Proposal 3
Approval of Amendments of the iStar Inc. 2009 Long-Term Incentive Plan
|
We
utilize our 2009 Long-Term Incentive Plan (2009 LTIP) to provide compensation to our executives using equity-based awards, rather than solely in cash, to align the interest of
management with those of our shareholders. The 2009 LTIP was adopted by our board, and approved by our shareholders, in 2009. The 2009 LTIP has been an important factor in attracting, retaining,
motivating, and rewarding certain employees, officers, directors, and consultants in a manner that benefits the interests of such individuals and those of our shareholders. On April 8, 2019,
our Compensation Committee approved amendments to the 2009 LTIP, subject to approval by our shareholders. We are asking our shareholders to approve amendments to the 2009 LTIP that
would:
-
o
-
Increase the number of shares of common stock reserved for issuance from 8,000,000 to
8,900,000, subject to adjustment as provided in the 2009 LTIP, with an equivalent increase to the number of shares of common stock available for grant pursuant to incentive stock options.
-
o
-
Extend the expiration date of the 2009 LTIP from May 27, 2019, to May 16,
2029.
-
o
-
Eliminate the ability to pay dividends on unearned (unvested) awards (provided that
dividend-equivalent rights may be accrued and paid if and only if the underlying awards vest).
-
o
-
Provide that, if our shares are used for any payment of the exercise price of an option
or for withholding taxes, such shares will no longer be available for grant under the 2009 Plan.
We
also are making a clerical amendment to change the name of the 2009 Plan to the iStar Inc. 2009 Long-Term Incentive Plan.
We
believe that increasing the share reserve and extending the expiration date to facilitate continued use of the 2009 LTIP is in the best interest of iStar and our shareholders because those
amendments will enable us to continue to motivate outstanding performance by our employees, officers, directors, and consultants.
In
considering the proposed share increase to the 2009 LTIP, the board and the Compensation Committee considered various factors, including potential dilution and potential burn rate. As of
March 22, 2019, 2,106,756 shares of common stock remained available for issuance under the 2009 Plan, there are 1,040,612 outstanding equity awards and the Company has 66,613,976 shares of
common stock outstanding. There are no outstanding stock options or stock appreciation rights. The following table provides information regarding our annual burn rate over the past three fiscal years.
|
|
|
|
|
|
|
Burn Rate
(shares in millions)
Year
|
|
Awards Granted
(1)
|
|
Weighted Average
Basic Shares Outstanding
|
|
Burn Rate
(2)
|
|
|
|
|
|
|
|
2018
|
|
1,245,320
|
|
67,958,008
|
|
.02
|
|
|
|
|
|
|
|
2017
|
|
270,355
|
|
71,021,491
|
|
.00
|
|
|
|
|
|
|
|
2016
|
|
400,364
|
|
73,452,828
|
|
.01
|
|
|
|
|
|
|
|
-
(1)
-
Includes
stock options, restricted stock, restricted stock units, and performance units. For performance units, includes the number of shares actually vested and
delivered upon achievement of the applicable performance goals.
-
(2)
-
Burn
rate is calculated by dividing the number of awards granted by our weighted average basic shares outstanding.
|
|
|
58
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
If
our shareholders approve this proposal, the amendments to the 2009 LTIP will become effective as of the date of shareholder approval. If our shareholders do not approve this proposal, the
amendments described in this proposal will not take effect and we will not be able make additional awards under the 2009 LTIP after May 27, 2019. As a result, our ability to attract, reward,
and retain valuable employees will be constrained and we may need to make cash-based awards.
The
following is a summary of the material features of the 2009 LTIP assuming the proposed amendments are approved by shareholders at the annual meeting. Except for the proposed
amendments, there are no changes to the terms and provisions of the 2009 LTIP. This summary of the 2009 LTIP is qualified in its entirety by reference to the full text of the proposed amendments, a
copy of which is attached to this proxy statement as Exhibit B, and the 2009 LTIP as currently in effect, a copy of which is attached to this proxy statement as Exhibit C. To the extent
there is a conflict between this summary and the
2009 LTIP, the 2009 LTIP will govern. Capitalized terms used but not defined herein have the meanings ascribed to them in the 2009 LTIP.
The
purpose of the 2009 LTIP is to provide incentives (which may be equity-based or cash-based) as a means of attracting and retaining qualified key employees, directors, officers,
advisors, consultants, and other personnel and encouraging those individuals to increase their efforts to make our business more successfulwhether directly or through our subsidiaries or
other affiliates. Awards under the 2009 LTIP may be in the form of options, restricted stock, restricted stock units (referred to as "phantom shares"), dividend equivalent rights, and other forms of
equity-based compensation, or cash-based compensation. We will consider awards pursuant to the 2009 LTIP in light of our overall compensation philosophy and competitive conditions in the marketplace.
If
the proposed amendments are approved by shareholders, awards may be granted under the 2009 LTIP until May 16, 2029, which will be the 10th anniversary of such
approval. However, the 2009 LTIP may be terminated at any time prior to that date by the board.
The
2009 LTIP will be administered by the Compensation Committee of our board. If no committee exists, the functions of the Compensation Committee will be exercised by the board.
Nevertheless, any grants to members of the Compensation Committee will be made and administered by the board rather than the Compensation Committee.
The
Compensation Committee has the full authority to administer and interpret the 2009 LTIP, to authorize the granting of awards, to determine the eligibility of a person to receive an award, and to
determine the number of shares of common stock to be covered by each award (subject to the individual participant limitations provided in the 2009 LTIP). Each award agreement will contain other terms,
provisions and conditions not inconsistent with the 2009 LTIP, as determined by the Compensation Committee. The Compensation Committee may (subject to such considerations as may arise under
Section 16 of the Securities Exchange Act of 1934, or under other corporate, securities, or tax laws) take any steps it deems appropriate, that are not inconsistent with the purposes and intent
of the 2009 LTIP, to establish performance-based criteria applicable to awards otherwise permitted to be granted under the 2009 LTIP.
|
|
|
59
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
The
Compensation Committee, in its discretion, may delegate to our chief executive officer all or part of the Compensation Committee's authority and duties with respect to awards. However, the
Compensation Committee may not delegate its authority and duties with respect to awards that have been, or will be, granted to our chief executive officer, or are intended to be exempt from the
limitations set forth in Section 162(m) of the Code, or are granted to Section 16 officers. Any other delegation by the Compensation Committee may, in the sole discretion of the
Compensation Committee, include a limitation as to the number of awards that may be granted during the period of the delegation and guidelines as to the determination of the option exercise price (or
price of other awards) and the vesting criteria. The Compensation Committee may revoke or amend the terms of a delegation at any time but such action will not invalidate any prior actions of the
Compensation Committee's delegate that were consistent with the terms of the 2009 LTIP.
Persons
who are eligible to be granted awards under the 2009 LTIP are key employees, directors, officers, advisors, consultants, or other personnel of iStar and our subsidiaries, or
other individuals expected to provide significant services (of a type expressly approved by the Compensation Committee as covered services for these purposes) to us or our subsidiaries, joint venture
affiliates or other entities designated in the discretion of the Compensation Committee, or employees of the foregoing. The Compensation Committee generally determines eligibility for awards under the
2009 LTIP.
If
the proposed amendments are approved by shareholders, and subject to adjustment upon certain corporate transactions or events, a maximum of 8,900,000 shares of common stock may be
issued (or deemed issued) under the 2009 LTIP in connection with awards of stock options, shares of restricted stock, restricted stock units and phantom shares, dividend equivalent rights, and other
equity-based or cash-based awards. The maximum number of shares of common stock issuable under the 2009 LTIP reflects the number of shares that may actually be issued (or deemed issued) in connection
with awards under the 2009 LTIP, after required settlement of tax withholding obligations. Awards granted under the 2009 LTIP will be settled on a net, after-tax basis, after deducting shares for
taxes and other applicable withholdings. In addition, subject to adjustment upon certain corporate transactions or events, a maximum of 4,000,000 shares of common stock may underlie awards of
incentive stock options. In the event an option or other award granted under the 2009 LTIP is forfeited or canceled, is settled in cash, or otherwise expires or terminates, or if shares of common
stock are delivered in full or partial payment of the exercise price in connection with an option, or if tax withholding obligations are satisfied by using shares of common stock on settlement of an
award, the shares subject to any portion of such award will again become available for the issuance of additional awards.
Other
than as specifically set forth under the terms of the 2009 LTIP, the Compensation Committee will determine the terms of specific options, including whether options will
constitute incentive stock options. The award agreement evidencing an award of options will specify the extent to which, and period during which, an option may be exercised after termination of
employment. Generally, an option cannot be exercised after a termination of employment (or other service) to the extent it was not exercisable at the time of termination.
The
exercise price of an option will be determined by the Compensation Committee and reflected in the applicable award agreement, but unless otherwise determined by the Compensation Committee, the
|
|
|
60
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
exercise
price must be at least equal to the fair market value of a share of common stock on the date of grant. The exercise price with respect to incentive stock options may not be lower than 100%,
or 110% in the case of an incentive stock option granted to a 10% shareholder, of the fair market value of our common
stock on the date of grant. The aggregate fair market value (determined as of the date an option is granted) of the shares for which any option holder may be awarded incentive stock options that
become exercisable for the first time during a single calendar year (under the 2009 LTIP or any other stock option plan required to be taken into account under Section 422(d) of the Code) may
not exceed $100,000.
Each
option will be exercisable for the period or periods specified in the applicable award agreement, which will generally not exceed ten years from the date of grant (or five years in the case of an
incentive stock option granted to a 10% shareholder). The Compensation Committee will determine the time or times at which an option may be exercised in whole or in part, and the method or methods by
which, and the form or forms in which, payment of the option price with respect thereto may be made or deemed to have been made (including by cash, loans or third-party sale programs, or by the tender
of previously-owned shares).
Options
granted under the 2009 LTIP generally will not be transferable except by will or the laws of descent and distribution. The Compensation Committee may establish a program under which
participants will have phantom shares credited upon their exercise of options rather than receiving shares at that time.
Restricted
stock is an award of common stock that is subject to restrictions (such as limitations on transferability or the right to vote) as the Compensation Committee may
determine. Subject to the other terms of the 2009 LTIP, the Compensation Committee may provide a specified purchase price for restricted stock, determine the restrictions applicable to restricted
stock, and determine or impose other conditions to the grant of restricted stock under the 2009 LTIP as it may deem appropriate.
Unless
otherwise provided in the applicable award agreement, dividends paid on shares of restricted stock before the shares vest will be held by iStar until the shares vest, and paid to the grantee as
soon as practicable after vesting.
Restrictions
on the shares will lapse in accordance with the terms of the applicable award agreement, as determined by the Compensation Committee. Unless otherwise provided in the applicable award
agreement, upon a termination of employment or other service for cause or by the grantee for any reason other than death, disability or retirement, all shares of restricted stock still subject to
restrictions will be forfeited to us and we will pay an amount equal to the lesser of the amount paid by the grantee for such shares and the fair market value on the date of forfeiture. It is
generally expected that, upon a termination of employment or other service on account of death, disability or retirement of a grantee, or if the grantee's service is terminated by us for any reason
other than cause, in each case during the applicable restricted period, the restrictions under the 2009 LTIP will immediately lapse on all restricted stock granted to such individual.
Restricted Stock Units and Phantom Shares
|
A
restricted stock unit or phantom share represents a right to receive the fair market value of a share of our common stock, or, if provided by the Compensation Committee, the right
to receive the fair market value of a share of our common stock in excess of a base value established by the Compensation Committee at the time of grant. The Compensation Committee may provide in an
award agreement that any particular unit or phantom share will expire at the end of a specified term.
|
|
|
61
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
Units
and phantom shares will vest as provided in the applicable award agreement. Unless otherwise determined by the Compensation Committee at the time of the grant, units and phantom shares will be
settled by a transfer of shares of common stock. Ordinarily, units and phantom shares will be settled with a single distribution, but the Compensation Committee may, in its discretion and under
certain circumstances, permit a participant to instead receive installments over a period not to exceed ten years. Unless otherwise provided in the applicable award agreement, the settlement date with
respect to a unit or phantom share is the first day of the month to follow the date on which the restrictions lapse or the phantom share vests. However, in accordance with procedures to be established
by the Compensation Committee, a grantee may elect that such settlement date will follow the grantee's termination of service, or such other time as may be permitted by the Compensation Committee.
A
dividend equivalent is a right to receive (or have credited) the equivalent value (in cash or shares of common stock) of dividends declared on shares of common stock otherwise
subject to an award. The Compensation Committee may provide that amounts payable with respect to dividend equivalents will be converted into cash or additional shares of our common stock. However,
dividends and dividend equivalents will not be paid on unvested awards, and will only be paid if the underlying award vests. The Compensation Committee will establish all other limitations and
conditions of awards of dividend equivalents.
The
2009 LTIP authorizes the making of cash awards and the granting of other awards based upon the common stock (including the grant of securities convertible into our common stock
and stock appreciation rights), and subject to terms and conditions established by the board.
The
Compensation Committee may, in its discretion, in the case of awards intended to qualify for an exception from the limitation imposed by Section 162(m) of the Code,
establish one or more performance goals as a precondition to the issuance or vesting of awards, and also provide for predetermined awards to those participants with respect to whom the applicable
performance goals are satisfied. The performance goals must be based upon one or more of the following criteria: pre-tax income; after tax income; net income; operating income; cash flow; earnings per
share; return on equity; return on invested capital or assets; cash and/or funds available for distribution; appreciation in the fair market value of the common stock; return on investment;
shareholder return; net earnings growth; stock appreciation; related return ratios; increase in revenues; net earnings; changes in the per share or aggregate market price of our common stock; number
of securities sold; earnings before any one or more of the following: interest, taxes, depreciation or amortization for the applicable period, as reflected in our financial reports for the applicable
period; total revenue growth; our published ranking against a peer group of real estate investment trusts based on total shareholder return; and funds from operations. The maximum amount that can be
paid to any individual participant with respect to any performance period (or with respect to any single year within a performance period, if the performance period extends beyond a single year)
pursuant to a performance-based award intended to qualify for an exception from the limitation imposed by Section 162(m) of the Code, denominated in cash (including annual cash bonuses), is
$10,000,000. Subject to certain grandfather rules, the performance-based exceptions under Section 162(m) are no longer applicable, so future awards generally will not be designed to be
compliant with Section 162(m).
|
|
|
62
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
Special Rules Upon Reorganizations, Changes in Control, Etc.
|
If
iStar is involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of substantially all of our assets or stock, or any similar
transaction, or upon certain changes in our capital structure and other similar events, the Compensation Committee may make related adjustments in its discretion to outstanding awards and to
provisions of the 2009 LTIP (including to the number and kind of shares available under the 2009 LTIP).
Upon
a change in control (as defined in the 2009 LTIP), the Compensation Committee may make such adjustments as it, in its discretion, determines are necessary or appropriate, but only if the
Compensation Committee determines that the adjustments will not have an adverse economic impact on the participants (as determined at the time of the adjustments).
Annual Grants to Independent Directors
|
Annual
awards of common stock equivalents to our non-employee directors under the Non-Employee Directors' Deferral Plan are counted as awards under the 2009 LTIP.
Amendment and Termination
|
The
board may amend the 2009 LTIP as it deems advisable, except that it may not amend the 2009 LTIP in any way that would adversely affect a participant with respect to an award
previously granted unless the amendment is required in order to comply with applicable laws.
Prohibition on Re-Pricing
|
The
2009 LTIP provides that no option or stock appreciation right issued under the 2009 LTIP may be amended to reduce the exercise price below the exercise price assigned on the date
of grant. In addition, no option or stock appreciation right may be granted in exchange for, or in connection with, the cancellation or surrender of an option, stock appreciation right, or other award
having a lower exercise price.
Prohibition on Loans to Executives
|
The
2009 LTIP prohibits the extension of any loans by us to any officer in respect of the exercise of options or with respect to any other award granted under the 2009 LTIP.
Certain U.S. Federal Income Tax Consequences
|
The following is a general summary of the material U.S. federal income tax consequences of the grant, exercise, and vesting of awards under the 2009 Plan and
the disposition of shares acquired pursuant to the exercise or settlement of such awards. This summary is intended to reflect the current provisions of the Code and the regulations thereunder, but is
not intended to be a complete statement of applicable law. We do not address foreign, state, local or payroll tax considerations. This summary assumes that all awards described herein are exempt from,
or comply with, the requirement of Section 409A of the Code. Moreover, the U.S. federal income tax consequences to any particular participant may differ from those described
herein.
Non-Qualified Stock Options
|
No
income will be recognized by an option holder at the time a non-qualified stock option is granted. Ordinary income generally will be recognized by an option holder at the time a
non-qualified stock option is exercised, in an amount equal to the excess of the fair market value of the underlying common stock on the exercise date over the exercise price. iStar generally will be
entitled to a deduction for federal income tax purposes in the same amount as the amount included in ordinary income by the option holder with
|
|
|
63
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
respect
to a non-qualified stock option. Gain or loss on a subsequent sale or other disposition of the shares acquired upon the exercise of a non-qualified stock option will be measured by the
difference between the amount realized on the disposition and the tax basis of such shares, and generally will be long-term or short-term capital gain, depending on the holding period involved. The
tax basis of the shares acquired upon the exercise of any non-qualified stock option will be equal to the sum of the exercise price of the non-qualified stock option and the amount included in income
with respect to the option. If exercise of an option is permitted other than by cash payment of the exercise price, various special tax rules may apply.
In
general, neither the grant nor the exercise of an incentive stock option will result in taxable income to an option holder or a deduction for us. To receive special tax treatment
under the Code as to shares acquired upon exercise of an incentive stock option, an option holder cannot dispose of the shares within two years after the incentive stock option is granted, nor within
one year after the transfer of the shares to the option holder pursuant to exercise of the option. In addition, the option holder must be an employee of iStar or a qualified subsidiary at all times
between the date of grant and the date three months (one year in the case of disability) before exercise of the option. (Special rules apply in the case of the death of the option holder.)
In
the event of a sale of shares of our common stock received upon the exercise of an incentive stock option, the Code generally allows any gain to be treated as a capital gain to the option holder,
but iStar will not be entitled to a tax deduction. The exercise of an incentive stock option (if the holding period rules described above are satisfied) will give rise to income includable by the
option holder in alternative
minimum taxable income in an amount equal to the excess of the fair market value of the stock acquired on the date of the exercise over the exercise price.
If
the holding period rules noted above are not satisfied, gain recognized on the disposition of the shares acquired upon the exercise of an incentive stock option will be characterized as ordinary
income. This gain will be equal to the difference between the exercise price and the fair market value of the shares at the time of exercise. (Special rules may apply to disqualifying dispositions
where the amount realized is less than the value at exercise.) iStar generally will be entitled to a deduction equal to the amount of such gain included by an option holder as ordinary income. Any
excess of the amount realized upon such disposition over the fair market value at exercise generally will be long-term or short-term capital gain, depending on the holding period involved. If exercise
of an option is permitted other than by cash payment of the exercise price, various special tax rules may apply.
Unless
a holder of restricted stock makes an "83(b) election" (as discussed below), there generally will be no tax consequences as a result of the grant of restricted stock until the
restricted stock is no longer subject to a substantial risk of forfeiture or is transferable (free of the risk). Dividends paid on unvested shares, if retained by the grantee, generally will be
treated as compensation income for U.S. federal income tax purposes (unless an 83(b) election has been made). Generally, when the restrictions are lifted, the holder will recognize ordinary income,
and iStar will be entitled to a deduction, equal to the difference between the fair market value of the stock at the time restrictions are lifted and the amount, if any, paid by the holder for the
restricted stock. Subsequently realized changes in the value of the stock generally will be treated as long-term or short-term capital gain or loss, depending on the length of time the shares were
held.
In
general terms, if a holder makes an election under Section 83(b) of the Code upon the award of restricted stock, the holder will recognize ordinary income on the date of the award, and iStar
will be entitled to a deduction, equal to (i) the fair market value of the restricted stock as though the stock were
|
|
|
64
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
(A) not
subject to a substantial risk of forfeiture or (B) transferable, minus (ii) the amount, if any, paid for the restricted stock. If a holder makes an 83(b) election, there
generally will be no tax consequences to the holder when restrictions are lifted, and all subsequent appreciation in the restricted stock generally would be eligible for capital gains treatment. In
the event of a forfeiture after an 83(b) election is made, no deduction or loss will be available, other than with respect to amounts actually paid for the stock.
Phantom Shares and Restricted Stock Units
|
It
is generally expected that phantom shares will be designed with the intention that there be no tax consequences as a result of the grant of a phantom share until the associated
payment is made. When payment is made, the grantee generally will recognize ordinary income, and iStar generally
will be entitled to a deduction, equal to the fair market value of the common stock and cash, as applicable, received upon payment, subject to any limitations under Section 162(m).
There
generally will be no tax consequences as a result of the award of a dividend equivalent. When payment is made, the holder of the dividend equivalent generally will recognize
ordinary income, and iStar will be entitled to a deduction, equal to the amount received, subject to any limitations under Section 162(m).
When
a cash bonus payment is made, the participant generally will recognize ordinary income, and iStar will be entitled to a deduction, equal to the amount of such payment, subject
to any limitations under Section 162(m).
It
is not possible to determine the benefits or amounts that will be received by or allocated to participants under the 2009 Plan or would have been received by or allocated to
participants for the last completed year because awards under the 2009 Plan will be made at the discretion of the Compensation Committee.
The
approval of the 2009 LTIP amendment requires the affirmative vote of the holders of a majority of our common stock represented and entitled to vote thereon at the meeting.
Abstentions are deemed entitled to vote on the incentive plan proposal. Therefore, abstentions will have the same effect as a vote
against
the incentive
plan proposal. Broker non-votes are not deemed entitled to vote on the proposal and, therefore, they will have no effect on the vote.
|
|
|
65
|
iStar
Inc. 2019
Proxy
Statement
|
|
Proposal
3
Approval
of
Amendments
of
the
iStar
Inc.
2009
Long-Term
Incentive
Plan
|
Table of Contents
Certain Relationships and
Related Party Transactions
|
It
is the policy of our board of directors that all transactions between iStar and a "related party" must be approved or ratified by at least a majority of the members of the board
who have no financial or other interest in the transaction. For this purpose, a related party includes any director or
executive officer, any nominee for director, any shareholder owning 5% of more of our outstanding shares, and any immediate family member of any such person.
In
determining whether to approve or ratify a related party transaction, the board will take into account, among other factors it deems appropriate, whether the transaction is on terms no less
favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, and the extent of the related party's interest in the transaction. No director will
participate in any discussion or approval of a related party transaction for which such director is a related party, except that such a director will provide all material information concerning the
related party transaction to our board.
If
a related party transaction will be ongoing, the board may establish guidelines for management to follow in its ongoing dealings with the related party. The board may delegate to our Nominating and
Governance Committee the authority to review and assess, on at least an annual basis, any such ongoing relationships with the related party to confirm they are in compliance with the board's
guidelines.
All
related party transactions will be disclosed in our applicable filings with the SEC as required under SEC rules.
|
|
|
72
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
Section 16(a) Beneficial
Ownership Reporting Compliance
|
Section 16(a)
of the Securities Exchange Act of 1934 requires our directors, executive officers, and persons who own more than 10% of a registered class of our equity
securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Directors, officers, and greater than 10% shareholders
are required to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us, during the fiscal year
ended December 31, 2018, all Section 16(a) filing requirements applicable to our directors, officers, and greater than 10% beneficial owners were met.
|
|
|
73
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
Information About the Annual
Meeting of Shareholders
to be held May 16, 2019
|
We
are making this proxy statement available to holders of our common stock and holders of our 8.00% Series D preferred stock on or about April 5, 2019, in connection
with the solicitation by our board of directors of proxies to be voted at our 2019 annual meeting of shareholders or at any postponement or adjournment of the annual meeting.
This
proxy statement is accompanied by our Annual Report for the year ended December 31, 2018. The Annual Report, including our financial statements at December 31, 2018, is available on
our website at
www.istar.com
by choosing "Investors" and then
à
"Governance &
Proxy," or you can obtain a print copy, without charge, by contacting our Investor Relations department at (212) 930-9400, or 1114 Avenue of the Americas,
39
th
Floor, New York, NY 10036. The information found on, or accessible through, our website is not incorporated into, and does not form a part of, this proxy statement or
any other report or document we file with or furnish to the SEC.
We
urge you to authorize a proxy to vote your shareseither by mail, by telephone, or onlineat your earliest convenience, even if you plan to attend the annual meeting in
person.
Who is entitled to vote at the meeting?
|
Only
holders of record of our common stock and our Series D preferred stock at the close of business on March 22, 2019, are entitled to receive notice of and to vote at
the annual meeting or at any postponement or adjournment of the meeting. On the record date, there were 66,613,976 shares of common stock and 4,000,000 shares of Series D preferred stock
outstanding and entitled to vote.
What constitutes a quorum?
|
In
order to have a quorum at the annual meeting, we need the presence, either in person or by proxy, of the holders of enough outstanding common stock and Series D preferred
stock, in the aggregate, to cast a majority of the votes entitled to be cast at the meeting.
What are the voting rights of shareholders?
|
Each
shareholder is entitled to one vote for each share of common stock owned, and 0.25 votes for each share of Series D preferred stock owned, on the record date.
|
|
|
74
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
What vote is needed to approve each proposal?
|
Assuming
a quorum is present in person or by proxy at the annual meeting, the proposals require the following votes:
|
|
|
|
|
|
|
Proposal
|
|
Vote needed to pass
|
|
Effect of abstentions and broker non-votes
|
|
|
|
|
|
|
|
1.
|
|
Election of directors
|
|
Each nominee must receive a plurality of the votes cast by the holders of our common stock and Series D preferred stock, all voting
as one class.
|
|
Counted toward a quorum but no effect on the vote results.
|
|
|
|
|
|
|
|
2.
|
|
Non-binding advisory vote to approve executive compensation
|
|
The affirmative vote of a majority
of the votes cast by the holders of
our common stock and Series D preferred stock, all voting as one
class.
|
|
Counted toward a quorum but no effect on the vote results
|
|
|
|
|
|
|
|
3.
|
|
Approval of amendments to the iStar 2009 LTIP
|
|
The affirmative vote of a majority
of the votes cast by the holders of
our common stock and Series D preferred stock, all voting as one
class.
|
|
Counted toward a quorum but no effect on the vote results
|
|
|
|
|
|
|
|
4.
|
|
Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm
|
|
The affirmative vote of a majority
of the votes cast by the holders of
our common stock and Series D preferred stock, all voting as
one class.
|
|
Abstentions will be counted toward a quorum but will have no effect on the vote results. There should not be any broker non-votes.
|
|
|
|
|
|
|
|
For
the approval of any other matters properly presented at the meeting for shareholder approval, the affirmative vote of a majority of the votes cast by the holders of our common stock and
Series D preferred stock, all voting as one class, is required.
What are broker non-votes?
|
A
"broker non-vote" occurs when a broker, bank, or other nominee does not have discretionary authority as to certain shares to vote on a particular matter, and has not received
voting instructions on that matter from the beneficial owner of those shares. Under current NYSE rules, a broker, bank, or other nominee does not have discretionary authority to vote shares without
specific voting instructions from the beneficial owner in an election of directors, on a resolution to approve executive compensation, or on amendments to an incentive plan. Brokers, banks, and other
nominees do have discretionary authority to vote shares without specific voting instructions on the ratification of the appointment of an independent registered public accounting firm.
If
you properly vote your proxy prior to the annual meeting, the shares that the proxy represents will be voted in the manner you direct. If your proxy does not specify a choice
regarding one or more proposals, your shares will be voted FOR the election of directors, FOR the resolution to approve, on a non-binding, advisory basis, executive compensation, FOR the proposed
amendments to the 2009 LTIP, and FOR the ratification of the appointment of the independent registered public accounting firm.
Votes
cast in person or by proxy at the annual meeting will be tabulated by the election inspectors appointed for the meeting, who also will determine whether a quorum is present. If your shares are
held by
|
|
|
75
|
iStar
Inc. 2019
Proxy
Statement
|
|
Information
About
the
Annual
Meeting
of
Shareholders
|
Table of Contents
a
broker, bank, or other nominee (i.e., in "street name"), you will receive instructions from your nominee that you must follow in order to have your shares voted. Street name shareholders who
wish to vote in person at
the meeting will need to obtain a proxy from the broker, bank, or other nominee that holds their shares of record.
Can I change my vote after I submit my proxy card or vote electronically?
|
If
you authorize a proxy to vote your shares, you may revoke it at any time before it is voted
by:
-
o
-
submitting voting instructions at a later time via the Internet or by telephone before
those voting facilities close;
-
o
-
giving written notice bearing a date later than the date of the proxy to our Secretary
expressly revoking the proxy;
-
o
-
signing and forwarding to us a proxy dated later; or
-
o
-
attending the annual meeting and personally voting the common stock or Series D
preferred stock that you own of record. Merely attending the annual meeting will not revoke a proxy.
Who pays the costs of soliciting proxies?
|
We
will pay the costs of soliciting proxies from our shareholders. In addition to solicitation by mail, certain of our directors, officers, and employees may solicit the return of
proxies by telephone, fax, personal interview, or otherwise without being paid additional compensation. We will reimburse brokerage firms and other persons representing the beneficial owners of our
shares for their reasonable expenses in forwarding proxy solicitation materials to the beneficial owners in accordance with the proxy solicitation rules and regulations of the SEC and the NYSE. We
have engaged Alliance Advisors LLC to solicit proxies on our behalf in connection with our 2019 annual meeting of shareholders and to provide other advisory services for a fee of $17,500, plus
expenses.
When are shareholder proposals due for the 2020 annual meeting?
|
Shareholder
proposals intended to be included in our proxy materials and presented at the 2020 annual meeting must be sent in writing, by certified mail, return receipt requested, to
us at our principal office, addressed to our Secretary. Such proposals must be received by us no later than December 5, 2019.
If
you wish to submit a shareholder proposal to be considered at our 2020 annual meeting but not included in our proxy materials, the proposal must contain the information required by our bylaws. Such
proposals must be submitted between November 5, 2019, and December 5, 2019. However, if the date of the 2020 annual meeting is advanced more than 30 days prior to, or delayed more
than 30 days after, May 16, 2020, such proposals must be delivered between the 150th day prior to the date of the 2020 annual meeting and the later of (i) the
120th day prior to the date of the 2020 annual meeting or (ii) the tenth day following the date on which public announcement of the date of the 2020 annual meeting of shareholders is
first made.
Householding of proxy materials
|
The
SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with
respect to two or more shareholders sharing the same address by delivering a single set of proxy materials to that address. This process, which is commonly referred to as "householding," potentially
means extra convenience for stockholders (less bulk mail) and cost savings for companies.
A
number of brokers with account holders who are our shareholders intend to "household" our proxy materials. A single proxy statement will be delivered to multiple shareholders sharing an address
unless contrary instructions have been received from the affected shareholders. Once you receive notice that
|
|
|
76
|
iStar
Inc. 2019
Proxy
Statement
|
|
Information
About
the
Annual
Meeting
of
Shareholders
|
Table of Contents
your
broker will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate proxy statement and annual report, please notify us in writing to iStar Inc., 1114 Avenue of the Americas,
39th Floor, New York, New York 10036, Attn: Investor Relations, or call our Investor Relations department at (212) 930-9400. Shareholders who currently receive multiple copies of the
proxy statement at their address and would like to request householding of their communications should contact us as specified above.
Are there any other matters coming before the 2019 Annual Meeting?
|
Management
does not intend to bring any other matters before the annual meeting and knows of no other matters that are likely to come before the meeting. In the event any other
matters properly come before the annual meeting or any postponement of the meeting, the individuals named in the accompanying proxy will vote the shares represented by your proxy in accordance with
their discretion.
The
Securities and Exchange Commission allows us to "incorporate by reference" information into this proxy statement. That means we can disclose important information to you by
referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this proxy statement, except to the extent the information is
superseded by information in this proxy statement.
This
proxy statement incorporates by reference: (a) the information contained in our Annual Report on Form 10-K for the year ended December 31, 2018; and (b) the
information contained in all other documents we file with the SEC after the date of this proxy statement and prior to the annual meeting of stockholders. The information contained in any of these
documents will be considered part of this proxy statement from the date these documents are filed.
Any
statement contained in this proxy statement or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for purposes of this proxy
statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this proxy statement.
You
may obtain, without charge, a copy of any of the documents incorporated by reference herein by writing to us at iStar Inc., 1114 Avenue of the Americas,
39
th
Floor, New York, NY 10036, Attention: Investor Relations, or by visiting our website at
www.istar.com.
|
|
|
By Order of the Board of Directors
Geoffrey M. Dugan
General Counsel, Corporate and Secretary
New York, NY
April 5, 2019
|
|
|
|
|
|
77
|
iStar
Inc. 2019
Proxy
Statement
|
|
Information
About
the
Annual
Meeting
of
Shareholders
|
Table of Contents
In
addition to net income (loss) prepared in conformity with GAAP, we use Adjusted Incomea non-GAAP financial measureto measure our operating performance. Adjusted Income is
used internally as a supplemental performance measure, adjusting for certain non-cash GAAP measures to give management a view of income more directly derived from current period activity. In the third
quarter 2017, we modified our presentation of Adjusted Income to exclude (i) the effect of the amount of the liquidation preference that was recorded as a premium above book value on the
redemption of preferred stock, and (ii) the imputed non-cash interest expense recognized for the conversion feature of our senior convertible notes. Adjusted Income also includes the impact to
retained earnings (income that would have been recognized in prior periods had the accounting standards been effective during those prior periods) resulting from the adoption of new accounting
standards on January 1, 2018. See Notes 3, 10 and 13 of our consolidated financial statements in our 2018 Annual Report on Form 10-K for further details.
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
2018
|
|
2017
|
|
|
|
(in thousands)
|
|
Adjusted Income
|
|
|
|
|
|
|
|
Net income (loss) allocable to common shareholders
|
|
$
|
(64,757
|
)
|
$
|
110,924
|
|
Add: Depreciation and amortization(1)
|
|
|
71,359
|
|
|
60,828
|
|
Add/Less: (Recovery of) provision for loan losses
|
|
|
16,937
|
|
|
(5,828
|
)
|
Add: Impairment of assets(2)
|
|
|
163,765
|
|
|
32,379
|
|
Add: Stock-based compensation expense
|
|
|
17,563
|
|
|
18,812
|
|
Add: Loss on early extinguishment of debt, net
|
|
|
4,318
|
|
|
3,065
|
|
Add: Non-cash interest expense on senior convertible notes
|
|
|
4,733
|
|
|
1,255
|
|
Add: Premium on redemption of preferred stock
|
|
|
|
|
|
16,314
|
|
Add: Impact from adoption of new accounting standards (3)
|
|
|
75,869
|
|
|
|
|
Less: Losses on charge-offs and dispositions(4)
|
|
|
(67,506
|
)
|
|
(23,130
|
)
|
|
|
|
|
|
|
|
|
Adjusted Income allocable to common shareholders
|
|
$
|
222,281
|
|
$
|
214,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Depreciation
and amortization also includes our proportionate share of depreciation and amortization expense for equity method investments and excludes the portion
of depreciation and amortization expense allocable to noncontrolling interests.
-
(2)
-
For
the year ended December 31, 2018, impairment of assets includes impairments on equity method investments.
-
(3)
-
Represents
an increase to retained earnings on January 1, 2018, upon the adoption of accounting guidance.
-
(4)
-
Represents
the impact of charge-offs and dispositions realized during the period. These charge-offs and dispositions were on assets that were previously impaired for
GAAP and reflected in net income but not in Adjusted Income.
|
|
|
A-1
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
SECOND AMENDMENT TO iSTAR INC.
2009 LONG-TERM INCENTIVE PLAN
|
The
iStar Inc. 2009 Long-Term Incentive Plan (the "
Plan
") is hereby amended, effective as of April 8, 2019 (the
"
Effective Date
"), as follows:
1.
Amendment to the Plan.
The Plan is hereby amended to replace the phrase "iStar Financial Inc." with
"iStar, Inc." each time such phrase appears in the Plan.
2.
Amendment to Section 2 of the Plan.
Section 2 of the Plan is hereby amended and restated in its
entirety to read as follows:
"The
effective date of the Plan is originally May 27, 2009. The Plan shall not become effective unless and until it is approved by the requisite percentage of the holders of the Common Stock of
the Company. Subject to the approval of the Company's shareholders at the 2019 annual meeting, the Plan shall terminate on, and no Award shall be granted hereunder on or after, the 10-year anniversary
of May 16, 2019, provided, however, that the Board may at any time prior to that date terminate the Plan."
3.
Amendment to Section 4.1 of the Plan.
Section 4.1(a) of the Plan is hereby amended to replace
the phrase "8,000,000" with "8,900,000".
4.
Amendment to Section 4.1 of the Plan.
The second to last sentence in Section 4.1(a) of the Plan
is amended and restated in its entirety to read as follows:
"Notwithstanding
the preceding sentence, in no event shall shares tendered or withheld on the exercise of an Option for the payment of the exercise price or withholding taxes become available and such
Shares shall be deemed to have been issued for purposes of determining the maximum number of Share available for delivery under the Plan."
5.
Amendment to Section 8.3 of the Plan.
The following sentence is added to the end of Section 8.3
of the Plan:
"Notwithstanding
anything in the Plan to the contrary, no dividend or dividend equivalents or Dividend Equivalent Rights shall be payable in respect of outstanding Options or unvested Awards (provided
that dividend equivalents may be accumulated in respect of unvested Awards and paid within 30 days after such Awards are earned and become payable or distributable).
6.
Effect on the Plan.
This Amendment shall not constitute a waiver, amendment or modification of any provision
of the Plan not expressly referred to herein. Except as expressly amended or modified herein, the provisions of the Plan are and shall remain in full force and effect and are hereby ratified and
confirmed.
|
|
|
B-1
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
iSTAR FINANCIAL INC.
2009 LONG-TERM INCENTIVE PLAN
Adopted May 27, 2009
(as amended effective March 31, 2014)
|
iStar
Financial Inc., a Maryland corporation, wishes to attract officers, key employees, Directors, consultants and advisers to the Company and its Subsidiaries and induce
officers, key employees, Directors, consultants and advisers to remain with the Company and its Subsidiaries, and encourage them to increase their efforts to make the Company's business more
successful whether directly or through its Subsidiaries and its affiliates. In furtherance thereof, the iStar Financial, Inc. 2009 Long-Term Incentive Plan is designed to provide equity-based
and cash-based incentives to officers, key employees, Directors, consultants and advisers of
the Company and its Subsidiaries and certain of its affiliates. Awards under the Plan may be made to selected officers, key employees, Directors, consultants and advisers of the Company and its
Subsidiaries in the form of Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights, other forms of equity-based compensation, or cash-based compensation.
1.
DEFINITIONS.
Whenever
used herein, the following terms shall have the meanings set forth below:
"Award,"
except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, Phantom Shares,
Dividend Equivalent Rights and other Awards as contemplated herein.
"Award
Agreement" means a written agreement in a form approved by the Committee to be entered into between the Company and the Participant as provided in Section 3. An Award
Agreement may be, without limitation, an employment or other similar agreement containing provisions governing grants hereunder, if approved by the Committee for use under the Plan.
"Board"
means the Board of Directors of the Company.
"Cause"
means, unless otherwise provided in the Participant's Award Agreement: (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect;
(ii) repeatedly failing to adhere to the directions of superiors or the Board or the written policies and practices of the Company or its Subsidiaries or its affiliates; (iii) the
commission of a felony or a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the Company or its Subsidiaries, or any affiliate thereof;
(iv) fraud, misappropriation or embezzlement of the Company's funds or other assets or other acts deemed by the Committee in the good faith exercise of its sole discretion to be an act of
dishonesty in respect to the Company; (v) material violation of any statutory or common law duty of loyalty to the Company; (vi) a material breach of the Participant's employment
agreement (if any) with the Company or its Subsidiaries or its affiliates (subject to any cure period therein provided); (vii) willfully and repeatedly refusing to perform or substantially
disregarding the duties properly assigned to the Participant by the Company (other than as a result of Disability); (viii) any significant activities materially harmful to the reputation of the
Company or its Subsidiaries or its affiliates; or (ix) repeated failure to devote substantially all of Participant's business time and efforts to the Company if required by Participant's
employment agreement; provided, however, that, if at any particular time the Participant is subject to an effective employment agreement with the Company,
|
|
|
C-1
|
iStar
Inc. 2019
Proxy
Statement
|
|
|
Table of Contents
then,
in lieu of the foregoing definition, "Cause" shall at that time have such meaning as may be specified in such employment agreement.
"Change
in Control" means the happening of any of the following:
(i) the
acquisition by any individual, entity or group (a "Person"), including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
of beneficial ownership within the meaning of the Rule 13d-3 promulgated under the Exchange Act, of 51% or more of either (A) the then outstanding
Shares, (collectively, the "Outstanding Shares") or (B) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of Directors (the
"Outstanding Voting Securities"); excluding, however, the following: (1) any acquisition by the Company; (2) any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation or trust controlled by the Company or (3) any acquisition by any corporation or trust pursuant to a transaction which complies with
clause (A), (B) or (C) of subsection (iii) of this definition;
(ii) individuals
who, as of the Effective Date constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided
that any individual who becomes a Director of the Company subsequent to the Effective Date whose election or nomination for election by the Company's shareholders was approved (other than in
connection with a material transaction relating to the Company or its assets or the Shares or the Class B Shares of the Company) by the vote of at least a majority of the Directors then
comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a Director of the Company as a result of an
actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of
proxies or consent by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;
(iii) consummation
by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction"); excluding, however, a Corporate Transaction pursuant to which (A) all or substantially all of the individuals or entities who are the beneficial owners, respectively,
of the Outstanding Shares and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 66
2
/
3
% of,
respectively, the outstanding shares of beneficial interest or common stock, and the combined voting power of the outstanding securities of such trust or corporation entitled to vote generally in the
election of Directors or directors, as the case may be, of the trust or corporation resulting from such Corporate Transaction (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company's assets either directly or indirectly in substantially the same proportions relative to each other as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Shares and the Outstanding Voting Securities as the case may be); (B) no Person (other than: the Company; any employee
benefit plan (or related trust) sponsored or maintained by the Company or any trust or corporation controlled by the Company, the trust or corporation resulting from such Corporate Transaction, and
any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 33
1
/
3
% or more of the Outstanding Shares or the Outstanding Voting
Securities, as the case may be) will beneficially own, directly or indirectly, 33
1
/
3
% or more of, respectively, the outstanding shares of beneficial interest or common stock of the
trust or corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such trust or corporation entitled to vote generally in the election of
Directors or directors; or (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of Directors or directors of the trust or
corporation resulting from such Corporate Transaction; or
|
|
|
C-2
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(iv) approval
by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company.
Notwithstanding
the foregoing, no event or condition shall constitute a Change in Control to the extent that, if it were, a 20% tax would be imposed upon or with respect to any Award under
Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Change in Control to the maximum extent possible (e.g., if applicable, in
respect of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.
"Code"
means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
"Committee"
means the committee appointed by the Board under Section 3.
"Common
Stock" means the Company's common stock, par value $.
001
per share, either currently existing or authorized hereafter.
"Company"
means iStar Financial, Inc., a Maryland corporation.
"Director"
means a non-employee director of the Company or its Subsidiaries.
"Disability"
means, unless otherwise provided by the Committee in the Participant's Award Agreement, a disability which renders the Participant incapable of performing all of his or her
material duties for a period of at least 180 consecutive or non-consecutive days during any consecutive twelve-month period. Notwithstanding the foregoing, no circumstances or condition shall
constitute a Disability to the extent that, if it were, a 20% tax would be imposed upon or with respect to any Award under Section 409A of the Code; provided that, in such a case, the event or
condition shall continue to constitute a Disability to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution) without causing the
imposition of such 20% tax.
"Dividend
Equivalent Right" means a right awarded under Section 8 of the Plan to receive (or have credited) the equivalent value of dividends paid on Common Stock.
"Effective
Date" means May 27, 2009.
"Eligible
Person" means an officer, Director, key employee, consultant or adviser of the Company or its Subsidiaries or other person expected to provide significant services (of a type
expressly approved by the Committee as covered services for these purposes) to the Company, its Subsidiaries or certain of its affiliates.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
"Fair
Market Value" per Share as of a particular date means the closing transaction price of a Share as reported in the New York Stock Exchange on the first business day immediately
preceding the date as of which such value is being determined, or, if there shall be no reported transaction on such day, on the next preceding business day for which a transaction was reported;
provided that if the Fair Market Value of a Share for any date cannot be determined as above provided, Fair Market Value of a Share shall be determined by the Committee by whatever means or method as
to which the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate. Notwithstanding the foregoing, with respect to any "stock right" within the meaning of
Section 409A of the Code, Fair Market Value shall not be less than the "fair market value" of the Shares determined in accordance with Treasury Regulation 1.409A-1(b)(iv).
"Grantee"
means an Eligible Person granted Restricted Stock, Phantom Shares, Dividend Equivalent Rights or other Awards (other than an Option) as may be granted pursuant to
Section 9.
"Incentive
Stock Option" means an "incentive stock option" within the meaning of Section 422(b) of the Code.
|
|
|
C-3
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
"Non-Qualified
Stock Option" means an Option which is not an Incentive Stock Option.
"Option"
means the right to purchase, at a price and for the term fixed by the Committee in accordance with the Plan, and subject to such other limitations and restrictions in the Plan
and the applicable Award Agreement, a number of Shares determined by the Committee.
"Optionee"
means an Eligible Person to whom an Option is granted, or the Successors of the Optionee, as the context so requires.
"Option
Price" means the price per share of Common Stock, determined by the Board or the Committee, at which an Option may be exercised.
"Participant"
means a Grantee or Optionee.
"Performance
Goals" have the meaning set forth in Section 10.
"Performance
Period" means any period designated by the Committee for which the Performance Criteria (as defined in Exhibit A) shall be calculated; provided however, that
Performance Period shall be the five-year period commencing on the Effective Date unless otherwise designated by the Committee.
"Permanent
and Total Disability" means the "permanent and total disability" within the meaning of Section 22(e)(3) of the Code.
"Phantom
Share" means a right, pursuant to the Plan, of the Grantee to payment of the Phantom Share Value.
"Phantom
Share Value," per Phantom Share, means the Fair Market Value of a Share or, if so provided by the Committee, such Fair Market Value to the extent in excess of a base value
established by the Committee at the time of grant.
"Plan"
means the Company's 2009 Long-Term Incentive Plan, as set forth herein and as the same may from time to time be amended.
"Prior
Plan" means the Company's 1996 Long-Term Incentive Plan, as amended and restated as of April 7, 2005.
"REIT
Requirements" means the requirements to qualify as a real estate investment trust under the Code and the rules and regulations promulgated thereunder.
"Restricted
Stock" means an award of Shares that are subject to restrictions hereunder.
"Securities
Act" means the Securities Act of 1933, as amended.
"Settlement
Date" means the date determined under Section 7.4(c).
"Shares"
means shares of Common Stock of the Company.
"Subsidiary"
means any corporation (other than the Company) that is a "subsidiary corporation" with respect to the Company under Section 424(f) of the Code. In the event the
Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall, unless otherwise determined by the Committee, also be applicable to any company that is a
"parent corporation" with respect to the Company under Section 424(e) of the Code, any corporation, partnership or other entity at least 50% of the economic interest in the equity of which is
owned by the Company or by another subsidiary.
"Successor
of the Optionee" means the legal representative of the estate of a deceased Optionee or the person or persons who shall acquire the right to exercise an Option by bequest or
inheritance or by reason of the death of the Optionee.
"Termination
of Service" means a Participant's termination of employment or other service, as applicable, with the Company and its Subsidiaries. Unless otherwise provided in the Award
Agreement, cessation of service as an officer, employee, Director or consultant, or other covered positions shall not be
|
|
|
C-4
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
treated
as a Termination of Service if the Participant continues without interruption to serve thereafter in another one (or more) of such other capacities, and Termination of Service shall be deemed
to have occurred when service in the final covered capacity ceases. Notwithstanding the foregoing, with respect to any Award that is subject to Section 409A of the Code, Termination of Service
shall be interpreted within the meaning of Section 409A of the Code and Treasury Regulation 1.409A-1(h).
2.
EFFECTIVE DATE AND TERMINATION OF PLAN.
The
effective date of the Plan is May 27, 2009. The Plan shall not become effective unless and until it is approved by the requisite percentage of the holders of the Common Stock
of the Company. The Plan shall terminate on, and no Award shall be granted hereunder on or after, the 10-year anniversary of the earlier of the approval of the Plan by (i) the Board or
(ii) the shareholders of the Company; provided, however, that the Board may at any time prior to that date terminate the Plan.
3.
ADMINISTRATION OF PLAN.
(a) The
Plan shall be administered by the Committee appointed by the Board. The Committee shall consist of at least two individuals each of whom shall be a "nonemployee
director" as defined in Rule 16b-3 as promulgated by the Securities and Exchange Commission ("Rule 16b-3") under the Exchange Act and shall, at such times as the Company is subject to
Section 162(m) of the Code (to the extent relief from the limitation of Section 162(m) of the Code is sought with respect to Awards), qualify as "outside directors" for purposes of
Section 162(m) of the Code. The acts of a majority of the members present at any meeting of the Committee at which a quorum is present, or acts approved in writing by a majority of the entire
Committee, shall be the acts of the Committee for purposes of the Plan. If and to the extent applicable, no member of the Committee may act as to matters under the Plan specifically relating to such
member. Notwithstanding the other foregoing provisions of this Section 3(a), any Award under the Plan to a person who is a member of the Committee shall be made and administered by the Board.
If no Committee is designated by the Board to act for these purposes, the Board shall have the rights and responsibilities of the Committee hereunder and under the Award Agreements.
(b) Subject
to the provisions of the Plan, the Committee shall in its discretion as reflected by the terms of the Award Agreements (i) authorize the granting of
Awards to Eligible Persons; and (ii) determine the eligibility of Eligible Persons to receive an Award, as well as determine the number of Shares to be covered under any Award Agreement,
considering the position and responsibilities of the Eligible Person, the nature and value to the Company of the Eligible Person's present and potential contribution to the success of the Company
whether directly or through its Subsidiaries and such other factors as the Committee may deem relevant. Notwithstanding the foregoing, to the extent permitted by applicable law, and other than with
respect to Awards intended to qualify for relief from the limitations of Section 162(m) of the Code, Awards made to individuals covered by Section 16 of the Exchange Act, and Awards
issued to the Chief Executive Officer of the Company, the Committee may delegate all are part of its authority and duties with respect to Awards issued under the Plan to the Chief Executive Officer.
(c) The
Award Agreement shall contain such other terms, provisions and conditions not inconsistent herewith as shall be determined by the Committee. In the event that any
Award Agreement or other agreement hereunder provides (without regard to this sentence) for the obligation of the Company or any affiliate thereof to purchase or repurchase Shares from a Participant
or any other person, then, notwithstanding the provisions of the Award Agreement or such other agreement, such obligation shall not apply to the extent that the purchase or repurchase would not be
permitted under New York law. The Participant shall take whatever additional actions and execute whatever additional documents the Committee may in its reasonable judgment deem necessary or advisable
in order to carry out or effect one or more of the obligations or restrictions imposed on the Participant pursuant to the express provisions of the Plan and the Award Agreement.
|
|
|
C-5
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
4.
SHARES AND UNITS SUBJECT TO THE PLAN.
4.1
In General.
(a) Subject
to adjustments as provided in Section 14, the total number of Shares subject to Awards granted under the Plan, in the aggregate, may not exceed
8,000,000. Notwithstanding the foregoing, an additional 500,000 Shares may be subject to Awards granted under the Plan;
provided, that,
such Shares shall
only be made available to the extent any awards granted under the Prior Plan are forfeited or cancelled, or expire or are settled in cash, including the settlement of tax-withholding obligations using
Shares. With respect to any Participant to whom Awards are intended to be exempt from the limitations set forth in Section 162(m) of the Code, the maximum number of Shares that may underlie
Awards, other than Options, granted in any one year to any Eligible Person, shall not exceed 4,000,000. Shares distributed under the Plan may be treasury Shares or authorized but unissued Shares. Any
Shares that have been granted as Restricted Stock or that have been reserved for distribution in payment for Options, Phantom Shares or other equity-based Awards but are later forfeited or for any
other reason are not payable or otherwise not made available for payment under the Plan may again be made the subject of Awards under the Plan. Any Shares covered by an Award (or portion of an Award)
granted under the Plan, which is forfeited or cancelled, expires or is settled in cash, including the settlement of tax-withholding obligations using Shares, shall be deemed not to have been issued
for purposes of determining the maximum number of Shares available for delivery under the Plan. If any Option is exercised by delivery of Shares to the Company as full or partial payment for such
exercise under this Plan, only the number of Shares issued net of the Shares delivered shall be deemed issued for purposes of determining the maximum number of Shares available for issuance under the
Plan. This Section 4.1(a) shall apply to the Share limit imposed to conform to Section 422(b)(1) of the Code (and the regulations issued thereunder) only to the extent consistent with
applicable regulations relating to Incentive Stock Options.
(b) Shares
subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights based directly on the dividends payable with respect to Shares subject to Options or
the dividends payable on a number of Shares corresponding to the number of Phantom Shares awarded, shall be subject to the limitation of Section 4.1(a). Notwithstanding Section 4.1(a),
except in the case of Awards intended to qualify for relief from the limitations of Section 162(m) of the Code, there shall be no limit on the number of Phantom Shares or Dividend Equivalent
Rights to the extent they are paid out in cash that may be granted under the Plan. If any Phantom Shares, Dividend Equivalent Rights or other equity-based Awards under Section 9 are paid out in
cash, then, notwithstanding the first sentence of Section 4.1(a) above (but subject to the second sentence thereof) the underlying Shares may again be made the subject of Awards under the Plan.
(c) Notwithstanding
any provision hereunder, no Award hereunder shall be exercisable or eligible for settlement if, as a result of either the ability to exercise or settle,
or the exercise or settlement of such Award, the Company would not satisfy the REIT Requirements in any respect.
4.2
Options.
Subject
to adjustments pursuant to Section 14, and subject to Section 4.1(a), Incentive Stock Options with respect to an aggregate of no more than 4,000,000 Shares may be
granted under the Plan. Subject to adjustments pursuant to Section 14, and with respect to any Participant to whom Options are intended to be exempt from the limitations set forth in
Section 162(m) of the Code, in no event may any Optionee receive Options for more than 4,000,000 Shares in any one year.
5.
PROVISIONS APPLICABLE TO STOCK OPTIONS.
5.1
Grant of Option.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) determine and designate from time
to time those Eligible Persons to whom Options are to be granted and the number of Shares to be optioned to each Eligible Person;
|
|
|
C-6
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(ii) determine
whether to grant Options intended to be Incentive Stock Options, or to grant Non-Qualified Stock Options, or both (to the extent that any Option does not qualify as an Incentive
Stock Option, it shall constitute a separate Non-Qualified Stock Option); provided that Incentive Stock Options may only be granted to employees; (iii) determine the time or times when and the
manner and condition in which each Option shall be exercisable and the duration of the exercise period; (iv) designate each Option as one intended to be an Incentive Stock Option or as a
Non-Qualified Stock Option; and (v) determine or impose other conditions to the grant or exercise of Options under the Plan as it may deem appropriate.
5.2
Option Price.
The
Option Price shall be determined by the Committee on the date the Option is granted and reflected in the Award Agreement, as the same may be amended from time to time. Any
particular Award Agreement may provide for different exercise prices for specified amounts of Shares subject to the Option. Unless
otherwise permitted by the Committee, the Option Price with respect to each Option shall not be less than 100% of the Fair Market Value of a Share on the day the Option is granted.
5.3
Period of Option and Vesting.
(a) Unless
earlier expired, forfeited or otherwise terminated, each Option shall expire in its entirety upon the 10th anniversary of the date of grant or shall have
such other term (which may be shorter, but not longer, in the case of Incentive Stock Options) as is set forth in the applicable Award Agreement (except that, in the case of an individual described in
Section 422(b)(6) of the Code (relating to certain 10% owners) who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant). The
Option shall also expire, be forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement.
(b) Each
Option, to the extent that the Optionee has not had a Termination of Service and the Option has not otherwise lapsed, expired, terminated or been forfeited, shall
first become exercisable according to the terms and conditions set forth in the Award Agreement, as determined by the Committee at the time of grant. Unless otherwise provided in the Award Agreement
or herein, no Option (or portion thereof) shall ever be exercisable if the Optionee has a Termination of Service before the time at which such Option (or portion thereof) would otherwise have become
exercisable, and any Option that would otherwise become exercisable after such Termination of Service shall not become exercisable and shall be forfeited upon such termination. Notwithstanding the
foregoing provisions of this Section 5.3(b), Options exercisable pursuant to the schedule set forth by the Committee at the time of grant may be fully or more rapidly exercisable or otherwise
vested at any time in the discretion of the Committee. Upon and after the death of an Optionee, such Optionee's Options, if and to the extent otherwise exercisable hereunder or under the applicable
Award Agreement after the Optionee's death, may be exercised by the Successors of the Optionee.
5.4
Exercisability Upon and After Termination of Optionee.
(a) Subject
to provisions of the Award Agreement, if an Optionee has a Termination of Service other than by the Company or its Subsidiaries for Cause and other than by
reason of death, or Disability, then no exercise of an Option may occur after the expiration of the three-month period to follow the termination, or if earlier, the expiration of the term of the
Option as provided under Section 5.3(a). If the Optionee should die during the three-month period after a Termination of Service for any reason other than Disability or Cause, the Option (if
and to the extent otherwise exercisable by the Optionee at the time of death) may be exercised until the earlier of (i) the date which is three months from the date of death of the Optionee, or
(ii) the date on which the term of the Option expires in accordance with Section 5.3(a).
(b) Subject
to provisions of the Award Agreement, in the event the Optionee has a Termination of Service on account of death or Disability, the Option (whether or not
otherwise exercisable) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the date on which the term of the Option
expires in accordance with Section 5.3(a). If the Optionee
|
|
|
C-7
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
should
die during the one-year period following a Termination of Service due to Disability, but while the Option is still in effect, the Option (if and to the extent otherwise exercisable by the
Optionee at the time of
death) may be exercised until the earlier of (i) the date which is one year from the date of death of the Optionee, or (ii) the date on which the term of the Option expires in accordance
with Section 5.3(a).
(c) Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement, if the Optionee has a Termination of Service by the Company for Cause,
then the Optionee's Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall be forfeited forthwith.
5.5
Exercise of Options.
(a) Subject
to vesting, restrictions on exercisability and other restrictions provided for hereunder or otherwise imposed in accordance herewith, an Option may be
exercised, and payment in full of the aggregate Option Price made, by an Optionee only by written notice (in the form prescribed by the Committee) to the Company specifying the number of Shares to be
purchased.
(b) Without
limiting the scope of the Committee's discretion hereunder, the Committee may impose such other restrictions on the exercise of Incentive Stock Options (whether
or not in the nature of the foregoing restrictions) as it may deem necessary or appropriate.
(c) Notwithstanding
any other provision of this Section 5, in the event of a Change in Control, Option shall become immediately exercisable for the full amount of
Shares subject thereto and shall be exercisable until expiration of the term of such Option.
5.6
Payment.
(a) The
aggregate Option Price shall be paid in full upon the exercise of the Option. Payment must be made by one of the following methods:
(i) cash
or a certified or bank cashier's check;
(ii) shares
of previously owned Common Stock, which have been previously owned for more than six months or which were purchased on the open market and for which the
Optionee has good title, free and clear of all liens and encumbrances, having an aggregate Fair Market Value on the date of exercise equal to the aggregate Option Price;
(iii) cash
by a broker-dealer acceptable to the Company to whom the Optionee has submitted an irrevocable notice of exercise;
(iv) a
combination of (i) and (ii);
(v) subject
to Section 12(e), the proceeds of a Company loan program or third-party sale program or a notice acceptable to the Committee given as consideration under
such a program, in each case if permitted by the Committee in its discretion, if such a program has been established and the Optionee is eligible to participate therein;
(vi) if
approved by the Committee in its discretion, through the written election of the Optionee to have Shares withheld by the Company from the Shares otherwise to be
received, with such withheld Shares having an aggregate Fair Market Value on the date of exercise equal to the aggregate Option Price; or
(vii) by
any combination of such methods of payment or any other method acceptable to the Committee in its discretion.
(b) Except
in the case of Options exercised by certified or bank cashier's check, the Committee may impose limitations and prohibitions on the exercise of Options as it
deems appropriate, including, without limitation, any limitation or prohibition designed to avoid accounting consequences which may result from the use of Common Stock as payment upon exercise of an
Option.
|
|
|
C-8
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(c) No
Option may be exercised with respect to any fractional Share. Any fractional Shares resulting from an Optionee's exercise that is accepted by the Company shall be
paid in cash.
5.7
Stock Appreciation Rights.
The
Committee, in its discretion, may also permit (taking into account, without limitation, the application of Section 409A of the Code, as the Committee may deem appropriate)
the Optionee to elect to exercise an Option by receiving a combination of Shares and cash, or, in the discretion of the Committee, either Shares or solely in cash, with an aggregate Fair Market Value
(or, to the extent of payment in cash, in an amount) equal to the excess of the Fair Market Value of the Shares with respect to which the Option is being exercised over the aggregate Option Price, as
determined as of the day the Option is exercised.
5.8
Exercise by Successors.
An
Option may be exercised, and payment in full of the aggregate Option Price made, by the Successors of the Optionee only by written notice (in the form prescribed by the Committee) to
the Company specifying the number of Shares to be purchased. Such notice shall state that the aggregate Option Price will be paid in full, or that the Option will be exercised as otherwise provided
hereunder, in the discretion of the Company or the Committee, if and as applicable.
5.9
Nontransferability of Option.
Each
Option granted under the Plan shall be nontransferable by the Optionee except by will or the laws of descent and distribution of the state wherein the Optionee is domiciled at the
time of his or her death; provided, however, that the Committee may (but need not) permit other transfers, where the Committee concludes that such transferability (i) does not result in
accelerated U.S. federal income taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of the Code, and
(iii) is otherwise appropriate and desirable.
5.10
Deferral.
The
Committee may establish a program (taking into account, without limitation, the application of Section 409A of the Code, as the Committee may deem appropriate) under which
Participants will have Phantom Shares subject to Section 7 credited upon their exercise of Options, rather than receiving Shares at that time.
5.11
Certain Incentive Stock Option Provisions.
(a) The
aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Stock for which any Optionee may be awarded Incentive Stock Options which
are first exercisable by the Optionee during any calendar year under the Plan (or any other stock option plan required to be taken into account under Section 422(d) of the Code) shall not
exceed $100,000.
(b) If
Shares acquired upon exercise of an Incentive Stock Option are disposed of in a disqualifying disposition within the meaning of Section 422 of the Code by an
Optionee prior to the expiration of either two years from the date of grant of such Option or one year from the transfer of Shares to the Optionee pursuant to the exercise of such Option, or in any
other disqualifying disposition within the meaning of Section 422 of the Code, such Optionee shall notify the Company in writing as soon as practicable thereafter of the date and terms of such
disposition and, if the Company (or any affiliate thereof) thereupon has a tax-withholding obligation, shall pay to the Company (or such affiliate) an amount equal to any withholding tax the Company
(or affiliate) is required to pay as a result of the disqualifying disposition.
(c) The
Option Price with respect to each Incentive Stock Option shall not be less than 100%, or 110% in the case of an individual described in Section 422(b)(6) of
the Code (relating to certain 10% owners), of the Fair Market Value of a Share on the day the Option is granted. In the case of an individual described in
|
|
|
C-9
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
Section 422(b)(6)
of the Code who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant.
(d) Subject
to provisions of the Award Agreement, if an Optionee has a Termination of Service other than by the Company or its Subsidiaries for Cause and other than by
reason of death or Permanent and Total Disability, then no exercise of an Incentive Stock Option may occur after the expiration of the three-month period to follow the termination, or if earlier, the
expiration of the term of the Incentive Stock Option as provided under Section 5.3(a); provided that, if the Optionee should die during the one-year period following a Termination of Service
due to Permanent and Total Disability or if the Optionee should die during the three-month period following a Termination of Service for any reason other than Permanent and Total Disability or Cause,
but while the Incentive Stock Option is still in effect, the Incentive Stock Option (if and to the extent otherwise exercisable by the Optionee at the time of death) may be exercised until the earlier
of (i) the date which is three months from the date of death of the Optionee, or (ii) the date on which the term of the Incentive Stock Option expires in accordance with
Section 5.3(a).
(e) Subject
to provisions of the Award Agreement, in the event the Optionee has a Termination of Service on account of death or Permanent and Total Disability, the
Incentive Stock Option (whether or not otherwise exercisable) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3(a).
(f) Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement, if the Optionee has a Termination of Service by the Company for Cause,
then the Optionee's Incentive Stock Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall be forfeited forthwith.
6.
PROVISIONS APPLICABLE TO RESTRICTED STOCK.
6.1
Grant of Restricted Stock.
(a) In
connection with the grant of Restricted Stock, whether or not Performance Goals (as provided for under Section 10) apply thereto, the Committee shall
establish one or more vesting periods with respect to the shares of Restricted Stock granted, the length of which shall be determined in the discretion of the Committee. Subject to the provisions of
this Section 6, the applicable Agreement and the other provisions of the Plan, restrictions on Restricted Stock shall lapse if the Grantee satisfies all applicable employment or other service
requirements through the end of the applicable vesting period.
(b) Subject
to the other terms of the Plan, the Committee may, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the
granting of Restricted Stock to Eligible Persons; (ii) provide a specified purchase price for the Restricted Stock (whether or not the payment of a purchase price is required by any state law
applicable to the Company); (iii) determine the restrictions applicable to Restricted Stock and (iv) determine or impose other conditions, including any applicable Performance Goals, to
the grant of Restricted Stock under the Plan as it may deem appropriate.
6.2
Certificates.
(a) Unless
otherwise provided by the Committee, each Grantee of Restricted Stock may be issued a stock certificate in respect of Shares of Restricted Stock awarded under
the Plan. Each such certificate shall be registered in the name of the Grantee. The certificates for Shares of Restricted Stock issued hereunder may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate, and,
|
|
|
C-10
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
without
limiting the generality of the foregoing, shall bear a legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE iSTAR FINANCIAL, INC. 2009 LONG-TERM
INCENTIVE PLAN AND AN AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND iSTAR FINANCIAL, INC. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE ON FILE IN THE OFFICES OF iSTAR
FINANCIAL, INC. AT 1114 AVENUE OF THE AMERICAS, 27TH FLOOR, NEW YORK, NEW YORK 10036.
(b) The
Committee may require that any stock certificates evidencing such Shares be held in custody by the Company until the restrictions hereunder shall have lapsed, and
that, as a condition of any Award of Restricted Stock, the Grantee may have delivered a stock power, endorsed in blank, relating to the stock covered by such Award. If and when such restrictions so
lapse, the stock certificates shall be delivered by the Company to the Grantee or his or her designee as provided in Section 6.3.
6.3
Restrictions and Conditions.
Unless
otherwise provided by the Committee, the Shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:
(i) Subject
to the provisions of the Plan and the Award Agreements, during a period commencing with the date of such Award and ending on the date the period of forfeiture
with respect to such Shares lapses, the Grantee shall not be permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or assign Shares of Restricted Stock
awarded under the Plan (or have such Shares attached or garnished). Subject to the provisions of the Award Agreements and clauses (iii) and (iv) below, the period of forfeiture with
respect to Shares granted hereunder shall lapse as provided in the applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly provided by the Committee, the period of
forfeiture with respect to such Shares shall only lapse as to whole Shares.
(ii) Except
as provided in the foregoing clause (i), below in this clause (ii) or in Section 14, or as otherwise provided in the applicable Award
Agreement, the Grantee shall have, in respect of the Shares of Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the Shares and the right to receive any
cash dividends; provided, however that cash dividends on such Shares shall, unless otherwise provided by the Committee, be held by the Company (unsegregated as a part of its general assets) until the
period of forfeiture lapses (and forfeited if the underlying Shares are forfeited), and paid over to the Grantee (without interest) as soon as practicable after such period lapses (if not forfeited).
Certificates for Shares (not subject to restrictions) shall be delivered to the Grantee or his or her designee promptly after,
and only after, the period of forfeiture shall lapse without forfeiture in respect of such Shares of Restricted Stock.
(iii) Except
as otherwise provided in the applicable Award Agreement, and subject to clause (iv) below, if the Grantee has a Termination of Service for any reason
other than death or Disability during the applicable period of forfeiture, then (A) all Shares still subject to restriction shall thereupon, and with no further action, be forfeited by the
Grantee, and (B) the Company shall pay to the Grantee as soon as practicable (and in no event more than 30 days) after such termination an amount equal to the lesser of (x) the
amount paid by the Grantee for such forfeited Restricted Stock as contemplated by Section 6.1, and (y) the Fair Market Value on the date of termination of the forfeited Restricted Stock.
(iv) Subject
to the provisions of the Award Agreement, in the event the Grantee has a Termination of Service on account of death or Disability, or in the event of a Change
in Control (regardless of whether a termination follows thereafter), during the applicable period of forfeiture, then restrictions under the Plan will immediately lapse on all Restricted Stock granted
to the applicable Grantee.
|
|
|
C-11
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
7.
PROVISIONS APPLICABLE TO PHANTOM SHARES.
7.1
Grant of Phantom Shares.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the granting of Phantom
Shares to Eligible Persons and (ii) determine or impose other conditions to the grant of Phantom Shares under the Plan as it may deem appropriate.
7.2
Term.
The
Committee may provide in an Award Agreement that any particular Phantom Share shall expire at the end of a specified term.
7.3
Vesting.
(a) Subject
to the provisions of the Award Agreements and Section 7.3(b), Phantom Shares shall vest as provided in the applicable Award Agreement.
(b) Unless
otherwise determined by the Committee at the time of grant, the Phantom Shares granted pursuant to the Plan shall be subject to the following vesting conditions:
(i) Subject
to the provisions of the Award Agreement and clause (ii) below, if the Grantee has a Termination of Service by the Company and its Subsidiaries for
Cause, all of the Grantee's Phantom Shares (whether or not such Phantom Shares are otherwise vested) shall thereupon, and with no further action, be forfeited and cease to be outstanding, and no
payments shall be made with respect to such forfeited Phantom Shares.
(ii) Subject
to the provisions of the Award Agreement, in the event the Grantee has a Termination of Service on account of death or Disability, or the Grantee has a
Termination of Service by the Company and its Subsidiaries for any reason other than Cause, or in the event of a Change in Control (regardless of whether a termination follows thereafter), all
outstanding Phantom Shares granted to such Grantee shall become immediately vested.
(iii) Other
than as provided in this Section 7.3, in the event that a Grantee has a Termination of Service, any and all of the Grantee's Phantom Shares which have
not vested prior to or as of such termination shall thereupon, and with no further action, be forfeited and cease to be outstanding and the Participant's vested Phantom Shares shall be settled as set
forth in Section 7.4.
7.4
Settlement of Phantom Shares.
(a) Each
vested and outstanding Phantom Share shall be settled by the transfer to the Grantee of one Share; provided that, the Committee at the time of grant (or, in the
appropriate case, as determined by the Committee, thereafter) may provide that a Phantom Share may be settled (i) in cash at the applicable Phantom Share Value, (ii) in cash or by
transfer of Shares as elected by the Grantee in accordance with procedures established by the Committee or (iii) in cash or by transfer of Shares as elected by the Company.
(b) Payment
(whether of cash or Shares) in respect of Phantom Shares shall be made in a single sum; provided that, with respect to Phantom Shares of a Grantee which have a
common Settlement Date, the Committee may permit the Grantee to elect in accordance with procedures established by the Committee (taking into account, without limitation, Section 409A of the
Code, as the Committee may deem appropriate) to receive installment payments over a period not to exceed 10 years. If the Grantee's Phantom Shares are paid out in installment payments, such
installment payments shall be treated as a series of separate payments for purposes of Section 409A of the Code.
(c) (i) Unless
otherwise provided in the applicable Award Agreement, the "Settlement Date" with respect to a Phantom Share is the first day of the month to
follow the date on which the Phantom Share
|
|
|
C-12
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
vests;
provided that a Grantee may elect, in accordance with procedures to be established by the Committee, that such Settlement Date will be deferred as elected by the Grantee to the first day of the
month to follow the Grantee's Termination of Service, or such other time as may be peAppendix 3: iStar Financial Inc. 2009 Long-Term Incentive Planrmitted by the Committee.
Notwithstanding the prior sentence, all initial elections to defer the Settlement Date shall be made in accordance with the requirements of Section 409A of the Code. In addition, unless
otherwise determined by the Committee, any subsequent elections under this Section 7.4(c)(i) must, except as may otherwise be permitted under the rules applicable under Section 409A of
the Code, (A) not be effective for at least one year after they are made, or, in the case of payments to commence at a specific time, be made at least one year before the first scheduled
payment and (B) defer the commencement of distributions (and each affected distribution) for at least five years.
(ii) Notwithstanding
Section 7.4(c)(i), the Committee may provide that distributions of Phantom Shares can be elected at any time in those cases in which the Phantom
Share Value is determined by reference to Fair
Market Value to the extent in excess of a base value, rather than by reference to unreduced Fair Market Value.
(iii) Notwithstanding
the foregoing, the Settlement Date, if not earlier pursuant to this Section 7.4(c), is the date of the Grantee's death.
(d) Notwithstanding
the other provisions of this Section 7, in the event of a Change in Control, the Settlement Date shall be the date of such Change in Control and
all amounts due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon as practicable (but in no event more than 30 days) after such Change in Control, unless such Grantee
elects otherwise in accordance with procedures established by the Committee.
(e) Notwithstanding
any other provision of the Plan, a Grantee may receive any amounts to be paid in installments as provided in Section 7.4(b) or deferred by the
Grantee as provided in Section 7.4(c) in the event of an "Unforeseeable Emergency." For these purposes, an "Unforeseeable Emergency," as determined by the Committee in its sole discretion, is a
severe financial hardship to the Grantee resulting from a sudden and unexpected illness or accident of the Grantee or "dependent," as defined in Section 152(a) of the Code, of the Grantee, loss
of the Grantee's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Grantee. The circumstances that will
constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:
(i) through
reimbursement or compensation by insurance or otherwise,
(ii) by
liquidation of the Grantee's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
(iii) by
future cessation of the making of additional deferrals under Section 7.4 (b) and (c).
Without
limitation, the need to send a Grantee's child to college or the desire to purchase a home shall not constitute an Unforeseeable Emergency. Distributions of amounts because of an Unforeseeable
Emergency shall be permitted to the extent reasonably needed to satisfy the emergency need.
7.5
Other Phantom Share Provisions.
(a) Rights
to payments with respect to Phantom Shares granted under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, levy, execution, or other legal or equitable process, either voluntary or involuntary; and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, attach or garnish, or levy or execute on any right to payments or other benefits payable hereunder, shall be void.
|
|
|
C-13
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(b) A
Grantee may designate in writing, on forms to be prescribed by the Committee, a beneficiary or beneficiaries to receive any payments payable after his or her death
and may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Grantee's death, payments hereunder shall be made to the Grantee's estate. If a
Grantee with a vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share Value in respect of such Phantom Shares paid, and any payments deferred pursuant to an election
under Section 7.4(c) shall be accelerated and paid, as soon as practicable (but no later than 60 days) after the date of death to such Grantee's beneficiary or estate, as applicable.
(c) The
Committee may establish a program (taking into account, without limitation, the application of Section 409A of the Code, as the Committee may deem
appropriate) under which distributions with respect to Phantom Shares may be deferred for periods in addition to those otherwise contemplated by the foregoing provisions of this Section 7. Such
program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants may select from
among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee.
(d) Notwithstanding
any other provision of this Section 7, any fractional Phantom Share will be paid out in cash at the Phantom Share Value as of the Settlement
Date.
(e) No
Phantom Share shall be construed to give any Grantee any rights with respect to Shares or any ownership interest in the Company. Except as may be provided in
accordance with Section 8, no provision of the Plan shall be interpreted to confer upon any Grantee any voting, dividend or derivative or other similar rights with respect to any Phantom Share.
7.6
Claims Procedures.
(a) To
the extent that the Plan is determined by the Committee to be subject to the Employee Retirement Income Security Act of 1974, as amended, the Grantee, or his or her
beneficiary hereunder or authorized representative, may file a claim for payments with respect to Phantom Shares under the Plan by written communication to the Committee or its designee. A
claim is not considered filed until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which
case notice of such special circumstances should be provided within the initial 90-day period) after the filing of the claim, the Committee will either:
(i) approve
the claim and take appropriate steps for satisfaction of the claim; or
(ii) if
the claim is wholly or partially denied, advise the claimant of such denial by furnishing to him or her a written notice of such denial setting forth (A) the
specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any rule of
construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the claimant; (C) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of the reasons why such material or information is necessary; and (D) a reference to this Section 7.6 as the provision
setting forth the claims procedure under the Plan.
(b) The
claimant may request a review of any denial of his or her claim by written application to the Committee within 60 days after receipt of the notice of denial
of such claim. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice of such special circumstances should be provided
within the initial 60-day period) after receipt of written application for review, the Committee will provide the claimant with its decision in writing, including, if the claimant's claim is not
approved, specific reasons for the decision and specific references to the Plan provisions on which the decision is based.
|
|
|
C-14
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
8.
PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.
8.1
Grant of Dividend Equivalent Rights.
Subject
to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the Award Agreements, authorize the granting of Dividend Equivalent Rights to
Eligible Persons based on the regular cash dividends declared on Common Stock, to be credited as of the dividend payment dates, during the period between the date an Award is granted, and the date
such Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalent Rights shall be converted to cash or additional Shares by such formula and at such time and subject
to such limitation as may be determined by the Committee. With respect to Dividend Equivalent Rights granted with respect to Options intended to be qualified performance-based compensation for
purposes of Section 162(m) of the Code, such Dividend Equivalent Rights shall be payable regardless of whether such Option is exercised. If a Dividend Equivalent Right is granted in respect of
another Award hereunder, then, unless otherwise stated in the Award Agreement, in no event shall the Dividend Equivalent Right be in effect for a period beyond the time during which the applicable
portion of the underlying Award is in effect.
8.2
Certain Terms.
(a) The
term of a Dividend Equivalent Right shall be set by the Committee in its discretion.
(b) Unless
otherwise determined by the Committee, except as contemplated by Section 8.4, a Dividend Equivalent Right is exercisable or payable only while the
Participant is an Eligible Person.
(c) Payment
of the amount determined in accordance with Section 8.1 shall be in cash, in Common Stock or a combination of the both, as determined by the Committee.
(d) The
Committee may impose such employment-related conditions on the grant of a Dividend Equivalent Right as it deems appropriate in its discretion.
8.3
Other Types of Dividend Equivalent Rights.
The
Committee may establish a program under which Dividend Equivalent Rights of a type whether or not described in the foregoing provisions of this Section 8 may be granted to
Participants. For example, and without limitation, the Committee may grant a Dividend Equivalent Right in respect of each Share subject to an Option or with respect to a Phantom Share, which right
would consist of the right (subject to Section 8.4) to receive a cash payment in an amount equal to the dividend distributions paid on a Share from time to time.
8.4
Deferral.
The
Committee may establish a program (taking into account, without limitation, the possible application of Section 409A of the Code, as the Committee may deem appropriate) under
which Participants (i) will have Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as though directly applicable with respect thereto, upon the granting of Dividend
Equivalent Rights, or (ii) will have payments with respect to Dividend Equivalent Rights deferred. In the case of the foregoing clause (ii), such program may include, without limitation,
provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants may select from among hypothetical investment
alternatives for such deferred amounts in accordance with procedures established by the Committee.
9.
OTHER AWARDS.
The
Committee shall have the right to grant other Awards based upon the Common Stock having such terms and conditions as the Committee may determine, including, without limitation, the
grant of shares based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights. Other Awards shall also include cash payments
(including the cash payment of Dividend Equivalent Rights) under the Plan having such terms and conditions as the Committee may
|
|
|
C-15
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
determine.
Such cash payments may be based on one or more criteria determined by the Committee which are unrelated to the value of Shares and which may be granted in tandem with, or independent of,
other Awards under the Plan.
10.
PERFORMANCE GOALS.
The
Committee, in its discretion, may, in the case of Awards (including, in particular, Awards other than Options) intended to qualify for an exception from the limitation imposed by
Section 162(m) of the Code ("Performance-Based Awards"), (i) establish one or more performance goals ("Performance Goals") as a precondition to the issuance or vesting of Awards, and
(ii) provide, in connection with the establishment of the Performance Goals, for predetermined Awards to those Participants (who continue to meet all applicable eligibility requirements) with
respect to whom the applicable Performance Goals are satisfied. The Performance Goals shall be based upon the criteria set forth in
Exhibit A
hereto which is hereby incorporated herein by reference as though set forth in full. The Performance Goals shall be established in a
timely fashion such that they are considered preestablished for purposes of the rules governing performance-based compensation under Section 162(m) of the Code. Prior to the award or vesting,
as applicable, of affected Awards hereunder, the Committee shall have certified that any applicable Performance Goals, and other material terms of the Award, have been satisfied. Performance Goals
which do not satisfy the foregoing provisions of this Section 10 may be established by the Committee with respect to Awards not intended to qualify for an exception from the limitations imposed
by Section 162(m) of the Code. The maximum amount that can be paid to any individual Participant with respect to any Performance Period (or with respect to any single year within a Performance
Period, if the Performance Period extends beyond a single year) pursuant to a Performance-Based Award denominated in cash (including annual cash bonuses) shall be $10,000,000.
11.
TAX WITHHOLDING.
11.1
In General.
The
Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding determined by the Committee to be required by law. Without limiting the
generality of the foregoing, the Committee may, in its discretion, require the Participant to pay to the Company at such time as the Committee determines the amount that the Committee deems necessary
to satisfy the Company's obligation to withhold federal, state or local income or other taxes incurred by reason of (i) the exercise of any Option, (ii) the lapsing of any restrictions
applicable to any Restricted Stock, (iii) the receipt of a distribution in respect of Phantom Shares or Dividend Equivalent Rights or (iv) any other applicable income-recognition event
(for example, an election under Section 83(b) of the Code).
11.2
Share Withholding.
(a) Upon
exercise of an Option, the Optionee may, if approved by the Committee in its discretion, make a written election to have Shares then issued withheld by the Company
from the Shares otherwise to be received, or to deliver previously owned whole Shares (which such holder has held for at least six months prior to the delivery of such Shares or which such holder
purchased on the open market and for which such holder has good title, free and clear of all liens and encumbrances), in order to satisfy the liability for such withholding taxes. In the event that
the Optionee makes, and the Committee permits, such an election, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy
the applicable withholding taxes. Where the exercise of an Option does not give rise to an obligation by the Company to withhold federal, state or local income or other taxes on the date of exercise,
but may give rise to such an obligation in the future, the Committee may, in its discretion, make such arrangements and impose such requirements as it deems necessary or appropriate.
(b) Upon
lapsing of restrictions on Restricted Stock (or other income-recognition event), the Grantee may, if approved by the Committee in its discretion, make a written
election to have Shares withheld by the
|
|
|
C-16
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
Company
from the Shares otherwise to be released from restriction, or to deliver previously owned whole Shares (not subject to restrictions hereunder) (which such holder has held for at least six
months prior to the delivery of such Shares or which such holder purchased on the open market and for which such holder has good title, free and clear of all liens and encumbrances), in order to
satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an election, the number of Shares so withheld or delivered shall have an
aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes.
(c) Upon
the making of a distribution in respect of Phantom Shares or Dividend Equivalent Rights, the Grantee may, if approved by the Committee in its discretion, make a
written election to have amounts (which may include Shares) withheld by the Company from the distribution otherwise to be made, or to deliver previously owned whole Shares (not subject to restrictions
hereunder) (which such holder has held for at least six months prior to the delivery of such Shares or which such holder purchased on the open market and for which such holder has good title, free and
clear of all liens and encumbrances), in order to satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such an election, any Shares so
withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes.
11.3
Withholding Required.
Notwithstanding
anything contained in the Plan or the Award Agreement to the contrary, the Participant's satisfaction of any tax-withholding requirements imposed by the Committee shall
be a condition precedent to the Company's obligation as may otherwise be provided hereunder to provide Shares to the Participant and to the release of any restrictions as may otherwise be provided
hereunder, as applicable; and the applicable Option, Restricted Stock, Phantom Shares or Dividend Equivalent Rights shall be forfeited upon the failure of the Participant to satisfy such requirements
with respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of restrictions on the Restricted Stock (or other income-recognition event) or (iii) distributions
in respect of any Phantom Share or Dividend Equivalent Right.
An
Award Agreement may provide that the Participant may satisfy any such obligation by any of the following means: (A) a cash payment to the Company, (B) delivery to the
Company of previously owned whole Shares) (which such Participant has held for at least six months prior to the delivery of such Shares or which such Participant purchased on the open market and for
which such Participant has good title, free and clear of all liens and encumbrances) having an aggregate Fair Market Value, determined as of the date the obligation to withhold or pay taxes arises in
connection with an Award (the "Tax Date"), equal to the amount necessary to satisfy any such obligation (C) in the case of the exercise of an Option, a cash payment by a broker-dealer
acceptable to the Company to whom the Participant has submitted an irrevocable notice of exercise or (D) any combination of (A) and (B), in each case to the extent set forth in the Award
Agreement; provided however, that the Committee shall have the sole discretion to disapprove of an election pursuant to any of the foregoing clauses (B) through (D). An Award Agreement may
provide for Shares to be delivered having a Fair Market Value in excess of the minimum amount required to be withheld, but not in excess of the amount determined by applying the Participant's maximum
marginal tax rate. Any fraction of a Share which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the Participant.
12.
REGULATIONS AND APPROVALS.
(a) The
obligation of the Company to sell Shares with respect to an Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including
all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.
|
|
|
C-17
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(b) The
Committee may make such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax
benefits applicable to an Award.
(c) Each
grant of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect thereof) or Dividend Equivalent Rights (or issuance of Shares in respect
thereof), or other Award under Section 9 (or issuance of Shares in respect thereof), is subject to the requirement that, if at any time the Committee determines, in its discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of Options, Shares of Restricted Stock, Phantom Shares, Dividend Equivalent Rights, other Awards or
other Shares, no payment shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock or other Award made, in whole or in part, unless listing, registration, qualification, consent
or approval has been effected or obtained free of any conditions in a manner acceptable to the Committee.
(d) In
the event that the disposition of stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not
otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act, and the Committee may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that such Shares are acquired for investment only and not with a view to distribution
and that such Shares will be disposed of only if registered for sale under the Securities Act or if there is an available exemption for such disposition.
(e) Notwithstanding
any other provision of the Plan, the Company shall not be required to take or permit any action under the Plan or any Award Agreement which, in the
good-faith determination of the Company, would result in a material risk of a violation by the Company of Section 13(k) of the Exchange Act.
13.
INTERPRETATION AND AMENDMENTS; OTHER RULES.
The
Committee may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate. Without limiting the generality of the
foregoing, the Committee may (i) determine the extent, if any, to which Options, Phantom Shares or Shares (whether or not Shares of Restricted Stock), Dividend Equivalent Rights, or other
Awards shall be forfeited (whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and the Award Agreements hereunder, with such interpretations to be
conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law, provided that the Committee's interpretation shall not be entitled to deference on and after a
Change in Control except to the extent that such interpretations are made exclusively by members of the Committee who are individuals who served as Committee members before the Change in Control; and
(iii) take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof.
In the event of any dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the
Plan, the decision of the Committee, except as provided in clause (ii) of the foregoing sentence, shall be final and
binding upon all persons. Unless otherwise expressly provided hereunder, the Committee, with respect to any grant, may exercise its discretion hereunder at the time of the Award or thereafter.
Notwithstanding any provision in the Plan to the contrary, no Option or stock appreciation right (granted pursuant to Section 5.7) issued under the Plan may be amended to reduce the Option
Price or the exercise price of such stock appreciation right below the Option Price or exercise price as of the date the Option or stock appreciation right was granted. In addition, no Option or stock
appreciation right may be granted in exchange for, or in connection with, the cancellation or surrender of an Option, stock appreciation right or other Award having a lower exercise price. The Board
may amend the Plan as it shall deem advisable,
|
|
|
C-18
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
except
that no amendment may adversely affect a Participant with respect to an Award previously granted unless such amendments are required in order to comply with applicable laws; provided, however,
that the Plan may not be amended without shareholder approval in any case in which amendment in the absence of shareholder approval would cause the Plan to fail to comply with any applicable legal
requirement or applicable exchange or similar rule.
14.
CHANGES IN CAPITAL STRUCTURE.
(a) If
(i) the Company or its Subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares,
sale of all or substantially all of the assets or stock of the Company or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its Subsidiaries, or any distribution to holders of Common Stock other than cash
dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of the outstanding Awards, then:
(x) the
maximum aggregate number and kind of Shares which may be made subject to Options and Dividend Equivalent Rights under the Plan, the maximum aggregate number and
kind of Shares of Restricted Stock that may be granted under the Plan, the maximum aggregate number of Phantom Shares and other Awards which may be granted under the Plan may be appropriately adjusted
by the Committee in its discretion; and
(y) the
Committee shall take any such action as in its discretion shall be necessary to maintain each Optionees' rights hereunder (including under their Award Agreements)
so that they are substantially in their respective Options, Phantom Shares and Dividend Equivalent Rights substantially proportionate to the rights existing in such Options, Phantom Shares and
Dividend Equivalent Rights prior to such event, including, without limitation, adjustments in (A) the number of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under
Section 9) granted, (B) the number and kind of shares or other property to be distributed in respect of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under
Section 9 as applicable), (C) the Option Price and Phantom Share Value, and (D) performance-based criteria established in connection with Awards (to the extent consistent with
Section 162(m) of the Code, as applicable); provided that, in the discretion of the Committee, the foregoing clause (D) may also be applied in the case of any event relating to a
Subsidiary if the event would have been covered under this Section 14(a) had the event related to the Company.
To
the extent that such action shall include an increase or decrease in the number of Shares (or units of other property then available) subject to all outstanding Awards, the number of Shares (or
units) available under Section 4 shall be increased or decreased, as the case may be, proportionately, as may be determined by the Committee in its discretion.
(b) Any
Shares or other securities distributed to a Grantee with respect to Restricted Stock or otherwise issued in substitution of Restricted Stock shall be subject to the
restrictions and requirements imposed by Section 6, including depositing the certificates therefor with the Company together with a stock power and bearing a legend as provided in
Section 6.2(a).
(c) If
the Company shall be consolidated or merged with another corporation or other entity, each Grantee who has received Restricted Stock that is then subject to
restrictions imposed by Section 6.3(a) may be required to deposit with the successor corporation the certificates, if any, for the stock or securities or the other property that the Grantee is
entitled to receive by reason of ownership of Restricted Stock in a manner consistent with Section 6.2(b), and such stock, securities or other property shall become subject to the restrictions
and requirements imposed by Section 6.3(a), and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in
Section 6.2(a).
|
|
|
C-19
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
(d) If
a Change in Control shall occur, then the Committee, as constituted immediately before the Change in Control, may make such adjustments as it, in its discretion,
determines are necessary or appropriate in light of the Change in Control, provided that the Committee determines that such adjustments do not have an adverse economic impact on the Participant as
determined at the time of the adjustments.
(e) The
judgment of the Committee with respect to any matter referred to in this Section 14 shall be conclusive and binding upon each Participant without the need
for any amendment to the Plan.
15.
MISCELLANEOUS.
15.1
No Rights to Employment or Other Service.
Nothing
in the Plan or in any grant made pursuant to the Plan shall confer on any individual any right to continue in the employ or other service of the Company or its Subsidiaries or
interfere in any way with the right of the Company or its Subsidiaries and its shareholders to terminate the individual's employment or other service at any time.
15.2
No Fiduciary Relationship.
Nothing
contained in the Plan (including without limitation Sections 7.5(c) and 8.4), and no action taken pursuant to the provisions of the Plan, shall create or shall be
construed to create a trust of any kind, or a fiduciary relationship between the Company or its Subsidiaries, or their officers or the Committee, on the one hand, and the Participant, the Company, its
Subsidiaries or any other person or entity, on the other.
15.3
Compliance With Section 409A Of The Code.
(a) Any
Award Agreement issued under the Plan that is subject to Section 409A of the Code shall include such additional terms and conditions as may be required to
satisfy the requirements thereof.
(b) With
respect to any Award issued under the Plan that is subject to Section 409A of the Code, and with respect to which a payment or distribution is to be made
upon a Termination of Service, if the Grantee is determined by the Company to be a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code and any of the Company's stock
is publicly traded on an established securities market or otherwise, such payment or distribution may not be made before the date which is six months after the date of Termination of Service (to the
extent required under Section 409A of the Code). Any payments or distributions delayed in accordance with the prior sentence shall be paid to the Grantee on the first day of the seventh month
following the Grantee's Termination of Service.
(c) Notwithstanding
any other provision of the Plan, the Board and the Committee shall administer the Plan, and exercise authority and discretion under the Plan, to satisfy
the requirements of Section 409A of the Code or any exemption thereto.
15.4
No Fund Created.
Any
and all payments hereunder to any Grantee under the Plan shall be made from the general funds of the Company (or, if applicable, a Participating Company), no special or separate
fund shall be established or other segregation of assets made to assure such payments, and the Phantom Shares (including for purposes of this Section 15.4 any accounts established to facilitate
the implementation of Section 7.4(c)) and any other similar devices issued hereunder to account for Plan obligations do not constitute Common Stock and shall not be treated as (or as giving
rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a mere bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle
that would not cause the Plan to be deemed to be funded for tax purposes or for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. The obligations of the Company
under the Plan are unsecured and constitute a mere promise by the Company to make benefit payments in the future and, to the extent that any person acquires a right to receive payments under the Plan
from the Company, such right shall be no greater than the right of a
|
|
|
C-20
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
general
unsecured creditor of the Company. (If any affiliate of the Company is or is made responsible with respect to any Awards, the foregoing sentence shall apply with respect to such affiliate.)
Without limiting the foregoing, Phantom Shares and any other similar devices issued hereunder to account for Plan obligations are solely a device for the measurement and determination of the amounts
to be paid to a Grantee under the Plan, and each Grantee's right in the Phantom Shares and any such other devices is limited to the right to receive payment, if any, as may herein be provided.
15.5
Notices.
All
notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Board or mailed to its principal office, addressed to the attention of the Board; and if
to the Participant, shall be delivered personally, sent by facsimile transmission or mailed to the Participant at the address appearing in the records of the Company. Such addresses may be changed at
any time by written notice to the other party given in accordance with this Section 15.5.
15.6
Exculpation and Indemnification.
The
Company shall indemnify and hold harmless the members of the Board and the members of the Committee from and against any and all liabilities, costs and expenses incurred by such
persons as a result of any act or omission to act in connection with the performance of such person's duties, responsibilities and obligations under the Plan, except in circumstances involving bad
faith.
15.7
Captions.
The
use of captions in this Plan is for convenience. The captions are not intended to provide substantive rights.
15.8
Governing Law.
THIS
PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
|
|
|
C-21
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
EXHIBIT A
PERFORMANCE CRITERIA
|
Performance-Based
Awards intended to qualify as "performance-based" compensation under Section 162(m) of the Code, may be payable upon the attainment of objective performance
goals that are established by the Committee and relate to one or more Performance Criteria, in each case on specified date or over any period, up to 10 years, as determined by the Committee.
Performance Criteria may (but need not) be based on the achievement of the specified levels of performance under one or more of the measures set out below relative to the performance of one or more
other corporations or indices.
"Performance
Criteria" means the following business criteria (or any combination thereof) with respect to one or more of the Company, any Participating Company or any division or
operating unit thereof:
-
(i)
-
pre-tax
income,
-
(ii)
-
after-tax
income,
-
(iii)
-
net
income (meaning net income as reflected in the Company's financial reports for the applicable period, on an aggregate, diluted and/or per share basis),
-
(iv)
-
operating
income,
-
(v)
-
cash
flow,
-
(vi)
-
earnings
per share,
-
(vii)
-
return
on equity,
-
(viii)
-
return
on invested capital or assets,
-
(ix)
-
cash
and/or funds available for distribution,
-
(x)
-
appreciation
in the fair market value of the Common Stock,
-
(xi)
-
return
on investment,
-
(xii)
-
shareholder
return (meaning the per annum compounded rate of increase in the Fair Market Value of an investment in Shares on the first day of the Performance
Period (assuming purchase of Shares at their Fair Market Value on such day) through the last day of the Performance Period, plus all dividends or distributions paid with respect to such Shares during
the Performance Period, and assuming reinvestment in Shares of all such dividends and distributions, adjusted to give effect to Section 14 of the Plan).
-
(xiii)
-
net
earnings growth,
-
(xiv)
-
stock
appreciation (meaning an increase in the price or value of the Common Stock after the date of grant of an award and during the applicable period),
-
(xv)
-
related
return ratios,
-
(xvi)
-
increase
in revenues,
-
(xvii)
-
net
earnings,
-
(xviii)
-
changes
(or the absence of changes) in the per share or aggregate market price of the Company's Common Stock,
-
(xix)
-
number
of securities sold,
-
(xx)
-
earnings
before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in the Company's
financial reports for the applicable period,
|
|
|
C-22
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
Table of Contents
-
(xxi)
-
total
revenue growth (meaning the increase in total revenues after the date of grant of an award and during the applicable period, as reflected in the Company's
financial reports for the applicable period),
-
(xxii)
-
the
Company's published ranking against its peer group of real estate investment trusts based on total shareholder return, and
-
(xxiii)
-
funds
from operations.
Performance
Goals may be absolute amounts or percentages of amounts, may be used on an adjusted basis, may be relative to the performance of other companies or of indexes or may be
based upon absolute values or values determined on a per-share basis.
Except
as otherwise expressly provided, all financial terms are used as defined under Generally Accepted Accounting Principles ("GAAP") and all determinations shall be made in
accordance with GAAP, as applied by the Company in the preparation of its periodic reports to shareholders.
To
the extent permitted by Section 162(m) of the Code, unless the Committee provides otherwise at the time of establishing the Performance Goals, for each fiscal year of the
Company, there shall be objectively determinable adjustments, as determined in accordance with GAAP, to any of the Performance Criteria
described above for one or more of the items of gain, loss, profit or expense: (A) determined to be extraordinary or unusual in nature or infrequent in occurrence, (B) related to the
disposal of a segment of a business, (C) related to a change in accounting principle under GAAP, (D) related to discontinued operations that do not qualify as a segment of a business
under GAAP, and (E) attributable to the business operations of any entity acquired by the Company during the fiscal year; and, to the extent allowed under Section 162(m) of the Code, the
Committee may make objectively determinable adjustments, as determined in accordance with GAAP, to any of the Performance Criteria described above, to reflect any of the following events not otherwise
described in clauses (A) through (E) above: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws,
accounting principles, or other laws or regulatory rules affecting reported results; (iv) any reorganization and restructuring programs; (v) extraordinary nonrecurring items as described
in Accounting Standards Codification Topic 225-20 (or any successor pronouncement thereto) and/or in management's discussion and analysis of financial condition and results of operations
appearing in the Company's annual report to shareholders for the applicable year; (vi) acquisitions or divestitures; (vii) any other specific unusual or nonrecurring events, or
objectively determinable category thereof; (viii) foreign exchange gains and losses; (ix) discontinued operations and nonrecurring charges; and (x) a change in the Company's
fiscal year.
|
|
|
C-23
|
iStar
Inc. 2019
Proxy
Statement
|
|
Exhibit
C
|
MMMMMMMMMMMM MMMMMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000004 ENDORSEMENT_LINE______________ SACKPACK_____________ Your vote matters heres how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 received by 1:00 a.m., Eastern Time, on May 16, 2019. Online GIof ntoo welwewct.reonnviicsivoontrienpgo, rts.com/STAR delete QR code and control # or scan the QR code login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/STAR Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: For Withhold For Withhold For Withhold 01 - Jay Sugarman 02 - Clifford De Souza 03 - Robert W. Holman, Jr 04 - Robin Josephs 05 - Richard Lieb 06 - Barry W. Ridings ForAgainst Abstain ForAgainst Abstain 2. Say on Pay A non-binding advisory vote approving executive compensation 3. Approval of amendments to iStar Inc. 2009 long-term incentive plan 4. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. MMMMMMM C 1234567890 J N T 1 6 6 0 8 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 6 3 D V 4 031BTB MMMMMMMMM B Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below A Proposals The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. Annual Meeting Proxy Card1234 5678 9012 345
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The material is available at: www.envisionreports.com/STAR q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + Notice of 2019 Annual Meeting of Shareholders The Harvard Club of New York City, 35 West 44th Street, 3rd Floor, New York, NY 10036 Proxy Solicited by Board of Directors for Annual Meeting May 16, 2019 at 9:00 a.m. Eastern Time Jay Sugarman and Geoffrey M. Dugan, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of iStar Inc. to be held on May 16, 2019 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR Item 1, the election of six nominees as directors, FOR Item 2, approval of the non-binding advisory vote approving executive compensation, FOR Item 3, approval of amendments to iStar Inc. 2009 long-term incentive plan, and FOR Item 4 the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.) Change of Address Please print new address below. Comments Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. + C Non-Voting Items Proxy iStar Inc. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/STAR
MMMMMMMMMMMM Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: For Withhold For Withhold For Withhold 01 - Jay Sugarman 02 - Clifford De Souza 03 - Robert W. Holman, Jr 04 - Robin Josephs 05 - Richard Lieb 06 - Barry W. Ridings ForAgainst Abstain ForAgainst Abstain 2. Say on Pay A non-binding advisory vote approving executive compensation 3. Approval of amendments to iStar Inc. 2009 long-term incentive plan 4. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. + 1 U P X 4 1 6 6 0 8 031BUB MMMMMMMMM B Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below A Proposals The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. Annual Meeting Proxy Card
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Notice of 2019 Annual Meeting of Shareholders The Harvard Club of New York City, 35 West 44th Street, 3rd Floor, New York, NY 10036 Proxy Solicited by Board of Directors for Annual Meeting May 16, 2019 at 9:00 a.m. Eastern Time Jay Sugarman and Geoffrey M. Dugan, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of iStar Inc. to be held on May 16, 2019 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR Item 1, the election of six nominees as directors, FOR Item 2, approval of the non-binding advisory vote approving executive compensation, FOR Item 3, approval of amendments to iStar Inc. 2009 long-term incentive plan, and FOR Item 4 the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.) Proxy iStar Inc.