Proposal 4 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 and internal control over financial reporting for the 2017 fiscal year. You can find more information about our relationship with Ernst & Young LLP on page 63 of this proxy
statement.
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.
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
|
|
|
Board/
Committee
|
|
Primary Areas
of Risk Oversight
|
Nominating and CG Committee:
|
|
Risks and exposures relating to corporate governance and director succession planning.
|
Human Resources Committee:
|
|
Risks and exposures associated with leadership assessment, management succession planning and compensation programs.
|
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. 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 independent 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.
Restrictions on Hedging and Pledging of Company Stock
Our insider trading policy restricts our 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. Our insider trading policy also prohibits 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.
Proxy Solicitation
We will bear the cost of
soliciting proxies for the meeting. We have retained Morrow Sodali LLC to assist in the solicitation and will pay them approximately $6,000. Our officers may also solicit proxies by mail, telephone,
e-mail
or
facsimile transmission, but we will not reimburse them for their efforts. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials.
Communications with the Board of Directors
Stockholders, employees and others interested in communicating with the Board (including
non-management
directors) may write to:
Ryman Hospitality Properties, Inc.
Attn: Corporate
Secretary
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 review a log of all correspondence 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, individual independent directors or the
independent directors as a group by email at
boardofdirectors@rymanhp.com
.
26
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Stock Ownership
The table below lists the beneficial ownership of our common stock as of March 17, 2017 (unless otherwise noted) by all directors (and nominees for director), each
of our NEOs, and the directors (and director nominees) 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 17, 2017. Unless otherwise noted, the address for each person listed is our principal office.
Beneficial Stock Ownership of
Directors, Executive Officers and Large Stockholders Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Shares
Owned
(1)
|
|
|
Director
Deferred
Restricted
Stock
Units
(2)
|
|
|
Stock Options
Exercisable
|
|
|
Total
Shares
Owned
|
|
|
% of Total
Outstanding
(3)
|
|
Colin V. Reed, NEO and Director
|
|
|
1,279,052
|
(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,279,052
|
|
|
|
2.5%
|
|
Michael J. Bender, Director
|
|
|
8,210
|
|
|
|
13,827
|
|
|
|
-
|
|
|
|
22,037
|
|
|
|
*
|
|
Rachna Bhasin, Director
|
|
|
1,614
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,614
|
|
|
|
*
|
|
William F. Hagerty, IV, Director
|
|
|
3,614
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,614
|
|
|
|
*
|
|
Ellen Levine, Director
|
|
|
25,725
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
25,725
|
|
|
|
*
|
|
Patrick Q. Moore, Director
|
|
|
-
|
|
|
|
3,504
|
|
|
|
-
|
|
|
|
3,504
|
|
|
|
*
|
|
Robert S. Prather, Jr., Director
|
|
|
3,960
|
|
|
|
19,599
|
|
|
|
-
|
|
|
|
23,559
|
|
|
|
*
|
|
Michael D. Rose, Director
|
|
|
104,566
|
|
|
|
30,266
|
|
|
|
-
|
|
|
|
134,832
|
|
|
|
*
|
|
Michael I. Roth, Director
|
|
|
34,836
|
(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
34,836
|
|
|
|
*
|
|
Alvin Bowles, Director Nominee
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
*
|
|
Mark Fioravanti, NEO
|
|
|
149,350
|
|
|
|
-
|
|
|
|
-
|
|
|
|
149,350
|
|
|
|
*
|
|
Bennett Westbrook, NEO
|
|
|
28,744
|
|
|
|
-
|
|
|
|
-
|
|
|
|
28,744
|
|
|
|
*
|
|
Patrick Chaffin, NEO
|
|
|
18,269
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,269
|
|
|
|
*
|
|
Scott Lynn, NEO
|
|
|
14,390
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,390
|
|
|
|
*
|
|
All directors (and nominees) and
executive officers (as a group)
|
|
|
1,684,819
|
|
|
|
67,196
|
|
|
|
-
|
|
|
|
1,752,015
|
|
|
|
3.4%
|
|
Vanguard Inc.
|
|
|
7,780,294
|
(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
7,780,294
|
|
|
|
15.2%
|
|
GAMCO Investors, Inc.
|
|
|
5,661,284
|
(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
5,661,284
|
|
|
|
11.1%
|
|
BlackRock, Inc.
|
|
|
3,855,401
|
(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,855,401
|
|
|
|
7.5%
|
|
Sterling Capital Management LLC
|
|
|
3,206,981
|
(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,206,981
|
|
|
|
6.3%
|
|
(1)
|
This column includes shares of common stock issuable upon the vesting of RSUs that will vest on or prior to May 17, 2017. For a listing of the RSUs held by NEOs,
see
Outstanding Equity Awards at 2016 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 in lieu of cash director fees to participating
directors. Directors may elect to defer receipt of RSUs awarded under our current and former omnibus incentive plans 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.
|
27
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
(3)
|
In calculating the percentages of outstanding stock, each persons RSUs that will vest on or prior to May 17, 2017 have been added to the total outstanding
shares for such persons calculation.
|
(4)
|
Includes 541,329 shares credited to Mr. Reeds SERP, as defined in
Other Compensation Information
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. Bhasin, Mr. Hagerty, Ms. Levine and Mr. Roth, includes 1,614 shares each issuable upon the vesting of RSUs on May 5, 2017.
|
(6)
|
Based on information in: Amendment Number 3 to Schedule 13G filed with the SEC on February 14, 2017 by Vanguard Specialized FundsVanguard REIT Index Fund,
which has sole voting power with respect to 3,485,216 shares; and Amendment Number 4 to Schedule 13G filed with the SEC on February 10, 2017 by The Vanguard Group, Inc., which has sole voting power with respect to 151,628 shares, shared voting
power with respect to 57,321 shares, sole dispositive power with respect to 7,636,225 shares and shared dispositive power with respect to 144,069 shares. The address for the reporting persons is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
|
(7)
|
Based on information in Amendment No. 43 to Schedule 13D filed with the SEC on December 16, 2016 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); Associated Capital Group, Inc. (Associated Capital);
Gabelli & Company Investment Advisers, Inc. (GC); Gabelli Foundation, Inc. (Foundation);
MJG-IV
Limited Partnership
(MJG-IV);
and Mario Gabelli. GGCP (which had sole voting and dispositive power with respect to 24,000 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 3,974,106 shares of common stock and sole dispositive power with respect to 4,224,521 shares of common stock), a wholly-owned subsidiary of GBL, is an investment adviser registered under the Investment Advisers Act of 1940. Funds, a
wholly owned subsidiary of GBL, is a limited liability company. Funds (which had sole voting power with respect to 56,900 shares of common stock and sole dispositive power with respect to 1,309,900
|
|
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 10,000 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. GC (which is
a wholly-owned subsidiary of Associated Capital, which had sole voting and dispositive power with respect to 12,000 shares of common stock) is an investment adviser registered under the Investment Advisers Act of 1940 which provides advisory
services for registered investment companies and which had sole voting and dispositive power with respect to 4,960 shares of common stock. The Foundation (which had sole voting and dispositive power with respect to 12,000 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
44,665 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 Amendment No. 5 to Schedule 13G filed with the SEC on January 25, 2017 by BlackRock, Inc., which has sole voting power with respect
to 3,725,775 shares and sole dispositive power with respect to 3,855,401 shares. The address for the reporting person is 55 East 52
nd
Street, New York, New York 10055.
|
(9)
|
Based on information in Amendment No. 4 to Schedule 13G filed with the SEC on January 26, 2017 by Sterling Capital Management LLC, which has sole voting and dispositive power with respect to 3,206,981 shares.
Sterling Capital Management LLC is an investment adviser registered under the Investment Advisers Act of 1940. The address for the reporting person is 4350 Congress Street, Suite 1000, Charlotte, North Carolina 28209.
|
28
|
2017 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 and talented 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 to both
maximize stockholder value
over the long-term and to
align pay with stockholders interests
;
|
|
|
A strong
pay-for-performance
philosophy synchronizes incentive payments with actual financial and business results
relative to performance expectations;
|
|
|
Our pay decisions are
transparent
to all stakeholders and tethered to
sound
governance measures
; and
|
|
|
Total compensation opportunity throughout our organization is
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.
Company Highlights2016 Financial and
Operating Highlights
We believe that our results in 2016 reflect the continued strength of our Hospitality business, particularly the group meetings segment in
which we focus, despite the challenging overall hospitality business environment. In 2016, we also experienced continued significant growth in our Entertainment business from the prior year, which reflected our investments in this business and the
popularity of Nashville as a tourist destination. Our 2016 financial and operating highlights include:
|
We Increased Company Revenues to New Highs
|
|
✓
|
|
Company Total Revenues
Our total revenues for 2016 were $1.15 billion, an increase of 5.2% from 2015. This represents the highest level of revenues in our history.
|
|
✓
|
|
Segment Revenues
We experienced revenue growth in both our Hospitality and Entertainment segments:
|
|
|
|
Hospitality
Hospitality segment (same-store) revenue
(1)
in 2016 increased 4.3% from 2015 to $1.03 billion.
|
|
|
|
Entertainment
Entertainment segment revenue in 2016 increased 12.3% from 2015 to $109.6 million.
|
|
We Saw Increased Levels of Profitability
|
|
✓
|
|
Net Income and Adjusted Funds from Operations
Our
2016
consolidated net income was $159.4 million, an increase of 42.9% from 2015. Our 2016 Adjusted
Funds from Operations, or AFFO
(1)
, was $281.5 million, an increase of 8.3% from 2015.
|
|
✓
|
|
Hospitality Business Segment
Our 2016 Hospitality segment (same-store) operating income was $215.7 million, an increase of 27.8% from 2015. Our 2016 Hospitality segment (same-store)
Adjusted EBITDA
(1)
was $333.8 million, an increase of 6.7% from 2015.
|
29
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
|
✓
|
|
Entertainment Business
Our 2016 Entertainment segment operating income was $28.0 million, an increase of 14.9% from 2015. Our Entertainment business segment Adjusted EBITDA
(1)
was $35.7 million, an increase of 16.0% from 2015.
|
|
We Continued to Increase Dividends to Stockholders
|
|
✓
|
|
Increased Dividends
In 2016 we increased our annual cash dividend by 11.1% in 2016 (as compared to 2015) to $3.00 per share, paying approximately $153 million in dividends to our
stockholders (including the dividends paid in January 2017 to holders of record as of December 30, 2016).
|
(1)
|
Same-store results exclude the results associated with our AC Hotel at National Harbor, which opened in April 2015. AFFO and segment-level Adjusted EBITDA (including
same-store Hospitality segment level Adjusted EBITDA) are
non-GAAP
financial measures. For a definition of the
non-GAAP
financial measures used herein, a reconciliation
of each
non-GAAP
financial measure to its most comparable GAAP financial measure, and an explanation of why we believe these measures present useful information to investors, see Appendix A.
|
Company HighlightsTotal Stockholder Return
The following chart shows how
a $100 investment in our common stock on December 31, 2011 would have grown to $390.17 on December 31, 2016, with dividends reinvested quarterly. The chart 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.
30
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
The stock price performance included in this graph is not necessarily indicative of future stock
price performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/11
|
|
|
12/12
|
|
|
12/13
|
|
|
12/14
|
|
|
12/15
|
|
|
12/16
|
|
Ryman Hospitality Properties, Inc.
|
|
|
100.00
|
|
|
|
194.11
|
|
|
|
221.92
|
|
|
|
293.37
|
|
|
|
302.00
|
|
|
|
390.17
|
|
S&P 500
|
|
|
100.00
|
|
|
|
116.00
|
|
|
|
153.58
|
|
|
|
174.60
|
|
|
|
177.01
|
|
|
|
198.18
|
|
FTSE NAREIT Equity REITs
|
|
|
100.00
|
|
|
|
118.06
|
|
|
|
120.97
|
|
|
|
157.43
|
|
|
|
162.46
|
|
|
|
176.30
|
|
Compensation Summary
The charts below
illustrate the balance of the elements of target total compensation
(2)
during 2016 for Mr. Reed, our CEO, and the average of the other NEOs.
As the charts above indicate, a significant portion of our NEOs target total compensation is performance-based and is also
aligned with the interests of our stockholders. Target total compensation for our CEO is weighted more toward long-term incentives than the other NEOs, as the Human Resources Committee wants to encourage our CEO, in particular, to focus on our
long-term growth.
(2)
|
Percentage of total compensation as calculated above is based on the 2016 base salary and the value of executive-level perquisites paid to the NEO which were not paid generally to all employees, the 2016 short-term
incentive compensation award (assuming achievement at the target level (such award was ultimately paid at the target payout level for the NEOs, as more fully described below, in addition to a discretionary cash award to Mr. Reed as described
below)), the grant date fair value of the performance-based RSU awards granted in February 2016 (assuming vesting at the target achievement level) and the grant date fair value of the time-based RSU awards granted in February 2016 (as well as, for
Mr. Westbrook, the time-based RSU awards granted in connection with his promotion to EVP & Chief Development Officer in June 2016). Each compensation element is outlined in more detail in the
2016 Summary Compensation Table
set
forth on page 44 below.
|
31
|
2017 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
|
|
Considerations
in Determining
the Amount of
Pay
|
|
2016
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.
|
|
Our CEO received a 6.3% increase in base salary, and our other NEOs (on average) received a 7.0% increase in base salary. See pages 33 and 34.
|
Short-Term
Cash Incentive
Compensation
|
|
Variable compensation.
Payable in cash based on performance against annually established performance objectives.
Reviewed annually and adjusted from year to year when appropriate.
|
|
Motivate and reward executives.
Incentivizes the executives to meet our short-term financial and operational objectives.
|
|
AFFO was the basis for the financial goal for the plan (the only goal for all NEOs
except Mr. Reed, whose goals were based 75% on the 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 the target payout for each NEO. Mr. Reed also
received additional discretionary cash incentive compensation in recognition of his contribution to our operating and financial performance. See page 34.
|
Long-Term Equity Incentive Compensation
|
|
Variable compensation.
Performance-based RSUs vesting over a three-year performance period.
Time-based RSUs vesting ratably over four years.
|
|
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 was approximately 50% performance-based RSUs and 50% time-based RSUs, with an additional
one-time
award of time-based RSUs to
Mr. Westbrook in connection with his promotion to EVP & Chief Development Officer in June 2016. See page 36.
|
Other Benefits
|
|
Fixed compensation.
Participation in broad-based plans at same cost as other employees.
Certain executive-level perquisites not paid generally to our other employees.
|
|
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.
Benefits provided by other similarly-positioned companies.
|
|
Our NEOs received only modest executive-level perquisites. See page 38.
|
32
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
2016 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 2016, the committee used a compensation peer
group of the following 14 companies:
|
|
|
American Campus
Communities, Inc.
Ashford Hospitality Trust, Inc.
Chatham Lodging Trust
Chesapeake Lodging Trust
Diamondrock Hospitality Co.
FelCor Lodging Trust Inc.
Kilroy Realty Corp.
|
|
LaSalle Hotel Properties
Mid-America
Apartment Communities, Inc.
Pebblebrook Hotel Trust
Post Properties, Inc.
RLJ Lodging Trust
Summit Hotel Properties, Inc.
Sunstone Hotel Investors, Inc.
|
|
|
|
|
|
|
These companies were selected based on their industry focus and their status as a REIT, enterprise value, revenue size and debt to
capital ratio. For 2016 the committee added five new peer companies (Chatham Lodging Trust, Chesapeake Lodging Trust, FelCor Lodging Trust Inc., Pebblebrook Hotel Trust and Summit Hotel Properties, Inc.). These companies were intended to replace two
peer companies which were no longer publicly traded due to acquisitions (Colonial Properties Trust and Strategic Hotels and Resorts) and to supplement the existing peer group by adding additional companies with a similar strategic focus, enterprise
value and TSR performance over a three year period.
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 Aon Hewitt, 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 utilize any formulaic 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 proprietary and publicly available compensation
surveys and data with respect to REITs and other public companies provided by our compensation consultant, Aon Hewitt, to obtain a general understanding of current compensation practices, including to confirm that the base salary and other elements
of target total compensation opportunity for our executive officers is at a market-competitive level. The committee does not specifically target or benchmark in any formulaic manner 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 employment agreements with Mr. Reed, Mr. Fioravanti and Mr. Westbrook that provide for a minimum base
salary. We 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 2016, base salary represented approximately 20% of our
CEOs total compensation package and (on average) approximately 30% of our other NEOs total compensation package (calculated in the manner described on page 31). The committee annually reviews the base salaries of each NEO and may make
adjustments based on individual performance and changes in roles and responsibilities.
At its February 24, 2016 meeting, the committee reviewed the existing
base salaries and perquisites for our NEOs. Specifically, the committee considered each NEOs current base pay, taking into account base salary levels paid to persons holding similar positions at peer companies. With respect to Mr. Reed,
the committee considered the complexity associated with his oversight of the companys
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|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Entertainment business operations and his oversight of the growth initiatives currently being undertaken at this business. With respect to Mr. Chaffin and Mr. Lynn, the committee
determined that a larger percentage adjustment to base salary was necessary to maintain a market-competitive level of compensation for these executives.
Based on
its review of the factors described above, the committee determined that the base salary amounts for the NEOs should be set at the following levels:
|
|
|
|
|
|
|
2016 Base
Salary
($)
|
|
% Change
from 2015
Base
Salary
|
Colin Reed
|
|
850,000
|
|
6.3%
|
Mark Fioravanti
|
|
500,000
|
|
5.3%
|
Bennett Westbrook
|
|
335,000
|
|
4.5%
|
Patrick Chaffin
|
|
300,000
|
|
7.1%
|
Scott Lynn
|
|
300,000
|
|
11.1%
|
In consideration of the additional duties associated with Mr. Westbrooks appointment as EVP & Chief Development
Officer in June 2016, the committee determined that Mr. Westbrooks annual base salary should be increased to $375,000 in connection with such appointment.
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.
2016 Performance Goals
For 2016 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.
The 2016 percentages of base salary at the threshold, target
and stretch levels for each NEO were set at the following percentages:
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
Level
|
|
|
Target
Level
|
|
Stretch
Level
|
|
Mr. Reed
|
|
|
75%
|
|
|
150%
|
|
|
300%
|
|
Mr. Fioravanti
|
|
|
62.5%
|
|
|
125%
|
|
|
250%
|
|
Mr. Westbrook
|
|
|
50%
|
|
|
100%
|
|
|
200%
|
|
Mr. Chaffin
|
|
|
50%
|
|
|
100%
|
|
|
200%
|
|
Mr. Lynn
|
|
|
50%
|
|
|
100%
|
|
|
200%
|
|
The percentage of salary awarded for performance falling between the threshold and target achievement levels and the target
and stretch achievement levels was to be determined using straight-line interpolation. In 2016, assuming performance at the target level of achievement, short-term cash incentive compensation represented approximately 29% 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 31).
In 2016,
the performance targets, measured using AFFO as reported, excluding income tax expense or benefit (Further Adjusted AFFO), established by the committee were:
|
|
Threshold Performance Goal:
Further Adjusted AFFO of $257.2 million.
|
|
|
Target Performance Goal:
Further Adjusted AFFO of $285.7 million.
|
|
|
Stretch Performance Goal:
Further Adjusted AFFO of $314.3 million.
|
The committee selected this 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 2016 after thorough discussion with management regarding our anticipated financial performance. In choosing this goal, the committee considered the general economic climate expected in 2016, the
expected conditions in the hospitality industry and our expected financial performance, including our guidance for 2016, as reflected in our earnings release issued in the first quarter of 2016. 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.
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|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
The awards to the NEOs (other than Mr. Reed) were based solely on our level of achievement of Further Adjusted AFFO.
The award to Mr. Reed was based 75% on our achievement of Further Adjusted AFFO and 25% on our achievement of the strategic objectives, approved in advance by the committee, of achieving effective capital allocation and balance sheet
management, specifically including maintaining leverage with a designated range, ensuring compliance with applicable debt covenants and managing interest rate risk associated with floating rate indebtedness.
When the committee established these targets at the beginning of 2016, it made a determination to adjust Further Adjusted AFFO for the year to exclude losses or expense
related to certain unusual or infrequently occurring events as set forth in our omnibus incentive plan (and that the committee would have the discretion whether to exclude any such items of income or gain). In addition, under the terms of our
omnibus incentive plan, the committee may exercise negative discretion in determining the final amounts of the short-term cash incentive awards payable at any given level of performance to ensure that such 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 2016 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.
2016
Short-Term Incentive Compensation Awards
In analyzing our results for purposes of determining the level of achievement under the short-term incentive
compensation plan, the committee reviewed our operating and financial results for 2016.
In performing its review, the committee made note of the following financial
and operating highlights:
|
|
The financial results of our Hospitality business segment, which the committee believed reflected the continued strength of that business, particularly the group meetings sector in which we focus, in a challenging
overall hospitality environment.
|
|
|
The improvements in the revenues and Adjusted EBITDA associated with our Entertainment business segment, which were significant increases from 2015 results.
|
|
|
Our continued focus on returning capital to our stockholders, as evidenced by the 11.1% increase in the amount of our annual dividend in 2016 (as compared to 2015), which resulted in the payment of approximately
$153 million in dividends on our common stock (including the fourth quarter dividend paid in early 2017 to holders of record as of December 30, 2016).
|
The committee determined that the companys 2016 Further Adjusted AFFO for purposes of our short-term incentive compensation plan was $285.7 million, which
represented the companys Further Adjusted AFFO, including the effect of a $1.2 million gain on the sale of certain excess real property located near our Gaylord Texan Resort. Under the terms of our omnibus incentive plan, the committee
had the discretion to exclude such gain from the calculation of Further Adjusted AFFO under the plan due to the infrequently occurring nature of such gain.
Based on
its review, however, the committee determined not to exclude this gain for purposes of the omnibus incentive plan because the gain was in furtherance of our strategic objective of increasing available cash for distribution to stockholders.
Accordingly, the committee determined that the companys Further Adjusted AFFO for purposes of our short-term incentive compensation plan for 2016 was
$285.7 million, which met the target performance goal. The committee also determined that Mr. Reed had met the individual strategic performance objectives described above, which combined with the Further Adjusted AFFO
achievement level described above, resulted in a payout level equal to the target payout level for Mr. Reed. The committee also determined that Mr. Reed should receive an additional amount of cash incentive compensation, as
listed in the table below, due to his contributions to the companys operating and financial performance in 2016, including, in particular, with respect to Mr. Reeds leadership with respect to the following accomplishments:
|
|
|
The successful completion of the Gaylord Rockies joint venture investment and commencement of asset management activities for the project; and
|
|
|
|
The successful commencement of several development projects in both the Hospitality segment (including the Gaylord Texan rooms and meeting space expansion project) and the Entertainment segment (including the Ole Red
entertainment complex project).
|
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2017 NOTICE OF MEETING AND PROXY STATEMENT
|
The committee also reviewed the annual performance rating of each NEO and determined that each NEO met the minimum level
performance rating.
As a result, the committee approved the following short-term cash incentive compensation awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculated
Short-Term
Cash
Incentive
Compen-
sation
($)
|
|
|
Additional
Short-
Term Cash
Incentive
Compen-
sation
($)
|
|
Total
Short-
Term
Cash
Incentive
Compen-
sation
(1)
($)
|
|
Mr. Reed
|
|
|
1,258,607
|
|
|
241,393
|
|
|
1,500,000
|
|
Mr. Fioravanti
|
|
|
618,169
|
|
|
-
|
|
|
618,169
|
|
Mr. Westbrook
|
|
|
352,363
|
|
|
-
|
|
|
352,363
|
|
Mr. Chaffin
|
|
|
295,628
|
|
|
-
|
|
|
295,628
|
|
Mr. Lynn
|
|
|
293,443
|
|
|
-
|
|
|
293,443
|
|
(1)
|
The estimated threshold, target and stretch payout levels for each NEO established under the short-term cash incentive plan for 2016 are listed in
2016
Grants of Plan-Based Awards
below.
|
2016 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 2016, long-term equity incentive compensation represented approximately 50% of our CEOs total compensation package and (on average) approximately 36% of our other NEOs total compensation package (calculated in the
manner described on page 31).
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:
|
|
Annual time-based RSU awards vest in equal amounts over four years, beginning on the first anniversary of the grant date. In certain cases, in connection with a promotional RSU grant or to aid in retention, the
committee may designate that certain time-based RSU awards will vest in equal installments over two years, beginning on the third 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.
|
2016 Long-Term Equity Incentive Compensation Awards
For 2016, the committee discussed with Aon Hewitt the most appropriate way to motivate and retain our executives. The committee believed it was important to
continue to use RSU awards instead of stock options to better align the interests of our executives with our stockholders, to encourage executive retention 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 compensation awards in 2016 as a combination of performance-based RSUs
and time-based RSUs. The determination of the number of RSUs to award to each NEO was based on a number of factors including but not limited to corporate and individual performance, historical grants and competitive practices. Additionally, in
connection with the appointment of Mr. Westbrook as EVP & Chief Development Officer in June 2016 the committee determined it was appropriate to make an additional award of time-based RSUs to aid in the retention of this executive.
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2017 NOTICE OF MEETING AND PROXY STATEMENT
|
As a result of the determinations discussed above, on February 24, 2016, the committee made the following long-term
incentive compensation awards to the NEOs:
|
|
|
|
|
|
|
|
|
|
|
Performance-
Based RSU
Awards
(1)
(#)
|
|
|
Annual
Time-
Based RSU
Awards
(2)
(#)
|
|
Mr. Reed
|
|
|
23,850
|
|
|
|
21,952
|
|
Mr. Fioravanti
|
|
|
8,418
|
|
|
|
7,748
|
|
Mr. Westbrook
|
|
|
3,765
|
|
|
|
3,466
|
(3)
|
Mr. Chaffin
|
|
|
3,367
|
|
|
|
3,099
|
|
Mr. Lynn
|
|
|
3,367
|
|
|
|
3,099
|
|
(1)
|
Up to 150% of the performance-based RSUs listed above will vest on March 15, 2019 based on our TSR performance over the three-year award cycle (January 1,
2016 December 31, 2018) relative to the median of the TSR performance of the 2016 Performance Peer Groups described below.
|
(2)
|
These RSUs vest ratably over four years, beginning on March 15, 2017.
|
(3)
|
In addition to the annual grant of time-based RSUs listed above, on June 27, 2016 Mr. Westbrook was awarded an additional 2,000 time-based RSUs in
connection with Mr. Westbrooks appointment as EVP & Chief Development Officer. These RSUs will vest 50% on June 27, 2019 and 50% on June 27, 2020.
|
2016 Performance-Based RSU Awards (2016-2018 Performance Period)
The
amount of the performance-based RSUs which will ultimately vest on March 15, 2019 will be determined by comparing our TSR performance during the performance period (January 1, 2016 December 31, 2018) relative to the median of the
TSR performance of the following two peer groups (the 2016 Performance Peer Groups), weighted equally: (1) our 2016 compensation peer group listed above; and (2) the following companies within the FTSE NAREIT Lodging Resorts
Index (which were selected by the committee based on their industry focus and their status as a REIT, enterprise value, revenue size, debt to capital ratio and TSR performance over a three year period):
|
|
|
Apple Hospitality REIT, Inc.
Ashford Hospitality Prime, Inc.
Ashford Hospitality Trust, Inc.
Chatham Lodging Trust
Chesapeake Lodging
Trust
Condor Hospitality Trust, Inc.
Diamondrock Hospitality Co.
FelCor Lodging
Trust Inc.
Hersha Hospitality Trust
Hospitality Properties Trust
|
|
Host Hotels & Resorts, Inc.
InnSuites Hospitality Trust
LaSalle Hotel Properties
Pebblebrook Hotel Trust
RLJ Lodging Trust
Sotherly Hotels, Inc.
Summit Hotel Properties, Inc.
Sunstone Hotel Investors, Inc.
Xenia Hotels & Resorts, Inc.
|
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 2016 Performance Peer Groups
|
|
|
150%
|
|
Equal to the median TSR performance of the 2016 Performance Peer Groups
|
|
|
100%
|
|
15 percentage points below the median TSR performance of the 2016 Performance Peer Groups
|
|
|
50%
|
|
Greater than 15 percentage points below the median TSR performance of the 2016 Performance Peer Groups
|
|
|
0%
|
|
If the performance achieved falls in between the established performance 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 24, 2016. The committee believes that limiting the maximum value of the award ensures the NEOs are not
disproportionally awarded for performance.
The committee
re-evaluates
the 2016 Performance Peer Groups for each fiscal year
to take into account changes to the composition of the 2016 Performance Peer Groups (i.e., corporate changes such as 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 has determined. The committee has not exercised this discretion in connection with the 2016 performance-based RSU awards except to reflect certain corporate changes in the peer group companies.
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 2016, performance-based RSUs represented approximately 25% of our CEOs total compensation package and
(on average) approximately 17% of our other NEOs total compensation package (calculated in the manner described on page 31).
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|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
2016 Time-Based RSU Awards
The time-based RSUs granted to the NEOs reflected in the chart above vest ratably over four years, beginning on March 15, 2017. The committee believed the amount of
the time-based RSU awards made to our NEOs was appropriate given our compensation philosophy and objectives, including the need to retain our executives. In 2016, time-based RSUs represented approximately 25% of our CEOs total compensation
package and (on average) approximately 19% of our other NEOs total compensation package (calculated in the manner described on page 31).
Vesting of 2014
Performance-Based RSU Awards in February 2017 (2014-2016 Performance Period)
In February 2014 we awarded performance-based RSUs to each NEO, which ultimately
were to vest based on the companys TSR performance over the
3-year
award cycle (2014-2016), as compared to the TSR for the designated performance peer groups during the same performance period.
Specifically, the awards were to vest as follows:
|
|
|
|
|
Company TSR
Performance
|
|
% of Award
Vesting
|
|
Greater than 15 percentage points above the median TSR performance of the 2014 Performance Peer Groups
|
|
|
150%
|
|
Equal to the median TSR performance of the 2014 Performance Peer Groups
|
|
|
100%
|
|
15 percentage points below the median TSR performance of the 2014 Performance Peer Groups
|
|
|
50%
|
|
Greater than 15 percentage points below the median TSR performance of the 2014 Performance Peer Groups
|
|
|
0%
|
|
Our TSR over the performance period, calculated pursuant to the terms of the performance-based RSU agreements, was approximately 50
percentage points above the median TSR performance of the designated performance peer groups.
As a result, the 2014 performance-based RSUs ultimately vested at the
150% level in February 2017 as follows:
|
|
|
|
|
|
|
2014 Performance-
Based RSU Awards
Vesting in February 2017
(#)
|
|
Colin Reed
|
|
|
35,625
|
|
Mark Fioravanti
|
|
|
15,000
|
|
Bennett Westbrook
|
|
|
5,712
|
|
Patrick Chaffin
|
|
|
5,625
|
|
Scott Lynn
|
|
|
5,625
|
|
Benefits and Perquisites
Our
benefit programs are 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 cost as other employees. These plans include a tax qualified 401(k) savings plan (with matching contributions of up to four percent of a participants pay), health and dental plans and various disability and life insurance plans.
We also provide a limited amount of executive-level perquisites to our NEOs and other designated senior executives, including the ability to participate in our unfunded,
unsecured, supplemental deferred compensation plan, or SUDCOMP, with a company matching component. Details about our SUDCOMP may be found under
Other Compensation InformationNonqualified Deferred Compensation
on page 50.
Our directors, NEOs and other employees routinely use commercial air service for business travel, and we generally reimburse them only at the coach or business class
rate.
Although we do not own a corporate airplane, we do maintain a limited aircraft program to provide our executives with timely and cost-effective travel
alternatives in connection with our business activities. We do not operate any aircraft, own or lease a hangar or employ pilots. Instead, we have purchased a fractional interest in an aircraft. We pay a fixed monthly fee, plus a variable charge for
hours actually flown. Our directors, NEOs and other employees use this aircraft for selected business trips when commercial air service is unavailable or otherwise impractical, based on the availability and cost of commercial air service, the travel
time involved, the number of employees traveling and the need for flexible travel arrangements. All travel under this program must be approved by our CEO.
Mr. Reeds employment agreement provides that he is entitled to a limited amount of personal aircraft usage on an annual basis. We also make the aircraft
available to our other executives for limited personal use, which is typically limited to permitting the executives spouse or other family member to accompany the executive on required business travel. We believe allowing limited personal use
of our aircraft program serves to reduce our executives personal travel time and to increase the time they can conduct company business on our behalf.
For more
information about this perquisite, and amounts reported as income in 2016 for each NEO,
see the table listing components of
All Other Compensation
on page 45.
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|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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 31).
As part of our REIT restructuring
transactions in 2012, in addition to their voluntary reductions in base pay, 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
Other Compensation InformationNonqualified 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 Mr. Westbrook, and
two times (2x) base salary for the other NEOs and other executives subject to these guidelines. The guidelines also 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, 2017 (the annual compliance date) all of the NEOs were in compliance with the guidelines, as follows:
|
|
|
|
|
|
|
|
|
|
|
Required Ownership as
of January 31, 2017
(1)
|
|
|
Shares
Owned
|
|
Colin Reed
|
|
|
69,467
|
|
|
|
1,303,061
(2)
|
|
Mark Fioravanti
|
|
|
24,518
|
|
|
|
166,644
(3)
|
|
Bennett Westbrook
|
|
|
18,388
|
|
|
|
34,570
(3)
|
|
Patrick Chaffin
|
|
|
9,807
|
|
|
|
22,547
(3)
|
|
Scott Lynn
|
|
|
9,807
|
|
|
|
18,546
(3)
|
|
(1)
|
The number of shares required to be owned by an NEO is an amount equal to (i) the product obtained by multiplying the NEOs base salary times the applicable
multiple (5x for Mr. Reed, 3x for Mr. Fioravanti and Mr. Westbrook, and 2x for the other NEOs)
divided by
(ii) the closing market price of our common stock on January 31, 2017 ($61.18).
|
(2)
|
Includes 541,329 shares credited to Mr. Reeds SERP and 59,099 shares of common stock issuable upon the vesting of time-based RSUs.
|
(3)
|
Includes the following number of shares of common stock issuable upon the vesting of time-based RSUs: Mr. Fioravanti: 31,306; Mr. Westbrook: 11,278; Mr. Chaffin: 9,585; and Mr. Lynn: 9,450.
|
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 have proven particularly important in providing for continuity of management during the period following our REIT
conversion and transition-related efforts. 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
39
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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 provide for cash compensation and certain other benefits only 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, 2016, is found under
Potential Payments on Termination or Change of Control
on page 52.
Tax
Deductibility Considerations
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.
However, the committee believes that stockholder interests are best served if it retains discretion and flexibility in awarding compensation to our NEOs, even where the compensation paid under such programs may not be fully deductible, and the
committee has approved and may approve the payment of compensation that is outside the deductibility limitations of Section 162(m).
Because we qualify as a REIT for
Federal income tax purposes, we 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 cash 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
programs 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. Annual equity awards to executives are approved by the committee and occur on the date of our first quarterly committee meeting of each year. Consistent with the
terms of the 2016 plan, the committee has also delegated to the CEO the authority to make limited equity grants to new members of our management team, which are then ratified by the committee.
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 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 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-
40
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
assessment of his performance. The committee then reviews these items and discusses and approves compensation for each NEO based on the 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 21. 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 has
retained Aon Hewitt as its outside compensation consultant since 2013. During 2016, Aon Hewitt regularly attended committee meetings and reported directly to the committee on matters relating to compensation for our executives. During 2016 the
committee requested that Aon Hewitt:
|
|
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 2016, 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, approximately 95.5% 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.
The committee intends to continue to consider the outcome of future advisory
say-on-pay
votes when making executive compensation decisions.
2017 NEO Compensation
At its February 22, 2017 meeting, the committee reviewed and approved the compensation to be paid to the NEOs for 2017, in light of our compensation
philosophy described above.
Base Salary
The committee determined
that base salaries for 2017 should be increased as follows:
|
|
|
|
|
|
|
|
|
|
|
2017 Base
Salary
($)
|
|
|
% Increase
from 2016
Base Salary
|
|
Colin Reed
|
|
|
925,000
|
|
|
|
8.8
|
%
|
Mark Fioravanti
|
|
|
515,000
|
|
|
|
3.0
|
%
|
Bennett Westbrook
|
|
|
386,250
|
|
|
|
3.0
|
%
|
Patrick Chaffin
|
|
|
325,000
|
|
|
|
8.3
|
%
|
Scott Lynn
|
|
|
325,000
|
|
|
|
8.3
|
%
|
Short-Term Cash Incentive Compensation
The
committee also established criteria for short-term cash incentive compensation pursuant to our omnibus incentive plan.
The committee determined that each NEO will
have the opportunity to earn the following percentage of his base salary based on the achievement of the AFFO goals (and, in the case of Mr. Reed, designated strategic objectives) established by the committee, at the following threshold, target
and stretch levels:
|
|
|
|
|
|
|
|
|
|
|
Threshold
Level
|
|
Target
Level
|
|
|
Stretch
Level
|
Colin Reed
|
|
75%
|
|
|
150%
|
|
|
300%
|
Mark Fioravanti
|
|
62.5%
|
|
|
125%
|
|
|
250%
|
Bennett Westbrook
|
|
50%
|
|
|
100%
|
|
|
200%
|
Patrick Chaffin
|
|
50%
|
|
|
100%
|
|
|
200%
|
Scott Lynn
|
|
50%
|
|
|
100%
|
|
|
200%
|
These percentages were unchanged from 2016. In choosing the AFFO target performance goal for 2017, the committee considered
the general economic climate expected in 2017, the expected conditions in the hospitality industry and our expected
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|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
financial performance, including our guidance for 2017, as reflected in our earnings release issued in the first quarter of 2017. 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 establishing these targets for 2017,
the committee has made a determination to adjust AFFO for the year to exclude losses or expense related to certain infrequently occurring events as set forth in our omnibus incentive plan (and the committee determined that it would have the
discretion whether to exclude any such items of income or gain).
In addition, under the terms of our omnibus incentive plan, the committee may exercise negative
discretion in determining the final amounts of the short-term cash incentive awards payable at any given level of performance to ensure that such awards accurately reflect our actual performance. The committee also has retained the
discretion to lower the amount of, or not award, annual cash incentive compensation otherwise payable to an executive under the plan for 2017 if the executive does 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.
Long-Term Equity Incentive Compensation
The committee also made the following
long-term equity incentive compensation awards to the NEOs:
|
|
|
|
|
|
|
|
|
|
|
Performance-
Based
RSU
Awards
(1)
(#)
|
|
|
Time-
Based RSU
Awards
(2)
(#)
|
|
Colin Reed
|
|
|
18,811
|
|
|
|
18,882
|
|
Mark Fioravanti
|
|
|
5,813
|
|
|
|
5,835
|
|
Bennett Westbrook
|
|
|
2,906
|
|
|
|
2,917
|
|
Patrick Chaffin
|
|
|
2,445
|
|
|
|
2,455
|
|
Scott Lynn
|
|
|
2,445
|
|
|
|
2,455
|
|
(1)
|
Up to 150% of the performance-based RSUs listed above will vest on March 15, 2020 based on our TSR performance over the three-year award cycle (January 1, 2017 December 31, 2019) relative to the
median of the TSR performance of the designated performance peer groups for such awards.
|
(2)
|
The time-based RSUs vest ratably over four years, beginning March 15, 2018.
|
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|
2017 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 Bender, Chairman
Ellen Levine
Robert S. Prather, Jr.
Michael I. Roth
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|
2017 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, 2016 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 grant date fair value of equity awards (some of which are performance-based and may or may not ultimately be earned).
2016 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal
Position
(a)
|
|
Year
(b)
|
|
Salary
(1)
($)
(c)
|
|
|
Bonus
(2)
($)
(d)
|
|
|
Stock
Awards
(3)
($)
(e)
|
|
|
Option
Awards
($)
(f)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(4)
($)
(g)
|
|
|
Change in
Pension
Value
and
Nonqual-
ified
Deferred
Compen-
sation
Earnings
($)
(h)
|
|
All Other
Compen-
sation
(5)
($)
(i)
|
|
|
Total
($)
(j)
|
|
Colin Reed
Chairman & Chief Executive Officer
|
|
2016
|
|
|
838,599
|
|
|
|
241,393
|
|
|
|
2,124,995
|
|
|
-
|
|
|
1,258,607
|
|
|
-
|
|
|
70,498
|
|
|
|
4,534,092
|
|
|
2015
|
|
|
782,830
|
|
|
|
156,544
|
|
|
|
2,110,036
|
|
|
-
|
|
|
1,343,456
|
|
|
-
|
|
|
66,555
|
|
|
|
4,459,421
|
|
|
2014
|
|
|
712,445
|
|
|
|
-
|
|
|
|
1,904,750
|
|
|
-
|
|
|
2,137,932
|
|
|
-
|
|
|
64,472
|
|
|
|
4,819,599
|
|
Mark Fioravanti
President & Chief
Financial Officer
|
|
2016
|
|
|
494,368
|
|
|
|
-
|
|
|
|
750,025
|
|
|
-
|
|
|
618,169
|
|
|
-
|
|
|
38,773
|
|
|
|
1,901,335
|
|
|
2015
|
|
|
469,407
|
|
|
|
63,817
|
|
|
|
1,265,263
|
|
|
-
|
|
|
536,183
|
|
|
-
|
|
|
36,155
|
|
|
|
2,370,825
|
|
|
2014
|
|
|
434,945
|
|
|
|
-
|
|
|
|
802,000
|
|
|
-
|
|
|
869,771
|
|
|
-
|
|
|
35,524
|
|
|
|
2,142,240
|
|
Bennett Westbrook
EVP & Chief Development Officer
|
|
2016
|
|
|
351,776
|
|
|
|
-
|
|
|
|
433,905
|
|
|
-
|
|
|
352,363
|
|
|
-
|
|
|
31,124
|
|
|
|
1,169,168
|
|
|
2015
|
|
|
318,447
|
|
|
|
27,013
|
|
|
|
338,047
|
|
|
-
|
|
|
272,987
|
|
|
-
|
|
|
27,664
|
|
|
|
984,158
|
|
|
2014
|
|
|
309,830
|
|
|
|
-
|
|
|
|
305,402
|
|
|
-
|
|
|
464,594
|
|
|
-
|
|
|
27,747
|
|
|
|
1,107,573
|
|
Patrick Chaffin
SVP, Asset Management
|
|
2016
|
|
|
295,522
|
|
|
|
-
|
|
|
|
299,992
|
|
|
-
|
|
|
295,628
|
|
|
-
|
|
|
18,644
|
|
|
|
909,786
|
|
|
2015
|
|
|
274,975
|
|
|
|
39,188
|
|
|
|
367,066
|
|
|
-
|
|
|
235,812
|
|
|
-
|
|
|
17,197
|
|
|
|
934,238
|
|
|
2014
|
|
|
255,907
|
|
|
|
16,277
|
|
|
|
300,750
|
|
|
-
|
|
|
383,723
|
|
|
-
|
|
|
9,316
|
|
|
|
965,973
|
|
Scott Lynn
SVP & General Counsel
|
|
2016
|
|
|
293,215
|
|
|
|
-
|
|
|
|
299,992
|
|
|
-
|
|
|
293,443
|
|
|
-
|
|
|
19,545
|
|
|
|
906,195
|
|
|
2015
|
|
|
264,876
|
|
|
|
47,820
|
|
|
|
353,919
|
|
|
-
|
|
|
227,180
|
|
|
-
|
|
|
20,369
|
|
|
|
914,164
|
|
|
2014
|
|
|
245,676
|
|
|
|
1,626
|
|
|
|
300,750
|
|
|
-
|
|
|
368,374
|
|
|
-
|
|
|
19,175
|
|
|
|
935,601
|
|
(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.
|
(2)
|
Represents a discretionary cash bonus award paid to the NEO in recognition of their contributions to the companys operating and financial performance for the
applicable fiscal year as described in the
Compensation Discussion and Analysis
above. Cash incentive compensation paid to each NEO pursuant to
|
|
our short-term cash incentive compensation plan 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 time-based RSU awards and performance-based RSU awards granted 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, 2016, included in our Annual Report on Form
10-K
for the year ended December 31, 2016, filed with the SEC on
|
44
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
|
February 28, 2017, for the assumptions made in determining grant date fair value. The maximum dollar value of the performance-based RSU awards granted in 2016 (based on the grant-date fair
value and assuming vesting at the stretch (150% performance level) are as follows: Mr. Reed: $1,593,777; Mr. Fioravanti:
|
|
$562,533; Mr. Westbrook: $251,597; Mr. Chaffin: $225,000; and Mr. Lynn: $225,000.
|
(4)
|
Represents amounts paid under our short-term cash incentive compensation plan.
|
(5)
|
The table below lists the components of the
All Other Compensation
amount for each NEO listed above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Company
Match to
401(k)
Plan
($)
(a)
|
|
|
Company
Match to
SUDCOMP
Plan
($)
(b)
|
|
|
Group
Term
Life
($)
(c)
|
|
|
Executive
LTD
($)
(d)
|
|
|
Other
($)
(e)
|
|
|
Total
($)
|
|
Colin Reed
|
|
|
10,600
|
|
|
|
27,616
|
|
|
|
25,655
|
|
|
|
3,629
|
|
|
|
2,998
|
|
|
|
70,498
|
|
Mark Fioravanti
|
|
|
10,600
|
|
|
|
16,186
|
|
|
|
7,657
|
|
|
|
3,918
|
|
|
|
412
|
|
|
|
38,773
|
|
Bennett Westbrook
|
|
|
10,600
|
|
|
|
11,625
|
|
|
|
4,260
|
|
|
|
3,139
|
|
|
|
1,500
|
|
|
|
31,124
|
|
Patrick Chaffin
|
|
|
-
|
|
|
|
11,826
|
|
|
|
3,092
|
|
|
|
2,660
|
|
|
|
1,066
|
|
|
|
18,644
|
|
Scott Lynn
|
|
|
3,211
|
|
|
|
10,581
|
|
|
|
2,906
|
|
|
|
2,733
|
|
|
|
114
|
|
|
|
19,545
|
|
(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 2015 short-term cash incentive plan payments made in 2016.
|
(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. Fioravanti and Mr. Westbrook, physical examination fees. Represents, for Mr. Reed, Mr. Chaffin and Mr. Lynn, personal
usage of aircraft. For purposes of reporting the value of personal usage of aircraft in this table, we use the incremental cost of such personal usage, calculated by estimating the direct variable operating cost of the aircraft on a per mile basis.
These costs include the cost of fuel, maintenance, landing and parking fees, crew travel expenses and supplies. For trips by NEOs that involved mixed personal and business usage, we include the incremental cost of such personal usage (i.e., the
excess of the cost of the actual trip over the cost of a hypothetical trip without the personal usage). For income tax purposes, the amounts included in NEO income are calculated based on the standard industry fare level valuation method. No tax
gross-ups
are provided for this imputed income.
|
45
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
2016 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 2016, and (2) RSU awards granted to our NEOs during 2016 under our long-term equity incentive compensation plan.
2016 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)
|
|
|
Maximum
($)(e)
|
|
|
Threshold
(#)(f)
|
|
|
Target
(#)(g)
|
|
|
Maximum
(#)(h)
|
|
|
|
Colin Reed
|
|
|
|
|
|
|
628,846
|
|
|
|
1,258,607
|
|
|
|
2,515,385
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,925
|
|
|
|
23,850
|
|
|
|
35,775
|
|
|
|
-
|
|
|
|
1,062,518
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,952
|
|
|
|
1,062,477
|
|
Mark Fioravanti
|
|
|
|
|
|
|
308,894
|
|
|
|
618,169
|
|
|
|
1,235,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,209
|
|
|
|
8,418
|
|
|
|
12,627
|
|
|
|
-
|
|
|
|
375,022
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,748
|
|
|
|
375,003
|
|
Bennett Westbrook
|
|
|
|
|
|
|
175,819
|
|
|
|
352,363
|
|
|
|
703,277
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,883
|
|
|
|
3,765
|
|
|
|
5,648
|
|
|
|
-
|
|
|
|
167,731
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,466
|
|
|
|
167,754
|
|
|
|
|
6/27/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,000
|
(5)
|
|
|
98,420
|
|
Patrick Chaffin
|
|
|
|
|
|
|
147,692
|
|
|
|
295,628
|
|
|
|
590,769
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,684
|
|
|
|
3,367
|
|
|
|
5,051
|
|
|
|
-
|
|
|
|
150,000
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,099
|
|
|
|
149,992
|
|
Scott Lynn
|
|
|
|
|
|
|
146,538
|
|
|
|
293,443
|
|
|
|
586,154
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,684
|
|
|
|
3,367
|
|
|
|
5,051
|
|
|
|
-
|
|
|
|
150,000
|
|
|
|
|
2/24/16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,099
|
|
|
|
149,992
|
|
(1)
|
Represents threshold, target and stretch performance goal achievement payout levels established under our annual short-term cash incentive plan for 2016 performance.
See the
Non-Equity
Incentive Plan Compensation column of the
2016 Summary Compensation Table
above for the amount actually paid to each NEO for 2016 performance.
|
(2)
|
Consists of performance-based RSUs awarded under our long-term equity 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, 2016 and ending December 31, 2018. See
Compensation Discussion and Analysis2016 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 equity incentive compensation plan. Each RSU is equivalent to one share of common stock on the date of
|
|
grant. Except with respect to the 2,000 RSUs awarded to Mr. Westbrook in connection with his appointment as Executive Vice President and Chief Development Officer described below (which vest
50% on the third and fourth anniversary of the grant date), all of the RSUs reflected in the chart above 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, 2016, included in our Annual Report on Form
10-K
for the year ended December 31, 2016, filed with the SEC on
February 28, 2017, for the assumptions made in determining grant date fair value.
|
(5)
|
Consists of time-based RSUs awarded in connection with Mr. Westbrooks appointment as Executive Vice President and Chief Development Officer, effective as
of June 27, 2016.
|
46
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Outstanding Equity Awards at 2016 Fiscal Year End
The table below shows information about the outstanding equity awards held by our NEOs as of December 31, 2016.
Outstanding Equity Awards at 2016 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
(#)(c)
|
|
Option
Exercise
Price
($)(d)
|
|
Option
Expiration
Date
(e)
|
|
Number of
Shares or
Units of
Stock That
Have
Not
Vested
(1)
(#)(f)
|
|
Market
Value of
Shares or
Units
of
Stock That
Have Not
Vested
(2)
($)(g)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(3)
(#)(h)
|
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
(2)
($)(i)
|
Colin Reed
|
|
-
|
|
-
|
|
-
|
|
-
|
|
58,406
|
|
3,680,162
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
76,534
|
|
4,822,407
|
Mark Fioravanti
|
|
-
|
|
-
|
|
-
|
|
-
|
|
30,941
|
|
1,949,592
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
29,495
|
|
1,858,480
|
Bennett Westbrook
|
|
-
|
|
-
|
|
-
|
|
-
|
|
11,147
|
|
702,373
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
12,210
|
|
769,352
|
Patrick Chaffin
|
|
-
|
|
-
|
|
-
|
|
-
|
|
9,474
|
|
596,957
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
10,783
|
|
679,437
|
Scott Lynn
|
|
-
|
|
-
|
|
-
|
|
-
|
|
9,341
|
|
588,576
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
10,719
|
|
675,404
|
47
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
(1)
|
The following table provides information as of December 31, 2016 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
|
|
2/14/2013
|
|
|
2/14/2017
|
|
|
|
6,958
|
|
|
|
2,419
|
|
|
|
906
|
|
|
|
452
|
|
|
|
452
|
|
2/26/2014
|
|
|
2/26/2017
|
|
|
|
6,835
|
|
|
|
2,877
|
|
|
|
1,094
|
|
|
|
1,077
|
|
|
|
1,077
|
|
2/24/2015
|
|
|
3/15/2017
|
|
|
|
4,943
|
|
|
|
1,759
|
|
|
|
791
|
|
|
|
1,210
|
|
|
|
1,166
|
|
2/24/2016
|
|
|
3/15/2017
|
|
|
|
5,738
|
|
|
|
2,025
|
|
|
|
906
|
|
|
|
810
|
|
|
|
810
|
|
2/26/2014
|
|
|
2/26/2018
|
|
|
|
6,835
|
|
|
|
2,877
|
|
|
|
1,093
|
|
|
|
1,077
|
|
|
|
1,077
|
|
2/24/2015
|
|
|
3/15/2018
|
|
|
|
4,942
|
|
|
|
1,759
|
|
|
|
790
|
|
|
|
1,210
|
|
|
|
1,165
|
|
3/1/2015
|
|
|
3/15/2018
|
|
|
|
-
|
|
|
|
4,696
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
2/24/2016
|
|
|
3/15/2018
|
|
|
|
5,738
|
|
|
|
2,025
|
|
|
|
906
|
|
|
|
810
|
|
|
|
810
|
|
2/24/2015
|
|
|
3/15/2019
|
|
|
|
4,942
|
|
|
|
1,759
|
|
|
|
790
|
|
|
|
1,209
|
|
|
|
1,165
|
|
3/1/2015
|
|
|
3/15/2019
|
|
|
|
-
|
|
|
|
4,695
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
2/24/2016
|
|
|
3/15/2019
|
|
|
|
5,738
|
|
|
|
2,025
|
|
|
|
906
|
|
|
|
810
|
|
|
|
810
|
|
6/27/2016
|
|
|
6/27/2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,030
|
|
|
|
-
|
|
|
|
-
|
|
2/24/2016
|
|
|
3/15/2020
|
|
|
|
5,737
|
|
|
|
2,025
|
|
|
|
905
|
|
|
|
809
|
|
|
|
809
|
|
6/27/2016
|
|
|
6/27/2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,030
|
|
|
|
-
|
|
|
|
-
|
|
(2)
|
Market value was determined based on the December 31, 2016 NYSE closing price of our common stock ($63.01).
|
(3)
|
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
|
|
2/26/2014
(a)
|
|
|
2/26/2017
|
|
|
35,625
|
|
|
15,000
|
|
|
|
5,712
|
|
|
|
5,625
|
|
|
|
5,625
|
|
2/24/2015
(b)
|
|
|
3/15/2018
|
|
|
17,059
|
|
|
6,077
|
|
|
|
2,733
|
|
|
|
1,791
|
|
|
|
1,727
|
|
2/24/2016
(b)
|
|
|
3/15/2019
|
|
|
23,850
|
|
|
8,418
|
|
|
|
3,765
|
|
|
|
3,367
|
|
|
|
3,367
|
|
(a)
|
The number of shares listed above with respect to the February 26, 2014 performance-based RSU grant assume vesting at the stretch (150%) performance level. The
RSUs ultimately vested at this payout level based on our achievement of TSR over the applicable performance period, as determined by the Human Resources Committee. See
Compensation Discussion and Analysis2016 Compensation
DecisionsLong-Term Equity Incentive Compensation
for a discussion of the terms of these RSUs.
|
(b)
|
The number of RSUs listed above with respect to the February 24, 2015 grant assume vesting at the target (100%) performance level, and the number of RSUs listed
above with respect to the February 24, 2016 grant assume vesting at the target (100%) 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 from January 1, 2015 to December 31, 2017 for the February 24, 2015 awards; and a period from January 1, 2016 to December 31, 2018 for the
February 24, 2016 awards). See
Compensation Discussion and Analysis2016 Compensation DecisionsLong-Term Equity Incentive Compensation
for a discussion of the terms of these RSUs.
|
48
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
2016 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 2016.
2016 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
|
|
|
92,696
|
|
|
|
2,304,524
|
|
|
|
82,605
|
|
|
|
3,946,346
|
|
Mark Fioravanti
|
|
|
19,363
|
|
|
|
516,787
|
|
|
|
24,929
|
|
|
|
1,196,613
|
|
Bennett Westbrook
|
|
|
3,049
|
|
|
|
78,420
|
|
|
|
9,916
|
|
|
|
475,673
|
|
Patrick Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
6,935
|
|
|
|
333,906
|
|
Scott Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
5,934
|
|
|
|
287,111
|
|
(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.
|
49
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Other Compensation Information
Pension Benefits
No NEOs participate in our frozen
defined benefit plan.
Nonqualified Deferred Compensation
Supplemental Deferred Compensation
Our supplemental deferred compensation plan, or SUDCOMP, is a nonqualified plan that allows eligible participants,
including NEOs (whose ability to contribute amounts to our 401(k) plan may be limited by IRS regulations), to defer up to 40% of their base salary, less amounts deferred under our 401(k) plan, and up to 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.
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 to 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 and any accrued cash dividends 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 and any accrued
cash dividends to Mr. Reed in satisfaction of his SERP benefit meets requirements necessary so that we will not recognize any increase
50
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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.
2016 Nonqualified
Deferred Compensation Table
The table below shows each NEOs salary deferrals, company matching obligations, earnings and account balances in the SUDCOMP
(and, in the case of Mr. Reed, his SERP), as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
211,406
|
|
|
|
27,616
|
|
|
|
2,426,886
|
|
|
-
|
|
|
18,121,152
|
|
Colin Reed
|
|
|
SERP
|
(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
7,702,772
|
(5)
|
|
-
|
|
|
34,109,386
|
(6)
|
Mark Fioravanti
|
|
|
SUDCOMP
|
|
|
|
19,857
|
|
|
|
16,186
|
|
|
|
80,970
|
|
|
-
|
|
|
911,540
|
|
Bennett Westbrook
|
|
|
SUDCOMP
|
|
|
|
35,239
|
|
|
|
11,625
|
|
|
|
60,986
|
|
|
-
|
|
|
724,057
|
|
Patrick Chaffin
|
|
|
SUDCOMP
|
|
|
|
11,826
|
|
|
|
11,826
|
|
|
|
11,966
|
|
|
1,269
|
|
|
153,352
|
|
Scott Lynn
|
|
|
SUDCOMP
|
|
|
|
29,308
|
|
|
|
10,581
|
|
|
|
12,300
|
|
|
-
|
|
|
161,375
|
|
(1)
|
Amounts in this column are reported as compensation in the
2016
Summary Compensation Table
above. Amounts in this column do not include deferrals of
cash incentive compensation amounts with respect to the 2015 fiscal year paid in 2016 (in the case of Mr. Fioravanti, $24,000) or company matching amounts with respect to such deferral (in the case of Mr. Fioravanti, $16,924).
|
(2)
|
None of the amounts in this column are included as compensation in the
2016
Summary Compensation Table
above because above-market or preferential
earnings are not available.
|
(3)
|
Of the amounts listed in this column with respect to the SUDCOMP, the following amounts have been reported as compensation in the
2016
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: $8,282,261; Mr. Fioravanti: $399,538; Mr. Westbrook: $341,569; Mr. Chaffin: $59,980;
and Mr. Lynn: $92,872. With respect to Mr. Reeds SERP, no amounts have been reported as compensation in the
Summary Compensation Table
for 2016 or previous years.
|
(4)
|
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 2016 was based solely on the amounts previously contributed.
|
(5)
|
Represents the change in market value of our common stock from December 31, 2015 to December 31, 2016, plus the reinvestment of cash dividends received on
the shares of common stock held in the SERP. This amount has not been reported as compensation in the
Summary Compensation Table
for 2016 or previous years since above-market or preferential returns are not available with respect to the SERP.
|
(6)
|
Represents the value of both the initial SERP benefit and the additional SERP benefit as of December 31, 2016, which is calculated by multiplying the 541,329
shares of our common stock held by the rabbi trust on such date by the December 31, 2016 NYSE closing price of our common stock ($63.01), plus accrued cash dividends received on the shares of common stock held in the SERP not yet reinvested in
additional shares of common stock.
|
51
|
2017 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. Fioravantis employment agreement was amended in March 2015.
Mr. Westbrooks employment agreement was amended in July 2016. 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.
52
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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 applies to each NEO.
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 amounts which have been earned by the NEO pursuant to the terms of our incentive and other benefit
plans
(1)
.
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
(2)
or if he resigned without Good Reason
(3)
he would not be entitled to receive any payments (other than as listed under
Payments Made on Any
Termination of Employment
).
(1)
|
These amounts consist of: (1) accrued but unpaid base salary through the date of termination; (2) any unpaid portion of any annual short-term cash incentive compensation bonus for prior calendar years;
(3) accrued but unpaid vacation pay, unreimbursed employment-related expenses and other benefits owed to the NEO under our general employee benefit plans or policies; (4) all vested 401(k) plan and SUDCOMP account balances; and (5) in
the case of Mr. Reed, his SERP benefit.
|
(2)
|
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.
|
(3)
|
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).
|
53
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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 (in addition to payments under our disability or life insurance plans):
|
|
|
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).
|
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 short-term cash incentive compensation and bonus
|
|
1x base salary plus 1x last years annual
short-term
cash incentive compensation and bonus
|
|
|
|
in the case of Mr. Fioravanti and Mr. Westbrook, 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 years 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.
|
54
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
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. With respect to the employment agreements with Mr. Reed, Mr. Fioravanti and Mr. Westbrook (and the severance agreements with
Mr. Chaffin and Mr. Lynn), a Change of Control 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.
|
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 short-term cash incentive compensation and bonus in last 3 years
|
|
2x base salary plus 2x last years annual short-term cash incentive compensation and 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.
|
In
addition, under the terms of our omnibus incentive plans and the award agreements issued thereunder, in the event of a Change of Control
(8)
, irrespective of any termination of employment, all
outstanding RSU awards held by our NEOs and other employees would vest immediately, with performance-based RSUs vesting at target level, and all outstanding stock option awards held by our NEOs and other employees would automatically accelerate and
become exercisable.
(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.
|
(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.
|
55
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
(8)
|
Under our 2016 and 2006 omnibus incentive plans, a Change of Control is deemed to occur if: (i) any person (subject to certain exceptions) becomes the beneficial owner of 35% or more of the combined
voting power of our then outstanding voting securities;
(ii) two-thirds
of the incumbent members of our Board cease to serve on our Board without the consent of the incumbent Board; (iii) following
the consummation of a merger, consolidation or reorganization, (a) the holders of our voting securities immediately prior to the transaction hold less than a majority of the combined voting power of the resulting entity in substantially the
same proportion as their ownership prior to such merger, consolidation or reorganization, (b) the individuals who were members of the incumbent Board immediately prior to the execution of the agreement providing for such transaction constitute
less than
two-thirds
of the members of the board of directors of the resulting entity, and (c) no person (subject to certain exceptions) has beneficial ownership of 35% or more of the resulting
entitys then outstanding voting securities; (iv) we completely liquidate or dissolve the company; or (v) we sell substantially all of our assets to any person, other than a transfer to a subsidiary of the company.
|
56
|
2017 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, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
($)
|
|
|
Termination
Without Cause
or
Resignation
for Good
Reason Upon
a Change of
Control
(10)
($)
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,700,000
|
(1)
|
|
|
8,963,796
|
(2)
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,100,000
|
(3)
|
|
|
4,109,313
|
(2)
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
635,000
|
(3)
|
|
|
2,398,782
|
(2)
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,150,000
|
(1)
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,150,000
|
(1)
|
Non-Equity
Incentive Compensation
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500,000
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
618,169
|
|
|
|
618,169
|
|
|
|
-
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
352,363
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Performance-Based RSU Accelerated Vesting
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
2,714,009
|
|
|
|
2,571,375
|
|
|
|
4,074,164
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
1,062,181
|
|
|
|
630,100
|
|
|
|
1,543,430
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
433,824
|
|
|
|
239,942
|
|
|
|
649,381
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
382,240
|
|
|
|
-
|
|
|
|
561,293
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
379,551
|
|
|
|
-
|
|
|
|
557,260
|
|
Time-Based RSU Accelerated
Vesting
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
3,680,162
|
|
|
|
2,645,727
|
|
|
|
3,680,162
|
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
1,949,592
|
|
|
|
572,131
|
|
|
|
1,949,592
|
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
702,372
|
|
|
|
232,948
|
|
|
|
702,372
|
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
596,957
|
|
|
|
-
|
|
|
|
596,957
|
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
588,576
|
|
|
|
-
|
|
|
|
588,576
|
|
Other Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
-
|
|
|
|
-
|
|
|
|
223,965
|
(7)
|
|
|
223,965
|
(7)
|
|
|
223,965
|
(7)
|
Mr. Fioravanti
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,157
|
(8)
|
Mr. Westbrook
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
70,857
|
(8)
|
Mr. Chaffin
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,238
|
(9)
|
Mr. Lynn
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41,238
|
(9)
|
57
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
(1)
|
Amount equal to two times base salary in effect at December 31, 2016, plus two times short-term cash incentive compensation and bonus for the 2015
fiscal year.
|
(2)
|
Amount equal to three times base salary in effect at December 31, 2016, plus three times short-term cash incentive compensation and bonus for the 2014 fiscal
year (the highest short-term cash incentive compensation and bonus for the last three fiscal years).
|
(3)
|
Amount equal to one times base salary in effect at December 31, 2016, plus one times short-term cash incentive compensation and bonus for the 2015
fiscal year.
|
(4)
|
Reflects the short-term cash incentive compensation and bonus for the 2016 fiscal year.
|
(5)
|
Calculated by multiplying the number of shares of common stock to be issued on the vesting of such award(s) by the December 31, 2016 NYSE closing price of our
common stock ($63.01), assuming vesting at the target (100%) performance level. The 2014 performance-based RSUs ultimately vested in February 2017 at the 150% payout level based on our achievement of TSR over the applicable performance period, as
determined by the Human Resources Committee. The number of shares of common stock to be issued upon vesting of the remaining performance-based RSUs will ultimately be based upon the actual achievement of the performance goals stated in the
applicable award agreement.
|
(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, 2016 NYSE closing price of our
common stock ($63.01).
|
(7)
|
Represents health insurance coverage for Mr. Reed and his spouse for a period of 15 years (assuming a life expectancy of 84 years for Mr. Reed and assuming
an annual cost of $14,931, which was the cost of such benefit in 2016).
|
(8)
|
Represents health insurance coverage and physical examination fees for a period of three years.
|
(9)
|
Represents health insurance coverage for a period of two years.
|
(10)
|
The awards underlying the amounts set forth under the headings Performance-Based RSU Accelerated Vesting and Time-Based RSU Accelerated
Vesting will automatically vest, with performance-based RSU awards vesting at target level, upon a Change of Control (as defined in the applicable omnibus incentive plan and the award agreements issued thereunder), irrespective of whether or
not the NEO is terminated in connection with a Change of Control.
|
58
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Director Compensation
Cash Compensation
Each
non-employee
director receives the following annual cash compensation:
|
|
|
|
|
Compensation
Item
|
|
Amount
($)
|
|
Annual Retainer (Independent Directors)
|
|
|
60,000
|
|
Lead Independent Director
|
|
|
30,000
|
|
Audit Committee Chairman
|
|
|
25,000
|
|
Human Resources Committee Chairman
|
|
|
20,000
|
|
Nominating and CG Committee Chairman
|
|
|
15,000
|
|
Audit Committee Members
|
|
|
10,000
|
|
Other Committee Members
|
|
|
7,500
|
|
Directors may elect to defer their cash compensation in the form of RSUs, the receipt of which will be deferred until either a specified
date or the directors retirement or resignation from the Board. In 2016, one director elected to defer cash compensation pursuant to this deferred compensation plan.
All directors are reimbursed for expenses incurred in attending meetings. Mr. Reed does not receive cash compensation for his service as a director.
Equity-Based Compensation
Each
non-employee
director receives, as of the date of the first board meeting following the annual meeting of stockholders, an annual grant of RSUs having a fixed dollar value of $80,000 (based upon the fair market
value of our common stock on the grant date). The RSUs vest fully on the first anniversary of the date of grant and are settled in shares of our common stock on such date, unless receipt of such shares is deferred by the director.
Until shares of common stock are issued in conversion of the RSUs, the director does not have any rights as a stockholder
with respect to such RSUs, other than the right to receive additional RSUs equal to any dividends paid on our common stock.
Director
Stock Ownership Guidelines
We have adopted stock ownership guidelines for our
non-employee
directors, which require
directors to hold a minimum of 6,000 shares of our common stock, with a five-year time period to comply. Shares of common stock issuable upon the vesting of RSUs are credited toward this requirement. If a non-employee director is not currently in
compliance with these guidelines (regardless of the applicable grace period for compliance) the
non-employee
director 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, 2017 (the annual compliance date), after taking into account the applicable grace period, all of our
non-employee
directors then serving in office met this requirement, as follows:
|
|
|
|
|
|
|
|
|
|
|
Required
Ownership
(#)
|
|
|
Shares
Owned
(1)
(#)
|
|
Michael J. Bender
|
|
|
6,000
|
|
|
|
22,037
|
|
Rachna Bhasin
|
|
|
6,000
|
|
|
|
1,614
|
|
William F. Hagerty, IV
|
|
|
6,000
|
|
|
|
3,614
|
|
Ellen Levine
|
|
|
6,000
|
|
|
|
25,725
|
|
Patrick Q. Moore
|
|
|
6,000
|
|
|
|
3,172
|
|
Robert S. Prather, Jr.
|
|
|
6,000
|
|
|
|
23,559
|
|
Michael D. Rose
|
|
|
6,000
|
|
|
|
119,818
|
|
Michael I. Roth
|
|
|
6,000
|
|
|
|
34,836
|
|
(1)
|
Includes the following shares represented by RSUs held by each director: Mr. Bender: 13,827; Ms. Bhasin 1,614; Mr. Hagerty: 1,614; Ms. Levine: 1,614; Mr. Moore: 3,172; Mr. Prather: 19,599;
Mr. Rose: 29,964; and Mr. Roth: 1,614.
|
59
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
2016
Non-Employee
Director
Compensation Table
The following table summarizes the annual compensation for 2016 for our
non-employee
directors who
served as directors in 2016. E.K. Gaylord II and D. Ralph Horn did not stand for
re-election
to the Board of Directors at the 2016 Annual Meeting of Stockholders. William F. Hagerty, IV became a member of the
Board of Directors on February 25, 2016, and Rachna Bhasin became a member of the Board of Directors on March 8, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Fees
Earned or
Paid in
Cash
(1)
($)(b)
|
|
|
Stock
Awards
(2)
($)(c)
|
|
|
Option
Awards
($)(d)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
($)(e)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compen-
sation
Earnings
(3)
($)(f)
|
|
All Other
Compen-
sation
($)(g)
|
|
Total
($)(h)
|
|
Michael Bender
|
|
|
82,500
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
162,480
|
|
Rachna Bhasin
|
|
|
35,000
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
114,980
|
|
E.K. Gaylord II
|
|
|
52,500
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
52,500
|
|
William F. Hagerty, IV
|
|
|
50,000
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
129,980
|
|
D. Ralph Horn
|
|
|
84,375
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
84,375
|
|
Ellen Levine
|
|
|
75,000
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
154,980
|
|
Patrick Q. Moore
|
|
|
77,500
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
157,480
|
|
Robert S. Prather, Jr.
|
|
|
67,500
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
147,480
|
|
Michael D. Rose
|
|
|
73,750
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
153,730
|
|
Michael I. Roth
|
|
|
100,000
|
|
|
|
79,980
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
179,980
|
|
(1)
|
The amount listed above represents cash compensation paid to the director or amounts which have been deferred by the director, as described above. Compensation for
service on the Board and its committees is payable quarterly in arrears. Due to the timing of payments and changes in committee assignments in 2016, these amounts may not correspond to the amounts listed above under
Cash Compensation
.
Mr. Gaylord and Mr. Horn did not stand for
re-election
at the 2016 Annual Meeting of Stockholders, and as a result the amounts listed above represents compensation earned by those directors prior to
the 2016 Annual Meeting of Stockholders. William F. Hagerty, IV became a member of the Board on February 25, 2016, and Rachna Bhasin became a member of the Board on March 8, 2016, and the amounts listed above represent compensation earned
by those directors for the portion of 2016 during which they served as directors.
|
(2)
|
Represents the grant date fair value of the annual grant of 1,550 RSUs to the
non-employee
directors then serving as directors
on May 5, 2016, determined in accordance with FASB ASC Topic 718. See Note 7 to our consolidated financial statements for the three years ended December 31, 2016 filed with the SEC on February 28, 2017 for the assumptions made in
determining grant date fair value.
|
As of December 31, 2016, the
non-employee
directors then
serving as directors held the following RSUs (consisting of annual RSU grants, including RSUs previously deferred, and RSUs granted pursuant to the directors deferred compensation plan, as adjusted for dividends paid on our common stock):
|
|
|
|
|
Non-Employee
Director
|
|
RSUs
(#)
|
|
Michael J. Bender
|
|
|
13,668
|
|
Rachna Bhasin
|
|
|
1,596
|
|
William F. Hagerty, IV
|
|
|
1,596
|
|
Ellen Levine
|
|
|
1,596
|
|
Patrick Q. Moore
|
|
|
3,136
|
|
Robert S. Prather, Jr.
|
|
|
19,373
|
|
Michael D. Rose
|
|
|
29,622
|
|
Michael I. Roth
|
|
|
1,596
|
|
(3)
|
During 2016 one director elected to defer annual cash compensation pursuant to the directors deferred compensation plan described above. No amount is reported in this
column due to the fact that above-market or preferential earnings were not available under the plan.
|
60
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Certain Transactions
Since January 1, 2016, there have not been any related person transactions that are required to be disclosed pursuant
to Item 404(a) of Regulation
S-K
under the Securities Exchange Act of 1934.
Our policies and procedures for the review,
approval or ratification of related person transactions (including those required to be disclosed under Item 404(a) of SEC Regulation
S-K)
are referenced in the charter of the Audit Committee of the Board and
are as follows: Possible related person transactions are first screened by the companys legal department for
materiality and then sent to the Audit Committee of the Board (or, if otherwise determined by the Board, another committee of the Board) for review, discussion with the companys management
and independent registered public accounting firm and approval. In its discretion, the Audit Committee (or other committee) may also consult with our legal department or external legal counsel. Audit Committee (or other committee) review and
approval of related person transactions would be evidenced in the minutes of the applicable Audit Committee (or other committee) meeting.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who
beneficially own more than 10% of the outstanding shares of our common stock to file reports of ownership and changes in ownership with the SEC and the NYSE. Based solely on our review of those reports and written representations from our executive
officers and directors, we believe that in 2016 all of our executive officers, directors and greater than 10% beneficial owners were in
compliance with all applicable filing requirements, except that (i) a Form 4 reporting the sale of 1,300 shares of common stock by Mr. Chaffin on August 16, 2016 was filed 15 days
late due to an administrative error, and (ii) a Form 4 reporting the vesting of restricted stock units on February 8, 2016 on behalf of Messrs. Reed, Fioravanti, Westbrook, Chaffin and Lynn, as well as Jennifer Hutcheson (our
SVP & Controller), was filed two days late due to an administrative error.
61
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Equity Compensation Plan Information
December 31, 2016 Equity Compensation Plan Information Table
The table below includes information about our equity compensation plans as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan category
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
|
|
|
Weighted
average
exercise price
of outstanding
options,
warrants and
rights
|
|
|
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
|
|
Equity compensation plans approved by security holders
|
|
|
521,442
|
(1)
|
|
|
-
|
(1)
|
|
|
1,740,782
|
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
521,442
|
(1)
|
|
|
-
|
(1)
|
|
|
1,740,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consists of: 362,251 shares issuable upon the vesting of time-based RSUs, with a weighted-average grant date fair value of $46.49 per share; 139,741
shares issuable upon the vesting of performance-based RSUs, with a weighted-average grant date fair value of $45.22 per share (valuing the 2014 performance-based RSUs at the stretch (150%) level and the remaining performance-based RSUs outstanding
at the target (100%) level); and 19,450 shares issuable upon the exercise of stock options (with a weighted-average exercise price of $21.31 per share).
|
62
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Our Independent Registered Public Accounting Firm
Appointment of Ernst & Young LLP
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm.
The committee has appointed Ernst & Young LLP as our independent registered public accounting firm, who will audit our consolidated financial statements for 2017 and the effectiveness of our internal control over financial reporting as of
December 31, 2017. This appointment has been submitted for your ratification. The committee and the Board believe that the continued retention of Ernst & Young LLP as our independent registered public accounting firm is in the best
interests of the company and its stockholders. If you do not ratify the appointment of Ernst & Young LLP, the committee will reconsider their appointment. Ernst & Young LLP has served as our independent registered public accounting
firm since 2002. Representatives of Ernst & Young LLP will attend the 2017 Annual Meeting and will have an opportunity to speak and respond to your questions.
Fee Information
We paid the following amounts as
audit, audit-related, tax and other services fees to Ernst & Young LLP for the years ended December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
Description of
Services
|
|
2016 Fees
($)
|
|
|
2015 Fees
($)
|
|
Audit Fees
|
|
|
1,245,557
|
|
|
|
1,179,046
|
|
Audit-Related Fees
|
|
|
191,998
|
|
|
|
276,716
|
|
Tax Fees
|
|
|
281,630
|
|
|
|
382,492
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
1,719,185
|
|
|
|
1,838,254
|
|
Audit and Audit-Related Services
The fees for
audit services during 2016 and 2015 include fees associated with the audit of our consolidated financial statements, including the audit
of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, issuances of comfort letters and assistance with documents filed with the SEC and reviews of our
2016 and 2015 quarterly financial statements.
The fees for audit-related services during 2016 and 2015 represent fees related to a stand-alone audit of our
Entertainment business segment. Ernst & Young LLP did not provide professional services during 2016 or
2015 related to financial information systems design and implementation.
Tax Services
In 2016, approximately 34% of fees for tax services related to
general tax compliance matters, tax advice and planning, and tax assistance, including with respect to our REIT compliance efforts. The remaining 66% of fees for
non-recurring
tax services in 2016 related
primarily to tax advice and planning with respect to our Gaylord Rockies joint venture investment. In 2015, approximately 69% of fees for tax services related to general tax compliance matters, tax advice and planning, and tax assistance, including
with respect to our REIT compliance efforts. The remaining 31% of fees for
non-recurring
tax services in 2015 related to tax advice and planning with respect to our Entertainment business segment.
We expect that, due to our REIT status, tax services fees paid to Ernst & Young LLP in a given year may be higher than those tax services fees paid to
Ernst & Young LLP than in years when we were operating as a taxable operating company. However, we believe that the selection of Ernst & Young LLP to provide these REIT-related services, and the amount of fees paid to
Ernst & Young LLP in 2016 and 2015 to provide these services, was appropriate and in the best interests of the company and our stockholders given Ernst & Young LLPs expertise and historical knowledge of our company and its
organizational structure. We believe this expertise is critical to our ongoing REIT compliance efforts.
63
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Audit Committee
Pre-Approval
Policy
All audit, audit-related, tax and other services were
pre-approved
by the committee, which concluded that the provision of such
services by Ernst & Young LLP was compatible with the maintenance of that firms independence in the conduct of its auditing functions. The committees
pre-approval
policy provides for
pre-approval
of audit, audit-related, tax and other services specifically described by the committee on
an annual basis, and individual engagements anticipated to exceed
pre-established
thresholds must be separately approved. The policy also requires specific
approval by the committee if total fees for audit-related and tax services would exceed total fees for audit services in any fiscal year. The policy authorizes the committee to delegate to one or more of its members
pre-approval
authority with respect to permitted services.
Audit Committee Report
The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or
incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report by reference therein.
The committee operates under a written charter originally adopted by the Board on February 4, 2004, as amended, which can be found on our website at
www.rymanhp.com
under Corporate Governance on the Investor Relations page. The charter is also available in print to any stockholder who requests it by making a written request addressed to:
Ryman Hospitality Properties, Inc.
Attn: Corporate
Secretary
One Gaylord Drive
Nashville, Tennessee
37214
All members of the committee meet the SEC and NYSE definitions of independence and financial literacy for audit committee members. In addition, the Board has
determined that Mr. Rose is an audit committee financial expert for purposes of SEC rules. Following Mr. Roses retirement from the Board, the Board expects to
re-evaluate
the
composition of the committee and, as a result of such evaluation, designate one or more committee members as an audit committee financial expert for purposes of SEC rules. During the fall of 2016 the committee conducted its annual
self-evaluation in order to assess its effectiveness, and at its December 2016 meeting the committee members discussed the results of its self-evaluation process.
The committee reviews the financial information provided to stockholders and others, oversees the performance of the
internal audit function and the system of internal control over financial reporting which management and the Board have established, oversees compliance with legal and regulatory requirements by the company and its employees relating to the
preparation of financial information and reviews the independent registered public accounting firms qualifications, independence and performance.
As part of
its oversight of our financial statements, the committee has:
|
|
reviewed and discussed our audited financial statements for the year ended December 31, 2016, and the financial statements for the three years ended December 31, 2016, with management and Ernst &
Young LLP, our independent registered public accounting firm;
|
|
|
discussed with Ernst & Young LLP the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board; and
|
|
|
received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young LLPs
communications with the committee, and has discussed with Ernst & Young LLP its independence.
|
The committee also has considered whether the
provision by Ernst & Young LLP of
non-audit
services described under
Our Independent Registered Public Accounting Firm
above is compatible with maintaining Ernst & Young LLPs
independence.
64
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
The committees review and discussion of the audited financial statements with management included a discussion of the
quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. In addressing the quality of managements accounting judgments, members
of the committee asked for managements representations that our audited consolidated financial statements have been prepared in conformity with generally accepted accounting principles. In performing these functions, the committee acts in an
oversight capacity. The committee does not complete all of its reviews prior to our public announcements of financial results and, necessarily, in its oversight role, the committee relies on the work and assurances of management, which has the
primary responsibility for
financial statements and reports, and of Ernst & Young LLP, which in its report expresses an opinion on the conformity of our annual financial statements with generally accepted
accounting principles.
In reliance on these reviews and discussions and the report of the independent registered public accounting firm, the committee recommended
to the Board that the audited financial statements be included in the companys Annual Report on
Form 10-K
for the year ended December 31, 2016, for filing with the SEC.
Audit Committee:
Patrick Q. Moore, Chairman
Rachna Bhasin
William F. Hagerty, IV
Michael D. Rose
Submitting Stockholder
Proposals and Nominations for 2018 Annual Meeting
Stockholder Proposals
If you would like to submit a proposal for inclusion in our proxy statement for the 2018 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 December 1, 2017 and otherwise comply with the requirements of Rule
14a-8.
If you want to bring business before the 2018 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 3, 2018, but not before January 4, 2018 (or, if the annual meeting is called for a date that is not within 30 days of May 4, 2018, 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, our Bylaws require that you deliver timely notice of the nomination in proper written form, as provided by 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
65
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
meeting, by February 3, 2018, but not before January 4, 2018 (or, if the annual meeting is called for a date that is not within 30 days of May 4, 2018, 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); 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 2017 Annual Meeting other than Proposals 1, 2, 3 and 4. As noted above, our Bylaws
require stockholders to give advance notice of any proposal intended to be presented at an annual meeting. The deadline for this notice has passed, and we did not receive any such notice made in compliance with our Bylaws. If any other matter
properly comes before our stockholders for a vote at the 2017 Annual Meeting, 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 31,
2017
66
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Appendix A
Reconciliation of
Non-GAAP
Financial Measures to GAAP Measures
Reconciliation of
AFFO
(1)
to Net Income
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Net income
|
|
$
|
159,366
|
|
|
|
|
|
|
$
|
111,511
|
|
Depreciation & amortization
|
|
|
109,816
|
|
|
|
|
|
|
|
114,383
|
|
Pro rata adjustments from joint ventures
|
|
|
59
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations (FFO)
|
|
$
|
269,241
|
|
|
|
|
|
|
$
|
225,894
|
|
Non-cash
lease expense
|
|
|
5,243
|
|
|
|
|
|
|
|
5,364
|
|
Pension settlement charge
|
|
|
1,715
|
|
|
|
|
|
|
|
2,356
|
|
Impairment charges
|
|
|
-
|
|
|
|
|
|
|
|
19,200
|
|
Pro rata adjustments from joint ventures
|
|
|
1,377
|
|
|
|
|
|
|
|
-
|
|
Loss on warrant settlements
|
|
|
-
|
|
|
|
|
|
|
|
20,246
|
|
Gain on other assets
|
|
|
(1,261)
|
|
|
|
|
|
|
|
(6,759)
|
|
Write-off
of deferred financing costs
|
|
|
-
|
|
|
|
|
|
|
|
1,926
|
|
Amortization of
deferred financing costs
|
|
|
4,863
|
|
|
|
|
|
|
|
5,507
|
|
Deferred tax (benefit) expense
|
|
|
321
|
|
|
|
|
|
|
|
(13,847)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted funds from operations (AFFO)
|
|
$
|
281,499
|
|
|
|
|
|
|
$
|
259,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
(2)
|
|
|
(58,753)
|
|
|
|
|
|
|
|
(50,988)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO less maintenance capital expenditures
|
|
$
|
222,746
|
|
|
|
|
|
|
$
|
208,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
|
$ 3.12
|
|
|
|
|
|
|
|
$ 2.18
|
|
Fully diluted net income per share
|
|
|
$ 3.11
|
|
|
|
|
|
|
|
$ 2.16
|
|
|
|
|
|
FFO per basic share
|
|
|
$ 5.28
|
|
|
|
|
|
|
|
$ 4.41
|
|
AFFO per basic share
|
|
|
$ 5.52
|
|
|
|
|
|
|
|
$ 5.07
|
|
|
|
|
|
FFO per diluted share
|
|
|
$ 5.25
|
|
|
|
|
|
|
|
$ 4.38
|
|
AFFO per diluted share
|
|
|
$ 5.49
|
|
|
|
|
|
|
|
$ 5.04
|
|
(1)
|
We calculate Adjusted Funds From Operations, or AFFO, to mean Net Income (Loss) (computed in accordance with generally accepted accounting principles, or GAAP),
excluding, to the extent the following adjustments occurred during the periods presented:
non-controlling
interests, and (gains) and losses from sales of property; depreciation and amortization (excluding
amortization of deferred financing costs and debt discounts) and certain pro rata adjustments from joint ventures (which equals Funds From Operations, or FFO). We then exclude, to the extent the following adjustments occurred during the periods
presented, impairment charges, write-offs of deferred financing costs,
non-cash
ground lease expense, amortization of debt discounts and amortization of deferred financing costs, pension settlement charges,
additional pro rata adjustments from joint ventures, (gains) losses on other assets, and (gains) losses on extinguishment of debt and warrant settlements. Beginning in 2016, we exclude the impact of deferred income tax expense (benefit). We have
also presented FFO and AFFO per basic share and diluted share. 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 the performance of our ongoing operations because such presentation 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. 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.
|
(2)
|
Represents furniture, fixtures and equipment reserve for managed properties and maintenance capital expenditures for
non-managed
properties.
|
A-1
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
Reconciliation of Consolidated Adjusted EBITDA
(1)
to Net Income and
Segment-Level Adjusted EBITDA
(1)
to Operating Income
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,149,207
|
|
|
|
|
|
|
$
|
1,092,124
|
|
Net income
|
|
$
|
159,366
|
|
|
|
|
|
|
$
|
111,511
|
|
Provision (benefit) for income taxes
|
|
|
3,400
|
|
|
|
|
|
|
|
(11,855)
|
|
Other (gains) and losses, net
|
|
|
(4,161)
|
|
|
|
|
|
|
|
10,889
|
|
Loss from joint ventures
|
|
|
2,794
|
|
|
|
|
|
|
|
-
|
|
Interest expense, net
|
|
|
52,406
|
|
|
|
|
|
|
|
51,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
213,805
|
|
|
|
|
|
|
|
162,062
|
|
Depreciation & amortization
|
|
|
109,816
|
|
|
|
|
|
|
|
114,383
|
|
Preopening costs
|
|
|
-
|
|
|
|
|
|
|
|
909
|
|
Non-cash
ground lease expense
|
|
|
5,243
|
|
|
|
|
|
|
|
5,364
|
|
Equity-based compensation expense
|
|
|
6,128
|
|
|
|
|
|
|
|
6,158
|
|
Pension settlement charge
|
|
|
1,715
|
|
|
|
|
|
|
|
2,356
|
|
Impairment charges
|
|
|
-
|
|
|
|
|
|
|
|
19,200
|
|
Interest income on Gaylord National bonds
|
|
|
11,410
|
|
|
|
|
|
|
|
12,337
|
|
Other gains and (losses), net
|
|
|
4,161
|
|
|
|
|
|
|
|
(10,889)
|
|
Loss on warrant settlements
|
|
|
-
|
|
|
|
|
|
|
|
20,246
|
|
Gain on disposal of assets
|
|
|
(2,084)
|
|
|
|
|
|
|
|
(7,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA
|
|
$
|
350,194
|
|
|
|
|
|
|
$
|
325,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,039,643
|
|
|
|
|
|
|
$
|
994,603
|
|
Operating income
|
|
$
|
217,564
|
|
|
|
|
|
|
$
|
169,383
|
|
Depreciation & amortization
|
|
|
100,186
|
|
|
|
|
|
|
|
105,876
|
|
Preopening costs
|
|
|
-
|
|
|
|
|
|
|
|
851
|
|
Non-cash
lease expense
|
|
|
5,243
|
|
|
|
|
|
|
|
5,364
|
|
Impairment charges
|
|
|
-
|
|
|
|
|
|
|
|
19,200
|
|
Interest income on Gaylord National bonds
|
|
|
11,410
|
|
|
|
|
|
|
|
12,337
|
|
Other gains and (losses), net
|
|
|
4,459
|
|
|
|
|
|
|
|
2,317
|
|
(Gain) loss on disposal of assets
|
|
|
(1,931)
|
|
|
|
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality Segment Adjusted EBITDA
|
|
$
|
336,931
|
|
|
|
|
|
|
$
|
315,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Hospitality Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hospitality Segment Revenue
|
|
$
|
1,039,643
|
|
|
|
|
|
|
$
|
994,603
|
|
AC Hotel at National Harbor Revenue
|
|
|
9,992
|
|
|
|
|
|
|
|
6,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Hospitality Segment Revenue
|
|
$
|
1,029,651
|
|
|
|
|
|
|
$
|
987,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hospitality Segment Adjusted EBITDA
|
|
$
|
336,931
|
|
|
|
|
|
|
$
|
315,466
|
|
AC Hotel at National Harbor Adjusted EBITDA
|
|
|
3,135
|
|
|
|
|
|
|
|
2,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Hospitality Segment Adjusted EBITDA
|
|
$
|
333,796
|
|
|
|
|
|
|
$
|
312,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-2
|
2017 NOTICE OF MEETING AND PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Entertainment Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
109,564
|
|
|
|
|
|
|
$
|
97,521
|
|
Operating income
|
|
$
|
27,980
|
|
|
|
|
|
|
$
|
24,353
|
|
Depreciation & amortization
|
|
|
7,034
|
|
|
|
|
|
|
|
5,747
|
|
Preopening costs
|
|
|
-
|
|
|
|
|
|
|
|
58
|
|
Equity-based compensation
|
|
|
711
|
|
|
|
|
|
|
|
629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment Segment Adjusted EBITDA
|
|
$
|
35,725
|
|
|
|
|
|
|
$
|
30,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Same-store Hospitality segment results exclude the results associated with our AC Hotel at National Harbor, which opened in April 2015. To calculate Adjusted EBITDA, we determine Operating Income, which represents Net
Income (Loss) determined in accordance with GAAP, plus to the extent the following adjustments occurred during the periods presented: loss (income) from discontinued operations, net; provision (benefit) for income taxes; other (gains) and losses,
net; loss on extinguishment of debt; (income) loss from joint ventures; and interest expense, net. Adjusted EBITDA is then calculated as Operating Income, plus, to the extent the following adjustments occurred during the periods presented:
depreciation and amortization; preopening costs;
non-cash
ground lease expense; equity-based compensation expense; impairment charges; any closing costs of completed acquisitions; interest income on Gaylord
National bonds; other gains and (losses), net; (gains) and losses on warrant settlements; pension settlement charges;
pro-rata
Adjusted EBITDA from joint ventures; (gains) losses on the disposal of assets; and
any other adjustments we may identify. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because this measure helps investors evaluate and compare the results of our operations from period to period by
removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results.
|
A-3
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD
IS VALID ONLY WHEN SIGNED AND DATED. Date Signature (Joint Owners) Date Signature [PLEASE SIGN WITHIN BOX] w SCAN TO VIEW MATERIALS & VOTE RYMAN HOSPITALITY PROPERTIES, INC. ONE GAYLORD DRIVE NASHVILLE, TN 37214 VOTE BY INTERNET -
www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 3, 2017 (for shares in the Companys 401(k) Savings Plan,
the voting deadline is 11:59 P.M. Eastern Time on May 2, 2017). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF
FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To
sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any
touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 3, 2017 (for shares in the Companys 401(k) Savings Plan, the voting deadline is 11:59 P.M. Eastern Time on May 2, 2017). Have your proxy card in
hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
E17234-P86457 RYMAN HOSPITALITY PROPERTIES, INC. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: For Against Abstain ! ! ! 1a. Michael J. Bender The Board of Directors recommends you vote FOR proposal
2. Against Abstain For ! ! ! ! ! ! 1b. Rachna Bhasin 2. To approve, on an advisory basis, the Companys executive compensation. ! ! ! 1c. Alvin Bowles The Board of Directors recommends that you vote for a frequency of every ONE YEAR. 3 Years 1
Year 2 Years Abstain ! ! ! ! ! ! ! 1d. William F. Hagerty, IV 3. To determine, on an advisory basis, whether we will have future advisory votes regarding our executive compensation every one year, every two years or every three years. ! ! ! 1e.
Ellen Levine ! ! ! Against Abstain For The Board of Directors recommends you vote FOR proposal 4. 1f. Patrick Q. Moore ! ! ! ! ! ! 1g. Robert S. Prather, Jr. 4. To ratify the appointment of Ernst & Young LLP as the Companys independent
registered public accounting firm for fiscal year 2017. ! ! ! 1h. Colin V. Reed ! ! ! NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 1i. Michael I. Roth Please sign exactly as your name(s) appear(s)
hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or
partnership name by authorized officer. V.1.1
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are
available at www.proxyvote.com. E17235-P86457 RYMAN HOSPITALITY PROPERTIES, INC. Annual Meeting of Stockholders May 4, 2017 10:00 AM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Colin V. Reed, Michael I.
Roth and Scott J. Lynn, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) 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 Stockholders to be held at 10:00 AM, Central Time on May 4, 2017, at the Gaylord Opryland Resort and Convention Center, 2800 Opryland Drive,
Nashville, TN 37214, 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 directed 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 Lincoln Financial Group, 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 2, 2017, for the Trustee to vote the plan shares. Continued and to be signed on reverse side V.1.1
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