PROPOSAL 3:
AMENDMENT TO THE 2011 EQUITY INCENTIVE PLAN
Proposal
We are asking our stockholders to approve the Amendment to the 2011 Equity Incentive Plan. The 2011 Equity Incentive Plan provides for the issuance of equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other equity awards, such as LTIP units in our operating partnership, to our executive officers, directors, employees and other individuals providing bona fide services to or for us.
The board believes that the 2011 Equity Incentive Plan is an important factor in attracting and retaining the high caliber employees and other service providers essential to our success and in aligning those individuals’ long-term interests with those of our stockholders. Therefore, the board has approved the Amendment to the 2011 Equity Incentive Plan, subject to the approval of stockholders at the annual meeting, to ensure that the board and the compensation committee will be able to use the 2011 Equity Incentive Plan to make the types of awards, and covering the number of shares, as necessary to meet these needs. The board believes that approval of the Amendment to the 2011 Equity Incentive Plan is in the best interests of our company and our stockholders. Stockholder approval of the Amendment to the 2011 Equity Incentive Plan is necessary for us to comply with NYSE stockholder approval requirements for equity compensation plans.
If approved by our stockholders, the Amendment to the 2011 Equity Incentive Plan will increase the total number of shares of our common stock authorized and reserved for issuance under the 2011 Equity Incentive Plan by 3,500,000 shares and extend the expiration date of the 2011 Equity Incentive Plan from April 30, 2028 to April 24, 2033. If our stockholders do not approve the Amendment to the 2011 Equity Incentive Plan, the 2011 Equity Incentive Plan will continue in effect under the terms currently in place. Any awards previously granted under the 2011 Equity Incentive Plan will remain in effect pursuant to their terms.
As of February 27, 2023, subject to increases resulting from the forfeiture of currently outstanding awards, 1,065,589 shares of common stock were reserved and available for future issuances under the 2011 Equity Incentive Plan, excluding shares that may be issued upon settlement of outstanding performance units. In addition, as of February 27, 2023, we have reserved for issuance under the 2011 Equity Incentive Plan approximately 355,892 shares pursuant to outstanding performance units, assuming settlement at target levels, or 889,730 shares, assuming settlement at maximum levels (before any deemed dividends).
In the three years ended December 31, 2022, we issued 1,586,849 shares, net of forfeitures, from the 2011 Equity Incentive Plan, excluding any shares issuable upon settlement of performance units granted during the three years ended December 31, 2022, and remaining outstanding as of December 31, 2022, which totaled 250,334, assuming settlement at target levels, or 625,835, assuming settlement at maximum levels (before any deemed dividends).
As of February 27, 2023, 179,372,871 shares of common stock were outstanding, 1,570,640 shares of common stock were issuable upon exchange or conversion of outstanding common units of our operating partnership, and an additional 2,577,112 shares of common stock were issuable upon exchange or conversion of outstanding LTIP units of our operating partnership. The closing price of our shares of common stock on the NYSE on February 27, 2023 was $34.01.
The material features of the 2011 Equity Incentive Plan, as proposed to be amended, are summarized below. The following summary does not purport to be complete, and is subject to and qualified in its entirety by reference to the complete text of the Amendment to the 2011 Equity Incentive Plan, which is included hereto as Appendix B and the 2011 Equity Incentive Plan, which is filed as an exhibit to our annual report on Form 10-K for the year ended December 31, 2022.
Description of the 2011 Equity Incentive Plan
The 2011 Equity Incentive Plan provides for the issuance of equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other