000
|
|
Mr. Chaffin
|
|
|
1,500
|
|
|
|
1,500
|
|
Mr. Lynn
|
|
|
1,500
|
|
|
|
1,500
|
|
(1)
|
The performance-based RSUs will vest on February 14, 2016 only to the extent that the designated goals under these awards as established by the committee (described below) are achieved. The amounts set forth above
represent the number of RSUs that will vest assuming achievement of the target performance level.
|
(2)
|
The time-based RSUs vest ratably over four years, beginning on February 14, 2014.
|
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|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
2013 Performance-Based RSU Awards
The amount of the performance-based RSUs which will ultimately vest on February 14, 2016 will be determined by comparing our TSR performance during the performance
period (January 1, 2013 December 31, 2015) relative to the median of the TSR performance of the following two peer groups, weighted equally: (1) companies within the FTSE NAREIT Lodging Resorts Index selected by the committee
(1)
; and (2) our 2013 compensation peer group listed above (collectively, the Performance Peer Groups). Specifically, the awards will vest as follows:
|
|
|
|
|
Company
TSR Performance
|
|
% of Award
Vesting
|
|
Greater than 15 percentage points above the median TSR performance of the Performance Peer Group
|
|
|
150%
|
|
Equal to the median TSR performance of the Performance Peer Group
|
|
|
100%
|
|
15 percentage points below the median TSR performance of the Performance Peer Group
|
|
|
50%
|
|
Greater than 15 percentage points below the median TSR performance of the Performance Peer Group
|
|
|
0%
|
|
If the performance achieved falls in between the established goal levels, the percentage of the award earned by the NEO will be
determined using straight-line interpolation and rounding to the nearest full share. The awards also provide that if our TSR is negative, on an absolute basis, the committee may, in its discretion, reduce by 25% the number of awards ultimately
vesting. In no event will the final value of the award exceed 500% of the fair market value of our common stock on the grant date of February 14, 2013. The committee believes that limiting the maximum value of the award ensures the NEOs are not
disproportionally awarded for performance. The committee also retains the discretion to re-evaluate the Performance Peer Groups for each fiscal year to take into account changes to the composition of the Performance Peer Groups (i.e., mergers or
delistings), or to otherwise modify the terms of the award to take into account such other factors which the committee in its sole discretion may determine.
The committee believed the amount of these awards was appropriate given our compensation philosophy and objectives,
specifically noting that achievement of greater than target level performance would have also resulted in higher than average TSR to our stockholders, as compared to our peers. In 2013, performance-based RSUs represented approximately
27% of our CEOs total compensation package and (on average) approximately 16% of our other NEOs total compensation package (calculated in the manner described on page 28).
2013 Time-Based RSU Awards
The time-based RSUs vest ratably over four
years, beginning on February 14, 2014. The committee believed the amount of these awards was appropriate given our compensation philosophy and objectives, including the need to retain our executives. In 2013, time-based RSUs represented
approximately 27% of our CEOs total compensation package and (on average) approximately 16% of our other NEOs total compensation package (calculated in the manner described on page 28).
Benefits
Our benefit programs are established based upon an assessment of
competitive market factors and a determination of what is needed to attract and retain qualified executives. Our primary benefits for executives include participation in our broad-based plans at the same costs as other employees. These plans include
a tax qualified 401(k) savings plan (with matching contributions equal to 4% of a participants pay), health and dental plans and various disability and life insurance plans.
We also provide the following additional executive-level perquisites to our NEOs and other designated senior executives:
|
|
Supplemental Deferred Compensation Plan
.
Eligible executive officers, including NEOs, may participate in an unfunded, unsecured, supplemental deferred compensation plan, or SUDCOMP, with a company
matching component. Details about our SUDCOMP may be found under
Nonqualified Deferred Compensation
on page 46.
|
(1)
|
The lodging companies selected by the committee were Ashford Hospitality Trust, Inc., Chatham Lodging Trust, Chesapeake Lodging Trust, Diamondrock Hospitality Co.,
FelCor Lodging Trust Inc., Hersha Hospitality Trust, Hospitality Properties Trust, Host Hotels & Resorts, Inc., LaSalle Hotel Properties, MHI Hospitality Corp., Pebblebrook Hotel Trust, RLJ Lodging Trust, Strategic Hotels & Resorts, Inc.,
Summit Properties, Inc., Sunstone Hotel Investors, Inc. and Supertel Hospitality, Inc.
|
34
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
|
|
Supplemental Insurance Programs.
Additional life and disability insurance is provided for our senior executives, including the NEOs.
|
We also continue to hold for sale a corporate airplane which was purchased by our predecessor company to support the extensive amount of travel required for hotel
operation, including for the large number of hotel site visits and other sales trips necessary to serve our convention and large group customer base. While the plane is held for sale, we continue to utilize the plane for business travel and allow
limited personal use of our plane by certain of our senior executives to provide for more efficient use of their time while traveling on company business. This benefit is taxable in accordance with IRS regulations.
These executive-level perquisites are established based upon an assessment of competitive market factors and a determination of what is needed to attract and retain
qualified executives. These executive-level perquisites represented approximately 1% of our CEOs total compensation package and (on average) approximately 2% of our other NEOs total compensation package (calculated in the manner
described on page 28).
As part of our REIT restructuring transactions, Mr. Reed, Mr. Fioravanti and Mr. Westbrook voluntarily agreed to amend their
employment agreements to remove the car allowance and annual financial planning cash perquisites previously paid to them. The severance agreements for Mr. Chaffin and Mr. Lynn do not provide for any perquisites.
When we recruited Mr. Reed to join our company in 2001, we agreed to pay Mr. Reed a retirement benefit pursuant to a Custom Mid-Career Supplemental Employee
Retirement Plan, or SERP. This benefit, which is described in
Nonqualified Deferred Compensation
below, was in the committees view essential to attracting Mr. Reed to employment with us and has also proved valuable in securing his
extended employment. The company has fully satisfied its funding obligations under the SERP by previously paying, in total, $3.5 million to Mr. Reeds SERP account (as described below), and the current balance in Mr. Reeds SERP
account in excess of such amount is attributable to investment gains and losses associated with the assets in the SERP account (currently shares of our common stock).
Other Compensation Information
Stock Ownership and Retention Guidelines
The committee has adopted stock
ownership guidelines for our senior executives. These guidelines are designed to encourage our executives to have a meaningful equity ownership in our company, thereby linking their interests with those of our stockholders. These guidelines provide
that within five years of becoming a senior executive, each executive must own (by way of shares owned directly or indirectly (including through our 401(k) plan) and shares represented by unvested time-based RSUs, but not including unexercised stock
options or performance-based RSUs) common stock with a value of either five times (5x) base salary for Mr. Reed, three times (3x) base salary for Mr. Fioravanti, and two times (2x) base salary for the other NEOs and other
executives subject to these guidelines. In 2014 we amended these guidelines to provide that if an executive is not currently in compliance with this guideline (regardless of the compliance grace period), the executive must retain 50% of the net
shares (after satisfying any tax obligations and any required payments upon exercise) received upon vesting of RSUs or the exercise of stock options. As of January 31, 2014 (the annual compliance date) all of the NEOs were in compliance with
the guidelines, after taking into account the applicable grace period for Mr. Chaffin and Mr. Lynn, as follows:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Required Ownership as
of January 31, 2014
|
|
Shares
Owned
|
Mr. Reed
|
|
|
|
80,996
|
|
|
|
|
1,055,251
(1)
|
|
Mr. Fioravanti
|
|
|
|
30,827
|
|
|
|
|
98,263
(2)
|
|
Mr. Westbrook
|
|
|
|
14,749
|
|
|
|
|
25,510
(3)
|
|
Mr. Chaffin
|
|
|
|
12,089
|
|
|
|
|
9,341
(4)
|
|
Mr. Lynn
|
|
|
|
11,605
|
|
|
|
|
7,510
(5)
|
|
(1)
|
Includes 477,149 shares credited to Mr. Reeds SERP and 112,897 shares of common stock issuable upon the vesting of time-based RSUs.
|
(2)
|
Includes 31,999 shares of common stock issuable upon the vesting of time-based RSUs.
|
(3)
|
Includes 19,146 shares of common stock issuable upon the vesting of time-based RSUs.
|
(4)
|
Consists of 9,341 shares of common stock issuable upon the vesting of time-based RSUs. Mr. Chaffin first became subject to the ownership guideline beginning January 1, 2013, with a five-year compliance period.
|
(5)
|
Includes 5,273 shares of common stock issuable upon the vesting of time-based RSUs. Mr. Lynn first became subject to the ownership guideline beginning January 1, 2013, with a five-year compliance period.
|
35
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Post-Termination Benefits
The
committee believes that severance and change of control benefits assist in attracting and retaining qualified executives. The committee believes these benefits were particularly important to provide for continuity of management during the period
immediately following our REIT conversion. The levels of payments and benefits upon termination were set to be at a market-competitive level based upon each executives experience and level in the organization.
Mr. Reed, Mr. Fioravanti and Mr. Westbrook have employment agreements that provide for cash severance payments and certain other benefits if termination
occurs without cause or if the executive leaves for good reason (as defined in their employment agreement). These agreements also provide for cash compensation and certain other benefits in the event of termination following
a change of control of the company (i.e., a double trigger). Mr. Chaffin and Mr. Lynn have severance agreements that only provide for compensation in the event of termination following a change of
control of the company (i.e., a double trigger). In addition, no tax gross-ups are provided in connection with any severance payments to our NEOs. Information regarding these payments, including a definition of key terms and the
amount of benefits that would have been received by our NEOs had termination occurred on December 31, 2013, is found under
Potential Payments on Termination or Change of Control
on page 48.
Tax Deductibility Policy
The committees policy is to consider the tax
treatment of compensation paid to our executive officers with appropriate rewards for their performance. Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deduction for their compensation in excess of $1.0
million paid to their chief executive officers and certain of their other executive officers unless designated performance and other requirements are met. We generally intend to design and administer executive compensation programs in a manner that
will preserve the deductibility of compensation paid to our executive officers. We believe that a substantial portion of our current executive compensation (including the short-term cash incentive compensation and performance-based RSUs granted to
our NEOs as described above) satisfies the
requirements for exemption from the $1.0 million
deduction limitation. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation paid under such
programs may not be fully deductible.
Because we qualify as a REIT for Federal income tax purposes, we generally expect to distribute at least 100% of our net
taxable income each year and therefore will not pay Federal income tax on our REIT taxable income. As a result, based on the level of compensation paid to our executive officers, we do not expect that the possible loss of a Federal income tax
deduction would materially impact our income tax liability. The committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary objective of ensuring that compensation paid to our
executives is reasonable, performance-based and consistent with our goals.
Equity Grant Practices
Our omnibus incentive plan allows the committee to grant various types of equity awards to any eligible employee, including the NEOs. This plan also permits delegation of
the committees authority to the CEO to make a small number of awards to non-executive officers to newly-hired or promoted employees (which are then ratified by the committee). Annual equity awards to executives are approved by the committee
and occur on the date of our first quarterly committee meeting of each year. These awards are granted pursuant to a formula based on a specified dollar amount, with the number of shares for each RSU award determined by dividing the dollar amount by
the closing market price of our stock on the date immediately prior to the grant date. Annual RSU awards for directors are approved by the committee and are granted on the date the director is elected or appointed to the Board. These awards are
granted pursuant to a formula based on a specified dollar amount, with the number of shares for each RSU grant determined by dividing the dollar amount by the closing market price of our stock on the date immediately prior to the grant date.
Role of the Human Resources Committee and Management
The committee awards
compensation to our NEOs and other executives consistent with our philosophy that compensation paid to our executives be fair, reasonable and competitive. The committee establishes and monitors compliance with our compensation philosophy, and the
committee also
36
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
oversees the development and administration of our compensation programs. Our management is responsible for the administration of our compensation programs once approved by the committee.
The committee makes all compensation decisions with respect to our NEOs, which are ratified by our Board. Our CEO annually reviews the performance of, and provides
compensation recommendations for, each NEO (other than the CEO). In the case of the CEO, the CEO provides the committee with a self-assessment of his performance. The committee then reviews these items and discusses and approves compensation for
each NEO based on considerations previously discussed. For a complete description of the committees members and its responsibilities, as well as information regarding the authority of our CEO to make limited equity grants to new members of our
management team, see
Committees of the Board
on page 17. You may also view the committees charter on our website at
www.rymanhp.com (
under Corporate Governance on the Investor Relations page).
Role of the Compensation Consultant
The committee retained AonHewitt as its
outside compensation consultant effective as of January 1, 2013. During 2013, AonHewitt regularly attended committee meetings and reported directly to the committee on matters relating to compensation for our executives. During 2013 the
committee requested that AonHewitt:
|
|
Analyze the compensation for our NEOs and other executives and assess how target and actual short-term incentive compensation aligned with our compensation philosophy and objectives.
|
|
|
Develop recommendations for the committee on the size and structure of long-term incentive compensation awards.
|
|
|
Assist the committee in the review of this proxy statement and this Compensation Discussion and Analysis.
|
|
|
Provide the committee with ongoing advice and counsel on market compensation practices, trends and legal and regulatory changes and their impact on our compensation programs.
|
Advisory Vote on Executive Compensation
At our annual meeting in May 2013, we
held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a say-on-pay vote. In our say-on-pay vote, 90.3% of the stockholder votes, excluding broker non-votes, were cast in favor of the say-on-pay
resolution. As the committee reviewed our compensation practices, it was mindful of the level of support our stockholders had previously expressed for our compensation programs, including our pay for performance philosophy and emphasis
on variable compensation, and the committee determined no specific actions in response to the vote were indicated. The committee intends to continue to consider the outcome of future advisory say-on-pay votes when making executive compensation
decisions.
2014 NEO Compensation
At its
February 26, 2014 meeting, the committee reviewed and approved the compensation to be paid to the NEOs for 2014, in light of our compensation philosophy and the other matters described above.
Base Salary
The committee determined that base salaries for 2014 should be
slightly increased to meet the objectives previously discussed, as follows:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2014 Base
Salary
($)
|
|
% Increase
from 2013
Base Salary
|
Mr. Reed
|
|
|
|
725,000
|
|
|
|
|
8.2
|
%
|
Mr. Fioravanti
|
|
|
|
437,500
|
|
|
|
|
3.0
|
%
|
Mr. Westbrook
|
|
|
|
311,100
|
|
|
|
|
2.0
|
%
|
Mr. Chaffin
|
|
|
|
257,500
|
|
|
|
|
3.0
|
%
|
Mr. Lynn
|
|
|
|
247,200
|
|
|
|
|
3.0
|
%
|
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|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Short-Term Cash Incentive Compensation
The committee also established criteria for short-term cash incentive compensation pursuant to our omnibus incentive plan. Each NEO will have the opportunity to earn the
following percentage of their base salary based on the achievement of the AFFO goals (and, in the case of Mr. Reed, designated strategic objectives) established by the committee:
|
|
|
|
|
|
|
|
|
Threshold
Level
|
|
Target
Level
|
|
Stretch
Level
|
Mr. Reed
|
|
75%
|
|
150%
|
|
300%
|
Mr. Fioravanti
|
|
50%
|
|
100%
|
|
200%
|
Mr. Westbrook
|
|
37.5%
|
|
75%
|
|
150%
|
Mr. Chaffin
|
|
37.5%
|
|
75%
|
|
150%
|
Mr. Lynn
|
|
37.5%
|
|
75%
|
|
150%
|
The committee set the AFFO target performance goal at our projected AFFO level for 2014, as the committee believes achieving
this goal will represent a significant step in meeting our financial and strategic objectives. In making determinations of the desired threshold, target and stretch performance goals, the committee also considered
the general economic and operating climate we are likely to face in 2014. In setting these goals, the committee attempted to set performance goals to ensure that the relative level of difficulty of achieving these levels was consistent with prior
years.
In determining whether an NEO meets his designated AFFO goals in 2014, the committee will adjust the actual AFFO for the year to exclude losses or expense
related to certain extraordinary non-recurring events or occurrences as set forth in our omnibus incentive plan (and may exclude any items
of income or gain) before exercising any negative discretion in determining the final amounts of the short-term cash incentive compensation awards to ensure that such awards accurately reflect
our actual performance. The Committee can also lower the amount of, or not award, annual cash incentive compensation otherwise payable to an officer under the plan for 2014 if the officer does not attain a minimum-level annual performance rating,
which will continue to be a prerequisite to receiving cash incentive compensation under the plan.
Long-Term Equity Incentive Compensation
The committee also made the following long-term equity incentive compensation awards to the NEOs:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Performance-
Based
RSU
Awards
(1)
(#)
|
|
Time-
Based RSU
Awards
(2)
(#)
|
Mr. Reed
|
|
|
|
23,750
|
|
|
|
|
23,750
|
|
Mr. Fioravanti
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
Mr. Westbrook
|
|
|
|
3,808
|
|
|
|
|
3,808
|
|
Mr. Chaffin
|
|
|
|
3,750
|
|
|
|
|
3,750
|
|
Mr. Lynn
|
|
|
|
3,750
|
|
|
|
|
3,750
|
|
(1)
|
Up to 150% of the performance-based RSUs listed above will vest on February 26, 2017 based on our TSR performance over the three-year award cycle (January 1, 2014 December 31, 2016) relative to the
median of the TSR performance of the Performance Peer Groups set forth above. The amounts set forth above represent the number of RSUs that will vest assuming achievement at the target performance level.
|
(2)
|
The time-based RSUs vest ratably over four years, beginning on February 26, 2015.
|
38
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Human Resources Committee Report
The following report of the Human Resources Committee does not constitute soliciting material and should not be deemed incorporated by reference into any other
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report herein.
The Human
Resources Committee (which functions as our compensation committee), comprised of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the companys management. Based on its review and these
discussions, the Human Resources Committee recommended to the Board that the Compensation Discussion and Analysis be included in these proxy materials.
Human
Resources Committee:
Michael I. Roth, Chairman
D. Ralph Horn
Ellen Levine
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|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Executive Compensation
The Summary Compensation Table below shows compensation information about our principal executive officer, our principal financial officer and the three other most
highly compensated executive officers as of December 31, 2013 other than our principal executive officer and principal financial officer. As required by SEC rules, the compensation amounts listed below include non-cash items such as the value
of equity awards (some of which are performance-based and may or may not ultimately be earned).
2013 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal
Position
(a)
|
|
Year
(b)
|
|
Salary
(1)
($)
(c)
|
|
Bonus
(2)
($)
(d)
|
|
Stock
Awards
(3)
($)
(e)
|
|
Option
Awards
(4)
($)
(f)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(5)
($)
(g)
|
|
Change in
Pension
Value
and
Nonqual-
ified
Deferred
Compen-
sation
Earnings
($)
(h)
|
|
All Other
Compen-
sation
(7)
($)
(i)
|
|
Total
($)
(j)
|
Colin Reed
Chairman, CEO &
President
|
|
2013
|
|
|
|
670,149
|
|
|
70,375
|
|
|
|
2,056,200
|
|
|
|
|
-
|
|
|
|
|
929,625
|
|
|
-
|
|
|
|
60,422
|
|
|
|
|
3,786,771
|
|
|
2012
|
|
|
|
910,000
|
|
|
-
|
|
|
|
3,063,720
|
|
|
|
|
1,023,480
|
|
|
|
|
2,000,000
|
|
|
-
|
|
|
|
111,434
|
|
|
|
|
7,108,634
|
|
|
2011
|
|
|
|
945,000
|
|
|
-
|
|
|
|
823,200
|
|
|
|
|
1,395,625
|
|
|
|
|
1,100,000
|
|
|
-
|
|
|
|
111,369
|
|
|
|
|
4,375,194
|
|
Mark Fioravanti
EVP & Chief Financial Officer
|
|
2013
|
|
|
|
425,198
|
|
|
50,000
|
|
|
|
715,200
|
|
|
|
|
-
|
|
|
|
|
382,500
|
|
|
-
|
|
|
|
34,165
|
|
|
|
|
1,607,063
|
|
|
2012
|
|
|
|
425,385
|
|
|
-
|
|
|
|
626,670
|
|
|
|
|
209,943
|
|
|
|
|
650,000
|
|
|
-
|
|
|
|
45,461
|
|
|
|
|
1,957,459
|
|
|
2011
|
|
|
|
412,577
|
|
|
-
|
|
|
|
171,500
|
|
|
|
|
309,031
|
|
|
|
|
300,044
|
|
|
-
|
|
|
|
47,107
|
|
|
|
|
1,240,259
|
|
|
|
|
|
|
|
|
|
|
|
Bennett
Westbrook
(6)
SVP, Development &
Design and Construction
|
|
2013
|
|
|
|
305,183
|
|
|
-
|
|
|
|
268,200
|
|
|
|
|
-
|
|
|
|
|
205,875
|
|
|
-
|
|
|
|
26,189
|
|
|
|
|
805,547
|
|
|
|
|
|
|
|
|
|
|
|
Patrick
Chaffin
(6)
SVP, Asset Management
|
|
2013
|
|
|
|
250,178
|
|
|
25,000
|
|
|
|
134,100
|
|
|
|
|
-
|
|
|
|
|
112,500
|
|
|
-
|
|
|
|
8,499
|
|
|
|
|
530,277
|
|
|
|
|
|
|
|
|
|
|
|
Scott Lynn
(6)
SVP & General Counsel
|
|
2013
|
|
|
|
240,149
|
|
|
25,000
|
|
|
|
134,100
|
|
|
|
|
-
|
|
|
|
|
108,000
|
|
|
-
|
|
|
|
13,923
|
|
|
|
|
521,172
|
|
(1)
|
Amounts shown are not reduced to reflect the NEOs contributions to our 401(k) plan or elections to defer receipt of salary under our SUDCOMP plan. Amounts shown are the amounts actually paid to the NEO during the
year and reflect, to the extent applicable, any changes in the base salary during the year. In 2011, each NEO, like all other salaried employees, received an additional bi-weekly payment of base salary due to the timing of our payroll schedule
(which resulted in each NEO receiving a slightly higher amount of base salary than their stated base salary).
|
(2)
|
Represents a discretionary bonus award paid to the NEO in recognition of their contributions in 2013, as described above in
Compensation Discussion and Analysis2013 Compensation Decisions
. Cash incentive
compensation paid to each NEO pursuant to our short-term cash incentive compensation plan for the applicable fiscal year is reflected in the column above entitled
Non-Equity Incentive Plan Compensation
.
|
(3)
|
Represents a non-cash amount equal to the grant date fair value of the RSU award to the NEO, determined in accordance with FASB ASC Topic 718, disregarding for this purpose estimated forfeitures. See Note 7 to our
consolidated financial statements for the three years ended December 31, 2013, included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014, for the assumptions made in
determining grant date fair value.
|
(4)
|
Represents a non-cash amount equal to the grant date fair value of the stock option award to the NEO, determined in accordance with FASB ASC Topic 718 based on the Black-Scholes-Merton option pricing formula. See Note 7
to our consolidated financial statements for the three years ended December 31, 2013, included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014, for the assumptions made
in determining grant date fair value.
|
40
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
(5)
|
Represents amounts paid under our short-term cash incentive compensation plan.
|
(6)
|
Compensation for Mr. Westbrook, Mr. Chaffin and Mr. Lynn is provided only for 2013 because such individuals were not NEOs in 2012 or 2011.
|
(7)
|
The table below lists the components of the
All Other Compensation
amount for each NEO listed above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Company
Match to
401(k)
Plan
($)
(a)
|
|
Company
Match to
SUCOMP
Plan
($)
(b)
|
|
Group
Term
Life
($)
(c)
|
|
Executive
LTD
($)
(d)
|
|
Other
($)
(e)
|
|
Total
($)
|
|
Colin Reed
|
|
|
|
10,200
|
|
|
|
|
22,957
|
|
|
|
|
15,342
|
|
|
|
|
2,359
|
|
|
|
|
9,564
|
|
|
|
|
60,422
|
|
Mark Fioravanti
|
|
|
|
10,200
|
|
|
|
|
14,420
|
|
|
|
|
4,000
|
|
|
|
|
2,547
|
|
|
|
|
2,998
|
|
|
|
|
34,165
|
|
Bennett Westbrook
|
|
|
|
10,200
|
|
|
|
|
10,339
|
|
|
|
|
2,620
|
|
|
|
|
2,040
|
|
|
|
|
990
|
|
|
|
|
26,189
|
|
Patrick Chaffin
|
|
|
|
-
|
|
|
|
|
2,505
|
|
|
|
|
1,499
|
|
|
|
|
1,497
|
|
|
|
|
2,998
|
|
|
|
|
8,499
|
|
Scott Lynn
|
|
|
|
6,779
|
|
|
|
|
4,698
|
|
|
|
|
1,277
|
|
|
|
|
1,169
|
|
|
|
|
-
|
|
|
|
|
13,923
|
|
(a)
|
We make matching contributions to the 401(k) plan accounts of the NEOs as described in
Compensation Discussion and Analysis
above.
|
(b)
|
We make matching contributions to the SUDCOMP accounts of the NEOs as described in
Nonqualified Deferred Compensation
below. Does not include company matching amounts for SUDCOMP deferrals with respect to 2012
short-term cash incentive plan payments made in 2013.
|
(c)
|
Represents the cost associated with the executive group term life insurance not made available generally to other employees.
|
(d)
|
Represents the cost associated with the executive long term disability insurance not made available generally to other employees.
|
(e)
|
Represents, for Mr. Reed, $6,947 for personal use of the company plane and $2,617 for physical examination fees. Represents, for Mr. Fioravanti and Mr. Chaffin, personal use of the company plane.
Represents, for Mr. Westbrook, physical examination fees. Amounts for personal use of company plane are based on the aggregate incremental cost associated with the use.
|
41
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Grants of Plan-Based Awards
The table below shows information about (1) the threshold, target and stretch (i.e., maximum) level of annual cash incentive awards for our NEOs for performance
during 2013, and (2) RSU awards granted to our NEOs during 2013 under our long-term equity incentive compensation plan.
Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
(1)
|
|
|
Estimated Future Payouts
Under Equity
Incentive Plan
Awards
(2)
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(3)
(#)(i)
|
|
|
Grant Date
Fair Value
of Stock
Awards
(4)
($)(j)
|
|
|
|
Name
(a)
|
|
Grant
Date
(b)
|
|
|
Threshold
($)(c)
|
|
|
Target
($)(d)
|
|
|
Stretch
($)(e)
|
|
|
Threshold
(#)(f)
|
|
|
Target
(#)(g)
|
|
|
Stretch
(#)(h)
|
|
|
|
|
Colin Reed
|
|
|
|
|
|
|
502,500
|
|
|
|
1,005,000
|
|
|
|
2,010,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,500
|
|
|
|
23,000
|
|
|
|
34,500
|
|
|
|
-
|
|
|
|
1,035,230
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23,000
|
|
|
|
1,020,970
|
|
|
|
Mark Fioravanti
|
|
|
|
|
|
|
212,500
|
|
|
|
425,000
|
|
|
|
850,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,000
|
|
|
|
8,000
|
|
|
|
12,000
|
|
|
|
-
|
|
|
|
360,080
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,000
|
|
|
|
355,120
|
|
|
|
Bennett Westbrook
|
|
|
|
|
|
|
114,375
|
|
|
|
228,750
|
|
|
|
457,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
3,000
|
|
|
|
4,500
|
|
|
|
-
|
|
|
|
135,030
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,000
|
|
|
|
133,170
|
|
|
|
Patrick Chaffin
|
|
|
|
|
|
|
62,500
|
|
|
|
125,000
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
750
|
|
|
|
1,500
|
|
|
|
2,250
|
|
|
|
-
|
|
|
|
67,515
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
66,585
|
|
|
|
Scott Lynn
|
|
|
|
|
|
|
60,000
|
|
|
|
120,000
|
|
|
|
240,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
750
|
|
|
|
1,500
|
|
|
|
2,250
|
|
|
|
-
|
|
|
|
67,515
|
|
|
|
|
|
|
2/14/13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
66,585
|
|
|
|
(1)
|
Represents threshold, target and stretch performance goal achievement payout levels established under our annual cash incentive plan for 2013 performance. See the Non-Equity Incentive Plan Compensation column of the
2013 Summary Compensation Table
above for the amount actually paid to each NEO for 2013 performance.
|
(2)
|
Consists of performance-based RSUs awarded under our long-term incentive compensation plan. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned for achieving specified
calculated TSR targets over a three-year performance period beginning January 1, 2013 and ending December 31, 2015. See
Compensation Discussion and Analysis2013 Compensation
DecisionsLong-Term Equity Incentive
Compensation
for a discussion of the terms of these RSUs.
|
(3)
|
Consists of time-based RSUs awarded under our long-term incentive compensation plan. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs vest 25% on each of the first through fourth
anniversaries of the grant date.
|
(4)
|
Grant date fair value of the RSU awards to the NEOs is determined in accordance with FASB ASC Topic 718, disregarding for this purpose estimated forfeitures. See Note 7 to our consolidated financial statements for the
three years ended December 31, 2013, included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014, for the assumptions made in determining grant date fair value.
|
42
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Outstanding Equity Awards at 2013 Fiscal Year End
The table below shows information about the outstanding equity awards held by our NEOs as of December 31, 2013.
Outstanding Equity Awards at 2013 Fiscal Year End Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(b)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(1)
(#)(c)
|
|
|
Option
Exercise
Price
($)(d)
|
|
|
Option
Expiration
Date
(e)
|
|
|
Number of
Shares or
Units
of
Stock That
Have Not
Vested
(2)
(#)(f)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have
Not
Vested
(3)
($)(g)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(4)
(#)(h)
|
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(3)
($)(i)
|
|
Colin Reed
|
|
|
91,475
|
|
|
|
-
|
|
|
|
23.79
|
|
|
|
2/5/14
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
81,870
|
|
|
|
27,291
|
|
|
|
16.47
|
|
|
|
2/3/20
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
42,688
|
|
|
|
42,689
|
|
|
|
28.13
|
|
|
|
2/2/21
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
71,351
|
|
|
|
24.40
|
|
|
|
2/8/22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
111,564
|
|
|
|
4,661,144
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
103,569
|
|
|
|
4,327,113
|
|
Mark Fioravanti
|
|
|
12,196
|
|
|
|
-
|
|
|
|
23.79
|
|
|
|
2/5/14
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
18,295
|
|
|
|
-
|
|
|
|
25.53
|
|
|
|
5/6/14
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
18,295
|
|
|
|
-
|
|
|
|
10.23
|
|
|
|
6/22/19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
12,621
|
|
|
|
4,210
|
|
|
|
16.47
|
|
|
|
2/3/20
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
9,452
|
|
|
|
9,453
|
|
|
|
28.13
|
|
|
|
2/2/21
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
14,636
|
|
|
|
24.40
|
|
|
|
2/8/22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,622
|
|
|
|
1,321,167
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,587
|
|
|
|
1,027,245
|
|
Bennett Westbrook
|
|
|
-
|
|
|
|
2,350
|
|
|
|
16.47
|
|
|
|
2/3/20
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
4,757
|
|
|
|
28.13
|
|
|
|
2/2/21
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
6,098
|
|
|
|
24.40
|
|
|
|
2/8/22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,922
|
|
|
|
790,561
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,820
|
|
|
|
452,060
|
|
Patrick Chaffin
|
|
|
488
|
|
|
|
-
|
|
|
|
32.98
|
|
|
|
2/9/15
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
915
|
|
|
|
-
|
|
|
|
36.33
|
|
|
|
2/8/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,219
|
|
|
|
-
|
|
|
|
46.03
|
|
|
|
2/7/17
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
4,024
|
|
|
|
-
|
|
|
|
25.44
|
|
|
|
2/4/18
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,379
|
|
|
|
-
|
|
|
|
8.45
|
|
|
|
2/4/19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,376
|
|
|
|
795
|
|
|
|
16.47
|
|
|
|
2/3/20
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,232
|
|
|
|
385,713
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
62,670
|
|
43
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(b)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(1)
(#)(c)
|
|
|
Option
Exercise
Price
($)(d)
|
|
|
Option
Expiration
Date
(e)
|
|
|
Number of
Shares or
Units
of
Stock That
Have Not
Vested
(2)
(#)(f)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have
Not
Vested
(3)
($)(g)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(4)
(#)(h)
|
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(3)
($)(i)
|
|
Scott Lynn
|
|
|
1,037
|
|
|
|
-
|
|
|
|
32.98
|
|
|
|
2/9/15
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,073
|
|
|
|
-
|
|
|
|
36.33
|
|
|
|
2/8/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,073
|
|
|
|
-
|
|
|
|
46.03
|
|
|
|
2/7/17
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
915
|
|
|
|
-
|
|
|
|
8.45
|
|
|
|
2/4/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,006
|
|
|
|
1,006
|
|
|
|
16.47
|
|
|
|
2/3/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,213
|
|
|
|
217,799
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
62,670
|
|
(1)
|
The following table provides information as of December 31, 2013 with respect to the vesting of each NEOs outstanding unexercisable options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
Vesting Date
|
|
|
Colin
Reed
|
|
|
Mark
Fioravanti
|
|
|
Bennett
Westbrook
|
|
|
Patrick
Chaffin
|
|
|
Scott
Lynn
|
|
2/2/2011
|
|
|
2/2/2014
|
|
|
|
21,344
|
|
|
|
4,726
|
|
|
|
2,378
|
|
|
|
|
|
|
|
|
|
2/3/2010
|
|
|
2/3/2014
|
|
|
|
27,291
|
|
|
|
4,210
|
|
|
|
2,350
|
|
|
|
795
|
|
|
|
1,006
|
|
2/2/2011
|
|
|
2/2/2015
|
|
|
|
21,344
|
|
|
|
4,727
|
|
|
|
2,379
|
|
|
|
-
|
|
|
|
-
|
|
2/8/2012
|
|
|
2/8/2015
|
|
|
|
35,675
|
|
|
|
7,318
|
|
|
|
3,049
|
|
|
|
-
|
|
|
|
-
|
|
2/8/2012
|
|
|
2/8/2016
|
|
|
|
35,676
|
|
|
|
7,318
|
|
|
|
3,049
|
|
|
|
-
|
|
|
|
-
|
|
(2)
|
The following table provides information as of December 31, 2013 with respect to the vesting of each NEOs outstanding time-based RSUs (including additional RSUs accrued with respect to dividends paid):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
Vesting
Date
|
|
|
Colin
Reed
|
|
|
Mark
Fioravanti
|
|
|
Bennett
Westbrook
|
|
|
Patrick
Chaffin
|
|
|
Scott
Lynn
|
|
2/2/2011
|
|
|
2/2/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,070
|
|
|
|
799
|
|
2/3/2010
|
|
|
2/3/2014
|
|
|
|
33,532
|
|
|
|
12,241
|
|
|
|
10,888
|
|
|
|
-
|
|
|
|
92
|
|
2/14/2013
|
|
|
2/14/2014
|
|
|
|
5,972
|
|
|
|
2,077
|
|
|
|
779
|
|
|
|
390
|
|
|
|
390
|
|
5/6/2010
|
|
|
5/6/2014
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,845
|
|
|
|
-
|
|
2/2/2011
|
|
|
2/2/2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,070
|
|
|
|
798
|
|
2/8/2012
|
|
|
2/8/2015
|
|
|
|
27,073
|
|
|
|
5,537
|
|
|
|
2,460
|
|
|
|
1,845
|
|
|
|
984
|
|
2/14/2013
|
|
|
2/14/2015
|
|
|
|
5,972
|
|
|
|
2,077
|
|
|
|
779
|
|
|
|
389
|
|
|
|
389
|
|
2/8/2012
|
|
|
2/8/2016
|
|
|
|
27,072
|
|
|
|
5,537
|
|
|
|
2,460
|
|
|
|
1,845
|
|
|
|
983
|
|
2/14/2013
|
|
|
2/14/2016
|
|
|
|
5,972
|
|
|
|
2,077
|
|
|
|
778
|
|
|
|
389
|
|
|
|
389
|
|
2/14/2013
|
|
|
2/14/2017
|
|
|
|
5,971
|
|
|
|
2,076
|
|
|
|
778
|
|
|
|
389
|
|
|
|
389
|
|
(3)
|
Market value was determined based on the December 31, 2013 NYSE closing price of our common stock ($41.78).
|
44
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
(4)
|
The following table provides information with respect to the vesting of the performance-based RSUs granted to each NEO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
Vesting
Date
|
|
|
Colin
Reed
|
|
Mark
Fioravanti
|
|
|
Bennett
Westbrook
|
|
|
Patrick
Chaffin
|
|
|
Scott
Lynn
|
|
2/2/2011
(a)
|
|
|
2/26/2014
|
|
|
28,436
|
|
|
5,924
|
|
|
|
3,081
|
|
|
|
-
|
|
|
|
-
|
|
2/8/2012
(b)
|
|
|
2/8/2015
|
|
|
52,133
|
|
|
10,663
|
|
|
|
4,739
|
|
|
|
-
|
|
|
|
-
|
|
2/14/2013
(b)
|
|
|
2/14/2016
|
|
|
23,000
|
|
|
8,000
|
|
|
|
3,000
|
|
|
|
1,500
|
|
|
|
1,500
|
|
(a)
|
The performance-based RSUs granted on February 2, 2011 ultimately vested on February 26, 2014 at the 90% payout level based on our achievement of Consolidated Cash Flow, or CCF, determined by the Human
Resources Committee.
|
(b)
|
The number of RSUs listed above with respect to the February 8, 2012 grant assume vesting at the target performance level, and the number of RSUs listed above with respect to the February 14, 2013
grant assume vesting at the target performance level, in each case taking into account performance to date with respect to the performance metrics under the award
|
|
agreement. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned for achieving specified calculated TSR targets over a three-year performance period (a
period beginning January 1, 2012 to December 31, 2014 for the February 8, 2012 awards; and a period beginning January 1, 2013 to December 31, 2015 for the February 14, 2013 awards). See
Compensation Discussion and
Analysis2013 Compensation DecisionsLong-Term Equity Incentive Compensation
for a discussion of the terms of these RSUs.
|
2013 Option Exercises
and Stock Vested
The table below shows information about the exercise of stock options by the NEOs and the vesting of the NEOs RSU awards in 2013.
2013 Option Exercises and Stock Vested Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
(a)
|
|
Number of
Shares
Acquired
Upon
Exercise
(#)(b)
|
|
Value Realized
Upon
Exercise
(1)
($)(c)
|
|
Number of
Shares
Acquired
on Vesting
(#)(d)
|
|
|
Value
Realized
on
Vesting
(2)
($)(e)
|
|
Colin Reed
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
Mark Fioravanti
|
|
-
|
|
-
|
|
|
3,293
|
|
|
|
116,144
|
|
Bennett Westbrook
|
|
7,103
|
|
141,944
|
|
|
-
|
|
|
|
-
|
|
Patrick Chaffin
|
|
-
|
|
-
|
|
|
1,796
|
|
|
|
78,683
|
|
Scott Lynn
|
|
-
|
|
-
|
|
|
89
|
|
|
|
3,691
|
|
(1)
|
Equal to the number of shares of common stock issued upon exercise of the stock option multiplied by the difference between (1) the fair market value of our common stock upon exercise and (2) the option
exercise price.
|
(2)
|
Equal to the number of shares of common stock issued upon vesting of RSUs multiplied by the closing market price of our common stock on the NYSE on the day prior to the vesting date.
|
45
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Other Compensation Information
Pension Benefits
None of our NEOs participate in
the frozen defined benefit plan we maintain.
Nonqualified Deferred Compensation
Supplemental Deferred Compensation
Our supplemental deferred compensation plan, or SUDCOMP, is a nonqualified plan that allows eligible participants
(including NEOs) to defer up to 40% of their base salary (less amounts deferred under our 401(k) plan) and 100% of their short-term cash incentive compensation. We contribute one dollar for each dollar contributed by the participant, up to four
percent of the participants contributions (less matching amounts under our 401(k) plan).
Participants elect hypothetical investment options mirroring the
funds in our 401(k) plan, with the exception of company stock. Participants can change their investment selections on a daily basis in the same manner as the 401(k) plan. Deferred amounts are credited with earnings or losses based on the rate of
return of the investment options selected by
the participant. When participants elect to defer amounts into the SUDCOMP, they also select when the amounts will be distributed to them. Distributions may either be made in a specific year
(whether or not employment has then ended) or at a time that begins at or after termination of employment. Distributions can be made in a lump sum or up to 15 annual installments. However, after a participants employment ends, his or her
account balance is automatically distributed in a lump sum (without regard to his or her election) if the balance is $10,000 or less.
The table below shows each
NEOs salary deferrals, company matching obligations, earnings and account balances in the SUDCOMP as of December 31, 2013:
Nonqualified Deferred
Compensation for Fiscal Year 2013 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Plan
(b)
|
|
|
Executive
Contributions
in Last FY
(1)
($)(c)
|
|
|
Registrant
Contributions
in Last FY
($)(d)
|
|
|
Aggregate
Earnings
(Losses) in
Last FY
(2)
($)(e)
|
|
|
Aggregate
Withdrawals/
Distributions
in Last FY
($)(f)
|
|
Aggregate
Balance at
Last FY
(3)
($)(g)
|
|
Colin Reed
|
|
|
SUDCOMP
|
|
|
|
169,565
|
|
|
|
22,957
|
|
|
|
3,379,001
|
|
|
-
|
|
|
13,796,122
|
|
Mark Fioravanti
|
|
|
SUDCOMP
|
|
|
|
17,044
|
|
|
|
14,420
|
|
|
|
96,146
|
|
|
-
|
|
|
588,935
|
|
Bennett Westbrook
|
|
|
SUDCOMP
|
|
|
|
27,492
|
|
|
|
10,339
|
|
|
|
110,145
|
|
|
-
|
|
|
515,697
|
|
Patrick Chaffin
|
|
|
SUDCOMP
|
|
|
|
2,505
|
|
|
|
2,505
|
|
|
|
16,829
|
|
|
-
|
|
|
91,286
|
|
Scott Lynn
|
|
|
SUDCOMP
|
|
|
|
12,012
|
|
|
|
4,698
|
|
|
|
7,949
|
|
|
-
|
|
|
56,394
|
|
(1)
|
Amounts in this column are reported as compensation in the
2013 Summary Compensation Table
above. Amounts in this column do not include deferrals of cash incentive bonus amounts with respect to the 2012 fiscal
year paid in 2013 ($992,500 in the case of Mr. Reed, $26,000 in the case of Mr. Fioravanti and $3,000 in the case of Mr. Chaffin), or the company match with respect to such amounts.
|
(2)
|
None of the amounts in this column are included as compensation in the
2013 Summary Compensation
|
|
Table
above because above-market or preferential earnings are not available.
|
(3)
|
Of the amounts listed in this column, the following amounts have been reported as compensation in the
2013 Summary Compensation Table
above or previous years (or would have been reported if the NEO had been
included in our proxy statement in those years): Mr. Reed: $7,200,027; Mr. Fioravanti: $267,343; Mr. Westbrook: $243,440; Mr. Chaffin: $31,959; and Mr. Lynn: $28,408.
|
46
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Supplemental Executive Retirement Plan
When we recruited Mr. Reed to join us in 2001, we agreed to establish a supplemental executive retirement plan, or
SERP, for Mr. Reed with an initial retirement benefit of $2.5 million. We believed at the time (and continue to believe) that the SERP was a material factor in Mr. Reeds agreement to give up benefits at his former employer and to
begin working for us. We believe that the SERP benefit was necessary to attract and retain a highly qualified executive such as Mr. Reed. Mr. Reeds April 23, 2001 employment agreement with us established the SERP, which fully
vested on April 23, 2005.
In 2004, as part of an amendment to Mr. Reeds employment agreement extending his employment term, we agreed to adjust the
initial SERP benefit for hypothetical investment earnings or losses, based on the performance of one or more mutual funds selected by Mr. Reed. At that time, we also agreed to pay Mr. Reed an additional retirement benefit under the SERP of
$1.0 million, as adjusted beginning April 23, 2005 for hypothetical investment earnings or losses, based on the performance of one or more mutual funds selected by Mr. Reed. This additional SERP benefit fully vested on May 1, 2010.
Mr. Reed is entitled to receive all of his SERP benefit upon any termination of employment. Mr. Reed has elected receive his SERP benefits, as adjusted, in the form of one lump sum payment.
On February 4, 2008, we entered into a new employment agreement with Mr. Reed which did not modify the terms of
the SERP. On December 18, 2008, we amended Mr. Reeds employment agreement to allow him to make an irrevocable election to invest his SERP benefit in our common stock. We established an independent rabbi trust and transferred cash in
an amount equal to the then-current balance of the SERP benefit, and the independent trustee of the rabbi trust purchased shares of our common stock in the open market.
Mr. Reed is now only entitled to a distribution of our stock held by the rabbi trust in satisfaction of his SERP benefit. We believe that the ownership of shares of
common stock by the rabbi trust and the distribution of those shares to Mr. Reed in satisfaction of his SERP benefit meets requirements necessary so that we will not recognize any increase or decrease in expense as a result of subsequent
changes in the value of our common stock. The terms of the rabbi trust provide that, to the extent that the shares owned by the rabbi trust are entitled to vote on any matter, the rabbi trustee will be entitled to vote such shares.
The table below shows the salary deferrals, company matching obligations, earnings and account balances with respect to Mr. Reeds SERP benefit in 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Plan
(1)
(b)
|
|
|
Executive
Contributions
in Last FY
($)(c)
|
|
Registrant
Contributions
in Last FY
(2)
($)(d)
|
|
Aggregate
Earnings
(Losses) in
Last FY
(3)
($)(e)
|
|
|
Aggregate
Withdrawals/
Distributions
in Last FY
($)(f)
|
|
Aggregate
Balance at
Last FY
(4)
($)(g)
|
|
Colin Reed
|
|
|
SERP
|
|
|
-
|
|
-
|
|
|
2,153,758
|
|
|
-
|
|
|
19,708,671
|
|
(1)
|
We have summarized the SERP benefit using the disclosure format prescribed by the SEC for nonqualified deferred compensation (under Item 402(i) of SEC Regulation S-K) rather than pension benefits due to the fact
that this SERP benefit more closely resembles a defined contribution award than a defined benefit award. This determination was based on the fact that the value of the SERP benefit in 2013 was based solely on the amounts
previously contributed.
|
(2)
|
As described above we are obligated to pay to Mr. Reed the initial SERP benefit and the additional SERP benefit by distributing the shares of our common stock held by the rabbi trust. The amount of these
obligations has not been reported as compensation in the
2013 Summary Compensation Table
or previous years since above-market or preferential returns are not available with respect to the SERP.
|
(3)
|
Represents the change in market value of our common stock from December 31, 2012 to December 31, 2013. Includes the value of additional shares of our common stock purchased by the rabbi trust during 2013 to
reinvest cash dividends paid on our common stock pursuant to standing instructions. This amount has not been reported as compensation in the
2013 Summary Compensation Table
or previous years since above-market or preferential returns are not
available with respect to the SERP.
|
(4)
|
Represents the value of both the initial SERP benefit and the additional SERP benefit as of December 31, 2013, which is calculated by multiplying the 471,725 shares of our common stock held by the rabbi trust on
such date by the December 31, 2013 NYSE closing price of our common stock ($41.78).
|
47
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Potential Payments on Termination or Change of Control
Employment and Severance Agreements
Mr. Reed, Mr. Fioravanti and Mr. Westbrook each have employment agreements with us, originally entered into in February 2008, with an initial two-year term
and automatically renewing two-year terms (unless either party provides notice of non-renewal). Mr. Reeds employment agreement was amended in December 2008 and September 2010. Mr. Fioravantis employment agreement was amended in
February 2010 and September 2010. Mr. Westbrooks employment agreement was amended in September 2010. In November 2012, Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements were amended in
connection with our REIT restructuring. Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements, together with each of their equity incentive award agreements and the terms of our incentive and other
benefit plans, provide for cash payments and other benefits in connection with their termination of employment in various circumstances, including in the event of a Change of Control (as defined below). Payment of these amounts generally is
conditioned upon compliance with the other provisions of the agreement, which include confidentiality obligations and nonsolicitation and noncompetition provisions.
Mr. Chaffin and Mr. Lynn each have severance agreements with us, entered into in October 2010 and February 2013, respectively, with an initial two-year term
and automatic renewals of one year following the initial two-year term (unless either party provides notice of non-renewal). The severance agreements provide for cash payments and other benefits only in connection with Mr. Chaffins and
Mr. Lynns
termination of employment in the event of a Change of Control. Payment of these amounts generally is conditioned upon compliance with the other provisions of the severance agreement, which
include confidentiality obligations. In addition, Mr. Chaffins and Mr. Lynns equity incentive award agreements, and the terms of our incentive and other benefit plans, provide for other benefits in connection with their
termination of employment in various circumstances, including in the event of a Change of Control.
Description of Potential Payments
on Termination or Change of Control
The discussion below outlines our obligations to our NEOs upon a termination or Change of Control. Except as otherwise noted,
the discussion below applies to each of the NEOs.
Payments Made on Any Termination of Employment
Regardless of the manner in which an NEOs employment with us is terminated, the NEO would be entitled to receive:
|
|
|
accrued but unpaid base salary through the date of termination;
|
|
|
|
any unpaid portion of any annual cash bonus for prior calendar years;
|
|
|
|
accrued but unpaid vacation pay, unreimbursed employment-related expenses and other benefits owed to the NEO under our employee benefit plans or policies;
|
|
|
|
all vested 401(k) plan and SUDCOMP account balances; and
|
|
|
|
in the case of Mr. Reed, his SERP benefit.
|
48
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Payments Made on Termination With Cause or Resignation Without Good Reason
Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements each provide that if the executive is terminated for Cause
(1)
or if he resigned without Good Reason
(2)
he would not be entitled to receive any payments (other than as listed under
Payments Made on Any
Termination of Employment
).
Payments Made on Death or Disability
Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements, together with their equity incentive award agreements and the terms
of our incentive and other benefit plans, provide for the following payments and other benefits (in addition to payments under our disability or life insurance plans) if the executive dies or becomes permanently disabled (defined as a
physical or mental incapacity rendering him unable to perform job duties for 90 consecutive days or for a total of 180 days in any 12 month period):
|
|
|
all amounts under
Payments Made on Any Termination of Employment
above;
|
|
|
|
a pro rata portion of his annual cash bonus in the year of termination;
|
|
|
|
the immediate vesting of all time-based RSUs;
|
|
|
|
for all performance-based RSUs, a pro rata (based on length of service during the performance period) portion of the awards actually vesting to the extent of satisfaction of the applicable performance criteria;
|
|
|
|
the accelerated vesting of all outstanding stock option awards (with an exercise period ending on the option expiration date); and
|
|
|
|
in the case of Mr. Reed, continuation of health care coverage at employee rates for Mr. Reed and his spouse until the earlier of their election to terminate coverage (or their non-payment of premiums), their
death or until we stop providing health care coverage to our employees.
|
In the event of Mr. Chaffins or Mr. Lynns death or
permanent disability, the executive would be entitled, under the terms of his equity incentive award agreements and the terms of our incentive and other benefit plans, to the following payments:
|
|
|
all amounts under
Payments Made on Any Termination of Employment
above;
|
|
|
|
the immediate vesting of all time-based RSUs;
|
|
|
|
for all performance-based RSUs, a pro rata (based on length of service during the performance period) portion of the awards actually vesting to the extent of satisfaction of the applicable performance criteria; and
|
|
|
|
the accelerated vesting of all outstanding stock option awards (with an exercise period ending on the option expiration date).
|
(1)
|
Under Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements, the term Cause is defined as: fraud, self-dealing, embezzlement or dishonesty in the course of employment, or any
conviction of a crime involving moral turpitude; a failure to comply with any valid or legal company directive, or any material uncured breach of obligations under the employment agreement; or the executives failure to adequately perform his
responsibilities, as demonstrated by objective and verifiable evidence showing that the business operations under his control have been materially harmed as a result of gross negligence or willful misconduct.
|
(2)
|
Under Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements, the term Good Reason is defined as: any adverse change in the executives position or title (whether or not
approved by our Board), any assignment over the executives reasonable objection to any duties materially inconsistent with his current status or a substantial adverse alteration in the nature of his responsibilities; a reduction in the
executives annual base salary; a failure to pay any portion of the executives current compensation, or a failure to continue in effect any material compensatory plan (or equivalent) in which the executive may participate; permanent
relocation of the executives principal place of employment to a location other than our corporate headquarters; a failure to provide, or a material reduction of, any insurance, retirement savings plan or other employee benefits package
substantially similar to those enjoyed by other senior executives in which the executive is entitled to participate; or a material uncured breach of the companys obligations under the executives employment agreement (or the
companys failure to renew it).
|
49
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Payments Made on Termination Without Cause or Resignation for Good Reason (Other Than Following a Change of Control)
Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements, together with their equity incentive award agreements and
the terms of our incentive and other benefit plans, provide for the following payments and other benefits if the executive is terminated without Cause (or resigned for Good Reason), other than following a Change of Control:
|
|
|
all amounts under
Payments Made on Any Termination of Employment
above;
|
|
|
|
the following severance payment:
|
|
|
|
Mr. Reed
|
|
Mr. Fioravanti &
Mr. Westbrook
|
|
|
2x base salary plus 2x last
years annual cash incentive
bonus
|
|
1x base salary plus 1x last
years annual cash incentive
bonus
|
|
|
|
in the case of Mr. Fioravanti, a pro rata portion of his annual cash bonus in the year of termination;
|
|
|
|
immediate vesting of RSUs as follows (in the case of performance-based RSUs, to the extent of the satisfaction of applicable performance criteria):
|
|
|
|
Mr. Reed
|
|
Mr. Fioravanti &
Mr. Westbrook
|
|
|
all awards scheduled to
vest within 2 years of
termination
|
|
all awards scheduled to
vest within 1 year of
termination
|
|
|
|
the accelerated vesting of the following stock option awards:
|
|
|
|
Mr. Reed
|
|
Mr. Fioravanti &
Mr. Westbrook
|
|
|
all unvested stock
options scheduled to
vest within 2
year of termination
|
|
all unvested stock
options scheduled to
vest within 1
year of termination
|
|
|
|
Mr. Reed would have 2 years from termination to exercise the awards, while Mr. Fioravanti and Mr. Westbrook would have 1 year from termination to exercise the awards; and
|
|
|
|
in the case of Mr. Reed, continuation of health care coverage at employee rates for Mr. Reed and his spouse until the earlier of their election to terminate coverage (or their non-payment of premiums), their
death or until we stop providing health care coverage to our employees.
|
Payments Made on Termination Without Cause or Resignation for Good
Reason Following a Change of Control
Mr. Reeds, Mr. Fioravantis and Mr. Westbrooks employment agreements (and
Mr. Chaffins and Mr. Lynns severance agreements), together with their equity incentive award agreements and the terms of our incentive and other benefit plans, provide for payments and other benefits in the event of a
termination in a designated period
(3)
following a Change of Control, which is deemed to occur if:
|
|
|
any person, other than us, our benefit plan or our designated affiliates, becomes the beneficial owner of 35% or more of our outstanding voting stock
(4)
;
|
|
|
|
a majority of the incumbent members of our Board cease to serve on our Board without the consent of the incumbent Board
(5)
;
|
|
|
|
following a merger, tender or exchange offer, other business combination or contested election, the holders of our stock prior to the transaction hold less than a majority of the combined voting power of the combined
entity; or
|
|
|
|
we sell all or substantially all of our assets.
|
(3)
|
For Mr. Reed, Mr. Fioravanti and Mr. Westbrook, this period is one year. For Mr. Chaffin and Mr. Lynn, this period is two years.
|
(4)
|
For Mr. Chaffin and Mr. Lynn, the required ownership percentage is 40% instead of 35%.
|
(5)
|
For Mr. Chaffin and Mr. Lynn, a Change of Control would occur if, during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at
least a majority of the Board without the consent of at least two-thirds of the incumbent Board who were directors at the beginning of such period.
|
50
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
If any of our NEOs were terminated without Cause
(6)
(or resigned for
Good Reason
(7)
) following a Change of Control within the designated period, the executive would be entitled to receive:
|
|
|
all amounts under
Payments Made
on Any
Termination of Employment
above;
|
the following severance payment:
|
Mr. Reed, Mr. Fioravanti
& Mr. Westbrook
|
|
Mr. Chaffin &
Mr. Lynn
|
|
|
3x base salary plus 3x highest
cash incentive bonus in
last 3 years
|
|
2x base salary plus 2x last
years annual cash incentive
bonus
|
|
|
|
|
|
|
|
immediate vesting of all RSUs, with performance-based RSUs vesting at the target level;
|
|
|
the accelerated vesting of all outstanding stock option awards. Each NEO would have 2 years from termination to exercise the awards;
|
|
|
continuation of health care coverage at employee rates: for Mr. Reed and his spouse, until the earlier of their election to terminate such coverage (or non-payment of premiums), their death or until we stop providing health
care coverage to our employees; for Mr. Fioravanti and Mr. Westbrook, for 3 years from termination; and for Mr. Chaffin and Mr. Lynn, for 2 years from the Change of Control; and
|
|
|
in the case of Mr. Fioravanti and Mr. Westbrook, executive physical examination fees for 3 years.
|
51
(6)
|
The severance agreements for Mr. Chaffin and Mr. Lynn provide that the executive may be terminated for Cause if he was terminated for gross misconduct.
|
(7)
|
The severance agreements for Mr. Chaffin and Mr. Lynn provide that the executive may terminate his employment for Good Reason following a Change of Control if: his salary is reduced, there is a material
reduction in his benefits or there is a material change in his status, working conditions or management responsibilities; or he is required to relocate his residence more than 100 miles from our corporate headquarters.
|
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Summary of Potential Payments on Termination or Change of Control
The following tables estimate the value of the potential payments on termination or change of control of the company for the NEOs as of December 31, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments
Upon Termination
|
|
Termination
for Cause or
Resignation
Without
Good
Reason
($)
|
|
|
Retirement
($)
|
|
|
Death or
Disability
($)
|
|
|
Termination
Without
Cause or
Resignation
for
Good
Reason
($)
|
|
|
Termination
Without Cause
or
Resignation
for Good
Reason Upon
a Change of
Control
($)
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,340,000
|
(1)
|
|
|
8,010,000
(2)
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,075,000
|
(3)
|
|
|
3,225,000
(2)
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
555,000
|
(3)
|
|
|
1,665,000
(2)
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
800,000
(1)
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
726,580
(1)
|
|
Non-Equity Incentive Compensation
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
432,500
|
|
|
|
432,500
|
|
|
|
-
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
205,875
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Stock Options Accelerated Vesting
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
2,513,508
|
|
|
|
1,893,459
|
|
|
|
2,513,508
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
489,963
|
|
|
|
171,065
|
|
|
|
489,963
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
230,396
|
|
|
|
91,962
|
|
|
|
230,396
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
20,121
|
|
|
|
-
|
|
|
|
20,121
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
25,462
|
|
|
|
-
|
|
|
|
25,462
|
|
Performance-Based RSU Accelerated Vesting
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
2,960,447
|
|
|
|
3,366,173
|
|
|
|
4,327,113
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
655,946
|
|
|
|
247,505
|
|
|
|
1,027,245
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
302,487
|
|
|
|
326,720
|
|
|
|
452,060
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
20,890
|
|
|
|
-
|
|
|
|
62,670
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
20,890
|
|
|
|
-
|
|
|
|
62,670
|
|
Time-Based RSU Accelerated Vesting
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
4,661,144
|
|
|
|
3,031,097
|
|
|
|
4,661,144
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
1,321,167
|
|
|
|
829,542
|
|
|
|
1,321,167
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
790,561
|
|
|
|
622,773
|
|
|
|
790,561
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
385,713
|
|
|
|
-
|
|
|
|
385,713
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
217,799
|
|
|
|
-
|
|
|
|
217,799
|
|
52
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Payments
Upon Termination
|
|
Termination
for Cause or
Resignation
Without
Good
Reason
($)
|
|
|
Retirement
($)
|
|
|
Death or
Disability
($)
|
|
|
Termination
Without
Cause or
Resignation
for
Good
Reason
($)
|
|
|
Termination
Without Cause
or
Resignation
for Good
Reason Upon
a Change of
Control
($)
|
|
Other Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
241,616
(8)
|
|
|
|
241,616
(8)
|
|
|
|
241,616
(8)
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61,785
(9)
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
65,559
(9)
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,706
(10)
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,706
(10)
|
|
(1)
|
Amount equal to two times base salary in effect at December 31, 2013, plus two times cash incentive bonus for the 2012 fiscal year.
|
(2)
|
Amount equal to three times base salary in effect at December 31, 2013, plus three times cash incentive bonus for the 2012 fiscal year (the highest cash incentive bonus for the last three fiscal years).
|
(3)
|
Amount equal to one times base salary in effect at December 31, 2013, plus one times cash incentive bonus for the 2012 fiscal year.
|
(4)
|
Reflects the cash incentive bonus for the 2013 fiscal year.
|
(5)
|
Calculated as the difference between the exercise price of the in-the-money stock options and the December 31, 2013 NYSE closing price of our common stock ($41.78).
|
(6)
|
Calculated by multiplying the number of shares of common stock to be issued on the vesting of such award(s) by the December 31, 2013 NYSE closing
|
|
price of our common stock ($41.78), assuming vesting at the target performance level. The number of shares of common stock to be issued upon vesting of performance-based RSUs is ultimately based
upon the actual achievement of the performance goals stated in the applicable award agreement.
|
(7)
|
Calculated by multiplying the number of shares of common stock to be issued on the vesting of such award(s) by the December 31, 2013 NYSE closing price of our common stock ($41.78).
|
(8)
|
Represents health insurance coverage for Mr. Reed and his spouse for a period of 16 years (assuming a life expectancy of 82 years for Mr. Reed and assuming an annual cost of $15,101, which was the cost of such
benefit in 2013).
|
(9)
|
Represents health insurance coverage and physical examination fees for a period of three years.
|
(10)
|
Represents health insurance coverage for a period of two years.
|
53
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Submitting Stockholder
Proposals and Nominations for 2015 Annual Meeting
Stockholder Proposals
If you would like to submit a proposal for inclusion in our proxy statement for the 2015 annual meeting under SEC Rule 14a-8, your proposal must be in writing and be
received by us at our principal executive offices prior to the close of business on November 28, 2014 and otherwise comply with the requirements of Rule 14a-8.
If you want to bring business before the 2015 annual meeting which is not the subject of a proposal submitted for inclusion in the proxy statement under Rule 14a-8
(excluding director nominations, which are discussed below under
Nominations of Board Candidates
), our Bylaws require that you deliver a notice in proper written form (and provide all information required by our Bylaws) to our Secretary by
February 7, 2015, but not before January 8, 2015 (or, if the annual meeting is called for a date that is not within 30 days of May 8, 2015, the notice must be received not earlier than the close of business on the 120
th
day prior to such annual meeting and not later than the close of business on the later of the 90
th
day prior to such annual meeting or the 10
th
day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs). If the presiding officer
at an annual meeting determines that business was not properly brought before the annual meeting in accordance with the
procedures set forth in our Bylaws, then the presiding officer will declare to the meeting that your business was not properly brought before the meeting, and your business will not be transacted
at that meeting.
Nominations of Board Candidates
If you wish to nominate an individual to serve as a director, you must deliver timely notice of the nomination in proper written form, using the procedures outlined in
our Bylaws. The notice must include certain biographical information regarding the proposed nominee, a completed written questionnaire with respect to each proposed nominee setting forth the background and qualifications of such proposed nominee
(which questionnaire will be provided by the Secretary upon written request), the proposed nominees written consent to nomination and the additional information as set forth in our Bylaws.
For a stockholders notice to the Secretary to be timely under our Bylaws, it must be delivered to or mailed and received at our principal executive offices:
(a) in the case of a nomination to be voted on at an annual meeting, by February 7, 2015, but not before January 8, 2015 (or, if the annual meeting is called for a date that is not within 30 days of May 8, 2015, the notice
must be received not earlier than the close of business on the 120
th
day prior to such annual meeting and not later than the close of business on the later of the 90
th
day prior to such annual meeting
59
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
or the 10
th
day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual
meeting was made, whichever first occurs); and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not earlier than the close of business on the
120
th
day prior to such special meeting and not later than the close of business on the later of the 90
th
day prior to such special meeting or
the 10
th
day following the day on which notice of
the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. If the presiding officer at a meeting determines that a
nomination was not properly made in accordance with the procedures set forth in our Bylaws, then the presiding officer will declare to the meeting that the nomination was defective, and the defective nomination shall be disregarded.
Discretionary Voting of Proxies on Other Matters
We do not intend to bring any proposals to the 2014 Annual Meeting other than the election of directors, the advisory vote on executive compensation and the ratification
of our independent registered public accounting firm. We do not expect any stockholder proposals. If new proposals requiring a vote of the stockholders are brought before the meeting in a proper manner, the persons named in the accompanying proxy
card intend to vote the shares represented by them in accordance with their best judgment.
By Order of the Board of Directors,
Scott J. Lynn, Secretary
Nashville, Tennessee
March 28, 2014
60
|
2014 NOTICE OF MEETING AND PROXY STATEMENT
|
Appendix A
Reconciliation of Non-GAAP Financial
Measures to GAAP Financial Measures
Reconciliation of
AFFO
(1)
(and AFFO Per Share) and AFFO Excluding REIT Conversion Costs
(and AFFO Excluding REIT
Conversion Costs Per Share)
to Net Income (Loss)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Net income (loss)
(2)
|
|
$
|
118,352
|
|
|
|
|
$
|
(26,644)
|
|
Depreciation and amortization
|
|
|
116,528
|
|
|
|
|
|
130,691
|
|
Gains on sale of real estate assets
|
|
|
(52)
|
|
|
|
|
|
(20,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations (FFO)
|
|
|
234,828
|
|
|
|
|
|
84,047
|
|
Capital expenditures
(3)
|
|
|
(29,801)
|
|
|
|
|
|
(55,183)
|
|
Non-cash lease expense
|
|
|
5,595
|
|
|
|
|
|
5,706
|
|
Impairment charges
|
|
|
3,527
|
|
|
|
|
|
33,291
|
|
Loss on extinguishment of debt
|
|
|
4,181
|
|
|
|
|
|
-
|
|
Write-off of deferred financing costs
|
|
|
1,845
|
|
|
|
|
|
-
|
|
Amortization of deferred financing costs
|
|
|
5,525
|
|
|
|
|
|
4,908
|
|
Amortization of debt discounts
|
|
|
13,816
|
|
|
|
|
|
13,793
|
|
Noncash tax benefit resulting from REIT conversion
|
|
|
(64,756)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted funds from operations (AFFO)
(2)
|
|
$
|
174,760
|
|
|
|
|
$
|
86,562
|
|
|
|
|
|
|
|
|
|
|
|
|
REIT conversion costs (tax effected)
|
|
|
15,414
|
|
|
|
|
|
43,251
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO excluding REIT conversion costs
(2)
|
|
$
|
190,174
|
|
|
|
|
$
|
129,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per basic share
|
|
|
$ 4.59
|
|
|
|
|
|
$ 1.77
|
|
AFFO per basic share
|
|
|
$ 3.42
|
|
|
|
|
|
$ 1.82
|
|
AFFO excluding REIT conversion costs per basic share
|
|
|
$ 3.72
|
|
|
|
|
|
$ 2.73
|
|
|
|
|
|
FFO per diluted share
(4)
|
|
|
$ 3.74
|
|
|
|
|
|
$ 1.77
|
|
AFFO per diluted share
|
|
|
$ 2.78
|
|
|
|
|
|
$ 1.82
|
|
AFFO excluding REIT conversion costs per diluted share
|
|
|
$ 3.03
|
|
|
|
|
|
$ 2.73
|
|
(1)
|
We calculate Adjusted Funds From Operations, or AFFO, to mean net income (loss) (computed in accordance with generally accepted accounting principles), excluding non-controlling interests, and gains and losses from
sales of property; plus depreciation and amortization (excluding amortization of deferred financing costs and debt discounts) and impairment losses; we also exclude written-off deferred financing costs, non-cash ground lease expense, amortization of
debt discounts and amortization of deferred financing costs; and gain (loss) on extinguishment of debt, and subtract certain capital expenditures (the required furniture, fixtures and equipment reserves for our managed properties plus maintenance
capital expenditures for our non-managed properties). We also exclude the effect of the non-cash income tax benefit relating to the REIT conversion. We have presented AFFO both excluding and including REIT conversion costs, as well as AFFO per basic
share and diluted share both excluding and including REIT conversion costs. Each of these measures is a non-GAAP financial measure. We believe that the presentation of these non-GAAP financial measures provides useful information to investors
regarding our operating performance because they are measures of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items (including REIT
conversion costs, in the case of AFFO excluding REIT conversion costs) which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing
operations. We also use AFFO as one measure in determining our results after taking into account the impact of our capital structure. The $4.9 million loss on the call spread settlement recorded in 2013 related to our convertible notes repurchase
does not result in a charge to net income. Therefore, AFFO for 2013 does not reflect the impact of the loss.
|
(2)
|
As the impact of the loss on the call spread modification related to the repurchase of our convertible notes does not represent a charge to net income, net income, AFFO and AFFO excluding REIT conversion costs do not
include this loss.
|
(3)
|
Represents furniture, fixtures and equipment reserve for managed properties and maintenance capital expenditures for non-managed properties.
|
(4)
|
As the GAAP calculation of diluted shares does not consider the anti-dilutive impact of our purchased call options associated with our outstanding 3.75% convertible notes, for 2013 the purchased call options effectively
reduce dilution by approximately 6.3 million shares.
|
A-1
RYMAN HOSPITALITY PROPERTIES, INC.
Annual Meeting of Stockholders
May 8, 2014 10:00 AM
This proxy is solicited by the Board of
Directors
The stockholder(s) hereby appoints Colin V. Reed, D. Ralph Horn and Scott J. Lynn, and each of them, as proxies, each with
the power to appoint his substitute, and hereby authorize them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of RYMAN HOSPITALITY PROPERTIES, INC. that the stockholder(s) is/are
entitled to vote at the Annual Meeting of Stockholder(s) to be held at 10:00 AM, Eastern Time on May 8, 2014, at the Gaylord Palms Resort and Convention Center, 6000 West Osceola Parkway, Kissimmee, FL, and any adjournment or postponement
thereof.
In their discretion the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of
Stockholders or any postponement or adjournment thereof. This proxy, when properly executed, will be voted in the manner herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors recommendations.
This proxy also provides voting instructions for shares held by Wilmington Trust, the Trustee for the Companys 401(k) Savings Plan, and directs such Trustee to vote, as indicated on the reverse side of this card, any shares allocated to the
account in this plan. The Trustee will vote these shares as you direct. The Trustee will vote allocated shares of the Companys stock for which proxies are not received in direct proportion to voting by allocated shares for which proxies are
received. This card should be voted by 11:59 p.m. Eastern time on May 6, 2014, for the Trustee to vote the plan shares.
Continued and to be signed on reverse side