CBL & Associates Properties Inc. filed SEC Form 8-K: Leadership Update, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Approval of 2025 Annual Incentive Compensation Plan
The 2025 AIP, similar to the Annual Incentive Compensation Plans adopted for prior years beginning with fiscal year 2015, is designed to reward the Named Executive Officers for the achievement of annual Corporate Goals and Individual Performance Goals, as assessed by the Compensation Committee. For the Chief Executive Officer (“CEO”), 70% of the total 2025 AIP opportunity will be based on the Corporate Goals, which are generally quantitative, and the remaining 30% will be based on qualitative Individual Performance Goals. For the other Named Executive Officers, 60% of the total award will be based on Corporate Goals and the remaining 40% will be based on Individual Performance Goals.
The Corporate Goals portion of the 2025 AIP awards will be allocated between the two categories of performance measures described below, with (A) the Financial Goals weighted 42% for the CEO and 36% for the other Named Executive Officers and (B) the Operational Goals weighted 28% for the CEO and 24% for the other Named Executive Officers:
(1) Financial Goals, including goals related to (i) Funds From Operations (“FFO”), as adjusted, as reported in the Company’s periodic reports (Forms 10‑K and 10‑Q) filed with the SEC (the “Periodic Reports”), (ii) Net Operating Income (“NOI”), as reported in the Periodic Reports and (iii) addressing property level mortgage maturities; and
(2) Operational Goals, including goals related to (i) square footage of new and renewal leases signed, (ii) achievement of targets related to new development and redevelopment project openings, as well as anchor transactions at the Company’s properties and (iii) successful completion of designated Environmental, Social and Governance (“ESG”) Goals.
The target cash bonus award levels were set by the Compensation Committee under the 2025 AIP for each of the Company’s Named Executive Officers as specified below:
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Total |
Quantitative/ |
Qualitative/ |
Stephen D. Lebovitz, Chief Executive Officer |
$1,473,377 |
70% |
30% |
Benjamin W. Jaenicke, Executive Vice President – Chief Financial Officer and Treasurer |
$635,145 |
60% |
40% |
Michael I. Lebovitz, President |
$485,454 |
60% |
40% |
Katie A. Reinsmidt, Executive Vice President and Chief Operating Officer |
$469,652 |
60% |
40% |
Jeffery V. Curry, Chief Legal Officer and Secretary |
$349,317 |
60% |
40% |
Based on consideration by the Compensation Committee and management of recommendations from the Company’s independent compensation consultant, Ferguson Partners Consulting, L.P., the Compensation Committee determined that these target cash bonus award levels for the 2025 AIP reflect a 5% increase from the target bonus levels set under the Company’s 2024 Annual Incentive Plan (the “2024 AIP”). The Compensation Committee also determined that the potential 2025 AIP payout associated with achievement of the ESG component of the Operational Goals for each Named Executive Officer will be limited to 100% of target. The Compensation Committee also approved an additional one-time, subjective merit-based increase of $100,000 in the cash bonus payable to Benjamin W. Jaenicke, the Company’s Executive Vice President – Chief Financial Officer and Treasurer, in connection with its approval of final 2024 AIP payouts to the Named Executive Officers.
Achievement of target performance for a performance measure under the 2025 AIP will result in 100% payout of the portion of the award based on that performance measure. Performance that meets threshold requirements will result in 50% (of target) payout of the portion of the award based on that performance measure and achievement of the stretch performance for a performance measure will result in 150% (of target) payout (other than in relation to the payment earned for achievement of the ESG Goals component of the Operational Goals, which will be capped at 100% of target payout for the 2025 AIP as noted above). Performance achieved between threshold and stretch level for either metric will result in a prorated bonus payout. There will be no payout for the portion of any award that is based on a performance measure for which less than the threshold level of performance is achieved. The Compensation Committee has the ability to adjust each metric, if appropriate, to account for significant unbudgeted transactions or events, such as acquisitions, dispositions, joint ventures, equity or debt issuances and other capital markets activities, mark-to-market adjustments and certain one-time extraordinary charges for purposes of determining the portion of any Corporate Goals AIP Bonus Award payment based on these metrics.
The Individual Performance Goals established by the Compensation Committee for each Named Executive Officer under the qualitative portion of the 2025 AIP are outlined below:
Named |
2025 Individual Performance Goals |
Stephen D. Lebovitz |
(1) Refining, enhancing and executing the Company’s Business Plan. (2) Progress Executive Team capabilities and responsibilities. (3) Coordinate closely with the Board Chairman and regularly communicate with other members of the Board. (4) Maintaining and enhancing key retailer, financial and other important relationships. |
Benjamin W. Jaenicke |
(1) Refining, enhancing and executing the Company’s Business Plan. (2) Managing future debt maturities, both secured loans and the term loan. Managing the Company’s lending relationships as well as overseeing the Company’s disposition program. (3) Effectively leading the financial services team and managing the accounting function including the relationship with outside auditors. Regular involvement with other internal departments including leasing, management, development and financial operations. (4) Maintaining and improving key financial stakeholder and joint venture partner relationships. Ongoing involvement with investors and shareholders. (5) Effectively overseeing cash management, insurance, real estate taxes and other key responsibilities of the CFO. |
Michael I. Lebovitz |
(1) Refining, enhancing and executing the Company’s Business Plan. (2) Supervising redevelopment projects with a focus on managing capital investment as well as achieving approved pro forma returns and scheduled openings. (3) Managing and enhancing anchor/department store and joint venture partner relationships. (4) Effectively overseeing the Company’s Technology Solutions (IT) and People & Culture (HR) functions including the implementation of technology and organizational initiatives. (5) Ongoing involvement with the leasing, marketing and management divisions of the Company. |
Katie A. Reinsmidt |
(1) Refining, enhancing and executing the Company’s Business Plan. (2) Successfully managing the Company’s operations as COO, including enhanced leadership of leasing, management and operations. Ongoing focus on developing external relationships and interactions to support effectiveness as the Company’s COO. (3) Leading the Company’s acquisition program. Ongoing involvement in capital markets programs as well as coordinate development of certain required disclosures and public filings. (4) Effectively managing and overseeing the Company’s ESG, corporate communications and investor relations programs. (5) Continuing lead for Board material preparation and Board support. |
Jeffery V. Curry |
(1) Refining, enhancing and executing the Company’s Business Plan. (2) Overseeing and pursuing favorable resolution of disputes/litigation as well as the legal department’s role in overall risk management for the Company. (3) Effectively managing and overseeing the legal department and manage spend on outside counsel. (4) Continued involvement in Board material preparation and Board support as necessary. Preparation and maintenance of corporate records including Board and committee meetings, resolutions and corporate actions, policies, organizational documents (charter, bylaws and certificates) and Company legal entity structure. (5) Maintaining and enhancing relationships with key business/legal representatives of CBL’s major vendors, joint venture partners and other key business relationships. |
Based on management’s recommendations developed in consultation with and approved by the Compensation Committee, one-fourth of the potential 2025 AIP cash bonus awards for achievement of these qualitative Individual Performance Goals (7.5% out of the 30% allocated to Individual Performance Goals for the CEO and 10% of the 40% allocated to Individual Performance Goals for the other Named Executive Officers) will be determined based on the Compensation Committee’s evaluation of their performance in relation to the first (Business Plan) goal listed above for each officer, with the remainder of such payments based on the Compensation Committee’s evaluation of each officer’s performance with respect to their other Individual Performance Goals.
Apart from the changes and updates for 2025 as described above, the additional terms of the 2025 AIP are substantially similar to those of the 2024 AIP for the Company’s Named Executive Officers, as described in the proxy statement for the Company’s 2024 Annual Meeting of Stockholders previously filed with the SEC. The 2025 AIP is an unfunded arrangement and any compensation payable thereunder may be evaluated, modified or revoked at any time in the sole discretion of the Compensation Committee, which is responsible for administering the plan.
The foregoing summary description of the 2025 AIP is not complete and is qualified in its entirety by reference to the full text of the 2025 AIP, which is filed as an exhibit to this report.
Approval of 2025 Long Term Incentive Compensation Program
Effective February 12, 2025, the Compensation Committee also approved the 2025 LTIP for the Named Executive Officers, consisting of the following elements:
Named Executive Officer Grants under 2025 LTIP
The following table illustrates the Long Term Incentives approved by the Compensation Committee on February 12, 2025 for the Company’s 2025 year and the 2025 – 2027 performance cycle with respect to the PSUs:
Plan Participants – |
Target Value of Long Term Incentive Award |
Target Value of PSU Award |
Target Number of Performance Stock Units |
Value of Annual Restricted Stock Award (1) |
Number of Shares of Annual Restricted Stock Awarded (3) |
Stephen D. Lebovitz, Chief Executive Officer |
$1,556,500 |
$1,089,550 |
35,318 |
$466,950 |
15,136 |
Ben Jaenicke, Executive Vice President, Chief Financial Officer and Treasurer |
$1,288,000 |
$772,800 |
25,050 |
$515,200 |
16,700 |
Michael I. Lebovitz, President |
$673,500 |
$404,100 |
13,099 |
$269,400 |
8,733 |
Katie Reinsmidt, Executive Vice President and Chief Operating Officer |
$673,500 |
$404,100 |
13,099 |
$269,400 |
8,733 |
Jeffery V. Curry, Chief Legal Officer |
$673,500 |
$404,100 |
13,099 |
$269,400 |
8,733 |
Performance Stock Unit Awards Component of the 2025 LTIP
Structure of Designated Index Measure Component of PSU Awards
As noted above, 30% of the number of shares issuable to a Named Executive Officer upon conclusion of the 3-year performance period will depend on the Company’s achievement of at least a “Threshold” level of TSR performance as compared to the TSR for the Designated Index over the same time period. The level of achievement will be determined based on how the Company’s TSR ranks among the constituents that comprise the Designated Index.
The “Threshold,” “Target,” and “Maximum” benchmarks established for the TSR achieved by the Company over the relevant 3-year performance period in comparison to the Designated Index, the resulting impact on the number of shares of Restricted Common Stock earned by each Named Executive Officer for the 30% of the award based on the Designated Index Measure upon the maturity of PSUs at the conclusion of the 3-year performance period, and the additional service-based vesting schedule applicable to any shares earned is summarized in the following table:
Performance Benchmark Achieved |
Number of Shares Awarded |
Vesting Schedule |
Below “Threshold” Level |
No performance stock earned |
The number of shares of Restricted Common Stock earned by (and then issued to) a Named Executive Officer for each rolling 3-year performance cycle is equal to the multiple indicated in the preceding column of the number of PSUs issued to each Named Executive Officer at the beginning of the 3-year performance period.
Such shares, when issued at the conclusion of the 3-year performance cycle, will then vest in full on the firstanniversary date following the date of issuance of such shares. |
“Threshold” No less than 30th Percentile of the Designated IndexTSR |
Shares issued equal to 0.5 x 30% of the Performance Stock Units issued for |
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“Target” No less than 50th Percentile of the Designated IndexTSR |
Shares issued equal to 1.0 x 30% of the Performance issued for Such 3-year Cycle, with excess over Target Benchmark pro-rated between Target and Maximum levels |
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“Maximum” At least75th Percentile of the Designated IndexTSR |
Shares issued equal to 2.0 x 30% of the Performance Issued for Such 3-yearCycle |
If the calculated comparison is between Threshold and Maximum for any performance period, then the number of Performance Stock Units earned will be prorated as indicated in the preceding table.
Structure of Company Absolute Return Measure Component of PSU Awards
As noted above, 70% of the number of shares issuable to a Named Executive Officer upon conclusion of the 3-year performance period will depend on the Company’s achievement of at least a “Threshold” level of absolute TSR for holders of the Company’s Common Stock over the same time period.
The “Threshold,” “Target,” and “Maximum” benchmarks established for the absolute TSR achieved by the Company over the relevant 3-year performance period, the resulting impact on the number of shares of Restricted Common Stock earned by each Named Executive Officer for the 70% of the award based on the Company Absolute Return Measure upon the maturity of PSUs at the conclusion of the 3-year performance period, and the additional service-based vesting schedule applicable to any shares earned is summarized in the following table:
Performance |
Number of Shares Awarded |
Vesting Schedule |
Below “Threshold” Level |
Noperformance stock earned |
The number of shares of Restricted Common Stockearned by (and then issued to) a Named Executive Officer for eachrolling 3‑year performance cycle is equal to the multiple indicated in the preceding column of the number of Performance Stock Units issued to each Named Executive Officer at the beginning of the 3‑year performance period.
Such shares, when issued at the conclusion of the 3-year performance cycle, will then vest in full on the firstanniversary date following the date of issuance of such shares.
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“Threshold” Annualized Company TSR of 5.5% |
Shares issued equal to 0.5 x 70% of the Performance StockUnits issued for Such 3-year Cycle, with excess over Threshold Benchmark pro-rated between Threshold |
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“Target” Annualized Company TSR of 10% |
Shares issued equal to 1.0 x 70% of thePerformance Stock Units issued for Such 3-year Cycle, with excess over Target Benchmark pro- rated between Target |
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“Maximum” Annualized Company TSR |
Shares issued equal to 2.0 x 70% of the Performance StockUnits Issued for Such3-year Cycle |
If the calculated basis point comparison is between benchmarks as noted above for the 3-year performance period, then the number of PSUs earned will be prorated as indicated in the preceding table.
As reflected above, once issued, the shares of Restricted Common Stock issued in connection with performance under either the Designated Index Measure or the Company Absolute Return Measure components of the PSUs will then vest one (1) year after the date of issuance. Upon vesting, the shares will not be subject to forfeiture.
Based on consideration by the Compensation Committee and management of recommendations from the Company’s independent compensation consultant, Ferguson Partners Consulting, L.P., concerning current market standards for the vesting of restricted stock awards in the event of retirement, the Company’s award agreements for both Performance Stock Units and Annual Restricted Stock Awards have been modified, beginning with the 2025 LTIP, to provide the Compensation Committee will have discretion to allow a portion of the shares earned to vest on a pro-rata basis in the event of an officer’s voluntary retirement. Additional terms and conditions of the PSU component of the LTIP Awards to the Named Executive Officers, including the update for the 2025 LTIP described in the preceding sentence, may be summarized as follows:
The foregoing description of the PSU awards is qualified in its entirety by reference to the full text of the Company’s EIP, the 2025 LTIP and the Form of Performance Stock Unit Award Agreement for such awards, each of which is filed or incorporated by reference as an exhibit to this report.
Annual Restricted Stock Awards Component of the 2025 LTIP
As referenced above, each LTIP Award includes a target value amount (40% for Named Executive Officers other than the CEO and 30% in the case of the CEO) that a grantee will receive in the form of an Annual Restricted Stock Award. The terms and conditions of the Annual Restricted Stock Awards to the Named Executive Officers, including the update made for the 2025 LTIP to provide the Compensation Committee with vesting discretion in the event of an officer’s retirement as described above, may be summarized as follows:
The foregoing description of such restricted stock awards is qualified in its entirety by reference to the full text of the EIP, the 2025 LTIP and the form of award agreement, each of which is filed or incorporated by reference as an exhibit to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
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10.1 |
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10.2 |
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10.3 |
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2025 Long Term Incentive Plan under CBL & Associates Properties, Inc. 2021 Equity Incentive Plan. |
10.4 |
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10.5 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CBL & ASSOCIATES PROPERTIES, INC. |
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Date: |
February 18, 2025 |
By: |
/s/ Jeffery V. Curry |
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Jeffery V. Curry |