SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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o Definitive
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o Soliciting
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W. P. Carey & Co. LLC
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TABLE OF CONTENTS
April 30,
2009
To Be Held Thursday,
June 11, 2009
Dear W. P. Carey & Co. LLC Shareholder:
The 2009 Annual Meeting of Shareholders of W. P.
Carey & Co. LLC will be held at TheTimesCenter,
242 West 41st Street, New York, New York, 10018, on
Thursday, June 11, 2009 at 4:00 p.m. for the following
purposes:
| • | To elect twelve Directors for 2009; | |
| • | To approve the W. P. Carey & Co. LLC 2009 Share Incentive Plan; | |
| • | To approve the W. P. Carey & Co. LLC 2009 Non-Employee Directors’ Incentive Plan; | |
| • | To transact such other business as may properly come before the meeting and any adjournment thereof. |
Only shareholders who owned stock at the close of business on
April 16, 2009 are entitled to vote at the meeting. W. P.
Carey & Co. LLC mailed the attached Proxy Statement,
proxy card and its Annual Report to shareholders on or about
May 1, 2009.
By Order of the Board of Directors
Susan C. Hyde
Managing Director and Secretary
Whether or not you attend the Annual Meeting, it is important
that your shares be represented and voted at the meeting. You
may vote your shares by using the telephone or through the
Internet. Instructions for using these services are set forth on
the enclosed proxy card. You may also vote your shares by
marking your votes on the enclosed proxy card, signing and
dating it and mailing it in the business reply envelope
provided. If you attend the Annual Meeting, you may withdraw
your proxy and vote in person.
Important
Notice Regarding Availability of Proxy Materials
For the 2009 Annual Meeting of Shareholders to Be Held on June 11, 2009
For the 2009 Annual Meeting of Shareholders to Be Held on June 11, 2009
This Proxy
Statement and the Annual Report to Shareholders
are available at www.proxyvote.com
are available at www.proxyvote.com
W. P.
CAREY & CO. LLC
PROXY
STATEMENT
MAY 1, 2009
MAY 1, 2009
QUESTIONS &
ANSWERS
The accompanying Proxy is solicited by the Board of Directors of
W. P. Carey & Co. LLC, a Delaware limited liability
company, for use at its annual meeting of shareholders (the
“Annual Meeting”) to be held at TheTimesCenter,
242 West 41st Street, New York, New York, 10018 on
Thursday, June 11, 2009 at 4:00 p.m., or any
adjournment thereof. As used herein, “W. P.
Carey & Co.,” the “Company,”
“we,” and “us” refer to W. P.
Carey & Co. LLC. References in this Proxy Statement to
W. P. Carey & Co. LLC or the Company include W. P.
Carey & Co. LLC’s affiliates and subsidiaries,
except where the context otherwise indicates.
Who is
soliciting my proxy?
The Directors of W. P. Carey & Co. LLC are sending you
this Proxy Statement and enclosed proxy.
Why did I
receive a Notice in the mail regarding the Internet availability
of the proxy materials this year instead of a paper copy of the
proxy materials?
This year, we are pleased to be using a rule of the Securities
and Exchange Commission, also known as the SEC, that allows
companies to furnish their proxy materials over the Internet. As
a result, we are mailing to many of our shareholders a Notice
about the Internet availability of the proxy materials instead
of a paper copy of the proxy materials. All shareholders
receiving the Notice will have the ability to access the proxy
materials over the Internet and request to receive a paper copy
of the proxy materials by mail. Instructions on how to access
the proxy materials over the Internet or to request a paper copy
may be found on the Notice.
Why
didn’t I receive a Notice about the Internet availability
of the proxy materials?
We are providing some of our shareholders, including
shareholders who have previously requested to receive paper
copies of the proxy materials, with paper copies of the proxy
materials instead of a Notice about the Internet availability of
the proxy materials.
How can I
access the proxy materials over the Internet?
Your Notice about the Internet availability of the proxy
materials, proxy card or voting instruction card will contain
instructions on how to view our proxy materials for the Annual
Meeting on the Internet.
How may I
obtain a paper copy of the proxy materials?
Shareholders receiving a Notice about the Internet availability
of the proxy materials will find instructions about how to
obtain a paper copy of the proxy materials on their Notice. All
shareholders who do not receive the Notice will receive a paper
copy of the proxy materials by mail.
Who is
entitled to vote?
W. P. Carey & Co. LLC’s shareholders as of
the close of business on April 16, 2009 (the “Record
Date”) are entitled to vote at the Annual Meeting.
How do I
vote?
You may vote your shares either by attending the Annual Meeting,
by telephone, through the Internet, or by mail by following the
instructions provided in the Notice or the printed copy of the
proxy materials. If you hold your shares in “street
name” through a broker or other nominee, you must follow
the instructions provided by your broker or nominee to vote your
shares. If you are a shareholder of record and received a
printed copy of the proxy materials, to
vote by proxy, sign and date the enclosed proxy card and return
it in the enclosed envelope. If you return your proxy card but
fail to mark your voting preference, your shares will be voted
FOR each of the nominees, FOR Proposals 2 and 3, and in the
discretion of the proxy holders, if any other matter properly
comes before the meeting. We suggest that you return a proxy
even if you plan to attend the Annual Meeting.
May I
revoke my proxy?
Yes, if you are a shareholder of record, you may revoke your
proxy at any time before the meeting by notifying
W. P. Carey & Co. LLC’s Secretary or
submitting a new proxy, or by voting in person at the Annual
Meeting. You should mail any notice of revocation of proxy to
Susan C. Hyde, Secretary, W. P. Carey & Co. LLC, 50
Rockefeller Plaza, New York, New York 10020.
How many
shares may vote?
At the close of business on the Record Date, W. P.
Carey & Co. LLC had 39,099,668 shares of its
Common Stock outstanding and entitled to vote. Every shareholder
is entitled to one vote for each share held.
What is a
quorum?
A quorum is the presence, either in person or represented by
proxy, of a majority of the shares entitled to vote at the
meeting. There must be a quorum for the meeting to be held.
How many
votes are required at the meeting for shareholder
approval?
Assuming a quorum is present, with respect to the election of
Directors, each share may be voted for as many individuals as
there are Directors to be elected. A plurality of all the votes
cast shall be sufficient to elect a Director. With respect to
Proposals Two and Three, the affirmative vote of a majority
of the votes cast by the shareholders, in person or by proxy and
entitled to vote, is necessary for approval. Abstentions and
broker “non-votes,” which arise when a broker cannot
vote on a particular matter because the matter is not routine
and the beneficial owner of the shares has not given applicable
instructions to the broker, are counted for quorum purposes but
are not counted as votes for or against any matter. For these
reasons, for any matter before the shareholders at the meeting,
abstentions and broker “non-votes” have no effect on
whether the votes cast at the meeting are enough for approval of
the matter.
How will
voting on shareholder proposals be conducted?
We do not know of any other matters that are likely to be
brought before the meeting. However, if any other matters
properly come before the Annual Meeting, your signed proxy gives
authority to the persons named in the enclosed proxy to vote
your shares on such matters in accordance with their best
judgment to the extent permitted by applicable law.
Who will
pay the cost for this proxy solicitation and how much will it
cost?
W. P. Carey & Co. LLC will pay the cost of
preparing, assembling and mailing the Notice about Internet
availability, this Proxy Statement, the Notice of Meeting and
the enclosed proxy card. In addition to the solicitation of
proxies by mail, we may utilize some of the officers and
employees of our wholly-owned subsidiaries, Carey Asset
Management Corp. (Carey Asset Management) and Carey Management
Services, Inc. (Carey Management Services) (who will receive no
compensation in addition to their regular salaries), to solicit
proxies personally and by telephone. Currently, we do not intend
to retain a solicitation firm to assist in the solicitation of
proxies, but if sufficient proxies are not returned to us, we
may retain an outside firm to assist in proxy solicitation for a
fee estimated to be $30,000 or less, plus out-of-pocket
expenses. We may request banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy
materials to their principals and to request authority for the
execution of proxies and will reimburse such persons for their
expenses in so doing. We expect the total cost of this
solicitation, assuming an outside proxy firm is not needed, to
be approximately $65,000.
2
W. P. Carey & Co. LLC will provide
shareholders, without charge, a copy of our Annual Report on
Form 10-K
for the year ended December 31, 2008, including the
financial statements and management’s report of internal
controls over financial reporting and schedules attached
thereto, but excluding exhibits (the “2008
Form 10-K”),
which was filed with the SEC on March 2, 2009, upon written
request to Ms. Susan C. Hyde, Director of Investor
Relations, W. P. Carey & Co. LLC, 50 Rockefeller
Plaza, New York, New York 10020.
PROPOSAL ONE
ELECTION
OF DIRECTORS
At the Annual Meeting, you and the other shareholders will elect
twelve Directors, each to hold office until the next annual
meeting of shareholders except in the event of death,
resignation or removal. If a nominee is unavailable for
election, the Board may reduce its size or designate a
substitute. If a substitute is designated, proxies voting on the
original nominee will be cast for the substituted nominee.
Currently, the Board is unaware of any circumstances that would
result in a nominee being unavailable. All of the nominees are
now members of the Board of Directors.
NOMINATING
PROCEDURES
The Nominating and Corporate Governance Committee considers
candidates for Board membership suggested by its members and
other Board members, as well as by management and shareholders.
A shareholder who wishes to recommend a prospective nominee for
the Board should notify our Corporate Secretary or any member of
the Nominating and Corporate Governance Committee in writing
with the information and in the time period required by our
By-Laws, which is set forth in more detail in “Shareholder
Proposals and Other Communications” below.
Once the Nominating and Corporate Governance Committee has
identified a prospective nominee, the Committee makes an initial
determination as to whether to conduct a full evaluation of the
candidate. This initial determination is based on whatever
information is provided to the Committee with the recommendation
of the prospective candidate, as well as the Committee’s
own knowledge of the prospective candidate, which may be
supplemented by inquiries to the person making the
recommendation or others. The preliminary determination is based
primarily on the need for additional Board members to fill
vacancies or expand the size of the Board and the likelihood
that the prospective nominee can satisfy the evaluation factors
described below. If the Committee determines, in consultation
with the Chairman of the Board and other Board members as
appropriate, that additional consideration is warranted, it may
request a search firm to gather additional information about the
prospective nominee’s background and experience and to
report its findings to the Committee. The Committee then
evaluates the prospective nominee’s qualifications. As set
forth in our Corporate Governance Guidelines, there are no firm
prerequisites to qualify as a candidate for the Board, although
the Board seeks candidates who possess the background, skills,
expertise, characteristics and time to make a significant
contribution to the Board, W. P. Carey & Co. LLC and
its shareholders. At least annually, the Nominating and
Corporate Governance Committee reviews the qualifications and
backgrounds of the Directors, as well as the overall composition
of the Board.
The Committee also considers such other relevant factors as it
deems appropriate, including the balance of management Directors
and Independent Directors, the need for Audit Committee or other
expertise, and the qualifications of other potential nominees.
In connection with its evaluation, the Committee determines
whether to interview the prospective nominee, and if warranted,
one or more members of the Committee, and others as appropriate,
interview prospective nominees in person or by telephone. After
completing this evaluation and interview, the Committee makes a
recommendation to the full Board as to the persons who should be
nominated by the Board, and the Board determines the nominees
after considering the recommendation and report of the Committee.
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NOMINEES
FOR THE BOARD OF DIRECTORS
Unless otherwise specified, proxies will be voted for the
election of the named nominees. Detailed information on each
nominee for election to the Board of Directors is provided below.
Wm. Polk
Carey
AGE: 78
Director Since: 1996
Mr. Carey, Chairman of the Board of Directors of W. P.
Carey & Co. LLC, has been active in lease financing
since 1959 and a specialist in net leasing of corporate real
estate property since 1964. Mr. Carey also serves as
Chairman of the Board of Corporate Property Associates 14
(“CPA®:14”),
Corporate Property Associates 15
(“CPA®:15”),
Corporate Property Associates 16 – Global
(“CPA®:16 –
Global”) and Corporate Property Associates 17 –
Global
(“CPA®:17 –
Global” and, together with
CPA®:14,
CPA®:15,
and
CPA®:16 –
Global, the “CPA REITs”), which are publicly owned,
non-traded real estate investment trusts sponsored by the
Company. He also served as the Co-Chief Executive Officer of W.
P. Carey & Co. LLC,
CPA®:14,
CPA®:15
and
CPA®:16 –
Global from 2002 until March 2005. Before founding W. P.
Carey & Co., Inc. in 1973, he served as Chairman of
the Executive Committee of Hubbard, Westervelt &
Mottelay (subsequently Merrill Lynch Hubbard), head of Real
Estate and Equipment Financing at Loeb Rhoades & Co.
(subsequently Lehman Brothers) and Vice Chairman of the
Investment Banking Board and Director of Corporate Finance of
duPont Glore Forgan Inc. A graduate of the University of
Pennsylvania’s Wharton School, Mr. Carey also received
his Sc.D. honoris causa from Arizona State University,
D.C.S. honoris causa from The City University of New York
and D.C.L. honoris causa from the University of the
South. He is a Trustee of The Johns Hopkins University and of
other educational and philanthropic institutions. He serves as
Chairman and a Trustee of the W. P. Carey Foundation and has
served as Chairman of the Penn Institute for Economic Research.
In the fall of 1999, Mr. Carey was
Executive-in-Residence
at Harvard Business School. Mr. Carey is the brother of
Francis J. Carey, a Director.
Gordon F.
DuGan
AGE: 42
Director Since: 1997
Mr. DuGan has been President of W. P. Carey & Co.
LLC since 1999 and Chief Executive Officer since 2005, having
served as co-CEO since 2002. Prior to that, Mr. DuGan
served in various capacities, including Deputy Head of
Investment. Mr. DuGan serves as Chief Executive Officer of
CPA®:14,
CPA®:15,
CPA®:16 –
Global and
CPA®:17 –
Global and as Director of
CPA®:15
and
CPA®:17 –
Global. Mr. DuGan has served as a Director of
CPA®:14
from June 2007 to July 2008, having previously served in that
capacity from February 2005 to April 2006, and as a Director of
CPA®:16 –
Global from December 2003 to July 2008. He serves as a Trustee
of the W. P. Carey Foundation. He also serves on the Board of
the New York Pops and is a member of the Young Presidents
Organization and the Council on Foreign Relations. He recently
joined the Advisory Board of The Innocence Project and the
Advisory Board of India 2020, Limited – a private
equity firm investing in Indian middle-market businesses. He is
a former member of the Board of NAREIT. Mr. DuGan received
his B.S. in Economics from the Wharton School at the University
of Pennsylvania.
Francis J.
Carey
AGE: 83
Director Since: 1996
Mr. Carey was elected in 2000 as Vice Chairman of the Board
of Directors and Chairman of the Executive Committee of the
Board of Directors of W. P. Carey & Co. LLC.
Mr. Carey retired from his position as Vice Chairman in
March 2005; he continues to serve as Chairman of the Executive
Committee and as Chief Ethics Officer of the Company.
Mr. Carey served as Chairman, Chief Executive Officer and a
Director of Carey Diversified LLC, the predecessor of W. P.
Carey & Co. LLC, from 1997 to 2000. From 1987 to 1997,
Mr. Carey held various positions with W. P.
Carey & Co., Inc., a company wholly-owned by Wm. Polk
Carey, and its affiliates, including as President and a Director
of W. P. Carey & Co., Inc. and as President and
Director of
CPA®:10,
CIP®
and
CPA®:12,
REITs organized by those entities. Mr. Carey also served as
a Director of W. P. Carey & Co., Inc. from its
founding in 1973 until 1997 and has been President and a
Director of that company from 2001 to the present. He has also
served since 1990 as President
4
and a Trustee of the W. P. Carey Foundation. Prior to 1987, he
was senior partner in Philadelphia, head of the real estate
department nationally, and a member of the Executive Committee
of Reed Smith LLP, a law firm. He served as a member of the
Executive Committee and Board of Managers of the Western Savings
Bank of Philadelphia from 1972 until its takeover by another
bank in 1982, and is a former Chairman of the Real Property,
Probate and Trust Section of the Pennsylvania Bar
Association. He served as a member of the Board of Overseers of
the School of Arts and Sciences at the University of
Pennsylvania from 1983 to 1990. He has served as a Trustee of
Germantown Academy in Fort Washington, Pennsylvania from
1961 to the present and as its President from 1966 to 1972. He
has also served as a member of the Board of Trustees and
Executive Committee of the Investment Program Association from
1990 to 2000, and as its Chairman from 1998 to 2000, and served
on the Business Advisory Council of the Business Council for the
United Nations from 1994 to 2002. He has served since 2002 on
the Board of Trustees of the Maryland Historical Society and
since 2006 as a Vice President and a member of its Executive
Committee. Mr. Carey has also served from 2004 to 2007 as
Chairman and Senior Warden of St. Martin’s in the Field
Episcopal Church in Biddeford Pool, Maine, and currently serves
as its Warden at Large. He attended Princeton University, holds
A.B. and J.D. degrees from the University of Pennsylvania, and
completed executive programs in corporate finance and accounting
at Stanford University Graduate School of Business and the
Wharton School of the University of Pennsylvania. Mr. Carey
is the brother of Wm. Polk Carey, the Company’s Chairman.
Trevor P.
Bond*
AGE: 47
Director Since: 2007
Mr. Bond served as an Independent Director and a member of
the Audit Committees of
CPA®:14,
CPA®:15
and
CPA®:16 –
Global, from 2005 to April 2007. Mr. Bond has been the
managing member of a private investment vehicle investing in
real estate limited partnerships Maidstone Investment Co., LLC,
since 2002. Mr. Bond served in several management
capacities for Credit Suisse First Boston from 1992 to 2002,
including: co-founder of CSFB’s Real Estate Equity Group,
which managed approximately $3 billion of real estate
assets; founding team member of Praedium Recovery Fund, a
$100 million fund managing distressed real estate and
mortgage debt; and as a member of the Principal Transactions
Group managing $100 million of distressed mortgage debt.
Prior to CSFB, Mr. Bond served as an associate to the real
estate and finance departments of Tishman Realty &
Construction Co. and Goldman Sachs & Co. in New York.
Mr. Bond also founded and managed an international trading
company from 1985 to 1987 that sourced industrial products in
China for U.S. manufacturers. Mr. Bond received an
M.B.A. from Harvard University.
Nathaniel S.
Coolidge*
AGE: 70
Director Since: 2002
Mr. Coolidge currently serves as Chairman of the Investment
Committee. He has previously served as Chairman of the Audit
Committee and is currently a member of that Committee.
Mr. Coolidge, former Senior Vice President of John Hancock
Mutual Life Insurance Company, retired in 1996 after
23 years of service. From 1986 to 1996, Mr. Coolidge
headed the Bond and Corporate Finance Department, which was
responsible for managing its entire fixed income investments
portfolio. Prior to 1986, Mr. Coolidge served as Second
Vice President and Senior Investment Officer. Mr. Coolidge
is a graduate of Harvard University and served as a
U.S. Naval officer.
Eberhard Faber,
IV*
AGE: 72
Director Since: 1998
Mr. Faber currently serves as Lead Director and Chairman of
the Nominating and Corporate Governance Committee. He serves as
Chairman of the Board of King’s College in Wilkes-Barre,
Pennsylvania. Mr. Faber held various posts with Eberhard
Faber Inc., the worldwide manufacturer of writing products and
art supplies, serving as Chairman and CEO from 1973 until 1987,
when the company merged into Faber-Castell Corporation. He
served as a Director of the Federal Reserve Bank of Philadelphia
from 1980 to 1986, chairing its Budget and Operations Committee,
and was Chairman of the Board of Citizen’s Voice Newspaper
from 1992 to 2002. Currently, he is a member of the Northeast
Pennsylvania Advisory Board of PNC Bank, N.A., where he served
as a Director from 1994
5
to 1998, a Trustee of the Geisinger Wyoming Valley Hospital and
the Eberhard L. Faber Foundation, and a Borough Councilman of
Bear Creek Village. In addition to graduating from Princeton
University magna cum laude, he was a member of Phi Beta
Kappa while serving as Chairman of The Daily Princetonian, and
was a Fulbright Scholar and teaching fellow at the University of
Caen in France. Mr. Faber also served as a Director of
First Eastern Bank from 1986 to 1992 and as the Chairman of the
Board from 1992 to 1994, when the bank was sold to PNC Bank, N.A.
Benjamin H. Griswold,
IV*
AGE: 68
Director Since: 2006
Mr. Griswold currently serves as Chairman of the
Compensation Committee. Mr. Griswold is a partner and
chairman of Brown Advisory, a Baltimore-based firm providing
asset management and strategic advisory services in the
U.S. and abroad. Prior to joining Brown Advisory as senior
partner in March 2005, Mr. Griswold had served as Senior
Chairman of Deutsche Bank Securities Inc. He had served as
Senior Chairman of Deutsche Banc Alex. Brown, the predecessor of
Deutsche Bank Securities Inc., since the acquisition of Bankers
Trust by Deutsche Bank in 1999. Mr. Griswold began his
career at Alex. Brown & Sons in 1967, and became a
partner of the firm in 1972. He headed the company’s
research department, equity trading and equity division prior to
being elected Vice Chairman of the Board and Director in 1984,
and Chairman of the Board in 1987. Upon the acquisition of Alex.
Brown by Bankers Trust New York Corporation in 1997, he
became Senior Chairman of BT Alex. Brown. Mr. Griswold
is a member of the boards of Black & Decker, Baltimore
Life Insurance and Flowers Foods. A former Director of the New
York Stock Exchange, he is active in civic affairs in the
Baltimore area and serves on the board of Johns Hopkins
University and heads the endowment board of the Baltimore
Symphony Orchestra. Mr. Griswold received his B.A. from
Princeton University, his M.B.A. from Harvard University and
served as a U.S. Army officer.
Dr. Lawrence R.
Klein*
AGE: 88
Director Since: 1998
Dr. Klein currently serves as Chairman of the Economic
Policy Committee. He is Benjamin Franklin Professor Emeritus of
Economics and Finance at the University of Pennsylvania and its
Wharton School, having joined the faculty of the University in
1958. Dr. Klein is a holder of earned degrees from the
University of California at Berkeley, the Massachusetts
Institute of Technology, and has been awarded the Alfred Nobel
Memorial Prize in Economic Sciences, as well as a number of
honorary degrees. Founder of Wharton Econometric Forecasting
Associates, Inc., Dr. Klein has been counselor to various
corporations, governments and government agencies, including
WealthEffect.com, the Federal Reserve Board and the
President’s Council of Economic Advisers. Dr. Klein
joined W. P. Carey & Co., Inc. in 1984 as Chairman of
the Economic Policy Committee and as a Director. He also serves
as a Trustee of the W. P. Carey Foundation. Dr. Klein
serves as a Director of a software company, Prognoz, in
Philadelphia, PA. He is also Chairman of a Panel to survey world
economic issues every fortnight at Global Insight, an economic
consulting company in Waltham, MA.
Robert E.
Mittelstaedt, Jr.*
AGE: 65
Director Since: 2007
Mr. Mittelstaedt currently serves as the Chairman of the
Strategic Planning Committee. Mr. Mittelstaedt has served
as dean of the W. P. Carey School of Business at Arizona State
University since June 2004. He also serves on the Boards of
Directors of Innovative Solutions & Support, Inc.,
Laboratory Corporation of America Inc. and ASU Research Park.
Between 1973 and 2004, Mr. Mittelstaedt served in numerous
positions at The Wharton School, most recently as Vice Dean,
Executive Education, and Director of the Aresty Institute of
Executive Education. From
1985-1990 he
co-founded, developed and sold Intellego, Inc., a company
engaged in practice management, systems development and service
bureau billing operations in the medical industry. He formerly
served as a member of the corporate Boards of Directors of: A.G.
Simpson Automotive, Inc., Dresser Insurance, Inc., HIP
Foundation, Inc. and Intelligent Electronics, Inc. He served on
the non-profit board of The Methodist Home for Children of
Philadelphia. Mr. Mittelstaedt received his B.S.
(Mechanical Engineering) from Tulane University and his MBA from
the Wharton School at the University of Pennsylvania.
6
Charles E.
Parente*
AGE: 68
Director Since: 2006
Mr. Parente currently serves as Chairman of the Audit
Committee. Mr. Parente also serves as Chief Executive
Officer of Pagnotti Enterprises, Inc., a diversified holding
company whose primary business includes workers’
compensation insurance, real estate, anthracite coal mining
preparation and sales, and as Chairman and CEO of CP Media,
LLC, a holding company that owns broadcast television stations.
Mr. Parente has also served as a Director of Community Bank
System, Inc., a bank holding company, and its affiliated bank,
Community Bank, N.A., since May 2004. Prior to this, from 1988
through 1993, he served as President and CEO of C-TEC
Corporation, a telecommunications and high-technology company.
From 1970 through 1987, Mr. Parente was CEO and Managing
Partner of Parente Randolph, LLC, the leading independent
accounting and consulting firm in Pennsylvania and among the top
30 in the country. Before this, from 1962 through 1970, he was a
Principal at Deloitte, Haskins & Sells, a public
accounting firm. Mr. Parente is a member of the Board of
Directors of: Sordoni Construction Services, Inc., a commercial
construction and real estate development company; Circle
Bolt & Nut Co., a distributor of industrial products;
and Frank Martz Coach Co. & Subsidiaries, a diversified
transportation company. He is active with various civic and
community organizations, is past Chairman of the Board of
Directors of the Wyoming Valley Health Care System, Inc. and is
a board member of The Luzerne Foundation and King’s
College, where he also served as Chairman from 1989 through
1998. He is a Certified Public Accountant and is a member of the
American Institute of Certified Public Accountants. He graduated
cum laude from King’s College in Wilkes-Barre, PA.
Dr. Karsten von
Köller*
AGE: 69
Director Since: 2003
Dr. von Köller is currently Chairman of Lone Star
Germany GmbH, Deputy Chairman of the Supervisory Board of
Corealcredit Bank AG, Deputy Chairman of the Supervisory Board
of MHB Bank AG, and Vice Chairman of the Supervisory Board of
IKB Deutsche Industriebank AG. Dr. von Köller was
Chief Executive Officer of Eurohypo AG until 2003.
Reginald
Winssinger*
AGE: 66
Director Since: 1998
Mr. Winssinger is founder and Chairman of National
Portfolio, Inc., an Arizona-based firm involved in acquisition,
financing, management and construction of commercial,
multi-family, industrial and land development real estate
projects. He spent ten years at the Winssinger family real
estate company, a third-generation Belgian real estate
enterprise, before coming to the United States in 1979 to expand
their investment activity. Over a
20-year
period he created and managed a $500 million portfolio of
U.S. real estate investment for U.S. and European
investors. He later formed Horizon Real Estate Group, Inc.,
doing business as NAI Horizon in Phoenix, Arizona, a full
service real estate firm providing brokerage, property
management, construction management and real estate consulting
services. He also serves as a Director of Carey Storage Asset
Management, LLC, a subsidiary of the Company.
Mr. Winssinger currently manages multiple companies with
real estate investments primarily in Arizona, California and
Texas. He also serves as a Director of Pierce-Eislen, Inc., and
is the Honorary Consul of Belgium to Arizona. He attended the
Sorbonne and is an alumnus of the University of California at
Berkeley.
* Independent Director
7
COMMITTEES
OF THE BOARD OF DIRECTORS
Members of the Board of Directors have been appointed to serve
on various committees of the Board of Directors. The Board of
Directors has currently established a Compensation Committee, an
Audit Committee and a Nominating and Corporate Governance
Committee, the functions of which are summarized below. The
Board of Directors has also established an Executive Committee,
which has the authority, subject to certain limitations, to
exercise the powers of the Board of Directors during intervals
between meetings of the full Board of Directors, an Economic
Policy Committee, which is available to render advice on
economic policy matters affecting the Company, and a Strategic
Planning Committee, which reviews and oversees the
Company’s strategic planning processes.
| • | Compensation Committee. The Compensation Committee’s responsibilities include setting compensation principles that apply generally to Company employees; reviewing and making recommendations to the Board of Directors with respect to compensation for Directors; reviewing the compensation structure for all current key executives, including incentive compensation plans and equity-based plans; reviewing goals and objectives relevant to Executive Officers’ compensation, evaluating the Executive Officers’ performance and approving their compensation levels and annual and long-term awards; and reviewing and approving the number of shares, price per share and period of duration for stock grants under any approved share incentive plan. There were five Compensation Committee meetings held during 2008. | |
| • | Audit Committee. The Audit Committee has been established to assist the Board of Directors in monitoring the integrity of the financial statements and management’s report of internal controls over financial reporting of the Company, the compliance by the Company with legal and regulatory requirements and the independence, qualifications and performance of the Company’s internal audit function and Independent Registered Public Accounting Firm. Among the responsibilities of the Audit Committee are to engage an Independent Registered Public Accounting Firm, review with the Independent Registered Public Accounting Firm the plans and results of the audit engagement, approve professional services provided by the Independent Registered Public Accounting Firm, review the independence of the Independent Registered Public Accounting Firm and consider the range of audit and non-audit fees. The Committee ratifies the engagement of the internal auditors and reviews the scope of their internal audit plan. The Committee also reviews and discusses with management the internal auditors and the Independent Registered Public Accounting Firm, the Company’s internal controls and reviews the results of the internal audit program. There were eight Audit Committee meetings held during 2008. | |
| • | Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for developing and implementing policies and practices relating to corporate governance, including monitoring implementation of W. P. Carey & Co. LLC’s corporate governance policies. In addition, the Committee develops and reviews background information for candidates for the Board of Directors, including those recommended by shareholders, and makes recommendations to the Board regarding such candidates. The Nominating and Corporate Governance Committee met five times during 2008. |
The Board has adopted written charters for each of the
Compensation, Audit, and Nominating and Corporate Governance
Committees, each of which can be viewed on our website,
www.wpcarey.com, under the heading “Investor
Relations.” Printed copies of each may also be obtained
upon a request submitted to our Investor Relations department.
Certain members of the Board are also members of the Investment
Committee of Carey Asset Management, a subsidiary of the Company
that provides advisory services to the
CPA®
REITs and may also provide services to the Company. Before a
property is acquired by a
CPA®
REIT, the transaction is reviewed by the Investment Committee to
ensure that it satisfies the relevant
CPA®
REIT’s investment criteria. The Investment Committee is not
directly involved in originating or negotiating potential
investments but instead functions as a separate and final step
in the investment process. In addition, the Investment Committee
may at the request of our Board of Directors or Executive
Committee also review any initial investment in which W. P.
Carey & Co. LLC proposes to engage directly. Directors
of W. P. Carey & Co. LLC who also serve on the
Investment Committee are Messrs. Bond, Coolidge (Chairman),
Klein and von Köller.
8
Board
Meetings and Directors’ Attendance
There were four regular quarterly and three special Board
meetings held in 2008, and each Director attended at least
seventy-five percent of the aggregate of such meetings and of
the meetings held during the year by the Committees of which he
was a member. Under our Corporate Governance Guidelines, each
Director is required to make every effort to attend each Board
meeting, and applicable Committee meetings, except in
unavoidable circumstances.
Since December 2006, Eberhard Faber, IV has served as Lead
Director. His primary responsibility as Lead Director is to
preside over periodic executive sessions of the Board in which
management Directors and other members of management will not
participate.
BOARD
COMMITTEE MEMBERSHIP ROSTER
|
Nominating and |
Economic |
Strategic |
||||||||||||||||||||||
|
Name
|
Executive | Compensation | Audit | Corporate Governance | Policy | Planning | ||||||||||||||||||
|
Wm. Polk Carey
|
X | X | ||||||||||||||||||||||
|
Gordon F. DuGan
|
X | X | ||||||||||||||||||||||
|
Francis J. Carey
|
X | * | ||||||||||||||||||||||
|
Trevor P. Bond
|
X | X | ||||||||||||||||||||||
|
Nathaniel S. Coolidge
|
X | |||||||||||||||||||||||
|
Eberhard Faber, IV
|
X | X | X | * | X | |||||||||||||||||||
|
Benjamin H. Griswold, IV
|
X | X | * | X | X | |||||||||||||||||||
|
Lawrence R. Klein
|
X | X | * | |||||||||||||||||||||
|
Robert E. Mittelstaedt, Jr.
|
X | X | * | |||||||||||||||||||||
|
Charles E. Parente**
|
X | X* | X | |||||||||||||||||||||
|
Karsten von Köller
|
X | |||||||||||||||||||||||
|
Reginald Winssinger
|
X | X | ||||||||||||||||||||||
| * | Chairman of Committee | |
| ** | Financial Expert |
The Board of Directors has determined that none of the Directors
who currently serve on the Compensation, Audit, or Nominating
and Corporate Governance Committees has a relationship to W. P.
Carey & Co. LLC that may interfere with his
independence from W. P. Carey & Co. LLC and its
management, and therefore all such Directors are
“independent” as defined in the Listing Standards of
the New York Stock Exchange, which we also refer to in this
Proxy Statement as the Exchange. Directors who serve on the
Audit Committee also satisfy the SEC’s standards for audit
committee membership.
Compensation
of the Board of Directors
W. P. Carey & Co. LLC pays its Directors who are
not its officers or employees or retired officers or employees
fees for their services as Directors. From January 1, 2008
through September 17, 2008, Board meeting annual
compensation included a $1,250 cash fee per regular quarterly
meeting attended, a retainer of $7,500 in cash payable quarterly
(for a total of $30,000 annually), and $7,500 payable quarterly
in the form of restricted shares of Common Stock, issuable under
the Company’s 1997 Non-Employee Directors’ Incentive
Plan. The number of shares of restricted stock issued was
calculated by dividing the dollar amount of the quarterly grant
by .93, to take into consideration vesting of the shares ratably
over three years, and dividing that amount by the closing price
of the Common Stock on the date of grant. During 2008, the
Board, based on the advice of an independent compensation
consultant, Watson Wyatt Worldwide, determined to change certain
aspects of Board compensation, commencing with the
September 18, 2008 Board meeting: the per meeting cash fee
was increased to $1,500 and extended to include telephonic
meetings; the annual cash retainer was increased to $50,000;
members of the Audit, Compensation, and Nominating and Corporate
Governance Committee meetings were to receive a fee of $1,500
per committee meeting; and, subject to the approval of the
shareholders at the Annual Meeting, the $7,500 quarterly
9
payment of restricted was replaced by an annual grant of
restricted stock units (also referred to in this Proxy Statement
as RSUs) with a total value of $50,000, which are immediately
vested but are required to be deferred until the Director
completes his or her service on the Board, as more fully
described under Proposal Three below.
Mr. Griswold receives an additional $10,000 per year for
serving as the Chairman of the Compensation Committee and
$10,000 per year for serving as a member of the Executive
Committee. Mr. Parente receives $10,000 per year for
serving as Chairman of the Audit Committee and received $7,500
in 2008 for serving as the Chairman of the Strategic Planning
Committee from January 1, 2008 through the
September 17, 2008 Board meeting. Mr. Faber receives
$10,000 per year for serving as Chairman of the Nominating and
Corporate Governance Committee, $10,000 per year for serving as
Lead Director and $10,000 per year for serving as a member of
the Executive Committee. Mr. Mittelstaedt receives $10,000
per year for serving as Chairman of the Strategic Planning
Committee, having received $2,500 in 2008 for serving in that
capacity commencing with the September 17, 2008 Board
meeting. All of such fees are payable in cash quarterly.
Messrs. Bond, Coolidge, Klein and von Köller are also
members of the Investment Committee of Carey Asset Management,
and each receives a cash fee of $1,500 per Investment Committee
meeting attended. Mr. Coolidge receives an additional
$20,000 per year cash fee for serving as Chairman of the
Investment Committee. In addition, Messrs. Bond, Klein, von
Köller and Winssinger are members of the Board of Directors
of W. P. Carey International LLC, a subsidiary of the Company
that structures net lease transactions on behalf of the
CPA®
REITs outside of the United States (“WPCI”), for which
service they receive $10,000 in annual fees, payable in cash
quarterly. Mr. Bond receives an additional $10,000 per year
for serving on the Investment Advisory Committee for WPCI-Asia.
Mr. von Köller receives an additional $5,000 in fees
annually for serving on the Board of Directors of W. P.
Carey & Co. BV, a Netherlands subsidiary of the
Company that manages international assets for the Company as
well as the CPA REITs. Mr. Winssinger is a member of the
Board of Directors of Carey Storage Asset Management, a
subsidiary of the Company, and he receives $25,000 per year for
such Board service, payable in cash monthly. Messrs. Wm.
Polk Carey, Francis J. Carey, and DuGan, who are officers or
employees of W. P. Carey & Co. LLC
and/or its
subsidiaries, are also Directors and are not paid any Director
fees.
DIRECTOR
COMPENSATION TABLE — FISCAL 2008
|
Fees Earned or Paid in Cash |
Stock
Awards(1) |
Option
Awards(1) |
Total |
|||||||||||||
|
Name
|
($) | ($) | ($) | ($) | ||||||||||||
|
Trevor P. Bond
|
71,500 | 28,580 | 4,011 | 104,091 | ||||||||||||
|
Nathaniel S. Coolidge
|
77,000 | 27,624 | 0 | 104,624 | ||||||||||||
|
Eberhard Faber, IV
|
73,500 | 27,624 | 0 | 101,124 | ||||||||||||
|
Benjamin H. Griswold, IV
|
60,500 | 29,317 | 3,354 | 93,171 | ||||||||||||
|
Lawrence R. Klein
|
70,000 | 27,624 | 0 | 97,624 | ||||||||||||
|
Robert E. Mittelstaedt, Jr.
|
44,500 | 24,814 | 2,617 | 71,931 | ||||||||||||
|
Charles E. Parente
|
61,000 | 22,216 | 2,659 | 85,875 | ||||||||||||
|
Karsten von Köller
|
55,000 | 27,624 | 0 | 82,624 | ||||||||||||
|
Reginald Winssinger
|
72,833 | 27,624 | 0 | 100,457 | ||||||||||||
| (1) | Amounts in these columns reflect the expense recognized for financial statement reporting purposes for the indicated fiscal year, in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), “Shared Based Payment,” or SFAS 123R, with respect to awards of options and shares of time-based restricted stock, which may include awards made during the indicated year or earlier; however, the estimate of forfeitures related to service-based vesting conditions is disregarded for purposes of this valuation. Awards of restricted stock during 2008 were all made pursuant to the 1997 Non-Employee Directors’ Incentive Plan. There were no option awards, non-equity incentive compensation or nonqualified deferred compensation granted to the Directors during 2008. For each of the Directors, the fair value of their restricted stock awards on the respective grant dates, computed in accordance with SFAS 123R, was: $8,041 on January 1, 2008; $8,057 on April 1, 2008; and $8,045 on July 1, 2008. The assumptions on which these valuations are based are set forth in Note 15 to the consolidated financial statements included in the 2008 Form 10-K. In October 2008, each of the directors received a grant of 1,429 RSUs under the Company’s 2009 Non-Employee Directors’ Incentive Plan, which was |
10
| adopted by the Board in 2008 and is more fully described in Proposal Three below, subject to the approval of the shareholders of that Plan at the Annual Meeting. These RSUs are not reflected in the table above (or the table below) due to their contingent nature as of December 31, 2008. |
The following table reflects Independent Director restricted
stock and option awards outstanding as of December 31, 2008.
|
Total Restricted |
Total Option |
|||||||||||
|
Stock Awards |
Awards |
Total Option |
||||||||||
| Unvested | Unvested | Awards Vested | ||||||||||
|
Trevor P. Bond
|
2,122 | 2,667 | 1,333 | |||||||||
|
Nathaniel S. Coolidge
|
1,873 | 0 | 4,000 | |||||||||
|
Eberhard Faber, IV
|
1,873 | 0 | 0 | |||||||||
|
Benjamin H. Griswold, IV
|
2,298 | 2,667 | 1,333 | |||||||||
|
Lawrence R. Klein
|
1,873 | 0 | 0 | |||||||||
|
Robert E. Mittelstaedt, Jr
|
1,962 | 2,667 | 1,333 | |||||||||
|
Charles E. Parente
|
2,085 | 2,667 | 1,333 | |||||||||
|
Karsten von Köller
|
1,873 | 0 | 4,000 | |||||||||
|
Reginald Winssinger
|
1,873 | 0 | 0 | |||||||||
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the Record Date by
each of W. P. Carey & Co. LLC’s nominees for
election as Director, each of the named executive officers
listed in the Summary Compensation Table below
(“NEOs”), all Directors and Executive Officers as a
group, and each person known to the Company to own beneficially
more than 5% of the Common Stock. Fractional shares are
rounded to the nearest full share. The business address of each
of the individuals listed is
c/o W.
P. Carey & Co. LLC, 50 Rockefeller Plaza, New York, NY
10020. Except as noted below, none of the shares has been
pledged as collateral.
|
Amount of Shares |
||||||||
|
Name of Beneficial Owner
|
Beneficially Owned(1) | Percentage of Class | ||||||
|
Wm. Polk
Carey(2)(3)
|
12,147,869 | 31.07 | % | |||||
|
Gordon F.
DuGan(2)(4)
|
724,839 | 1.54 | % | |||||
|
Francis J.
Carey(2)(5)
|
499,963 | 1.28 | % | |||||
|
Trevor P.
Bond(6)
|
16,150 | * | ||||||
|
Nathaniel S.
Coolidge(10)
|
9,167 | * | ||||||
|
Mark J.
DeCesaris(2)(7)
|
64,916 | * | ||||||
|
Eberhard Faber,
IV(8)
|
30,188 | * | ||||||
|
Benjamin H. Griswold,
IV(6)
|
97,214 | * | ||||||
|
Dr. Lawrence R. Klein
|
3,458 | * | ||||||
|
Edward V.
LaPuma(2)(9)
|
145,327 | * | ||||||
|
Robert E.
Mittelstaedt(6)
|
5,877 | * | ||||||
|
Charles E.
Parente(6)
|
21,377 | * | ||||||
|
Reginald Winssinger
|
18,680 | * | ||||||
|
Dr. Karsten von
Köller(10)
|
11,129 | * | ||||||
|
Thomas E.
Zacharias(2)(11)
|
223,529 | * | ||||||
|
All Directors and Executive Officers as a Group
(16 individuals)(2) |
14,024,432 | 35.87 | % | |||||
| * | Less than 1% |
11
| (1) | Beneficial ownership has been determined in accordance with the rules of the SEC. Except as noted, and except for any community property interest owned by spouses, the listed individuals have sole investment power and sole voting power as to all shares of which they are identified as being the beneficial owners. | |
| (2) | The amounts shown do not include 1,395 shares that the listed Executive Officer has the right to acquire within 60 days under the Company’s employee stock purchase plan, or ESPP, assuming each individual purchases the maximum number of shares he is eligible to purchase and assuming a per-share purchase price of $17.92 (based on 85% of the price of the Common Stock on the first day of trading under the semi-annual purchase period pursuant to the terms of the ESPP as more fully described under “Equity Compensation Plan Information” below). | |
| (3) | The amount shown includes 7,170,012 shares held by W. P. Carey & Co., Inc. and 85,671 shares held by Carey Asset Management, both of which Mr. Wm. Polk Carey is deemed to beneficially own. This amount also includes 334,451 shares that Mr. Carey has the right to acquire through the exercise of stock options within 60 days under the Company’s 1997 Share Incentive Plan, including those issued in connection with the Company’s Partnership Equity Unit Plans, which we collectively refer to as the PEP Plan. The amount shown includes 1 million shares that have been pledged. | |
| (4) | The amount shown includes 127,760 shares that Mr. DuGan has the right to acquire through the exercise of stock options within 60 days under the 1997 Share Incentive Plan, including those issued in connection with the PEP Plan. | |
| (5) | The amount shown includes 399,962 shares that have been pledged. | |
| (6) | The amount shown includes 1,333 shares this Director has the right to acquire through the exercise of stock options within 60 days under the 1997 Non-Employee Director Plan. | |
| (7) | The amount shown includes 50,000 shares that Mr. DeCesaris has the right to acquire through the exercise of stock options within 60 days under the 1997 Share Incentive Plan. | |
| (8) | The amount shown includes 4,675 shares held by the Faber Family Trust, of which Mr. Faber is a trustee and a beneficiary, and 1,100 shares owned by Mr. Faber’s spouse. It does not include 1,590 shares held by the Faber Foundation. | |
| (9) | The amount shown includes 38,826 shares that Mr. LaPuma has the right to acquire through the exercise of stock options within 60 days under the 1997 Share Incentive Plan, including those issued in connection with the PEP Plan. | |
| (10) | The amount shown includes 4,000 shares that the Director has the right to acquire through the exercise of stock options within 60 days under the 1997 Non-Employee Director Plan. | |
| (11) | The amount shown includes 174,044 shares that Mr. Zacharias has the right to acquire through the exercise of stock options within 60 days under the 1997 Share Incentive Plan. |
PROPOSAL TWO
APPROVAL
OF ADOPTION OF 2009 SHARE INCENTIVE PLAN
As adopted by the Board of Directors, the Company’s
2009 Share Incentive Plan (the “Plan”) will be
effective on June 11, 2009, contingent upon approval by the
Company’s shareholders. If approved by shareholders at the
Annual Meeting, the Plan will replace the predecessor plan, the
1997 Share Incentive Plan, except with respect to outstanding
contractual obligations under the predecessor plan, so that no
further awards can be made under that plan.
The principal features of the Plan are summarized below. The
summary is qualified in its entirety by the full text of the
Plan, which is set forth as Exhibit A to this Proxy
Statement.
The Board of Directors recommends that the shareholders vote
“FOR” approval of the adoption of the Plan. Unless
otherwise specified thereon, proxies received in the
accompanying form will be voted in favor of the approval of the
Plan.
12
General
The purpose of the Plan is to encourage and enable the officers,
employees and
employee-directors,
upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business, to acquire a
proprietary stake in the Company.
Employees, including officers and
employee-directors
of the Company or any subsidiary or affiliate, who are
responsible for or contribute to the management, growth or
profitability of the Company are eligible to receive awards
under the Plan. It is currently expected that approximately
60 employees, 90 officers and
3 employee-directors
will be eligible to participate in the Plan.
The aggregate number of shares of Common Stock, which we also
refer to herein as shares, that may be issued under the Plan is
3.6 million, subject to proportionate adjustment in the
event of share splits and similar events. No awards may be
granted under the Plan subsequent to June 10, 2019.
If any award under the Plan is forfeited, canceled, reacquired
by the Company, satisfied without the issuance of shares or
otherwise terminated, other than by exercise, the number of
shares subject to the award will be available for re-issuance
under the Plan, provided that the participants have received no
benefits of ownership of the underlying shares. Shares
previously owned or acquired by an awardee that are delivered to
the Company, and shares withheld from the award to pay the
exercise price of an award or for purposes of satisfying a tax
withholding obligation, will not become available for
re-issuance under the Plan.
Administration
The Plan will be administered by the Compensation Committee (the
“Committee”), consisting of not less than two members
of the Board. Each member of the Committee must be a
“non-employee director” as defined in
Rule 16b-3
under the Securities Exchange Act of 1934, also referred to as
the Exchange Act, and an independent director under the rules of
the New York Stock Exchange.
The Committee has full authority, in its discretion, to
interpret the Plan and to select the persons who will receive
awards and the number of shares to be covered by each award. The
types of awards that the Committee has authority to grant are
(1) share options, (2) restricted share awards,
(3) RSUs, (4) performance share awards,
(5) performance share units, or PSUs, and (6) dividend
equivalent rights. Each of these types of awards is described
below. The number of shares available under any outstanding
awards and the exercise price of awards are adjusted in the
event of share dividends and similar events.
Share
Options
The Plan provides for the grant of share options. The option
price for each share option may not be less than 100% of the
fair market value of the Common Stock on the date the share
option is granted. Fair market value, for purposes of the Plan,
is the last reported sale price of the Common Stock as reported
on the New York Stock Exchange for the date as of which fair
market value is to be determined. On the Record Date, the fair
market value of a share of Common Stock was $22.50.
A share option becomes exercisable at such time or times
and/or upon
the occurrence of such event or events as the Committee may
determine. No share option may be exercised after the expiration
of ten years from the date of grant. A share option to the
extent exercisable at any time may be exercised in whole or in
part.
The following provisions of this paragraph will apply in the
case of an optionee whose employment is terminated. If the
employment of the optionee is terminated by reason of the
optionee’s disability, outstanding share options of the
optionee will be exercisable (to the extent exercisable
immediately prior to the termination of employment or such
larger portion as the Committee may determine in its discretion)
at any time prior to the expiration date of the share option or
within twelve months after the date of termination of
employment, whichever is the shorter period. Following the death
of an optionee during employment or within a period following
termination of employment during which a share option remains
exercisable, outstanding share options of the optionee will be
exercisable (to the extent exercisable immediately prior to the
death of the optionee or such larger portion as the Committee
may determine in its discretion in the case of an optionee who
dies during employment) by
13
the legal representative or legatee of the optionee, at any time
prior to the expiration date of the share option or within six
months after the date of death of the optionee, whichever is the
shorter period. If the employment of an optionee is terminated
by the Company for cause, as defined in the Plan, all
outstanding share options held by the optionee will immediately
terminate unless otherwise determined by the Committee. All of
the time periods for exercise of options described in this
paragraph may be extended by the Committee, subject to the
maximum ten year expiration date. If the employment of an
optionee terminates for any reason other than for cause,
disability or death, as described above, outstanding share
options granted to the optionee may be exercised for such period
as the Committee shall specify.
The exercise price for each share option will be payable in full
in cash at the time of exercise; however, in lieu of cash the
holder of a share option may, if authorized by the Committee,
pay the option price in whole or in part by delivering to the
Company, or by the Company withholding from the award, shares
having a fair market value on the date of exercise of the share
option equal to the exercise price for the shares being
purchased, except that any portion of the exercise price
representing a fraction of a share must be paid in cash.
No share option granted under the Plan is transferable other
than by will or by the laws of descent and distribution, except
for gifts for the benefit of a Plan participant’s
descendants for estate planning purposes or pursuant to a
certified domestic relations order. A share option may be
exercised during an optionee’s lifetime only by the
optionee.
Subject to the foregoing and the other provisions of the Plan,
share options granted under the Plan may be exercised at such
times and in such amounts and be subject to such restrictions
and other terms and conditions, if any, as shall be determined,
in its discretion, by the Committee.
Restricted
Share Awards and Restricted Share Units
General. Restricted shares are an award of
Common Stock, either at no cost or at a price determined by the
Committee, subject to established restrictions and conditions.
RSUs represent a right to receive shares or cash based upon
established restrictions and conditions.
Restricted shares and RSUs will be subject to such restrictions
(which may include restrictions on the right to transfer or
encumber the shares or units while subject to restriction) as
the Committee may impose and may be subject to forfeiture in
whole or in part if certain events (which may, in the discretion
of the Committee, include termination of employment
and/or
performance-based events) specified by the Committee occur prior
to the lapse of the restrictions. The award agreement between
the Company and the awardee will set forth the number of
restricted shares or RSUs awarded to the awardee, the
restrictions imposed thereon, the duration of such restrictions,
the events the occurrence of which would cause a forfeiture of
the restricted shares or RSUs in whole or in part, and such
other terms and conditions as the Committee in its discretion
deems appropriate.
Unless otherwise determined by the Committee, restricted shares
and RSUs are forfeited upon termination of employment for any
reason prior to vesting.
Restricted Shares. Following a restricted
share award and prior to the lapse or termination of the
applicable restrictions, the restricted shares will be held in
escrow. Upon the lapse or termination of the restrictions (and
not before), the share certificates, or record in book-entry
form, will be delivered to the awardee. From the date a
restricted share award is effective, however, the awardee will
be a shareholder with respect to the restricted shares and will
have all the rights of a shareholder with respect to such
shares, including the right to vote the shares and to receive
all dividends and other distributions paid with respect to the
shares, subject only to the restrictions and limitations imposed
by the Committee.
Restricted Share Units. The award agreement
for RSUs will specify the time and form of payment of vested
units. The Company’s obligation with respect to RSUs may be
paid in shares or cash, or partially in each. RSUs may provide
for dividend equivalent rights, as determined by the Committee.
14
Performance
Share Awards and Performance Share Units
General. Performance shares represent a right
to receive Company shares based on the achievement or the level
of achievement, during a specified performance period of one or
more performance goals established by the Committee at the time
of the award. Performance share units, or PSUs, represent a
right to receive Company shares or cash based on the
achievement, or level of achievement, during a specified
performance period of one or more performance goals established
by the Committee at the time of award.
Performance shares and PSUs will be subject to restrictions on
the right to transfer the shares or units while subject to
restriction. The award agreement between the Company and the
awardee will set forth the number of performance shares or PSUs
awarded to the awardee, the performance period, the performance
goals, any restrictions imposed thereon and the duration of such
restrictions, the events the occurrence of which would cause a
forfeiture of the performance shares or PSUs in whole or in part
and such other terms and conditions as the Committee in its
discretion deems appropriate.
Unless otherwise determined by the Committee, performance shares
and PSUs are forfeited upon termination of employment for any
reason prior to vesting.
Performance Shares. Upon satisfaction of all
of the conditions applicable to a performance share award (and
not before), the share certificates, or record in book-entry
form, will be delivered to the awardee. Awardees will be a
shareholder with respect to the performance shares and will have
all the rights of a shareholder only with respect to such shares
actually received upon satisfaction of the applicable
conditions. The award agreement may provide for the waiver,
immediate payment, deferral, or investment of associated
dividend rights with respect to any performance shares.
Performance Share Units. The award agreement
for PSUs will specify the time and form of payment of vested
PSUs. The Company’s obligation with respect to PSUs may be
paid in Company shares or cash, or partially in each. PSUs may
provide for dividend equivalent rights. The award agreement may
provide for the immediate payment, deferral, or investment of
dividend equivalent rights.
Dividend
Equivalent Rights
A dividend equivalent right entitles the awardee to receive
credit based on cash distributions that would be paid on
specified shares if such shares were held by the awardee.
Dividend equivalent rights may be granted as a component of
another award or on a freestanding basis. Dividend equivalent
rights granted as a component of another award may also contain
terms and conditions that differ from the underlying award. The
terms and conditions of dividend equivalent rights will be
specified in the underlying grant. Dividend equivalent rights
may be paid currently, on a deferred basis, or may be deemed to
be reinvested in additional shares. Dividend equivalent rights
may be settled in cash or shares or a combination thereof.
Additional
Rights in Certain Events
The Plan provides for certain additional rights upon the
occurrence of a Change of Control. Such an event is deemed to
have occurred (1) when a beneficial owner of securities
(other than Wm. Polk Carey, the Carey Family, as defined in the
Plan, the W. P. Carey Foundation, the Company, a subsidiary or
any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan of the Company or any
subsidiary) is entitled to twenty-five percent (25%) or more of
the voting power of the Company or the then outstanding shares
of the Company, (2) the Company’s shareholders approve
(i) any consolidation or merger of the Company or any
subsidiary, where the shareholders will not own, after such
consolidation or merger, 50% or more of the voting equity of the
entity issuing the cash or securities in the transaction, or its
ultimate parent, (ii) any sale, lease, exchange or other
transfer of all or substantially of the Company’s
consolidated assets, unless following the sale the
Company’s shareholders (as determined immediately prior to
the sale) own more than 80% of the outstanding shares and
combined voting power of the entity that acquired the assets, or
(iii) any plan or proposal for the liquidation or
dissolution of the Company, or (3) when the incumbent
Directors of the Company, measured as of the effective date of
the Plan, together with any Directors they approve by at least a
majority vote, cease to constitute at least a majority of the
15
Board of Directors. For purposes of the foregoing, certain
transactions resulting from the acquisition of securities by the
Company are excluded.
Unless provided by the Committee at the time of grant of the
award, upon a Change of Control (1) all outstanding share
options will become immediately and fully exercisable,
(2) all restrictions and conditions applicable to
restricted shares, RSUs, performance shares, PSUs, and dividend
equivalent rights shall automatically be deemed waived and the
recipients of such awards shall become entitled to receipt of
the maximum amount of shares subject to such award, provided
that the payment date of any awards considered to be deferred
compensation shall not be accelerated, and (3) participants
who hold share options shall have the right, in lieu of
exercising the share option, to elect to surrender all or part
of the share option to the Company and to receive cash in an
amount equal to the excess of the fair market value of a share
on the date of surrender, as determined under the Plan, over the
per share exercise price of the share option, multiplied by the
number of shares with respect to which the share option is
surrendered.
Possible
Anti-Takeover Effect
The provisions of the Plan providing for the acceleration of the
exercise date of share options, the lapse of restrictions
applicable to restricted shares, RSUs, performance shares, PSUs,
and dividend equivalent rights upon the occurrence of a Change
of Control may be considered as having an anti-takeover effect.
Amendment
and Discontinuance
The Board may amend or discontinue the Plan at any time, and the
Committee may at any time amend or cancel an outstanding award
for the purpose of satisfying changes in law or for any other
lawful purpose, but no such action may adversely affect rights
under any outstanding award without the holder’s consent.
Further, the Board may not amend the Plan without the approval
of the Company’s shareholders to the extent such approval
is required by the rules of any exchange upon which the Common
Stock is listed or if approval of the amendment is required to
qualify for the exemption provided by
Rule 16b-3
of the SEC under the Securities Exchange Act of 1934.
New Plan
Benefits
The actual amount of awards to be received by or allocated to
participants or groups under the Plan is not determinable in
advance because the selection of participants who receive awards
under the Plan, and the size and type of awards to such
individuals and groups, are generally determined by the
Committee in its discretion. In 2008, 72,375 PSUs (assuming
Threshold Amounts are reached), 150,400 RSUs and
50,400 shares of restricted stock were awarded to all
employees in the aggregate under the predecessor plan, of which
a total of 30,275 PSUs and 60,550 RSUs were awarded to Executive
Officers as a group. In 2009, 77,250 PSUs (assuming Threshold
Amounts are reached), 126,050 RSUs, and 1,000 shares of
restricted stock were awarded to all employees in the aggregate
under the predecessor plan, of which a total of 30,275 PSUs and
60,550 RSUs were awarded to Executive Officers as a group. For
information regarding awards to NEOs under the predecessor plan
during 2008, see the Grants of Plan-Based Awards Table below.
Federal
Income Tax Consequences
The following is a brief summary of the principal Federal income
tax consequences of the grant and exercise of awards under
present law.
Share Options. An optionee will not recognize
any taxable income for Federal income tax purposes upon receipt
of a share option. Upon the exercise of a share option, the
amount by which the fair market value of the shares received,
determined as of the date of exercise, exceeds the exercise
price will be treated as compensation received by the optionee
in the year of exercise. If the option price of a share option
is paid in whole or in part with shares, no income, gain, or
loss will be recognized by the optionee on the receipt of shares
equal in value on the date of exercise to the shares delivered
in payment of the exercise price. The fair market value of the
remainder of the shares received upon exercise of the share
option, determined as of the date of exercise, less the amount
of cash, if any, paid upon exercise will be treated as
compensation income received by the optionee on the date of
exercise of the share option.
16
Except as described in “Other Tax Matters” below, the
Company or one of its subsidiaries generally will be entitled to
a deduction for compensation paid in the same amount treated as
compensation received by the optionee.
Restricted Shares. An awardee of restricted
shares will not recognize any taxable income for Federal income
tax purposes in the year of the award, provided the shares are
subject to restrictions (that is, they are nontransferable and
subject to a substantial risk of forfeiture). However, an
awardee may elect under Section 83(b) of the Internal
Revenue Code to recognize compensation income in the year of the
award in an amount equal to the fair market value of the shares
on the date of the award, determined without regard to the
restrictions. If the awardee does not make a Section 83(b)
election, the fair market value of the shares on the date the
restrictions lapse will be treated as compensation income to the
awardee and will be taxable in the year the restrictions lapse.
Except as described in “Other Tax Matters” below, the
Company or one of its subsidiaries generally will be entitled to
a deduction for compensation paid in the same amount treated as
compensation income to the awardee.
Restricted Share Units. An awardee who
receives RSUs will not recognize any taxable income for Federal
income tax purposes upon receipt of the award. Any cash or
shares received pursuant to the award will be treated as
compensation income received by the awardee generally in the
year in which the awardee receives such cash or shares. Except
as described in “Other Tax Matters” below, the Company
generally will be entitled to a deduction for compensation paid
in the same amount treated as compensation income to the awardee.
Performance Shares and Performance Share
Units. An awardee who receives a performance
share or PSU award will not recognize any taxable income for
Federal income tax purposes upon receipt of the award. Any cash
or shares received pursuant to the award will be treated as
compensation income received by the awardee generally in the
year in which the awardee receives such cash or shares. Except
as described in “Other Tax Matters” below, the Company
generally will be entitled to a deduction for compensation paid
in the same amount treated as compensation income to the awardee.
Dividend Equivalent Rights. An awardee who
receives dividend equivalent rights will not recognize any
taxable income for Federal income tax purposes upon receipt of
the award. Any cash or Company shares received pursuant to the
award will be treated as compensation income received by the
awardee generally in the year in which the awardee receives such
cash or shares. Except as described in “Other Tax
Matters” below, the Company generally will be entitled to a
deduction for compensation paid in the same amount treated as
compensation income to the awardee.
Other Tax Matters. The exercise by an awardee
of a share option, the lapse of restrictions on restricted
shares or RSUs, performance shares or PSUs, and dividend
equivalent rights, or the deemed waiver of restrictions and
conditions with respect to awards following the occurrence of a
Change of Control, in certain circumstances, may result in
(i) a 20% Federal excise tax (in addition to Federal income
tax) to the awardee on certain payments of shares or cash
resulting from such exercise or deemed waiver of restrictions
and conditions, or on all or a portion of the fair market value
of the shares or cash associated with such awards on the date
the restrictions lapse and (ii) the loss of a compensation
deduction that would otherwise be allowable to the Company or
one of its subsidiaries as explained above.
Vote
Required
Approval of the W. P. Carey & Co. LLC 2009 Share
Incentive Plan requires the affirmative vote of a majority of
the votes actually cast by shares present in person or
represented by proxy at the Annual Meeting, a quorum being
present. An abstention from voting on a matter will not be
considered a vote cast on the matter, will not be counted in
determining the number of affirmative votes required for
approval and, accordingly, will not have the effect of a vote
for or against the proposal. If a broker or similar nominee
limits on a proxy card the number of shares voted on this
proposal or indicates that the shares represented by a proxy
card are not voted on this proposal, such broker non-votes will
not be considered a vote cast, will not be counted in
determining the number of affirmative votes required for
approval and, accordingly, will not have the effect of a vote
for or against the proposal.
With respect to Proposal Two, the Board of Directors
recommends a vote FOR approval of the adoption of the W. P.
Carey & Co. LLC 2009 Share Incentive Plan.
17
PROPOSAL THREE
APPROVAL
OF ADOPTION OF 2009 NON-EMPLOYEE DIRECTORS’ INCENTIVE
PLAN
The Company’s 2009 Non-Employee Directors’ Incentive
Plan (the “Directors’ Plan”) was approved by the
Board of Directors in 2008, contingent upon approval by the
Company’s shareholders. If approved by shareholders at the
Annual Meeting, the Directors’ Plan will replace the
predecessor plan, the 1997 Non-Employee Directors’
Incentive Plan, except with respect to outstanding contractual
obligations under the predecessor plan, so that no further
awards can be made under that plan.
The principal features of the Directors’ Plan are
summarized below. The summary is qualified in its entirety by
the full text of the Directors’ Plan, which is set forth as
Exhibit B to this Proxy Statement.
The Board of Directors recommends that the shareholders vote
“FOR” approval of the adoption of the Directors’
Plan. Unless otherwise specified thereon, proxies received in
the accompanying form will be voted in favor of the approval of
the Directors’ Plan.
General
The purposes of the Directors’ Plan are to promote the
long-term success of the Company by
| • | creating a long-term mutuality of interests between the Non-Employee Directors and shareholders of the Company, | |
| • | providing an additional inducement for such Directors to remain with the Company, and | |
| • | providing a means through which the Company may attract able persons to serve as Directors of the Company. |
Each person who is a member of the Board of Directors and who is
not an employee of the Company or any subsidiary is eligible to
receive automatic awards under the Directors’ Plan. It is
currently expected that approximately nine non-employee
Directors will be eligible to participate in the Directors’
Plan.
The aggregate number of shares that may be issued under the
Directors’ Plan is 325,000, subject to proportionate
adjustment in the event of share splits and similar events. No
awards may be granted under the Directors’ Plan subsequent
to June 10, 2019.
If any award under the Directors’ Plan is forfeited or
canceled by mutual consent or terminates or expires for any
reason without having been exercised in full, the number of
shares subject to the award will be available for
re-issuance
under the Directors’ Plan, provided that the participants
have received no benefits of ownership of the underlying shares.
Shares previously owned or acquired by an awardee that are
delivered to the Company, or shares withheld from an award, to
pay the exercise price of an award will not become available for
re-issuance under the Directors’ Plan.
Administration
The Directors’ Plan will be administered by the Board,
which may delegate some or all of its duties to a committee of
the Board (the Directors’ Plan administrator is referred to
in this Proposal as the “Committee”). A majority of
the Committee will constitute a quorum. The vote of a majority
of a quorum, or the unanimous written consent, will constitute
action by the Committee. The Committee has the power to
interpret and administer the Directors’ Plan. All questions
of interpretation with respect to the Directors’ Plan, and
application of the Directors’ Plan, or as to share options,
restricted share awards or RSU awards granted under the
Directors’ Plan will be determined by the Committee, and
its determination will be final and binding.
The Directors’ Plan provides for the automatic award of
RSUs. In the discretion of the Committee, the awards may also be
in the form of share options or restricted shares, or any
combination of the permitted types of awards. All of the
foregoing grants are sometimes referred to herein as
“awards.”
18
Awards
The Directors’ Plan provides that on each July 1, or
if such day is not a business day, the next succeeding business
day, each director who is not an employee of the Company or a
subsidiary will automatically be granted an award of restricted
share units with a total value of $50,000, determined by
dividing $50,000 by the grant date fair market value per share.
Fair market value, for purposes of the Directors’ Plan, is
the last reported sale price of the Common Stock as reported on
the New York Stock Exchange for the date as of which fair market
value is to be determined. On the Record Date, the fair market
value of a share was $22.50. In addition, each non-employee
director received a grant of RSUs with a total value of $37,500,
based upon the foregoing calculation, and related dividend
equivalents, on October 1, 2008, contingent upon
shareholder approval of the Directors’ Plan.
The number of shares available under any outstanding awards and
the exercise prices of awards are adjusted in the event of share
dividends and similar events.
Restricted
Share Units
RSUs represent a right to receive shares or cash at a specified
time. RSUs are immediately vested upon grant, unless otherwise
determined by the Committee in its discretion. The
Company’s obligation with respect to RSUs may be paid in
shares or cash, or partially in each. RSUs are paid within
30 days following the non-employee director’s
separation from service. RSUs may provide for dividend
equivalent rights, as determined by the Committee. The award
agreement may provide for the immediate payment, deferral, or
investment of dividend equivalent rights.
Share
Options
Share options that may be granted under the Directors’ Plan
become exercisable upon grant, unless otherwise determined by
the Committee, and expire ten years from the date of grant.
The following provisions of this paragraph will apply in the
case of an optionee whose service as a non-employee director is
terminated. If the service of the optionee is terminated by
reason of the optionee’s resignation or removal for cause,
any outstanding share options of the optionee will be
exercisable (to the extent exercisable immediately prior to the
termination of service) at any time prior to the expiration date
of the share option or within 90 days after the date of
termination of service, whichever is the shorter period.
Following the death of an optionee during service with the
Company, or within a period following termination of service
during which a share option remains exercisable, outstanding
share options of the optionee will be exercisable (whether or
not exercisable immediately prior to the death of the optionee
in the case of an optionee who dies during service with the
Company) by the legal representative or legatee of the optionee,
at any time prior to the expiration date of the share option or
within one year after the date of death of the optionee,
whichever is the shorter period. If the service of an optionee
terminates for any reason other than for resignation, removal
for cause or death, as described above, outstanding share
options granted to the optionee will be exercisable (whether or
not exercisable immediately prior to the separation from
service) at any time prior to the expiration date of the share
option or within one year after the date of termination of
service, whichever is the shorter period.
The exercise price for each share option will be payable in full
in cash at the time of exercise; however, in lieu of cash the
holder of a share option may, if authorized by the Committee,
pay the option price in whole or in part by delivering to the
Company, or by the Company withholding from the award, shares
having a fair market value on the date of exercise of the share
option equal to the exercise price for the shares being
purchased, except that any portion of the exercise price
representing a fraction of a share must be paid in cash.
If required to qualify for exemption under SEC
Rule 16b-3,
no share option granted under the Directors’ Plan is
transferable other than by will or by the laws of descent and
distribution, and all share options may be exercised during an
optionee’s lifetime only by the optionee.
Restricted
Shares
Restricted shares are an award of Common Stock, either at no
cost or at a price determined by the Committee, subject to
established restrictions and conditions. The restrictions may
include restrictions upon the sale,
19
assignment, transfer, or other disposition of the restricted
shares and conditions may be based upon continuing service and
such other criteria as the Committee may determine in its
discretion. Following a restricted share award and prior to the
lapse or termination of the applicable restrictions, the
restricted shares will be held in escrow. The non-employee
Director will have, with respect to awards of restricted shares,
all of the rights of a shareholder of the Company, including the
right to vote the restricted shares and the right to receive any
dividends and other distributions paid with respect to the
shares, subject only to the restrictions and limitations imposed
by the Committee.
Additional
Rights on Certain Events
The Directors’ Plan provides for certain additional rights
upon the occurrence of a Change of Control. Such an event is
deemed to have occurred (1) when a beneficial owner of
securities (other than Wm. Polk Carey, the Carey Family, as
defined in the Directors’ Plan, the W. P. Carey Foundation,
the Company, a subsidiary or any trustee, fiduciary or other
person or entity holding securities under any employee benefit
plan of the Company or any subsidiary) is entitled to
twenty-five percent (25%) or more of the voting power of the
Company or the then outstanding shares of the Company,
(2) the Company’s shareholders approve (i) any
consolidation or merger of the Company or any subsidiary, where
the shareholders will not own, after such consolidation or
merger, 50% or more of the voting equity of the entity issuing
the cash or securities in the transaction, or its ultimate
parent, (ii) any sale, lease, exchange or other transfer of
all or substantially of the Company’s consolidated assets,
unless following the sale the Company’s shareholders (as
determined immediately prior to the sale) own more than 80% of
the outstanding shares and combined voting power of the entity
that acquired the assets, or (iii) any plan or proposal for
the liquidation or dissolution of the Company, or (3) when
the incumbent Directors of the Company, measured as of the
effective date of the Directors’ Plan, together with any
Directors they approve by at least a majority vote, cease to
constitute at least a majority of the Board of Directors. For
purposes of the foregoing, certain transactions resulting from
the acquisition of securities by the Company are excluded.
Upon a Change of Control (1) all outstanding share options
will become immediately and fully exercisable, (2) all
restrictions applicable to restricted shares and RSUs shall
lapse immediately, provided that the payment date of any awards
considered to be deferred compensation shall not be accelerated.
Possible
Anti-Takeover Effect
The provisions of the Directors’ Plan providing for the
acceleration of the exercise date of share options and the lapse
of restrictions applicable to restricted shares and RSUs upon
the occurrence of a Change of Control may be considered as
having an anti-takeover effect.
Amendment
and Termination
The Board of Directors may at any time amend or terminate the
Directors’ Plan. However, no such termination may terminate
any outstanding share option, restricted share or RSU. Further,
the Board may not amend the Directors’ Plan without the
approval of the Company’s shareholders to the extent such
approval is required by the rules of any exchange upon which the
Common Stock is listed or if approval of the amendment is
required to qualify for the exemption provided by SEC
Rule 16b-3.
New Plan
Benefits
The actual amount of RSUs or other awards to be received by or
allocated to non-employee Directors, the only category of
participants under the Directors’ Plan, is not determinable
in advance because of the nature of the formula utilized, which
depends on the share price at the time of the award, as
described above. However, under the predecessor plan, the nine
non-employee Directors each received 792 restricted shares in
2008 and, under the Directors’ Plan, the nine non-employee
Directors each received 1,429 RSUs on October 1, 2008,
contingent upon shareholder approval.
20
Federal
Income Tax Consequences
The following is a brief summary of the principal Federal income
tax consequences of the grant and exercise of awards under
present law.
Share Options. A non-employee Director will
not recognize any taxable income for Federal income tax purposes
upon receipt of a share option. Upon the exercise of a share
option, the amount by which the fair market value of the shares
received, determined as of the date of exercise, exceeds the
exercise price will be treated as compensation received by the
non-employee Director in the year of exercise. If the option
price of a share option is paid in whole or in part with shares,
no income, gain, or loss will be recognized by the non-employee
Director on the receipt of shares equal in value on the date of
exercise to the shares delivered in payment of the exercise
price. The fair market value of the remainder of the shares
received upon exercise of the share option, determined as of the
date of exercise, less the amount of cash, if any, paid upon
exercise, will be treated as compensation income received by the
non-employee Director on the date of exercise of the share
option. The Company will be entitled to a deduction for
compensation paid in the same amount treated as compensation
received by the non-employee Director.
Restricted Shares. A non-employee Director who
receives an award of restricted shares will not recognize any
taxable income for Federal income tax purposes in the year of
the award, provided the shares are subject to restrictions (that
is, they are nontransferable and subject to a substantial risk
of forfeiture). However, a non-employee Director may elect under
Section 83(b) of the Internal Revenue Code to recognize
compensation income in the year of the award in an amount equal
to the fair market value of the shares on the date of the award,
determined without regard to the restrictions. If the
non-employee Director does not make a Section 83(b)
election within thirty (30) days of the grant, the fair
market value of the shares on the date the restrictions lapse
will be treated as compensation income to the non-employee
Director and will be taxable in the year the restrictions lapse.
The Company generally will be entitled to a deduction for
compensation paid in the same amount treated as compensation
income to the non-employee Director.
Restricted Share Units. A non-employee
Director who receives RSUs will not recognize any taxable income
for Federal income tax purposes upon receipt of the award. Any
cash or shares received pursuant to the award will be treated as
compensation income received by the non-employee Director
generally in the year in which the non-employee director
receives such cash or Company shares. The Company generally will
be entitled to a deduction for compensation paid in the same
amount treated as compensation income to the non-employee
Director.
Vote
Required
Approval of the W. P. Carey & Co. LLC 2009
Non-Employee Directors’ Incentive Plan requires the
affirmative vote of a majority of the votes actually cast by
shares present in person or represented by proxy at the Annual
Meeting, a quorum being present. An abstention from voting on a
matter will not be considered a vote cast on the matter, will
not be counted in determining the number of affirmative votes
required for approval and, accordingly, will not have the effect
of a vote for or against the proposal. If a broker or similar
nominee limits on a proxy card the number of shares voted on
this proposal or indicates that the shares represented by a
proxy card are not voted on this proposal, such broker non-votes
will not be considered a vote cast, will not be counted in
determining the number of affirmative votes required for
approval and, accordingly, will not have the effect of a vote
for or against the proposal.
With respect to Proposal Three, the Board of Directors
recommends a vote FOR approval of the adoption of the W .P.
Carey & Co. LLC 2009 Non-Employee Directors’
Incentive Plan.
21
EQUITY
COMPENSATION PLAN INFORMATION
The following table presents information regarding the
Company’s equity compensation plans as of December 31,
2008:
|
Number of Securities |
||||||||||||
|
to be Issued |
Weighted-Average |
Number of Securities |
||||||||||
|
Upon Exercise of |
Exercise Price of |
Remaining Available for |
||||||||||
|
Outstanding Options, |
Outstanding Options, |
Future Issuance Under |
||||||||||
|
Plan Category
|
Warrants and Rights | Warrants and Rights | Equity Compensation Plans | |||||||||
|
Equity compensation plans approved by security holders
|
2,767,414 | (1) | $ | 27.15 | (2) | 710,140 | (3) | |||||
|
Equity compensation plans not approved by security holders
|
12,861 | (4) | N/A | (2) | 312,139 | (5) | ||||||
| (1) | Reflects outstanding options, RSUs, and PSUs issued under the 1997 Share Incentive Plan. For PSUs, which may vest in varying amounts depending on the achievement of specified performance criteria, the Threshold Amount, which is based on actual performance as of December 31, 2008, aggregating 72,375 PSUs, was used; the Maximum Amount that can be issued would be 434,250. |
| (2) | RSUs and PSUs are settled in shares of Common Stock on a one-for-one basis and accordingly do not have a Weighted-Average Exercise Price. The Weighted-Average Exercise Price shown is for outstanding options only. |
| (3) | Includes 332,510 shares of Common Stock issuable under the 1997 Share Incentive Plan, which may be issued upon the exercise of stock options, as restricted stock, upon vesting of RSUs or PSUs, or as other stock based awards, 127,733 shares issuable under the 1997 Non-Employee Director Incentive Plan, which may be issued upon the exercise of stock options or as restricted stock, and 249,897 shares issuable under the ESPP. Under the terms of the ESPP, eligible employees may purchase shares semi-annually with up to a maximum of 10% of eligible compensation (or $25,000, if less). The purchase price is 85% of the lower of the market price of the Company’s stock on the first and last day of each semi-annual purchase period. The terms of the ESPP do not limit the aggregate number of shares subject to purchase by all participants during any one purchase period. If the 2009 Share Incentive Plan described in Proposal Two or the 2009 Non-Employee Directors’ Incentive Plan described in Proposal Three are approved by the shareholders at the Annual Meeting, no further awards will be made under the 1997 Share Incentive Plan or the 1997 Non-Employee Director Incentive Plan, respectively. |
| (4) | Reflects 1,429 RSUs granted to each of the nine Independent Directors on October 1, 2008 under the 2009 Non-Employee Directors’ Incentive Plan, as more fully described in Proposal Three above, contingent upon shareholder approval at the Annual Meeting. |
| (5) | Reflects the total amount of shares available for awards approved by the Board as part of the 2009 Non-Employee Directors’ Incentive Plan, which remains subject to approval by the shareholders at the Annual Meeting as described in Proposal Three. |
22
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Executive Summary. The Company’s overall
objective is to maintain a compensation system that fosters the
short-term and long-term goals of the Company and its
shareholders. Central to achieving these goals is the motivation
of the Company’s senior leadership group to achieve a high
level of financial performance. Therefore, variable compensation
is tied strongly to Company performance. Incentive compensation
decisions, including 2008 bonuses and 2009 long-term incentive
grants, were reflective of Company performance during the 2008
fiscal year.
The Committee considers a number of key financial and market
measures in making compensation decisions, including revenue,
EBITDA, Net Income, Operating Margin, Earnings per Share,
Adjusted Cash Flow from Operations, assets under management,
investment volume, fundraising objectives, market cap, stock
price appreciation, dividend yield, and total shareholder
return. In making compensation decisions in 2008, the Committee
considered the Company’s performance relative to both prior
year performance and the performance of its peers. In 2008,
financial and market performance was strong compared to the
Company’s peer group but decreased slightly from the
Company’s performance the previous fiscal year.
In light of these performance considerations, the Committee
decided not to increase base salaries in 2008 for the Named
Executive Officers, or NEOs. The Committee also determined that
bonuses in 2008 would be decreased 20% from 2007 levels. To
reflect the decrease in the Company’s share price year over
year, the NEOs received the same number of RSUs and PSUs in 2009
as awarded in 2008. This resulted in the value of 2009 equity
awards being approximately 36% less than the value delivered in
2008. The Committee believes that given these actions, NEO pay
and Company performance are strongly aligned.
Introduction
The Company’s compensation philosophy and its processes for
compensating Executive Officers are supervised by the
Compensation Committee of the Board of Directors. This Committee
currently consists of four Directors, each of whom is
independent within the meaning of the New York Stock Exchange
Listing Standards. The Compensation Committee’s
responsibilities include setting the Company’s executive
compensation principles and objectives, setting the compensation
of Executive Officers, and monitoring the Company’s general
compensation programs.
Its functions include the following:
| • | Annually, evaluate the Chief Executive Officer’s performance and approve the Chief Executive Officer’s compensation level based on that evaluation. | |
| • | Annually, review the performance and approve the compensation of Executive Officers in addition to the Chief Executive Officer. | |
| • | Review and approve any changes to the Company’s compensation programs, particularly with respect to incentive compensation plans and equity-based compensation plans. | |
| • | Administer all equity-based plans and monitor shareholder dilution. | |
| • | Retain a compensation consulting firm, on the Compensation Committee’s sole authority, that reports directly to the Committee. |
The Compensation Committee relies on input both from management
and from its independent compensation consultant, Watson Wyatt
Worldwide, to assist the Committee in making its determinations.
The Committee also considers the perspective of the Chairman of
the Company, who is the Company’s largest shareholder.
Although the Compensation Committee receives information and
recommendations regarding the design of the compensation program
and level of compensation for Executive Officers from these
sources, the Compensation Committee retains the sole authority
to make final decisions both as to the types of compensation and
compensation levels for these executives.
23
Compensation Philosophy: The Company’s
compensation program is designed to align executive pay with
Company performance and to motivate management to make sound
financial decisions that increase the value of the Company. The
Committee believes that a blend of incentive programs based on
both quantitative and qualitative performance objectives is the
most appropriate way to encourage not only the achievement of
outstanding financial performance, but maintenance of consistent
standards of teamwork, creativity, good judgment, and integrity.
The Compensation Committee does not rely exclusively on rigid
incentive formulae but rather exercises its best judgment in
taking into account the many aspects of performance that make up
an individual’s contribution to the Company’s success.
Thus, in determining 2008 compensation, the Committee examined a
broad range of information on financial performance. The
Committee also reviewed information on the performance of and
contributions made by individual Executive Officers and, in
doing so, placed substantial reliance on information received
from, and the judgment of, the Chairman and the Chief Executive
Officer. While the Compensation Committee does take into account
independent survey data and public peer group data as market
reference points, it does not target compensation levels at any
particular quartile or other reference level.
Outside Compensation Consultant: Since January
2007, the Compensation Committee has retained an independent
compensation consulting firm, Watson Wyatt Worldwide, to provide
the Committee with ongoing advice and support in relation to the
Company’s executive compensation programs. In 2008, Watson
Wyatt Worldwide analyzed the Company’s executive
compensation practices and award levels against market practices
generally. That review was intended, among other things, to
assist the Compensation Committee in determining appropriate
compensation levels for NEOs given 2008 performance. Watson
Wyatt also presented the Committee with historical performance
peer group data that the Committee considered in setting the
2009-2011
Performance Share Unit metrics and goals, as described below.
2008
Performance Summary
The Committee considered a number of factors in determining NEO
compensation levels for 2008. Among these factors were the
Company’s financial and market performance compared to
prior years, the 2008 business plan, and the performance of the
peer group discussed below. The Committee determined that 2008
market and financial performance was strong compared to the
performance of the peer group, albeit below the Company’s
2007 performance. Given these considerations, the Committee
decided to decrease the value of incentive compensation by 20%
with respect to the annual bonus for 2008 and by 36% with
respect to long-term incentive awards in 2009. Some of the
specific financial results the Committee evaluated were:
|
Financial Metric
|
2008 Results | 2007 Results | ||
|
Total Revenues (net of reimbursed expenses)
|
$197.6 million | $249.3 million | ||
|
Net Income
|
$ 78.0 million | $ 79.3 million | ||
|
Diluted Earnings Per Share
|
$ 1.96 | $ 2.05 | ||
|
Cash flow from operating activities
|
$ 63.2 million | $ 47.5 million | ||
|
CPA®
REITs Structured Investments
|
$ 457 million | $ 1.1 billion | ||
|
CPA®
REITs Total Assets
|
$ 8.1 billion | $ 8.4 billion |
The Committee also considered the following supplemental metrics:
|
Financial
Metric(1)
|
2008 Results | 2007 Results | ||||||
|
Funds From Operations (FFO)
|
$ | 124.5 million | $ | 133.3 million | ||||
|
FFO (Real Estate Ownership Segment)
|
$ | 75.3 million | $ | 64.1 million | ||||
|
EBITDA
|
$ | 146.2 million | $ | 179.4 million | ||||
|
EBITDA (from Investment Management)
|
$ | 61.8 million | $ | 91.1 million | ||||
|
Adjusted Cash Flow From Operations
|
$ | 89.4 million | $ | 84.2 million | ||||
| (1) | The Company believes that these non-GAAP financial measures are useful supplemental measures that assist investors to better understand the underlying performance of its business segments. These non-GAAP financial |
24
| measures do not represent net income or cash flow from operating activities that are computed in accordance with accounting principles generally accepted in the United States (“GAAP”) and should not be considered an alternative to net income or cash flow from operating activities as an indicator of the Company’s financial performance. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Please refer to the Company’s Form 8-K, which was filed with the SEC on March 2, 2009, for a reconciliation of these non-GAAP financial measures to the Company’s consolidated financial statements. |
The Committee did not put emphasis on any single metric but
rather reviewed the overall results to arrive at a viewpoint on
how financial performance compared with prior years and the peer
companies and what effect this should have on annual
compensation levels.
2008 Peer
Comparison Group
When determining compensation levels for the NEOs, the Committee
considers a number of external market reference points,
including published survey data and the competitive pay levels
of an established group of publicly traded peer companies. This
peer comparison group consists of companies with whom the
Company competes for executive talent. The current peer
comparison group is comprised of 13 companies operating in
the asset management, and more specifically real estate asset
management, industries. The Committee annually reviews the peer
group to determine what changes, if any, are appropriate. Prior
to 2008, the peer group consisted solely of real estate
investment trust companies. In 2008, the Committee changed the
peer comparison group to more closely reflect the asset
management and managed fund nature of its business.
Companies used for the Company’s peer group generally have
the following characteristics:
| • | Companies operating in the property acquisition, development, management leasing or REIT industries; | |
| • | Companies operating in the asset management or fund administration industries; | |
| • | Companies with a strategic focus on commercial and industrial properties; | |
| • | Companies with revenues, net investment in real estate, and market capitalization roughly equivalent to the Company (revenues, investments and market capitalization of the Company were computed inclusive of such data for its affiliated CPA® REIT funds, for which the Company provides management services, including day-to-day management and responsibility for property acquisitions, refinancing, and sales); and | |
| • | Publicly traded companies. |
The peer group ultimately recommended by the Chief Executive
Officer and approved by the Committee consisted of the following
companies:
|
AMB Property Corporation
|
Eaton Vance Corp | Northstar Realty Finance | ||
|
Affiliated Managers Group
|
Kimco Realty Corporation | Realty Income Corporation | ||
|
Alliance Bernstein Holdings
|
Lexington Realty Trust | Waddell & Reed Financial Inc. | ||
|
Calamos Asset Management
|
Liberty Property Trust | |||
|
Cohen and Steers Inc.
|
National Retail Properties |
Elements
of Compensation
The Company uses base salary, annual bonuses, and stock-based
awards, as well as a range of benefit plans, as tools to help
achieve its compensation objectives. The Company’s approach
to the mix of compensation among these elements emphasizes
variable compensation, including bonuses and stock-based awards,
over fixed compensation. The emphasis on stock-based awards
helps to promote a long-term perspective and align
management’s interest with that of shareholders of the
Company.
Base
Salary
The objective of base salary is to reflect job responsibilities
and set a minimum baseline for compensation. In most cases, base
salaries for Executive Officers are viewed as a significantly
less important component of their
25
overall compensation than variable elements of compensation.
When setting salary levels, the Committee considered the
following factors:
| • | the nature and responsibility of the position; | |
| • | the expertise of the individual executive; | |
| • | changes in the cost of living and inflation; | |
| • | the competitive labor market for the executive’s services; and | |
| • | the recommendations of the Chairman and of the Chief Executive Officer with respect to Executive Officers who report to them. |
Salary levels for Executive Officers joining the Company are
typically set initially by negotiation between the prospective
employee and management. Base salaries are subject to annual
review by the Committee, who consider competitive market data
provided by the Committee’s independent consultants. In
2008, Watson Wyatt undertook a review of base salaries for the
Named Executive Officers and found that base salaries were
generally competitive with typical market practice. When
considering changes to base salaries for the Executive Officers,
the Committee also takes into consideration the impact on total
compensation, which includes base salary, annual bonus and
long-term incentives. In 2008, the Committee did not adjust the
base salaries for the NEOs from the 2007 levels, which had also
remained unchanged from 2006.
Annual
Cash Incentives
Annual cash bonuses are intended to motivate Executive Officers
to achieve Company goals, align executive pay with shareholder
interests, and reward performance, both by the Company as a
whole and by the individual Executive Officers. Annual cash
incentive payments to NEOs are not based on rigid formulae and
are at the discretion of the Compensation Committee. In awarding
bonuses to Executive Officers, the Compensation Committee
reviewed the Company’s performance compared to prior years
and against the public peer group, specifically noting such
measurements as revenue, EBITDA, Net Income, Operating Margin,
Earnings per Share, Adjusted Cash Flow from Operations, assets
under management, investment volume, fundraising objectives,
market cap, stock price appreciation, dividend yield, and total
shareholder return. The Committee also took into account other
non-recurring factors that may have affected year-to-year
comparisons, such as liquidity events for the CPA REITs and
receipt of deferred performance revenue from a CPA REIT upon
attainment of performance targets, which only occur every few
years. The Compensation Committee also considered such
additional factors as progress toward achieving financial and
non-financial goals and long-term objectives, performance
against the pre-set business plan, performance compared to the
peer group, and unforeseen changes in the Company’s
operating environment during the year. In light of these
considerations, the Committee reduced Executive Officer bonuses
by 20% from 2007 levels.
In addition to the annual cash bonus plan, the Company also
maintains a short-term incentive, cash commission program
exclusively for its investment officers. Commission income under
this plan is accrued as a percentage of revenues earned from
structuring new investments for the Company’s managed
funds. These commission payments are a significant component of
overall compensation for the Company’s investment officers
and are directly linked to the achievement of quantitative
objectives in the CPA REITs. A portion of the total commission
payouts are allocated among the investment officers at the time
of transaction and may be adjusted up or down, at the discretion
of the Chairman and the Chief Executive Officer and with the
recommendation of the department head. The remaining portion of
the commissions is set aside into a bonus pool and divided among
the investment officers at the end of the year. In 2008, Edward
V. LaPuma was the only NEO to participate in this commission
program. His total 2008 commission earnings were $731,895, as
compared to total 2007 commission earnings of $1,712,426.
Long-Term
Incentive Awards
In 2008, the Company approved, as a subset of its
1997 Share Incentive Plan, the Long-Term Incentive Plan
(“LTIP”), which is designed to reward key managers for
high performance and to drive shareholder value and
26
increase the value of assets under management. Under the LTIP,
participants are awarded 50% of their long-term incentive value
in the form of time-vested RSUs and 50% in the form of PSUs
annually. The RSUs granted in 2008 vest ratably over three years
at 33% a year starting January 2, 2009. The PSUs are earned
at the end of a three year performance period. The ultimate
number of PSUs earned is based upon achievement of the following
four goals, each of which are weighted equally:
| • | Growth in adjusted cash flow from operations | |
| • | Normalized EBITDA growth | |
| • | Growth in asset management | |
| • | Three year total shareholder return relative to the Russell 2000 Small Cap Index |
PSUs are tied to specific performance targets determined at the
beginning of the performance cycle. Management and the
Committee’s independent consultant work together to propose
three-year performance targets at the beginning of each
performance cycle. The Committee considers these recommendations
in conjunction with the established long-term business plan of
the Company to determine the final goals. At the end of the
performance period, the Committee will evaluate the
Company’s actual performance compared to the pre-set goals
and determine the payout level achieved. There are five
potential payout levels corresponding to actual Company
performance; miss, which corresponds to no payout; threshold,
which corresponds to a payout equal to one half of target;
target, which results in the targeted payout level; stretch,
which corresponds to a payout equal to two times target, and
maximum, which corresponds to a payout of three times target.
Prior to 2008, the Company did not have a formalized or annual
recurring equity incentive program but instead periodically
awarded stock options and restricted shares to the NEOs to
motivate and reward the creation and preservation of long-term
shareholder value. When setting target equity grant levels for
the NEOs in 2008 under the LTIP, the Committee considered
outstanding equity previously granted and competitive market
data from the Company’s public peer group. Long-term
incentive award levels for the NEOs were generally consistent
with competitive market practice. In 2009, the Committee
determined that the number of shares awarded to NEOs would
remain the same as awarded in 2008, which, given the change in
the price of the Common Stock between the two periods, resulted
in the value of 2009 equity awards delivered to the NEOs being
approximately 36% less than the value delivered in 2008.
For the
2008-2010
cycle relevant to PSUs awarded in 2008, the three year goals are:
|
Adjusted Cash Flow |
Assets Under |
|||||||||||||||
|
from Operations |
Normalized EBITDA |
Management Growth |
Total Shareholder |
|||||||||||||
|
(Average Annual |
Growth (Average |
(Compounded Annual |
Return Relative to |
|||||||||||||
| Growth) | Annual Growth) | Growth) | Russell 2000 | |||||||||||||
|
Threshold
|
3 | % | 3.5 | % | 7.5 | % | 20th Percentile | |||||||||
|
Target
|
6 | % | 7 | % | 15 | % | 40th Percentile | |||||||||
|
Stretch
|
12 | % | 14 | % | 20 | % | 80th Percentile | |||||||||
|
Maximum
|
16 | % | 18 | % | 25 | % | 85th Percentile | |||||||||
For the
2009-2011
cycle relevant to PSUs awarded in 2009, the three year goals are:
|
Adjusted Cash Flow |
Assets Under |
|||||||||||||||
|
from Operations |
Normalized EBITDA |
Management Growth |
Total Shareholder |
|||||||||||||
|
(Average Annual |
Growth (Average |
(Compounded Annual |
Return Relative to |
|||||||||||||
| Growth) | Annual Growth) | Growth) | Russell 2000 | |||||||||||||
|
Threshold
|
0 | % | 0 | % | 0 | % | 30th Percentile | |||||||||
|
Target
|
3 | % | 3 | % | 3 | % | 40th Percentile | |||||||||
|
Stretch
|
6 | % | 6 | % | 7.5 | % | 70th Percentile | |||||||||
|
Maximum
|
12 | % | 12 | % | 15 | % | 75th Percentile | |||||||||
27
Other
Compensation and Benefits
Deferred Compensation Plans. In light of its
adoption of the LTIP effective in 2008, the Committee terminated
further contributions by executives to the 2005 Partnership
Equity Unit Plan, or 2005 PEP. For NEOs, all prior deferrals
under the 2005 PEP and its predecessor, the Partnership Equity
Unit Plan, which are collectively referred to as the PEP Plans,
are now maintained in the Company’s Deferred Compensation
Plan, pursuant to elections offered in 2008 through which
participants elected specified payment dates for deferral
amounts.
The purpose of the PEP Plans was to align the interests of the
Company’s highly-compensated officers with the interests of
investors in the CPA REITs, in a tax-advantaged manner, through
the use of phantom equity in those funds. In the
Committee’s view, the LTIP will provide a strong alignment
with the interests of the Company shareholders. Accordingly, the
Committee, after discussion with Watson Wyatt, determined to
replace the PEP Plans with the LTIP. In 2008, PEP participants
who were then current employees were given the opportunity to
convert their deemed interests in the PEP Plans for a deemed
equity investment in the Company in the form of RSUs. If so
elected, this conversion is scheduled to take place on or about
June 15, 2009 and will provide participants with a number
of RSUs equal to the equivalent value of the Common Stock as
previously held in interests through the PEP Plans. The RSUs,
like the underlying PEP Units, will be fully vested but, in
general, receipt of the underlying shares of Common Stock must
be deferred by the participants for a minimum of two years.
Awards under the LTIP may be deferred if approved by the
Committee and are subject to the requirements of
Section 409A of the Internal Revenue Code. For awards of
RSUs in 2008, the following NEOs elected to defer receipt of the
underlying shares in accordance with the terms of the
Company’s Deferred Compensation Plan: Mr. Carey
(12,267) and Mr. DuGan (12,267).
Benefits and Perquisites. The Company does not
maintain any defined-benefit pension plans. The Company does
maintain a profit-sharing plan, a 401(k) plan, and the ESPP,
under which eligible employees may purchase Company stock at a
discount of 15% of the market price of the Common Stock on the
first or last day of the semi-annual purchase period, whatever
is lower. These plans are generally available to all employees.
Certain perquisites, as described in the Summary Compensation
Table below, are available to a more limited group of officers
that includes the NEOs. These perquisites are not deemed by the
Company to constitute a material element of compensation.
Employment
Agreements
The Company may from time to time enter into employment
contracts when it deems it to be advantageous in order to
attract or retain certain individuals. Currently, of the NEOs,
only Mr. LaPuma has such an agreement.
Other
Considerations
The Company does not have any equity or other security ownership
requirements or guidelines. The Company has been advised by
counsel that it is not subject to Section 162(m) of the
Internal Revenue Code.
28
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with management. Based on
such review and discussions, the Committee recommended to the
Board of Directors, and the Board approved, that the
Compensation Discussion and Analysis be included in this Proxy
Statement, and incorporated by reference in the Company’s
Annual Report on
Form 10-K
for the year ended December 31, 2008.
COMPENSATION COMMITTEE
Benjamin H. Griswold, IV, Chairman
Trevor P. Bond
Charles E. Parente
Reginald Winssinger
Trevor P. Bond
Charles E. Parente
Reginald Winssinger
SUMMARY
COMPENSATION TABLE
All management functions of W. P. Carey & Co. LLC are
provided by its wholly-owed subsidiaries, Carey Asset Management
and Carey Management Services. All policy-making functions are
carried out by Executive Officers of Carey Asset Management or
Carey Management Services, who generally hold the same titles as
officers of W. P. Carey & Co. LLC. The following table
summarizes the compensation of our NEOs for each of the fiscal
years ended December 31, 2008, 2007 and 2006. Our NEOs are
our Chief Executive Officer, Acting Chief Financial Officer and
the three other most highly compensated Executive Officers as
determined by their total compensation in the table below in
accordance with SEC Rules.
|
Non-Equity |
||||||||||||||||||||||||||||||||
|
Stock |
Option |
Incentive Plan |
All Other |
|||||||||||||||||||||||||||||
|
Salary(1) |
Bonus(1) |
Awards(2) |
Awards(2) |
Compensation(3) |
Compensation(4) |
Total |
||||||||||||||||||||||||||
|
Name and Principal Position
|
Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||
| Wm. Polk Carey | 2008 | 300,000 | 800,000 | 348,435 | 0 | 0 | 141,204 | 1,589,639 | ||||||||||||||||||||||||
|
Chairman
|
2007 | 300,000 | 1,000,000 | 0 | 30,136 | 49,254 | 102,844 | 1,482,234 | ||||||||||||||||||||||||
| 2006 | 300,000 | 900,000 | 0 | 7,935 | 0 | 94,202 | 1,302,137 | |||||||||||||||||||||||||
|
Gordon F. DuGan
|
2008 | 600,000 | 896,000 | 348,435 | 65,121 | 0 | 220,473 | 2,130,029 | ||||||||||||||||||||||||
|
CEO
|
2007 | 600,000 | 1,120,000 | 0 | 80,501 | 62,280 | 160,171 | 2,022,952 | ||||||||||||||||||||||||
| 2006 | 600,000 | 1,000,000 | 0 | 52,208 | 0 | 132,731 | 1,784,939 | |||||||||||||||||||||||||
|
Mark J. DeCesaris
|
2008 | 250,000 | 500,000 | 241,435 | 53,223 | 0 | 94,470 | 1,139,128 | ||||||||||||||||||||||||
|
Acting CFO
|
2007 | 250,000 | 625,000 | 75,533 | 44,889 | 7,884 | 76,187 | 1,079,493 | ||||||||||||||||||||||||
| 2006 | 250,000 | 550,000 | 68,621 | 22,901 | 0 | 69,030 | 960,552 | |||||||||||||||||||||||||
|
Edward V. LaPuma
|
2008 | 300,000 | 175,000 | 0 | 0 | 0 | 3,719,262 | 4,194,262 | ||||||||||||||||||||||||
|
Managing Director
|
2007 | 300,000 | 0 | 49,680 | 110,784 | 1,392,377 | 2,046,530 | 3,899,370 | ||||||||||||||||||||||||
| 2006 | 300,000 | 0 | 113,554 | 74,636 | 877,065 | 1,459,942 | 2,825,197 | |||||||||||||||||||||||||
|
Thomas E. Zacharias
|
2008 | 350,000 | 760,000 | 293,943 | 80,085 | 0 | 142,648 | 1,626,676 | ||||||||||||||||||||||||
|
COO
|
2007 | 350,000 | 950,000 | 0 | 94,244 | 19,077 | 119,059 | 1,532,380 | ||||||||||||||||||||||||
| 2006 | 350,000 | 850,000 | 0 | 67,190 | 0 | 101,504 | 1,368,694 | |||||||||||||||||||||||||
| (1) | The amounts in the Bonus column represent bonuses paid in February 2009 for performance in 2008. Certain amounts of salary and bonus payments reported in this table have been deferred under the 2005 PEP. Further deferrals under the 2005 PEP were terminated effective December 31, 2007. See the Non-Qualified Deferred Compensation Table below. Mr. LaPuma’s salary is governed by the provisions of his employment agreement with the Company, the material terms of which are described under “Grants of Plan-Based Awards” and “Potential Payments Upon Termination or Change in Control” below. | |
| (2) | The amounts in the Stock Awards and Option Awards columns reflect the expense recognized for financial statement reporting purposes for the indicated fiscal year, in accordance with SFAS 123R (excluding risk of forfeiture), with respect to awards of time-based restricted shares and options to acquire Common Stock, which may include awards made during the indicated year or earlier, and for 2008 also includes awards of RSUs and |
29
| PSUs granted under the 1997 Share Incentive Plan. For Mr. LaPuma, the amounts in these columns for 2006 and 2007 also include awards of time-based restricted interests and options to acquire interests in WPCI. For details of the individual grants of RSUs and PSUs during 2008, please see the Grants of Plan-Based Awards Table below. There were no forfeitures of RSUs and PSUs by any of the NEOs during 2008. The assumptions on which these valuations are based are set forth in Note 15 to the consolidated financial statements included in the 2008 Form 10-K. | ||
| (3) | The amounts shown in 2007 for Messrs. Carey, DuGan, DeCesaris and Zacharias represent previously deferred interest, computed at a 6% rate, that was paid in June 2007 with respect to cumulative bonus amounts deferred by the NEOs, and also include interest on cumulative commission and commission bonus amounts deferred by Mr. La Puma, from 2004 through 2006. Such cumulative amounts deferred were $665,000 for Mr. Carey, $811,817 for Mr. DuGan, $225,000 for Mr. DeCesaris, $435,000 for Mr. Zacharias and $1,004,424, inclusive of cumulative commission bonus ($581,686) and commission ($422,738) amounts, for Mr. LaPuma. Deferred bonus amounts for 2006 are included in the Bonus column for that year. Deferred commission amounts for 2006 for Mr. LaPuma are included in the All Other Compensation column and deferred commission bonus amounts are included in this column. Mr. LaPuma also received a bonus payment of $1,322,873 for 2007, which is included in this column. | |
| (4) | The All Other Compensation column includes, in addition to the perquisites and personal benefits described below, the following amounts for 2008: compensation related to Company contributions on behalf of the NEOs to the Company sponsored profit sharing plan, including forfeitures ($35,420 for each NEO); dividends on unvested restricted stock ($24,321 for Mr. Zacharias and $15,489 for Mr. DeCesaris), unvested RSUs ($26,882 each for Messrs. Carey and DuGan, $12,784 for Mr. DeCesaris, and $18,263 for Mr. Zacharias), and PEP Units ($78,902 for Mr. Carey, $126,579 for Mr. DuGan, $42,126 for Mr. Zacharias, and $163,900 for Mr. LaPuma); and, for Mr. LaPuma, commission compensation earned in connection with structuring net lease transactions ($731,895), a capital distribution from WPCI for personal tax liability ($2,759,186), and payment by the Company of life insurance premiums ($15,000). Perquisites and personal benefits for each NEO (except Mr. Carey) include: automobile use (depreciation), plus related expenses attributable to personal use, and (except for Mr. LaPuma) club dues attributable to personal use. |
30
GRANTS OF
PLAN-BASED AWARDS — FISCAL 2008
The following table provides information on PSUs and RSUs
granted to our NEOs in 2008.
|
All Other |
||||||||||||||||||||||||
|
Stock |
||||||||||||||||||||||||
|
Awards: |
Grant Date Fair |
|||||||||||||||||||||||
|
Estimated Future Payouts Under |
Number of |
Value of |
||||||||||||||||||||||
| Equity Incentive Plan Awards(1) |
Units(2) |
Stock
Awards(3) |
||||||||||||||||||||||
|
Name
|
Grant Date | Threshold | Target | Maximum | (#) | ($) | ||||||||||||||||||
|
Wm. Polk Carey
|
01/02/08 | 18,400 | 603,888 | |||||||||||||||||||||
| 01/02/08 | 9,200 | 18,400 | 55,200 | 441,416 | ||||||||||||||||||||
|
Gordon F. DuGan
|
01/02/08 | 18,400 | 603,888 | |||||||||||||||||||||
| 01/02/08 | 9,200 | 18,400 | 55,200 | 441,416 | ||||||||||||||||||||
|
Mark J. DeCesaris
|
01/02/08 | 8,750 | 287,175 | |||||||||||||||||||||
| 01/02/08 | 4,375 | 8,750 | 26,250 | 209,913 | ||||||||||||||||||||
|
Edward V. LaPuma
|
— | — | — | — | — | — | ||||||||||||||||||
|
Thomas E. Zacharias
|
01/02/08 | 12,500 | 410,250 | |||||||||||||||||||||
| 01/02/08 | 6,250 | 12,500 | 37,500 | 299,875 | ||||||||||||||||||||
| (1) | Reflects awards of PSUs under of the Company’s 1997 Share Incentive Plan, which may vest on January 2, 2011 at the end of a three year performance period (2008-2010) depending on the achievement of certain criteria, as described under “Compensation Discussion and Analysis” above. Dividend equivalents are accrued and paid at the end of the performance period only to the extent the PSUs vest. | |
| (2) | Reflects awards of RSUs under the 1997 Share Incentive Plan, which vest in three equal installments commencing on January 2, 2009. Dividend equivalents are paid concurrently with the payment of dividends on the shares of Common Stock underlying the RSUs contingent upon the individual’s continued employment. | |
| (3) | Represents the fair value of awards on the date of grant as calculated in accordance with SFAS 123R. For additional information on the valuation assumptions, refer to Note 15 to the consolidated financial statements included in the 2008 Form 10-K. The amounts shown under Grant Date Fair Value of Stock Awards do not necessarily correspond to the actual value that may be realized by the NEOs. |
31
OUTSTANDING
EQUITY AWARDS — FISCAL 2008
The following table sets forth certain information with regard
to all unexercised options and all unvested awards of restricted
stock, RSUs and PSUs held by our NEOs on December 31, 2008.
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||||||
|
Equity |
Plan Awards: |
|||||||||||||||||||||||||||||||||||||||
|
Incentive |
Market or |
|||||||||||||||||||||||||||||||||||||||
|
Equity |
Plan Awards: |
Payout |
||||||||||||||||||||||||||||||||||||||
|
Incentive |
Market |
Number of |
Value of |
|||||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Value of |
Unearned |
Unearned |
|||||||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
Shares or |
Shares, Units |
Shares, Units |
|||||||||||||||||||||||||||||||||||
|
Number of |
Securities |
Securities |
Shares or |
Units of |
or Other |
or Other |
||||||||||||||||||||||||||||||||||
|
Securities |
Underlying |
Underlying |
Units of Stock |
Stock that |
Rights that |
Rights that |
||||||||||||||||||||||||||||||||||
|
Underlying |
Unexercised |
Unexercised |
Option |
Option |
that have |
have not |
have not |
have not |
||||||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Expiration |
not Vested |
Vested |
Vested |
Vested |
||||||||||||||||||||||||||||||||
|
Name
|
Grant Date | (#) Exercisable | (#) Unexercisable | Options (#) | Price ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||
|
Wm. Polk Carey
|
01/02/01 | 150,000 | 0 | 0 | $ | 18.26 | 01/02/11 | |||||||||||||||||||||||||||||||||
| 04/01/02 | 182,725 | 0 | 0 | 23.00 | 03/31/12 | |||||||||||||||||||||||||||||||||||
| 12/31/02 | 2,726 | 4,092 | 0 | 24.75 | 12/31/12 | |||||||||||||||||||||||||||||||||||
| 06/30/04 | 0 | 7,933 | 0 | 29.78 | 06/30/14 | |||||||||||||||||||||||||||||||||||
| 12/31/04 | 0 | 230 | 0 | 35.16 | 12/31/14 | |||||||||||||||||||||||||||||||||||
| 06/30/05 | 0 | 6,501 | 0 | 29.28 | 06/30/15 | |||||||||||||||||||||||||||||||||||
| 12/31/05 | 0 | 266 | 0 | 25.36 | 12/31/15 | |||||||||||||||||||||||||||||||||||
| 06/30/06 | 0 | 3,786 | 0 | 25.32 | 06/30/16 | |||||||||||||||||||||||||||||||||||
| 12/31/06 | 0 | 224 | 0 | 30.07 | 12/31/16 | |||||||||||||||||||||||||||||||||||
| 06/30/07 | 0 | 8,328 | 0 | 31.45 | 06/30/17 | |||||||||||||||||||||||||||||||||||
| 12/31/07 | 0 | 1,220 | 0 | 33.20 | 12/31/17 | |||||||||||||||||||||||||||||||||||
| 01/02/08 | 18,400 | $ | 431,112 | 9,200 | $ | 215,556 | ||||||||||||||||||||||||||||||||||
|
Gordon F. DuGan
|
04/01/02 | 75,000 | 0 | 0 | 23.00 | 03/31/12 | ||||||||||||||||||||||||||||||||||
| 12/31/02 | 2,726 | 4,092 | 0 | 24.75 | 12/31/12 | |||||||||||||||||||||||||||||||||||
| 12/31/03 | 221 | 885 | 0 | 30.52 | 12/31/13 | |||||||||||||||||||||||||||||||||||
| 02/15/04 | 25,000 | 75,000 | 0 | 29.70 | 02/15/14 | |||||||||||||||||||||||||||||||||||
| 06/30/04 | 0 | 9,279 | 0 | 29.78 | 06/30/14 | |||||||||||||||||||||||||||||||||||
| 12/31/04 | 0 | 1,701 | 0 | 35.16 | 12/31/14 | |||||||||||||||||||||||||||||||||||
| 06/30/05 | 0 | 13,026 | 0 | 29.28 | 06/30/15 | |||||||||||||||||||||||||||||||||||
| 12/31/05 | 0 | 2,252 | 0 | 25.36 | 12/31/15 | |||||||||||||||||||||||||||||||||||
| 06/30/06 | 0 | 6,781 | 0 | 25.32 | 06/30/16 | |||||||||||||||||||||||||||||||||||
| 12/31/06 | 0 | 1,796 | 0 | 30.07 | 12/31/16 | |||||||||||||||||||||||||||||||||||
| 06/30/07 | 0 | 12,335 | 0 | 31.45 | 06/30/17 | |||||||||||||||||||||||||||||||||||
| 12/31/07 | 0 | 2,440 | 0 | 33.20 | 12/31/17 | |||||||||||||||||||||||||||||||||||
| 01/02/08 | 18,400 | 431,112 | 9,200 | 215,556 | ||||||||||||||||||||||||||||||||||||
|
Mark J. DeCesaris
|
02/15/06 | 6,250 | 18,750 | 0 | 26.19 | 02/15/16 | 6,000 | 140,580 | ||||||||||||||||||||||||||||||||
| 05/15/06 | 25,000 | 25,000 | 0 | 26.99 | 05/15/16 | |||||||||||||||||||||||||||||||||||
| 06/30/07 | 0 | 2,876 | 0 | 31.45 | 06/30/17 | |||||||||||||||||||||||||||||||||||
| 12/31/07 | 0 | 1,017 | 0 | 33.20 | 12/31/17 | |||||||||||||||||||||||||||||||||||
| 01/02/08 | 8,750 | 205,013 | 4,375 | 102,506 | ||||||||||||||||||||||||||||||||||||
|
Edward V. LaPuma
|
04/01/02 | 36,000 | 0 | 0 | 23.00 | 03/31/12 | ||||||||||||||||||||||||||||||||||
| 12/31/02 | 1,268 | 1,903 | 0 | 24.75 | 12/31/12 | |||||||||||||||||||||||||||||||||||
| 06/30/03 | 338 | 1,353 | 0 | 29.94 | 06/30/13 | |||||||||||||||||||||||||||||||||||
| 12/31/03 | 1,220 | 4,884 | 0 | 30.52 | 12/31/13 | |||||||||||||||||||||||||||||||||||
| 06/30/04 | 0 | 4,323 | 0 | 29.78 | 06/30/14 | |||||||||||||||||||||||||||||||||||
| 12/31/04 | 0 | 2,860 | 0 | 35.16 | 12/31/14 | |||||||||||||||||||||||||||||||||||
| 06/30/05 | 0 | 11,449 | 0 | 29.28 | 06/30/15 | |||||||||||||||||||||||||||||||||||
| 12/31/05 | 0 | 4,578 | 0 | 25.36 | 12/31/15 | |||||||||||||||||||||||||||||||||||
| 06/30/06 | 0 | 5,065 | 0 | 25.32 | 06/30/16 | |||||||||||||||||||||||||||||||||||
| 12/31/06 | 0 | 3,689 | 0 | 30.07 | 12/31/16 | |||||||||||||||||||||||||||||||||||
| 06/30/07 | 0 | 15,788 | 0 | 31.45 | 06/30/17 | |||||||||||||||||||||||||||||||||||
| 12/31/07 | 0 | 13,478 | 0 | 33.20 | 12/31/17 | |||||||||||||||||||||||||||||||||||
32
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||||||
|
Equity |
Plan Awards: |
|||||||||||||||||||||||||||||||||||||||
|
Incentive |
Market or |
|||||||||||||||||||||||||||||||||||||||
|
Equity |
Plan Awards: |
Payout |
||||||||||||||||||||||||||||||||||||||
|
Incentive |
Market |
Number of |
Value of |
|||||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Value of |
Unearned |
Unearned |
|||||||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
Shares or |
Shares, Units |
Shares, Units |
|||||||||||||||||||||||||||||||||||
|
Number of |
Securities |
Securities |
Shares or |
Units of |
or Other |
or Other |
||||||||||||||||||||||||||||||||||
|
Securities |
Underlying |
Underlying |
Units of Stock |
Stock that |
Rights that |
Rights that |
||||||||||||||||||||||||||||||||||
|
Underlying |
Unexercised |
Unexercised |
Option |
Option |
that have |
have not |
have not |
have not |
||||||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Expiration |
not Vested |
Vested |
Vested |
Vested |
||||||||||||||||||||||||||||||||
|
Name
|
Grant Date | (#) Exercisable | (#) Unexercisable | Options (#) | Price ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||
|
Thomas E. Zacharias
|
04/01/02 | 75,000 | 0 | 0 | 23.00 | 03/31/12 | ||||||||||||||||||||||||||||||||||
| 12/31/03 | 44 | 177 | 0 | 30.52 | 12/31/13 | |||||||||||||||||||||||||||||||||||
| 02/15/04 | 12,500 | 37,500 | 0 | 29.70 | 02/15/14 | 10,000 | 234,300 | |||||||||||||||||||||||||||||||||
| 06/30/04 | 0 | 2,720 | 0 | 29.78 | 06/30/14 | |||||||||||||||||||||||||||||||||||
| 12/31/04 | 0 | 430 | 0 | 35.16 | 12/31/14 | |||||||||||||||||||||||||||||||||||
| 06/30/05 | 0 | 3,974 | 0 | 29.28 | 06/30/15 | |||||||||||||||||||||||||||||||||||
| 12/31/05 | 0 | 532 | 0 | 25.36 | 12/31/15 | |||||||||||||||||||||||||||||||||||
| 03/10/06 | 50,000 | 50,000 | 0 | 26.00 | 03/10/16 | |||||||||||||||||||||||||||||||||||
| 06/30/06 | 0 | 2,613 | 0 | 25.32 | 06/30/16 | |||||||||||||||||||||||||||||||||||
| 12/31/06 | 0 | 449 | 0 | 30.07 | 12/31/16 | |||||||||||||||||||||||||||||||||||
| 06/30/07 | 0 | 6,482 | 0 | 31.45 | 06/30/17 | |||||||||||||||||||||||||||||||||||
| 12/31/07 | 0 | 1,423 | 0 | 33.20 | 12/31/17 | |||||||||||||||||||||||||||||||||||
| 01/02/08 | 12,500 | $ | 292,875 | 6,250 | $ | 146,438 | ||||||||||||||||||||||||||||||||||
| (1) | The option, restricted stock, PSU, and RSU awards listed above vest over the following periods: |
Option
Awards:
| • | Grants dated June 30th or December 31st represent options granted in connection with the 2005 PEP and vest in equal annual installments on the fifth through ninth anniversaries of the grant date. | |
| • | Grants dated 1/2/01 and 4/1/02 vested in equal annual installments over three years on the anniversary of the grant date. | |
| • | Grants dated 2/15/04 and 2/15/06 vest in equal annual installments over four years beginning on January 1st of year 2008 through 2011. These options originally were scheduled to vest in years 5 through 9; in October 2007, the Board modified the vesting period of these grants to the current schedule. | |
| • | Grants dated 3/10/06 and 5/15/06 vest in equal annual installments over four years on the anniversary of the grant date. |
Stock
Awards:
| • | Restricted Stock grant dated 2/15/04 vests 2,000 shares each in years one and two; 3,000 shares each in years three and four; and 5,000 shares each in years five and six. | |
| • | Restricted Stock grant dated 2/15/06 vests in equal annual installments over four years on the anniversary of the grant date. | |
| • | RSU grants dated 1/2/08 vest in three equal annual installments commencing on January 2, 2009. | |
| • | PSU grants dated 1/2/08 are shown under Equity Incentive Plan Awards columns and reflect the Threshold Amount of PSUs that may vest on January 2, 2011 if certain performance criteria are met. |
All market values are based on the $23.43 closing price of the
Common Stock on December 31, 2008.
In December 2008, Mr. LaPuma exercised an award of
1 million options to acquire interests in WPCI. Under the
terms of Mr. LaPuma’s employment agreement, he has the
right to put all vested interests in WPCI (as well as certain
related entities in which he also has interests as a result of a
recent corporate restructuring), including those acquired on
exercise of options to purchase interests in WPCI, to the
Company on or after December 31, 2012 (or earlier in
certain circumstances, as described under Potential Payments
Upon Termination or Change in Control), at the value thereof as
determined by an independent appraisal. Mr. LaPuma will
receive payment for such interests in
33
shares of Common Stock of the Company, valued at the average
between the reported high and low trading prices for the thirty
days prior to payment, and must continue to hold these shares
for one year after receipt.
OPTION
EXERCISES AND STOCK VESTED — FISCAL 2008
The following table contains information about shares acquired
by the NEOs upon the exercise of stock options or vesting of
restricted stock awards during 2008.
| Option Awards | Stock Awards | |||||||||||||||
|
Number of Shares |
Value Realized on |
Number of Shares |
Value Realized on |
|||||||||||||
|
Acquired on Exercise |
Exercise |
Acquired on Vesting |
Vesting(2) |
|||||||||||||
|
Name
|
(#) | ($) | (#) | ($) | ||||||||||||
|
Wm. Polk Carey
|
0 | 0 | 0 | 0 | ||||||||||||
|
Gordon F. DuGan
|
0 | 0 | 0 | 0 | ||||||||||||
|
Mark J. DeCesaris
|
0 | 0 | 3,000 | $ | 96,180 | |||||||||||
|
Edward V. LaPuma
|
25,000 | $ | 496,250 | (1) | 0 | 0 | ||||||||||
|
Thomas E. Zacharias
|
0 | 0 | 3,000 | 96,180 | ||||||||||||
| (1) | In accordance with SEC rules, the Value Realized on Exercise was calculated by subtracting the grant price of $16.25 from the fair market value of the Common Stock, as determined under the terms of the Company’s 1997 Share Incentive Plan, on October 27, 2008, the date of exercise, which was $19.85. | |
| (2) | The amounts in the Stock Awards — Value Realized on Vesting column represents the product of the number of restricted stock awards vested and $32.06, which was the closing price of the Common Stock on February 15, 2008, the date of vesting for all restricted stock awards in 2008 for the NEOs. |
PENSION
PLANS
W. P. Carey & Co. LLC does not maintain a
qualified deferred benefit plan and did not provide pension
benefits to its NEOs for the fiscal year ended December 31,
2008.
NONQUALIFIED
DEFERRED COMPENSATION — FISCAL 2008
The following table shows the aggregate earnings, withdrawals,
and account balances for the NEOs in our PEP Plans. As discussed
in “Compensation Discussion and Analysis” above, the
Company terminated further contributions by executives in the
PEP Plans effective December 31, 2007, and there were no
registrant contributions made to those plans in 2008.
|
Aggregate Earnings |
Aggregate |
Aggregate Balance |
||||||||||
|
in Last Fiscal |
Withdrawals/ |
at Last Fiscal Year |
||||||||||
|
Year(1) |
Distributions(2) |
End(3) |
||||||||||
|
Name
|
($) | ($) | ($) | |||||||||
|
Wm. Polk Carey
|
$ | 33,842 | $ | (78,902 | ) | $ | 1,181,940 | |||||
|
Gordon F. DuGan
|
64,082 | (126,579 | ) | 1,894,809 | ||||||||
|
Mark J. DeCesaris
|
6,290 | (9,050 | ) | 135,240 | ||||||||
|
Edward V. LaPuma
|
92,132 | (163,900 | ) | 2,452,232 | ||||||||
|
Thomas E. Zacharias
|
24,729 | (42,126 | ) | 630,130 | ||||||||
| (1) | The Aggregate Earnings in Last Fiscal Year column represents combined earnings on the PEP Plans, including dividend equivalents as well as any change in the annual valuation of the PEP units, reflecting a corresponding change in the estimated net asset value of CPA®:15 and/or CPA®:16 as of December 31, 2008. | |
| (2) | The Aggregate Withdrawals/Distributions column represents distributions in 2008 from the PEP Plans of dividend equivalents. | |
| (3) | The Aggregate Balance at Last Fiscal Year column represents aggregate balances invested in the PEP Plans and increases in valuation therein for years prior to 2008, together with Aggregate Earnings in 2008, less Aggregate |
34
| Distributions in 2008. Balances in the PEP Plans for all NEOs were rolled over to the Company’s Deferred Compensation Plan pursuant to elections by the NEOs effective as of December 31, 2008 and are scheduled to convert to RSUs on June 15, 2009. Amounts contributed to the PEP Plans in prior years consist of a portion of salary, bonus, and commissions and were previously reported for NEOs in the Summary Compensation Tables for such prior years. |
In 2008, the Company adopted the Deferred Compensation Plan,
which allows participants to defer receipt of the Common Stock
underlying awards of RSUs and PSUs, as more fully described in
“Compensation Discussion and Analysis” above. No such
deferrals occurred with respect to any amounts otherwise payable
in 2008.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
None of the NEOs, other than Edward V. LaPuma, has an
employment, severance or change in control agreement with the
Company that, in the event of termination of their employment or
a change in control, which are collectively referred to below as
termination events, would provide them with any right to a cash
severance or incremental benefit.
As an inducement to retain the services of Mr. LaPuma, on
March 21, 2003, W. P. Carey & Co. LLC and WPCI
entered into an Amended Employment Agreement with
Mr. LaPuma, which modified his prior Employment Agreement
with the Company dated June 28, 2000. Under his Amended
Employment Agreement, Mr. LaPuma is entitled to
post-employment benefits depending upon the reason for
termination (as such reasons are defined in the Employment and
the Amended Employment Agreements). Assuming that a termination
without cause, voluntary termination with good reason, or
termination due to a change in control had occurred as of
December 31, 2008, Mr. LaPuma would have received
severance payments totaling $4,242,194. Certain payments are
subject to reduction in an amount equal to 50% of any amounts
received from any source by Mr. LaPuma for his services
during that period. Upon the occurrence of these termination
events, Mr. LaPuma would also be entitled to put all of his
vested interests in WPCI, including those acquired upon the
exercise of options to purchase interests in WPCI that occurred
in December 2008, as well as certain related entities, back to
the Company immediately, rather than on or after
December 31, 2012 pursuant to the terms of that put right,
at the value thereof as determined by an independent appraisal.
In addition, a voluntary termination for good reason associated
with his position within or the operations of the Company would
result in the payment of an additional $1 million to
Mr. LaPuma.
The terms of the Company’s outstanding equity awards
provide that, in the event of a change of control, the portion
of the award not already vested becomes exercisable or vested,
as the case may be; for PSUs, the awards vest at the Maximum
Amount, which is three times the Target Award. Upon termination
of employment, the provisions of the Company’s outstanding
equity awards provide as follows:
Options. Upon termination of employment by
reason of death or disability, options may be exercised to the
extent exercisable upon termination (or to the full extent, at
the Compensation Committee’s discretion) for a period of
six months from death or twelve months from termination by
reason of disability. The post-termination exercise periods may
be extended by the Committee. Upon termination of employment for
cause, as defined in the 1997 Share Incentive Plan, options
immediately terminate, except that the Committee can provide for
a period for 30 day period to exercise, in its discretion.
Upon any other termination, unvested options are forfeited upon
termination, and optionees have a 30 day period from
termination to exercise vested options.
Restricted Stock. Upon termination of
employment by reason of death or disability, the restricted
stock becomes fully vested on the date of death or disability.
In all other cases, unvested shares are forfeited upon
termination.
RSUs. Upon termination of employment by reason
of death or disability, the RSUs becomes fully vested on the
date of death or disability. In all other cases, unvested RSUs
are forfeited upon termination.
PSUs. The 1997 Share Incentive Plan
provides that, except as otherwise provided by the Compensation
Committee, PSUs automatically terminate upon a
participant’s termination of service for any reason.
However, the award agreement forms approved by the Committee
provide that, if a participant’s employment terminates for
any reason other than disability, involuntary dismissal,
retirement or death prior to the conclusion of the performance
35
period, then the PSUs are forfeited, subject to the
Committee’s discretion otherwise. In the case of a
termination due to disability, involuntary dismissal, retirement
or death, the participant (or beneficiary) is entitled to a
pro-rata portion of the award, contingent upon satisfaction of
the performance criteria.
As applicable, the value of this accelerated vesting, assuming
that a termination event to which accelerated vesting applies,
as described above, occurred on December 31, 2008, would
have been: in the case of a stock option, the excess of the
Common Stock price on that date ($23.43) over the option
exercise price and; in the case of a restricted stock award,
RSUs, and PSUs, that price times the number of shares for which
the vesting was accelerated. The option values for the NEOs were
zero as of December 31, 2008 because the Common Stock price
on that date was below each of the option exercise prices. The
restricted stock award values for the NEOs at December 31,
2008 would have been: $140,580 for Mr. DeCesaris and
$234,300 for Mr. Zacharias. The RSU values for each of the
NEOs at December 31, 2008 would have been $431,112 for each
of Messrs. Carey and DuGan, $205,013 for
Mr. DeCesaris, and $292,875 for Mr. Zacharias. The PSU
values for each of the NEOs, assuming a change in control at
December 31, 2008, would have been: $1,293,336 for each of
Messrs. Carey and DuGan, $615,038 for Mr. DeCesaris,
and $878,625 for Mr. Zacharias.
REPORT OF
THE AUDIT COMMITTEE
The information contained in this report shall not be deemed to
be “soliciting material” or to be “filed”
with the SEC, nor shall such information be incorporated by
reference into any previous or future filings under the
Securities Act of 1933 or the Securities Exchange Act of 1934
except to the extent that the Company incorporates it by
specific reference.
The Audit Committee of the Board of Directors reports as follows
with respect to the audit of W. P. Carey & Co.
LLC’s fiscal 2008 audited financial statements and
management’s report of internal controls over financial
reporting.
The audit functions of the Committee focus on the adequacy of W.
P. Carey & Co. LLC’s internal controls and
financial reporting procedures, the performance of W. P.
Carey & Co. LLC’s internal audit function and the
independence and performance of W. P. Carey & Co.
LLC’s Independent Registered Public Accounting Firm,
PricewaterhouseCoopers LLP. The Committee meets periodically
with management to consider the adequacy of internal controls
and the objectivity of W. P. Carey & Co. LLC’s
financial reporting. The Committee discusses these matters with
appropriate internal financial personnel as well as its
Independent Registered Public Accounting Firm. The Committee
held four regularly scheduled quarterly meetings during 2008 and
also met four additional times.
Management has primary responsibility for W. P.
Carey & Co. LLC’s financial statements and
management’s report of internal controls over financial
reporting and the overall reporting process, including W. P.
Carey & Co. LLC’s system of internal controls.
The Independent Registered Public Accounting Firm audits the
annual financial statements and the effectiveness of internal
controls over financial reporting, expresses an opinion on the
conformity of the audited financial statements with accounting
principles generally accepted in the United States of America
and discusses with the Committee any issues they believe should
be raised with us. The Committee monitors these processes,
relying without independent verification on the information
provided to us and on the representations made by management.
The Committee has reviewed and discussed the audited financial
statements and management’s report of internal controls
over financial reporting with the management of W. P.
Carey & Co. LLC. The Directors who serve on the Audit
Committee are all “independent” as defined in the New
York Stock Exchange listing standards and applicable rules of
the Securities and Exchange Commission.
The Committee has discussed with the Company’s Independent
Registered Public Accounting Firm the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended, as adopted by the Public Company Accounting Oversight
Board, or PCAOB, in Rule 3200T. The Committee has received
written disclosures and the letter from the Independent
Registered Public Accounting Firm required by the applicable
requirements of the PCAOB regarding the Independent Registered
Public Accounting Firm’s communication with the Committee
concerning independence and has discussed with the Independent
Registered Public Accounting Firm their independence from W. P.
Carey & Co. LLC. Based on review and discussions of
the audited financial statements
36
and management’s report on internal control over financial
reporting of W. P. Carey & Co. LLC with management and
discussions with the Independent Registered Public Accounting
Firm, the Audit Committee recommended to the Board of Directors
that the audited financial statements for the fiscal year ended
December 31, 2008 be included in the Company’s Annual
Report on
Form 10-K
for filing with the SEC.
Submitted by the Audit Committee:
Charles E. Parente, Chairman
Trevor P. Bond
Nathaniel S. Coolidge
Eberhard Faber, IV
Trevor P. Bond
Nathaniel S. Coolidge
Eberhard Faber, IV
Financial
Expert
The Board of Directors has determined that Charles E. Parente,
who is an Independent Director and Chairman of the Audit
Committee, is a “financial expert” as defined in
Item 407 of SEC
Regulation S-K
under the Securities Exchange Act of 1934.
Fees
Billed by PricewaterhouseCoopers LLP During Fiscal Years 2008
and 2007
The following table sets forth the approximate aggregate fees
billed to W. P. Carey & Co. LLC during fiscal years
2008 and 2007 by PricewaterhouseCoopers LLP, categorized in
accordance with SEC definitions and rules:
| 2008 | 2007 | |||||||
|
Audit
Fees(1)
|
$ | 904,474 | $ | 871,009 | ||||
|
Audit-Related
Fees(2)
|
0 | 0 | ||||||
|
Tax
Fees(3)
|
653,283 | 1,124,807 | ||||||
|
All Other Fees
|
0 | 0 | ||||||
|
Total Fees
|
$ | 1,557,757 | $ | 1,995,816 | ||||
| (1) | Audit Fees: This category consists of fees for professional services rendered for the audit of W. P. Carey & Co. LLC’s fiscal 2008 and 2007 financial statements included in the Company’s Annual Reports on Form 10-K (including services incurred with respect to rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002), the review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for each of the quarters ended March 31, June 30, and September 30, 2008 and 2007, and other audit services including certain statutory audits and SEC registration statement review and the related issuance of comfort letters and consents. | |
| (2) | Audit-Related Fees: This category consists of audit related services performed by PricewaterhouseCoopers LLP and includes services in connection with audits of the Company’s benefit plan. | |
| (3) | Tax Fees: This category consists of fees billed to W. P. Carey & Co. LLC by PricewaterhouseCoopers LLP for tax compliance services and consultation in connection with transactions. |
Pre-Approval
Policies
The Audit Committee’s policy is to pre-approve audit and
permissible non-audit services provided by the Company’s
Independent Registered Public Accounting Firm. These services
may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to
one year and any pre-approval is detailed as to the particular
service or category of services. The Independent Registered
Public Accounting Firm and management are required to report
periodically to the Audit Committee regarding the extent of
services provided by the Independent Registered Public
Accounting Firm in accordance with this pre-approval, and the
fees for the services performed to date. The Audit Committee may
also pre-approve particular services on a
case-by-case
basis. If a non-audit service is required before the Audit
Committee’s next scheduled meeting, the
37
Committee has delegated to its Chairman, Mr. Parente, the
authority to approve such services on its behalf, provided that
such action is reported to the Committee at its next meeting.
Pursuant to these policies, the Audit Committee pre-approved all
the services provided by the Independent Registered Public
Accounting Firm in 2008 and 2007 shown in the table above.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
From the Company’s inception, it has engaged the firm of
PricewaterhouseCoopers LLP as its Independent Registered Public
Accounting Firm. For 2009, the Audit Committee has again engaged
PricewaterhouseCoopers LLP as the Company’s independent
auditors. A representative of PricewaterhouseCoopers LLP will be
present at the Annual Meeting to make a statement, if he or she
desires to do so, and to respond to appropriate questions from
shareholders.
SHAREHOLDER
PROPOSALS AND OTHER COMMUNICATIONS
Shareholder
Proposals
The date by which shareholder proposals must be received by W.
P. Carey & Co. LLC for inclusion in proxy materials
relating to the 2010 Annual Meeting of Shareholders is
January 1, 2010 and must meet the other requirements of SEC
Rule 14a-8.
In order for proposals submitted outside of
Rule 14-a-8
to be considered at the 2010 Annual Meeting, shareholder
proposals, including shareholder nominations for Director, must
comply with the advance notice and eligibility requirements
contained in W. P. Carey & Co. LLC’s By-Laws. The
By-Laws provide that shareholders are required to give advance
notice to W. P. Carey & Co. LLC of any business to be
brought by a shareholder before an annual shareholders’
meeting. For business to be properly brought before an annual
meeting by a shareholder, the shareholder must give timely
written notice thereof to the Secretary of W. P.
Carey & Co. LLC. In order to be timely, a
shareholder’s notice must be delivered to or mailed and
received at the principal executive offices of the Company not
fewer than 90 days nor more than 120 days prior to the
first anniversary of the preceding year’s annual meeting.
Therefore, any shareholder proposals, including nominations for
directors, submitted outside of
Rule 14a-8
to be voted on at the 2010 Annual Meeting of Shareholders must
be received by W. P. Carey & Co. LLC not earlier than
February 11, 2010 and not later than March 13, 2010,
being, respectively, 120 and 90 days prior to June 11,
2010, which is the first anniversary of the Annual Meeting.
However, in the event that the date of the Annual Meeting of
Shareholders in 2010 is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date,
notice by the shareholder to be timely must be delivered not
earlier than the 120th day prior to such changed annual
meeting date and not later than the close of business on the
later of the 90th day prior to such changed annual meeting
date or the tenth day following the day on which public
announcement of the date of such meeting is first made.
The notice must set forth:
| • | as to each person whom the shareholder proposes to nominate for election or reelection as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to SEC Regulation 14A under the Securities Exchange Act of 1934 (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); | |
| • | as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and of the beneficial owner, if any, on whose behalf the proposal is made; and | |
| • | as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the name and address of such shareholder, as they may appear on the Company’s books, |
38
| and of such beneficial owner and (ii) the class and number of shares of Common Stock that are owned beneficially and of record by such shareholder and such beneficial owner. |
A copy of the Company’s By-Laws is available upon request.
Such requests and any shareholder proposals should be sent to
Susan C. Hyde, Secretary, W. P. Carey & Co. LLC, 50
Rockefeller Plaza, New York, NY 10020. These procedures apply to
any matter that a shareholder wishes to raise at any annual
meeting, including those matters raised other than pursuant to
SEC
Rule 14a-8.
A shareholder proposal that does not meet the above requirements
will be considered untimely, and any proxy solicited by W. P.
Carey & Co. LLC may confer discretionary authority to
vote on such proposal.
Communication
with the Board
Shareholders who wish to send communications on any topic to the
Board, the Lead Director, or the Independent Directors as a
group may do so by writing to the Lead Director, W. P.
Carey & Co. LLC, 50 Rockefeller Plaza, New York, NY
10020. The Nominating and Corporate Governance Committee has
approved a process for handling communications to the Board in
which the Corporate Secretary, Susan C. Hyde, monitors
communications from shareholders and provides copies or
summaries of such communications to the Directors as she
considers appropriate. The Board will give appropriate attention
to written communications that are submitted by shareholders and
will respond if and as appropriate. Absent unusual circumstances
or as contemplated by committee charters and subject to any
required assistance or advice from legal counsel, Ms. Hyde
is responsible for monitoring communications from shareholders
and for providing copies or summaries of such communications to
the Directors as she considers appropriate.
DIRECTOR
INDEPENDENCE
In recent years, the Board has strengthened the Company’s
corporate governance practices, including by its adoption of W.
P. Carey & Co. LLC’s Corporate Governance
Guidelines. The Guidelines meet or exceed the Listing Standards
adopted by the New York Stock Exchange. The Guidelines can be
found in the “WPC Investor Relations” section of W. P.
Carey & Co. LLC’s website (www.wpcarey.com). A
printed copy may also be obtained upon request from our
Secretary, Susan C. Hyde.
Pursuant to the Guidelines, the Board undertook its annual
review of Director independence in March 2009. During this
review, the Board considered transactions and relationships
between each Director and nominee or any member of his or her
immediate family and W. P. Carey & Co. LLC and its
subsidiaries and affiliates, including those reported under
“Certain Relationships and Related Transactions”
below. The Board also examined transactions and relationships
between Directors and nominees or their affiliates and members
of our senior management or their affiliates. As provided in the
Guidelines, the purpose of this review was to determine whether
any such relationships or transactions were inconsistent with a
determination that the Director is independent.
The Guidelines provide that a majority of the Directors will be
Independent Directors. A Director is independent if he or she
does not have a material relationship with the Company or one of
its subsidiaries. The Board has established guidelines to assist
it in determining Director independence, although compliance
with the guidelines is not sufficient for a determination of
independence by the board.
The guidelines provide that a Director shall not be an
Independent Director if he or she:
| • | has in the last three years been employed by the Company; | |
| • | has in the last three years been affiliated with or employed by a (present or former) auditor of the Company or of an affiliate of the Company; | |
| • | has in the last three years been part of an interlocking directorate in which an Executive Officer of the Company sits on the compensation committee of another company (including parent and subsidiaries of such company) that concurrently employs the Director; or is or has been in the last three years an Executive Officer or employee of a company that makes payments to, or receives payments from the Company for property or services in an amount that, in any single fiscal year, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues. |
39
| • | has an immediate family member who falls within any of the above categories. |
The Guidelines also provide that ownership of Common Stock by
Directors is encouraged and that ownership of a substantial
amount of stock is not in itself a basis for a Director to be
considered as not independent, provided that ownership of more
than 10% of the outstanding shares may preclude a Director from
being deemed independent for the purpose of serving on the Audit
Committee.
The New York Stock Exchange also requires that the Board of
Directors determine whether a Director is
“independent” for purposes of the Exchange’s
Listing Standards. The Nominating and Corporate Governance
Committee has asked each Director and nominee to specify in
writing the nature of any relevant relationships such individual
may have with the Company, including, but not limited to, any
relationships that would specifically preclude a finding of
“independence” under the Listing Standards. Upon
review of these disclosures, the Board has affirmatively
determined that none of the Directors or nominees noted as
“independent” in this Proxy Statement has a material
relationship with W. P. Carey & Co. LLC that would
interfere with his independence from the Company and its
Management.
As a result of this review, the Board has affirmatively
determined that Messrs. Bond, Coolidge, Faber, Griswold,
Klein, Mittelstaedt, Parente, von Köller, and Winssinger
are independent of the Company and its Management under the
standards set forth in the Company’s Corporate Governance
Guidelines and the New York Stock Exchange Listing Standards and
for the purpose of serving on the Audit Committee, where
applicable. Messrs. Wm. Polk Carey, Francis Carey and DuGan
are considered affiliated Directors because of their
relationship to, or current or former employment as senior
executives of, W. P. Carey & Co. LLC and its
affiliates.
CODE OF
ETHICS
The Board of Directors has also adopted a Code of Business
Conduct and Ethics (“Code”), which sets forth the
standards of business conduct and ethics applicable to all of
our employees, including our NEOs and Directors. This code is
available on the Company’s website (www.wpcarey.com) in the
“Investor Relations” section. Printed copies may also
be obtained upon a request submitted to our Investor Relations
department. W. P. Carey & Co. LLC also intends to post
amendments to or waivers from the Code (to the extent applicable
to our principal executive officer, principal financial officer
and principal accounting officer) at this location on the
website. Francis J. Carey, our retired Vice Chairman, has been
appointed the Company’s Chief Ethics Officer.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Policies
and Procedures with Respect to Related Party
Transactions
The NEOs and Directors are committed to upholding the highest
legal and ethical conduct in fulfilling their responsibilities
and recognize that related party transactions can present a
heightened risk of potential or actual conflicts of interest.
Employees, officers and Directors have an obligation to act in
the best interest of the Company and to put such interests at
all times ahead of their own personal interests. In addition,
all employees, officers and Directors of the Company should seek
to avoid any action or interest that conflicts with or gives the
appearance of a conflict with the Company’s interests.
According to the Code, a conflict of interest occurs when a
person’s private economic or other interest conflicts with,
is reasonably expected to conflict with, or may give the
appearance of conflicting with, any interest of the Company. The
following conflicts of interest are prohibited, and employees,
officers and Directors of W. P. Carey & Co. LLC must
take all reasonable steps to detect, prevent, and eliminate such
conflicts:
| • | Working in any capacity – including service on a Board of Directors or trustees, or on a committee thereof – for a competitor while employed by the Company. | |
| • | Competing with the Company for the purchase, sale or financing of property, services or other interests. | |
| • | Soliciting or accepting any personal benefit from a third party (including any competitor, customer or service provider) in exchange for any benefit from the Company. (Applicable Company policies may permit the acceptance of gifts and entertainment from third parties, subject to certain limitations.) |
40
Individuals are expected to adhere to these policies where
applicable and in general to limit acceptance of benefits to
those that are reasonable and customary in a business
environment and that are not reasonably likely to improperly
influence the individual. Other conflicts of interest, while not
prohibited in all cases, may be harmful to the Company and
therefore must be disclosed in accordance with the Code. The
Chief Ethics Officer of the Company has primary authority and
responsibility for the administration of this Code subject to
the oversight of the Nominating and Corporate Governance
Committee or, in the case of accounting, internal accounting
controls or auditing matters, the Audit Committee.
Transactions
With Managed Funds
Through a wholly-owned subsidiary, W. P. Carey & Co.
LLC earns revenue as the advisor to the
CPA®
REITs. Under advisory agreements that the Company has with each
of the
CPA®
REITs, the Company performs services and earns asset management
revenue related to the day-to-day management of the
CPA®
REITs and provides transaction-related services and earns
structuring revenue in connection with structuring and
negotiating investments and any related financing on their
behalf. In addition, the Company provides further services and
earns revenue when each
CPA®
REIT is liquidated. The Company is also reimbursed for certain
costs incurred in providing services, including broker-dealer
commissions paid on behalf of the
CPA®
REITs, marketing costs and the cost of personnel provided for
the administration of the
CPA®
REITs. As a result of electing to receive certain payments for
services in shares, the Company also holds ownership interests
in the
CPA®
REITs. For the year ended December 31, 2008, total
asset-based revenue earned was approximately $80.7 million,
while reimbursed costs totaled approximately $41.2 million.
In 2008, for
CPA®:14,
CPA®:15
and
CPA®:16 –
Global, the Company elected to receive all asset management
revenue in cash and all performance revenue in restricted shares
of their common stock, while for
CPA®:17 –
Global, the Company elected to receive asset management revenue
in restricted shares of its common stock.
In connection with structuring and negotiating investments and
any related financing for the
CPA®
REITs, the advisory agreements provide for structuring revenue
based on the cost of investments. A portion of this revenue is
paid when the transaction is completed while the remainder is
payable in equal annual installments, subject to the relevant
CPA®
REIT meeting its performance criterion. The Company may be
entitled to loan refinancing revenue in connection with
structuring and negotiating investments. This loan refinancing
revenue, together with the acquisition revenue, is referred to
as structuring revenue. The Company earned structuring revenue
of approximately $20.2 million for the year ended
December 31, 2008. In addition, the Company may also earn
revenue related to the disposition of properties, subject to
subordination provisions, and will only recognize such revenue
as such provisions are achieved.
Other
Transactions
The Company owns interests in entities ranging from 5% to 95%,
with the remaining interests generally held by affiliates,
including the CPA REITs, and owns common stock in each of the
CPA®
REITs. The Company is the general partner in a limited
partnership (which it consolidates for financial statement
purposes) that leases its home office space and participates in
an agreement with certain affiliates, including the
CPA®
REITs, for the purpose of leasing office space used for the
administration of its operations, the operations of its
affiliates and for sharing the associated costs. During the year
ended December 31, 2008, the Company recorded income from
minority interest partners of approximately $2.4 million
related to reimbursements from these affiliates. As of
December 31, 2008, the average estimated minimum lease
payments on the office lease, inclusive of minority interest,
approximates $2.9 million annually through 2016.
Included in Other liabilities in the Company’s consolidated
balance sheet at December 31, 2008 are amounts due to
affiliates totaling approximately $0.9 million.
Livho,
Inc.
In connection with the consolidation of the nine
CPA®
partnerships in 1998, the Company obtained a hotel in Livonia,
Michigan, which was not subject to a lease. The Company would be
taxed as a corporation if it received more than a small
percentage of its income from the operation of a hotel. In order
to avoid taxation as a corporation,
41
the Company in 1998 leased the hotel to Livho Inc., a
corporation wholly-owned by Director Francis J. Carey, its
chairman, pursuant to a two-year lease, which was subsequently
modified and extended. The Company consolidates the accounts of
Livho in its consolidated financial statements in accordance
with Financial Accounting Standards Board Interpretation
No. 46R, “Consolidation of Variable Interest
Entities,” or FIN 46R, because Livho is a variable
interest entity, or VIE, of which it is the primary beneficiary.
Livho’s rent for 2008 was approximately $0.9 million.
Mr. Francis J. Carey, as sole shareholder, did not receive
a dividend payment from Livho, as excess cash flow was applied
to rental arrearages due to the Company.
Reginald
H. Winssinger Investments
Members of the family of Director Reginald H. Winssinger are
co-investors with the Company in one of the Company’s
properties in France. Specifically, in December 2001
Mr. Winssinger’s family members purchased, at the time
of and on the same terms as the purchase of the properties by
the Company, a 15% aggregate ownership interest in the property
leased to Bouyges Telecom SA in Illkirch, France for an original
equity investment of approximately $0.5 million. These
ownership interests are subject to substantially the same terms
as all other ownership interests in the subsidiary company.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of filings with the SEC, W. P.
Carey & Co. LLC believes our Directors, Executive
Officers and beneficial owners of 10% or more of our shares did
not timely file reports required to be filed in 2008 under
Section 16(a) on the following occasions: (a) Eberhard
Faber, IV did not timely report the acquisition of
400 shares by his spouse; and (b) Francis J. Carey did
not timely report the acquisition of 1,000 shares.
Corrective filings have been made with respect to each of these
transactions.
EXECUTIVE
OFFICERS OF W. P. CAREY & CO. LLC
The Company’s Executive Officers are elected annually by
the Board of Directors. Detailed information regarding the
Executive Officers who are not directors as of the date of this
Proxy Statement is set forth below.
Mark
J.
DeCesaris
AGE: 50
AGE: 50
Mr. DeCesaris has served as Acting Chief Financial Officer,
Chief Administrative Officer and Managing Director since
November 2005. He has also served in the same capacities with
CPA®:14,
CPA®:15
and
CPA®:16 –
Global since November 2005, and
CPA®:17 –
Global since October 2007. Mr. DeCesaris had previously
been a consultant to W. P. Carey & Co.
LLC’s finance department since May 2005. Prior to joining
W. P. Carey & Co. LLC, from 2003 to 2004
Mr. DeCesaris was Executive Vice President for Southern
Union Company, a natural gas energy company publicly traded on
the New York Stock Exchange, where his responsibilities included
overseeing the integration of acquisitions and developing and
implementing a shared service organization to reduce annual
operating costs. From 1999 to 2003, he was Senior Vice President
for Penn Millers Insurance Company, a property and casualty
insurance company, where he served as President and Chief
Operating Officer of Penn Software, a subsidiary of Penn Millers
Insurance. From 1994 to 1999, he was President and Chief
Executive Officer of System One Solutions, a business consulting
firm that he founded. He started his career with
Coopers & Lybrand in Philadelphia, PA.
Mr. DeCesaris graduated from Kings College with a BS in
Accounting and a BS in Information Technology. He currently
serves as a member of the Board of Trustees of Kings College.
Edward
V.
LaPuma
AGE: 36
AGE: 36
Mr. LaPuma became a Managing Director of W. P. Carey in
March 2002 and President of W. P. Carey International LLC in
2004. He joined W. P. Carey as an Assistant to the Chairman in
1994 and has served as President of
CPA®:14
since 2005. Mr. LaPuma established W. P. Carey’s
Institutional Department, which he headed as President of
CIP®.
Prior to joining W. P. Carey, Mr. LaPuma was a consultant
with Sol C. Snider Entrepreneurial
42
Center, a strategic consulting firm. A magna cum laude graduate
of the University of Pennsylvania, Mr. LaPuma received a
B.A. in Global Economic Strategies from The College of Arts and
Sciences and a B.S. in Economics with a concentration in Finance
from the Wharton School. He is a member of the board of
directors of W. P. Carey International LLC. He is also a trustee
for the Rensselaerville Institute and a trustee for the W. P.
Carey Foundation.
John
D.
Miller
AGE: 64
AGE: 64
Mr. Miller joined W. P. Carey & Co. LLC in 2004
as Vice Chairman of Carey Asset Management and has served as
Chief Investment Officer of W. P. Carey & Co. LLC,
CPA®:14;
CPA®:15
and
CPA®:16 –
Global since 2005, and
CPA®:17 –
Global since October 2007. Mr. Miller was a Co-founder of
StarVest Partners, L.P., a technology oriented venture capital
fund. He was Chairman and President of the StarVest management
company from 1998 to 2005 and served on a number of boards of
its portfolio companies until the end of the fund’s active
investment period in 2005. Mr. Miller continues to retain a
Non-Managing Member interest in StarVest. From 1995 to 1998, he
served as President of Rothschild Ventures Inc., the private
investment unit of Rothschild North America, a subsidiary of the
worldwide Rothschild Group, where he helped raise and was
Co-chair of the Rothschild Recovery Fund. Prior to joining
Rothschild in 1995, he held positions at two private equity
firms, Credit Suisse First Boston’s Clipper group and
Starplough Inc., an affiliate of Rosecliff. Mr. Miller
previously served in investment positions at the Equitable,
including serving as President and Chief Executive Officer of
Equitable Capital Management Corporation, and as head of its
corporate finance department. He currently serves on the Board
of FX Real Estate and Entertainment Inc. He received his B.S.
from the University of Utah and an M.B.A. from the University of
Santa Clara.
Thomas
E.
Zacharias
AGE: 55
AGE: 55
Mr. Zacharias joined W. P. Carey & Co. LLC in
April 2002 and is head of the Asset Management Department. He
currently serves as Chief Operating Officer and Managing
Director of W. P. Carey & Co. LLC,
CPA®:14,
CPA®:15
and
CPA®:16 –
Global since 2005, and
CPA®:17 –
Global since October 2007. He has also served as
CPA®:16 –
Global’s President since 2003. Mr. Zacharias
previously served as an Independent Director of
CPA®:14
from 1997 to 2001 and
CPA®:15
in 2001. Prior to joining W. P. Carey & Co. LLC,
Mr. Zacharias was a Senior Vice President of MetroNexus
North America, a Morgan Stanley Real Estate Funds Enterprise.
Prior to joining MetroNexus in 2000, Mr. Zacharias was a
Principal at Lend Lease Development U.S., a subsidiary of Lend
Lease Corporation, a global real estate investment management
company. Between 1981 and 1998 Mr. Zacharias was a senior
officer at Corporate Property Investors, which at the time of
its merger into Simon Property Group in 1998 was the largest
private equity REIT. Mr. Zacharias received his
undergraduate degree, magna cum laude, from Princeton University
in 1976 and a Masters in Business Administration from Yale
School of Management in 1979. He is a member of the Urban Land
Institute, International Council of Shopping Centers and NAREIT,
and served as a Trustee of Groton School in Groton,
Massachusetts between 2003 and 2007.
43
Exhibit A
W. P.
CAREY & CO. LLC
2009
SHARE INCENTIVE PLAN
The name of this plan is the W. P. Carey & Co. LLC
2009 Share Incentive Plan (the “Plan”). The
purpose of this Plan is to encourage and enable the officers,
employees and Eligible Directors of W. P. Carey & Co.
LLC (the “Company”) and its Subsidiaries and
Affiliates upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its
business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in
the Company’s welfare will assure a closer identification
of their interests with those of the Company, thereby
stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company.
SECTION 1
Definitions
The following terms shall be defined as set forth below:
“Act” means the Securities Exchange Act of
1934, as amended.
“Affiliate” means any entity other than the
Company and its Subsidiaries that is designated by the Board or
the Committee as a participating employer under the Plan.
“Award” or “Awards”, except
where referring to a particular category of grant under the
Plan, shall include Share Options, Restricted Share Awards,
Restricted Share Units, Performance Share Awards, Performance
Share Units and Dividend Equivalent Rights.
“Board” means the Board of Directors of the
Company.
“Cause” means and shall be limited to a vote of
the Board to the effect that the participant should be dismissed
as a result of (i) any material breach by the participant
of any agreement to which the participant and the Company or an
Affiliate are parties, (ii) any act (other than retirement)
or omission to act by the participant, including without
limitation, the commission of any crime (other than ordinary
traffic violations) that may have a material and adverse effect
on the business of the Company or any Affiliate or on the
participant’s ability to perform services for the Company
or any Affiliate, or (iii) any material misconduct or
neglect of duties by the participant in connection with the
business or affairs of the Company or any Affiliate.
“Change of Control” is defined in
Section 13.
“Code” means the Internal Revenue Code of 1986,
as amended, and any successor Code, and related rules,
regulations and interpretations.
“Committee” means any Committee of the Board
referred to in Section 2.
“Disability” means disability as set forth in
Section 409A(a)(2)(C) of the Code.
“Dividend Equivalent Right” means a right,
granted under Section 8, to receive cash, Shares or other
property equal in value to dividends paid with respect to a
specified number of Shares.
“Effective Date” means the date set forth in
Section 15.
“Eligible Director” means members of the Board
who are employees of the Company, its Subsidiaries or their
Affiliates and who are not Non-Employee Directors.
“Fair Market Value” on any given date means the
last reported sale price at which a Share is traded on such date
or, if no Share is traded on such date, the most recent date on
which Shares were traded, as reflected on the New York Stock
Exchange or, if applicable, any other national stock exchange
which is the principal trading market for the Shares.
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“Non-Employee Director” means a member of the
Board who: (i) is not currently an officer of the Company
or any Affiliate; (ii) does not receive compensation for
services rendered to the Company or any Affiliate in any
capacity other than as a Director; (iii) does not possess
an interest in any transaction with the Company for which
disclosure would be required under the securities laws; and
(iv) is not engaged in a business relationship with the
Company for which disclosure would be required under the
securities laws.
“Option” or “Share Option”
means any option to purchase Shares granted pursuant to
Section 5.
“Performance Share Award” means Awards granted
pursuant to Section 7.
“Performance Share Unit” means Awards granted
pursuant to Section 7.
“Restricted Share Award” means Awards granted
pursuant to Section 6.
“Restricted Share Unit” means Awards granted
pursuant to Section 6.
“Shares” means the listed shares of the
Company, subject to adjustment pursuant to Section 3.
“Subsidiary” means any entity (other than the
Company) in an unbroken chain of entities, beginning with the
Company if each of the entities (other than the last entity in
the unbroken chain) owns equity possessing 50% or more of the
total combined voting power of all classes of equity in one of
the other entities in the chain.
SECTION 2
Administration
of Plan; Committee Authority to Select Participants
and
Determine Awards
(a) Committee. The Plan shall be
administered by a committee of not less than two directors, as
appointed by the Board from time to time (the
“Committee”) who are “non-employee
directors” as then defined under
Rule 16b-3
of the Act and “independent” directors under the rules
of the New York Stock Exchange, which shall initially be the
Compensation Committee of the Board.
(b) Powers of Committee. The
Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and
authority:
(i) to select the officers, employees and Eligible
Directors of the Company and Affiliates to whom Awards may from
time to time be granted;
(ii) to determine the time or times of grant, and the
extent, if any, of Share Options, Restricted Shares, Restricted
Share Units, Performance Shares, Performance Share Units and
Dividend Equivalent Rights, or any combination of the foregoing,
granted to any officer, employee or Eligible Director;
(iii) to determine the number of Shares to be covered by
any Award granted to an officer, employee, Eligible Director or
Affiliate;
(iv) to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the
Plan, of any Award granted to an officer, employee or Director,
which terms and conditions may differ among individual Awards
and participants, and to approve the form of written instruments
evidencing the Awards;
(v) to accelerate the exercisability or vesting of all or
any portion of any Award granted to a participant;
(vi) subject to the provisions of Section 5(ii) of the
Plan and Section 409A of the Code, to extend the period in
which Share Options may be exercised;
(vii) to determine, consistent with the provisions of
Section 409A of the Code, whether, to what extent and under
what circumstances Shares and other amounts payable with respect
to an Award granted to a participant shall be deferred either
automatically or at the election of the participant and whether
and to what extent the Company will pay or credit amounts equal
to interest (at rates determined by the Committee) or dividends
or deemed dividends on such deferrals; and
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(viii) to adopt, alter and repeal such rules and guidelines
for administration of the Plan and for its own acts as it shall
deem advisable; to interpret the terms, the Plan and any Award
(including related written instruments) granted to a
participant; and to decide all disputes arising in connection
with and make all determinations it deems advisable for the
administration of the Plan.
All decisions and interpretations of the Committee shall be
binding on all persons, including the Company and Plan
participants.
SECTION 3
Shares
Issuable under the Plan; Mergers; Substitution
(a) Shares Issuable. The maximum
number of Shares reserved and available for issuance under the
Plan shall be 3,600,000. For purposes of this limitation, the
Shares underlying any Awards, including Dividend Equivalent
Rights, which are forfeited, canceled, reacquired by the
Company, satisfied without the issuance of Shares or otherwise
terminated (other than by exercise) shall be added back to the
Shares available for issuance under the Plan so long as the
participants to whom such Awards had been previously granted
received no benefits of ownership of the underlying Shares to
which the Award related. Notwithstanding the foregoing, the
following Shares shall not become available for purposes of the
Plan: (1) Shares previously owned or acquired by an awardee
that are delivered to the Company, or withheld from an Award, to
pay the exercise price, or (2) Shares that are delivered or
withheld for purposes of satisfying a tax withholding
obligation. Shares issued under the Plan may be unissued Shares
or Shares reacquired by the Company.
(b) Shares, Dividends, Mergers,
etc. In the event of any recapitalization,
reclassification,
split-up or
consolidation of Shares, separation (including a spin-off),
dividend on Shares payable in securities of the Company
(including Shares), or other similar change in capitalization of
the Company or a merger or consolidation of the Company or sale
by the Company of all or a portion of its assets or other
similar event, the Committee shall make such appropriate
adjustments in the exercise prices of Awards, including Awards
then outstanding, in the number and kind of securities, cash or
other property which may be issued pursuant to Awards under the
Plan, including Awards then outstanding, and in the number of
Shares with respect to which Awards may be granted (in the
aggregate and to individual participants) in a manner consistent
with Section 409A of the Code and as the Committee deems
equitable with a view toward maintaining the proportionate
interest of the participant and preserving the value of the
Awards.
(c) Substitute Awards. The
Committee may grant Awards under the Plan in substitution for
share and share-based awards held by employees of another
corporation who concurrently become employees of the Company or
an Affiliate as the result of a merger or consolidation of the
employing corporation with the Company or an Affiliate or the
acquisition by the Company or an Affiliate of property or Shares
of the employing corporation. The Committee may direct that the
substitute awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances.
SECTION 4
Eligibility
Participants in the Plan are those Eligible Directors and such
full or part-time officers and other employees of the Company,
its Subsidiaries and its Affiliates who are responsible for or
contribute to the management, growth or profitability of the
Company, its Subsidiaries and its Affiliates and who are
selected from time to time by the Committee, in its sole
discretion.
SECTION 5
Share Options
Subject to the terms of the Plan, any Share Option granted under
the Plan shall be in such form as the Committee may from time to
time approve.
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The Committee in its discretion may grant Share Options to
employees of the Company, Subsidiaries or any Affiliate. Share
Options granted to Eligible Directors and employees pursuant to
this Section 5 shall be subject to the following terms and
conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable:
(i) Exercise Price. The per share
exercise price of a Share Option granted pursuant to this
Section 5 shall be determined by the Committee at the time
of grant. The per share exercise price of a Share Option shall
not be less than 100% of the Fair Market Value of the Shares
underlying the Share Option on the date of grant. The exercise
price of any outstanding Share Option may not be reduced,
whether through amendment, cancellation or replacement, unless
such reduction is approved by the shareholders of the Company.
(ii) Option Term. The term of each
Share Option shall be fixed by the Committee, but no Share
Option shall be exercisable more than ten years after the date
the option is granted.
(iii) Exercisability; Rights of a
Shareholder. Share Options shall become
exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or
after the grant date. The Committee may at any time accelerate
the exercisability of all or any portion of any Share Option. An
optionee shall have the rights of a shareholder only as to
Shares acquired upon the exercise of a Share Option and not as
to unexercised Share Options.
(iv) Method of Exercise. Share
Options may be exercised in whole or in part, by giving written,
electronic or telephonic notice of exercise to the Company or
its agent, in a method acceptable to the Company, specifying the
number of Shares to be purchased. Payment of the purchase price
may be made by one or more of the following methods:
(A) In cash (by certified, bank check, money order or other
instrument acceptable to the Committee);
(B) In the form of delivered Shares that are not then
subject to restrictions, or Shares withheld from the exercise of
the Award, in either case if permitted by the Committee in its
discretion. Such surrendered or withheld shares shall be valued
at Fair Market Value on the exercise date;
(C) Any combination of cash and such Shares, if the use of
Shares is permitted by the Committee in its discretion, in the
amount of the full purchase price for the number of Shares as to
which the Option is exercised; provided, however, that any
portion of the option price representing a fraction of a share
shall be paid by the Optionee in cash; or
(D) By the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price;
provided that in the event the optionee chooses to pay the
purchase price as so provided, the optionee and the broker shall
comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe
as a condition of such payment procedure. Payment instruments
will be received subject to collection.
The delivery of certificates representing Shares to be purchased
pursuant to the exercise of the Share Option or electronic or
book-entry recordation thereof will be contingent upon receipt
from the optionee by the Company of the full purchase price for
such shares and the fulfillment of any other requirements
contained in the Share Option or applicable provisions of laws.
If the option price is paid in cash, the exercise of the stock
option shall not be deemed to occur and no Shares will be issued
until the Company has received full payment in cash (including
check, bank draft or money order) for the option price, whether
from the optionee, or from a broker or other agent.
(v) Non-transferability of
Options. No Share Option shall be
transferable by the optionee otherwise than by will or by the
laws of descent and distribution, except that Share Options may
be transferred by gifting for the benefit of a
participant’s descendants for estate planning purposes or
pursuant to a certified domestic relations order. All Share
Options shall be exercisable, during the optionee’s
lifetime, only by the optionee.
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(vi) Termination of Employment by
Death. If any optionee’s service with
the Company and its Affiliates terminates by reason of death,
the Share Option may thereafter be exercised, to the extent
exercisable at the date of death, or to the full extent of the
option or any portion thereof, at the Committee’s
discretion, by the legal representative or legatee of the
optionee, for a period of six months (or such longer period as
the Committee shall specify at any time) from the date of death,
or until the expiration of the stated term of the Option, if
earlier.
(vii) Termination of Employment by Reason of
Disability.
(A) Any Share Option held by an optionee whose service with
the Company and its Affiliates has terminated by reason of
Disability may thereafter be exercised, to the extent it was
exercisable at the time of such termination or to the full
extent of the option or any portion thereof, at the
Committee’s discretion, by the optionee or the legal
representative of the optionee, for a period of twelve months
(or such longer period as the Committee shall specify at any
time) from the date of such termination of service, or until the
expiration of the stated term of the Option, if earlier.
(B) The Committee shall have sole authority and discretion
to determine whether a participant’s service has been
terminated by reason of Disability.
(C) Except as otherwise provided by the Committee at the
time of grant or otherwise, the death of an optionee during a
period provided in this Section 5(vii) for the exercise of
a Share Option shall operate to extend such period for six
months from the date of death, subject to termination on the
expiration of the stated term of the Option, if earlier.
(viii) Termination for
Cause. Unless otherwise determined by the
Committee in its discretion, if any optionee’s service with
the Company or its Affiliates has been terminated for Cause, any
Share Option held by such optionee shall immediately terminate
and be of no further force and effect.
(ix) Other Termination. Unless
otherwise determined by the Committee in its discretion, if an
optionee’s service with the Company and its Affiliates
terminates for any reason other than death, Disability, or for
Cause, any Share Option held by such optionee may thereafter be
exercised for such period as the Committee shall specify at any
time, but in no event later than the expiration of the stated
term of the option.
(x) Restrictions on Shares. Shares
issued upon exercise of a Share Option shall be free of all
restrictions under the Plan, except as otherwise provided herein.
(y) Agreement or Notice. Share
Options shall be evidenced by an agreement or notice thereof.
SECTION 6
Restricted
Share Awards and Restricted Share Units
(a) Nature of Restricted Share Award and Restricted
Share Units. The Committee may grant
Restricted Share Awards and Restricted Share Units to Eligible
Directors and employees of the Company, a Subsidiary or any
Affiliate. A Restricted Share Award is an Award entitling the
recipient to acquire, at no cost or for a purchase price
determined by the Committee, Shares subject to such restrictions
and conditions as the Committee may determine at the time of
grant (“Restricted Shares”). A Restricted Share Unit
represents a right to receive Shares or cash based upon
conditions as the Committee may determine at the time of grant
(“Restricted Share Units”). Conditions may be based on
continuing service
and/or
achievement of pre-established performance goals and objectives.
(b) Acceptance of Award. A
participant who is granted a Restricted Share Award or
Restricted Share Unit which requires the making of a payment to
the Company shall have no rights with respect to such Award
unless the participant shall have accepted the Award within
60 days (or such shorter date as the Committee may specify)
following the award date by making payment to the Company by
certified or bank check or other instrument or form of payment
acceptable to the Committee in an amount equal to the specified
purchase price, if any, of the Shares, covered by the Award and
by executing and delivering to the Company a written instrument
that sets forth the terms and conditions of the Restricted
Shares or Restricted Share Unit in such form as the Committee
shall determine. Restricted Share Awards or Restricted Share
Units will otherwise be evidenced by notice thereof.
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(c) Rights as a Shareholder. Upon
complying with Section 6(b) above, a participant shall have
all the rights of a shareholder with respect to the Restricted
Shares including voting and dividend rights, subject to
transferability restrictions and Company repurchase or
forfeiture rights described in this Section 6 and subject
to such other conditions contained in the written instrument
evidencing the Restricted Share Award. Unless the Committee
shall otherwise determine, certificates evidencing Restricted
Shares shall remain in the possession of the Company until such
shares are vested as provided in Section 6(e) below.
Holders of Restricted Share Units shall not have the rights of
shareholders until Shares are issued in satisfaction thereof,
but may have Dividend Equivalent Rights, as determined by the
Committee.
(d) Restrictions. Restricted
Shares and Restricted Share Units may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of
except as specifically provided herein.
(e) Vesting of Restricted Shares and Restricted Share
Units. The Committee at the time of grant
shall specify the date or dates
and/or the
attainment of pre-established performance goals, objectives and
other conditions on which the non-transferability of the
Restricted Shares and Restricted Share Units and the
Company’s right of repurchase or forfeiture shall lapse.
Subsequent to such date or dates
and/or the
attainment of such pre-established performance goals, objectives
and other conditions, the Shares on which all restrictions have
lapsed shall no longer be Restricted Shares or Restricted Share
Units and shall be deemed “vested.”
(f) Waiver, Deferral and Reinvestment of
Dividends. The written instrument evidencing
the Restricted Share Award
and/or
Restricted Share Unit may require or permit the immediate
payment, waiver, deferral or investment of dividends or Dividend
Equivalent Rights paid on the Restricted Shares or Restricted
Share Units.
(g) Termination. Except as may
otherwise be provided by the Committee at any time prior to
termination of service, a participant’s rights in all
Restricted Share Awards and Restricted Share Unit Awards shall
automatically terminate upon the participant’s termination
of service with the Company, its Subsidiaries and its Affiliates
for any reason (including, without limitation, death, Disability
and for Cause).
SECTION 7
Performance
Share Awards and Performance Share Units
(a) Nature of Performance Shares and Performance
Share Units. A Performance Share Award is an
award entitling the recipient to acquire Shares upon the
attainment of specified performance goals. A Performance Share
Unit represents a right to receive Shares or cash based upon the
achievement, or level of achievement, of one or more performance
goals established by the Committee at the time of grant. The
Committee may make Performance Share Awards and Performance
Share Unit Awards independent of or in connection with the
granting of any other Award under the Plan. Performance Share
Awards and Performance Share Units may be granted under the Plan
to Eligible Directors and employees of the Company, a Subsidiary
or any Affiliate, including those who qualify for awards under
other performance plans of the Company. The Committee in its
sole discretion shall determine whether and to whom Performance
Share Awards and Performance Share Units shall be made, the
performance goals applicable under each such Award, the periods
during which performance is to be measured, and all other
limitations and conditions applicable to the awarded Performance
Shares and Performance Share Units; provided, however, that the
Committee may rely on the performance goals and other standards
applicable to other performance based plans of the Company in
setting the standards for Performance Share Awards and
Performance Share Units under the Plan.
(b) Restrictions on
Transfer. Performance Share Awards and
Performance Share Units and all rights with respect to such
Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) Rights as a Shareholder. A
participant receiving a Performance Share Award shall have the
rights of a shareholder only as to Shares actually received by
the participant under the Plan and not with respect to Shares
subject to the Award but not actually received by the
participant. A participant shall be entitled to receive a Share
certificate evidencing the acquisition of Shares under a
Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance
Share Award (or in a performance plan adopted by the Committee).
Holders of Performance Share Units shall not have the rights of
shareholders until
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Shares are issued in satisfaction thereof, but may have Dividend
Equivalent Rights, as determined by the Committee. The written
instrument evidencing the Performance Share Award
and/or
Performance Share Unit may require or permit the immediate
payment, waiver, deferral or investment of dividends or Dividend
Equivalent Rights paid on the Performance Award
and/or
Performance Share Units.
(d) Termination. Except as may
otherwise be provided by the Committee at any time prior to
termination of service, a participant’s rights in all
Performance Share Awards and Performance Share Unit Awards shall
automatically terminate upon the participant’s termination
of service with the Company, its Subsidiaries and its Affiliates
for any reason (including, without limitation, death, Disability
and for Cause).
(e) Acceleration, Waiver, Etc. At
any time prior to the participant’s termination of service
with the Company and its Affiliates, the Committee may in its
sole discretion accelerate, waive or, subject to
Section 12, amend any or all of the goals, restrictions or
conditions imposed under any Performance Share Award or
Performance Share Unit; provided, however, that in no event
shall any provision of the Plan be construed as granting to the
Committee any discretion to increase the amount of compensation
payable under any Performance Share Award or Performance Share
Unit, and the Committee shall have no such discretion
notwithstanding any provision of the Plan to the contrary.
SECTION 8
Dividend
Equivalent Rights
A Dividend Equivalent Right is an Award entitling the recipient
to receive credits based on cash distributions that would be
paid on the Shares specified in the Dividend Equivalent Right
(or other award to which it relates) if such shares were held by
the recipient. A Dividend Equivalent Right may be granted
hereunder to any participant as a component of another Award or
as a freestanding Award. The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant. Dividend
Equivalent Rights credited to a participant may be paid
currently, on a deferred basis, or may be deemed to be
reinvested in additional Shares. Any such reinvestment shall be
at Fair Market Value on the date of reinvestment or such other
price as may then apply under a dividend reinvestment plan
sponsored by the Company, if any. Dividend Equivalent Rights may
be settled in cash or Shares or a combination thereof, in a
single installment or installments. A Dividend Equivalent Right
granted as a component of another Award may provide that such
Dividend Equivalent Right shall be settled upon exercise,
settlement, or payment of, or lapse of restrictions on, such
other award, and that such Dividend Equivalent Right shall
expire or be forfeited or annulled under the same conditions as
such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions
different from such other award.
SECTION 9
Tax
Withholding
(a) Payment by Participant. Each
participant shall, no later than the date as of which the value
of an Award or of any Shares or other amounts received
thereunder first becomes includible in the gross income of the
participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding
payment of, any Federal, state, or local taxes of any kind
required by law to be withheld with respect to such income. The
Company and its Affiliates shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the participant.
(b) Payment in Shares. A
participant may elect to have such tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the
Company to withhold from Shares to be issued pursuant to any
Award a number of shares with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the
withholding amount due, or (ii) transferring to the Company
Shares owned by the participant with an aggregate Fair Market
Value (as of the date the withholding is effected) that would
satisfy the withholding amount due.
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SECTION 10
Transfers
For purposes of the Plan, a transfer to the employment of the
Company from a Subsidiary or an Affiliate or from the Company to
a Subsidiary or an Affiliate, or from one Subsidiary or
Affiliate to another shall not be deemed a termination of
service.
SECTION 11
Amendments
and Termination
The Board may at any time amend, terminate or discontinue the
Plan and the Committee may at any time amend or cancel any
outstanding Award for the purpose of satisfying changes in law
or for any other lawful purpose, but no such action shall
adversely affect rights under any outstanding Award without the
holder’s consent; and provided further that no amendment of
the Plan shall be made without shareholder approval if
shareholder approval of the amendment is at the time required
for awards under the Plan to qualify for the exemption from
Section 16(b) of the Act provided by
Rule 16b-3
or by the rules of the New York Stock Exchange or any stock
exchange on which the Shares may then be listed, or otherwise
amend the Plan in any manner that would cause awards under the
Plan not to qualify for the exemption provided by
Rule 16b-3.
SECTION 12
Status of
Plan
With respect to the portion of any Award which has not been
exercised and any payments in cash, Shares or other
consideration not received by a participant, a participant shall
have no rights greater than those of a general unsecured
creditor of the Company unless the Committee shall otherwise
expressly determine in connection with any Award or Awards. In
its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the Company’s
obligations to deliver Shares or make payments with respect to
Awards hereunder, provided that the existence of such trusts or
other arrangements is consistent with the provision of the
foregoing sentence.
SECTION 13
Change of
Control Provisions
Upon the occurrence of a Change of Control as defined in this
Section 13:
(a) Each Share Option shall automatically become fully
exercisable unless the Committee shall otherwise expressly
provide at the time of grant.
(b) Restrictions and conditions on Awards of Restricted
Shares, Restricted Share Units, Performance Shares, Performance
Share Units and Dividend Equivalent Rights shall automatically
be deemed waived, and the recipients of such Awards shall become
entitled to receipt of the maximum amount of Shares subject to
such Awards unless the Committee shall otherwise expressly
provide at the time of grant; provided that the payment date of
any Awards that are considered to be deferred compensation shall
not be accelerated.
(c) Unless otherwise expressly provided at the time of
grant, participants who hold Share Options shall have the right,
in lieu of exercising the Option, to elect to surrender all or
part of such Option to the Company and to receive cash in an
amount equal to the excess of (i) the Fair Market Value of
a Share on the date such right is exercised over (ii) the
exercise price per share under the Option, multiplied by the
number of Shares with respect to which such right is exercised.
(d) “Change of Control” shall mean the
occurrence of any one of the following events:
(i) any “person”, as such term is used in
Sections 13(d) and 14(d) of the Act (other than
Wm. Polk Carey, the Carey Family, the W. P. Carey
Foundation, the Company, any of its Subsidiaries, any trustee,
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fiduciary or other person or entity holding securities under any
employee benefit plan of the Company or any of its
Subsidiaries), together with all “affiliates” and
“associates” (as such terms are defined in
Rule 12b-2
under the Act) of such person, shall become the “beneficial
owner” (as such term is defined in
Rule 13d-3
under the Act), directly or indirectly, of securities of the
Company representing 25% or more of either (A) the combined
voting power of the Company’s then outstanding securities
having the right to vote in an election of the Company’s
Board of Eligible Directors (“Voting Securities”) or
(B) the then outstanding Shares of the Company (in either
such case other than as a result of acquisition of securities
directly from the Company); or
(ii) persons (as defined in the previous subsection) who,
as of the Effective Date, constitute the Company’s Board of
Eligible Directors (the “Incumbent Eligible
Directors”) cease for any reason, including without
limitation, as a result of a tender offer, proxy contest, merger
or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a Eligible Director of
the Company subsequent to the Effective Date whose election or
nomination for election was approved by a vote of at least a
majority of the Incumbent Eligible Directors shall, for purposes
of this Plan, be considered an Incumbent Eligible
Director; or
(iii) the Shareholders of the Company shall approve
(A) any consolidation or merger of the Company or any
Subsidiary where the shareholders of the Company, immediately
prior to the consolidation or merger, would not, immediately
after the consolidation or merger, beneficially own (as such
term is defined in
Rule 13d-3
under the Act), directly or indirectly, shares representing in
the aggregate 50% or more of the voting equity of the entity
issuing cash or securities in the consolidation or merger (or of
its ultimate parent entity, if any), (B) any sale, lease,
exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company
other than to an entity with respect to which, following such
sale or disposition, the shareholders of the Company immediately
prior to the sale own more than eighty percent (80%) of,
respectively, the outstanding shares of stock and the combined
voting power of the outstanding voting securities entitled to
vote generally in the election of the board of such entity, or
(C) any plan or proposal for the liquidation or dissolution
of the Company;
Notwithstanding the foregoing, a “Change of Control”
shall not be deemed to have occurred for purposes of the
foregoing clause (i) solely as the result of an acquisition
of securities by the Company which, by reducing the number of
Shares outstanding, increases (x) the proportionate number
of Shares beneficially owned by any person to 25% or more of the
Shares then outstanding or (y) the proportionate voting
power represented by the Shares beneficially owned by any person
to 25% or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if
any person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any
additional Shares or other Voting Securities (other than
pursuant to a Share split, Share dividend, or similar
transaction), then a “Change of Control” shall be
deemed to have occurred for purposes of the foregoing clause
(i). For purposes of the foregoing, “Carey Family”
shall mean Wm. Polk Carey, his spouse, and lineal descendants
and his brothers and
brothers-in-law,
sisters and
sisters-in-law
and each of their lineal descendants.
SECTION 14
General
Provisions
(a) No Distribution; Compliance with Legal
Requirements. The Committee may require each
person acquiring shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No Shares shall be issued pursuant to an Award until all
applicable securities laws and other legal and Shares exchange
requirements have been satisfied. The Committee may require the
placing of such stop-orders and restrictive legends on
certificates for Shares and Awards as it deems appropriate.
(b) Delivery or Recordation of
Shares. Delivery of Shares certificates or
electronic or book-entry recordation thereof to participants
under this Plan shall be deemed effected for all purposes when
the Company or a Share
A-9
transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the
participant, at the participant’s last known address on
file with the Company or otherwise recorded ownership thereof.
(c) Other Compensation Arrangements; No Employment
Rights. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation
arrangements, including trusts, subject to shareholder approval
if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific
cases. The adoption of the Plan and the grant of Awards do not
confer upon any employee any right to continued employment with
the Company or any Subsidiary or Affiliate. In the discretion of
the Committee, Awards authorized under the Plan may be used in
connection with, or to satisfy obligations of the Company or a
Subsidiary or Affiliate under, other compensation or incentive
plans, programs or arrangements of the Company or any Subsidiary
or Affiliate for eligible participants.
(d) Code Section 409A
Compliance. The Plan is not intended to
provide for deferred compensation, except to the extent as may
be permitted pursuant to individual agreements with Awardees. To
the extent that the Plan or any related agreement may be subject
to Section 409A of the Code, it shall be construed in a
manner to comply with the requirements thereof, including good
faith, reasonable statutory interpretations that are contrary to
the terms of the Plan or related agreement. Consistent with that
intent, the Plan and related agreements shall be interpreted in
a manner consistent with Section 409A of the Code. In the
event that any provision that is necessary for the Plan or
related agreement to comply with Section 409A of the Code
is determined by the Company to have been omitted, such omitted
provision shall be deemed to be included herein and is hereby
incorporated as part of the Plan or related agreement, as
applicable.
SECTION 15
Effective
Date and Duration of Plan
The effective date of this Plan shall be June 11, 2009, subject
to approval of the Company’s shareholders. No Awards may be
granted under the Plan subsequent to June 10, 2019.
SECTION 16
Governing Law
This Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, to the
extent applicable, without regard to conflicts of laws
principles.
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Exhibit B
W. P.
CAREY & CO. LLC
2009
NON-EMPLOYEE DIRECTORS’ INCENTIVE PLAN
The purposes of the 2009 Non-Employee Directors’ Incentive
Plan (the “Plan”) are to promote the long-term success
of W. P. Carey & Co. LLC (the “Company”) by
creating a long-term mutuality of interests between the
Non-Employee Directors and shareholders of the Company, to
provide an additional inducement for such Directors to remain
associated with the Company and to provide a means through which
the Company may attract able persons to serve as Directors of
the Company.
SECTION 1
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the
Company (the “Board”), which may delegate some or all
of its duties to a committee of the Board (the administrator is
referred to herein as the “Committee”). The Committee
shall initially be the Compensation Committee of the Board.
The Committee shall keep records of actions taken at its
meetings. A majority of the Committee shall constitute a quorum
at any meeting, and the acts of a majority of the members
present at any meeting at which a quorum is present shall be the
acts of the Committee. The Committee may also take action by
approval in writing of all members of the Committee.
The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operation of
the Plan as it shall deem to be necessary and advisable for the
administration of the Plan consistent with the purposes of the
Plan. All questions of interpretation and application of the
Plan, as to options (“Share Options”) to purchase
interests in the Company known as listed shares
(“Shares”), as to Shares subject to restrictions as to
transferability or other rights of ownership (“Restricted
Shares”) and as to rights to receive Shares or cash
(“Restricted Share Units”) granted under the Plan,
shall be subject to the determination of the Committee, which
shall be final and binding.
Notwithstanding the above, the selection of the Directors to
whom Share Options, Restricted Shares or Restricted Share Units
(collectively, “Awards” or individually an
“Award”) are to be granted, the timing of such grants,
the number of Shares subject to any Share Option, the exercise
price of any Share Option, the periods during which any Share
Option may be exercised and the amount and term of any Share
Option, Restricted Share or Restricted Share Unit grant shall be
as hereinafter provided, and the Committee shall have no
discretion as to such matters.
SECTION 2
SHARES
AVAILABLE UNDER THE PLAN
The aggregate net number of Shares which may either be issued
pursuant to or be subject to outstanding Share Options or
granted as Restricted Shares or Restricted Share Units under the
Plan is limited to 325,000 Shares of the Company, subject
to adjustment and substitution as set forth in Section 7.
If any Share Option granted under the Plan is canceled by mutual
consent or terminates or expires for any reason without having
been exercised in full, or any Restricted Shares or Restricted
Share Units are forfeited the number of Shares subject thereto
shall again be available for purposes of the Plan so long as the
participants to whom such Awards had been previously granted
received no benefits of ownership of the underlying Shares to
which the Award related. Notwithstanding the foregoing, Shares
previously owned or acquired by an awardee that are delivered to
the Company, or withheld from an Award, to pay the exercise
price of an Award shall not become available for purposes of the
Plan.
B-1
SECTION 3
GRANT OF
SHARE OPTIONS, RESTRICTED SHARES OR RESTRICTED SHARE UNITS
On each July 1 (or if such day is not a business day, the next
succeeding day) within the duration of the Plan, each person who
is then a member of the Board and who is not then an employee of
the Company or any of its subsidiaries (a “Non-Employee
Director”) shall be granted an Award of Restricted Share
Units with a total value of $50,000, with the number of
Restricted Share Units equal to $50,000 divided by the Fair
Market Value of a Share, determined as provided in
Section 4(H), on the date of grant. Each Non-Employee
Director also received a grant of Restricted Share Units with a
total value of $37,500, based upon the foregoing calculation, on
October 1, 2008 (the “Interim Grant”), which is
contingent upon shareholder approval of the Plan. In the
discretion of the Committee, instead of an Award consisting
solely of Restricted Share Units, the composition of the Award
may be in the form of Share Options, Restricted Shares or
Restricted Share Units, or any combination thereof. If the
number of Shares then remaining available for the grant under
the Plan is not sufficient for each Non-Employee Director to be
granted an award with a total value of $50,000, then each
Non-Employee Director shall be granted an Award with a value
equal to the number of Shares then remaining available divided
by the number of Non-Employee Directors, disregarding any
fractions of a share.
SECTION 4
TERMS AND
CONDITIONS OF SHARE OPTIONS
Share Options granted under the Plan shall be subject to the
following terms and conditions:
(A) Option Price. The purchase
price at which each Share Option may be exercised (the
“Option Price”) shall be one hundred percent (100%) of
the Fair Market Value per share of the Shares covered by the
Share Option on the date of grant, determined as provided in
Section 4(H).
(B) Method of Exercise. Share
Options may be exercised in whole or in part, by giving written,
electronic or telephonic notice of exercise to the Company or
its agent, in a method acceptable to the Company, specifying the
number of Shares to be purchased. Payment of the purchase price
may be made by one or more of the following methods:
(i) In cash (by certified, bank check, money order or other
instrument acceptable to the Committee);
(ii) In the form of delivered Shares that are not then
subject to restrictions, or Shares withheld from the exercise of
the Option, in either case if permitted by the Committee in its
discretion. Such surrendered or withheld shares shall be valued
at Fair Market Value on the exercise date; or
(iii) Any combination of cash and such Shares, if the use
of Shares is permitted by the Committee in its discretion, in
the amount of the full purchase price for the number of Shares
as to which the Option is exercised; provided, however, that any
portion of the Option Price representing a fraction of a share
shall be paid by the Optionee in cash.
(iv) By the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price;
provided that in the event the optionee chooses to pay the
purchase price as so provided, the optionee and the broker shall
comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe
as a condition of such payment procedure. Payment instruments
will be received subject to collection.
The delivery of certificates representing Shares to be purchased
pursuant to the exercise of the Share Option or electronic or
book-entry recordation thereof will be contingent upon receipt
from the optionee by the Company of the full purchase price for
such shares and the fulfillment of any other requirements
contained in the Share Option or applicable provisions of laws.
If the option price is paid in cash, the exercise of the stock
option shall not be deemed to occur and no Shares will be issued
until the Company has received full payment in cash (including
check, bank draft or money order) for the option price, whether
from the optionee, or from a broker or other agent.
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(C) Cashless Exercise. If
expressly provided at the time of grant, participants who hold
Share Options shall have the right, in lieu of exercising the
Option, to elect to surrender all or part of such Option to the
Company and to receive cash in an amount equal to the excess of
the Fair Market Value of a Share on the date such right is
exercised over the Option Price of the Option, multiplied by the
number of Shares with respect to which such right is exercised.
(D) Vesting. Except as otherwise
provided by the Committee, Share Options granted hereunder shall
be exercisable immediately upon the date of grant. No Share
Option shall be exercisable after the expiration of ten years
from the date of grant. A Share Option, to the extent
exercisable, may be exercised in whole or in part.
(E) Transferability. If and to the
extent required for Share Options granted under the Plan to
qualify for the exemption provided by
Rule 16b-3
under the Securities Exchange Act of 1934 (the
“1934 Act”), (i) no Share Option shall be
transferable by the grantee otherwise than by will, or if the
grantee dies intestate, by the laws of descent and distribution
of the state of domicile of the grantee at the time of death and
(ii) all Share Options shall be exercisable during the
lifetime of the grantee only by the grantee or the
grantee’s guardian or legal representative.
(F) Separation from Service. If a
grantee ceases to be a Director of the Company for any reason,
any outstanding Share Options of the grantee (whether or not
then held by the grantee) shall be exercisable and shall
terminate according to the following provisions:
(i) If a grantee ceases to be a Director of the Company for
any reason other than resignation, removal for cause or death,
any then outstanding Share Option of such grantee (whether or
not exercisable immediately prior to the grantee ceasing to be a
Director) shall be exercisable at any time prior to the
expiration date of such Share Option or within one year after
the date the grantee ceases to be a Director, whichever is the
shorter period;
(ii) If during his term of office as a Director, a grantee
resigns from the Board or is removed from office for cause, any
outstanding Share Option of the grantee which is not exercisable
immediately prior to resignation or removal shall terminate as
of the date of resignation or removal, and any outstanding Share
Option of the grantee which is exercisable immediately prior to
resignation or removal shall be exercisable at any time prior to
the expiration date of such Share Option or within 90 days
after the date of resignation or removal, whichever is the
shorter period;
(iii) Following the death of a grantee during service as a
Director of the Company, any Share Option of the grantee
outstanding at the time of death (whether or not exercisable
immediately prior to death of the grantee) shall be exercisable
by the person entitled to do so under the Will of the grantee,
or, if the grantee shall fail to make testamentary disposition
of the Share Option or shall die intestate, by the legal
representative of the grantee (or, if then permitted under the
Plan and the applicable Share Option agreement, by the
grantee’s inter vivos transferee) at any time prior to the
expiration date of such Share Option or within one year after
the date of death of the grantee, whichever is the shorter
period;
(iv) Following the death of a grantee after ceasing to be a
Director and during a period when a Share Option remains
outstanding, any Share Option of the grantee outstanding and
exercisable at the time of death shall be exercisable by such
person entitled to do so under the Will of the grantee or by
such legal representative (or, if then permitted under the Plan,
by such inter vivos transferee) at any time prior to the
expiration date of such Share Option or within one year after
the date of death of the grantee, whichever is the shorter
period.
(G) Agreement. All Share Options
shall be confirmed or evidenced by an agreement or notice
thereof, or an amendment thereto, which shall be executed on
behalf of the Company and, if required by the Company, by the
grantee.
(H) Fair Market Value. Fair Market
Value of the Shares means the last reported sale price at which
a Share is traded on such date or, if no Shares are traded on
such date, the most recent date on which Shares were traded, as
reflected on the New York Stock Exchange or, if applicable, any
other national stock exchange which is the principal trading
market for the Shares.
B-3
(I) Registration and Listing. The
obligation of the Company to issue Shares under the Plan shall
be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with
respect to such Shares, if deemed necessary or appropriate by
counsel for the Company, (ii) the condition that the Shares
shall have been listed (or authorized for listing upon official
notice of issuance) upon each stock exchange, if any, on which
the Shares may then be listed and (iii) all other
applicable laws, regulations, rules and orders which may then be
in effect.
Subject to the foregoing provisions of this Section 4 and
the other provisions of the Plan, any Share Option granted under
the Plan may be subject to such restrictions and other terms and
conditions, if any, as shall be determined, in its discretion,
by the Committee and set forth in the agreement referred to in
Section 4(G), or an amendment thereto.
SECTION 5
RESTRICTED
SHARE AWARDS
(A) Nature of Restricted Share
Award. A Restricted Share Award is an Award
entitling the recipient to acquire, at no cost or for a purchase
price determined by the Committee, Shares subject to such
restrictions and conditions as the Committee may determine at
the time of grant. Conditions may be based on continuing service
and/or such
other criteria as the Committee may determine in its discretion.
(B) Acceptance of Award. A
participant who is granted a Restricted Share Award which
requires the making of a payment to the Company shall have no
rights with respect to such Award unless the participant shall
have accepted the Award within 60 days (or such shorter
date as the Committee may specify) following the award date by
making payment to the Company, if required, by certified or bank
check or other instrument or form of payment acceptable to the
Committee in an amount equal to the specified purchase price, if
any, of the Shares, covered by the Award and by executing and
delivering to the Company a written instrument that sets forth
the terms and conditions of the Restricted Shares in such form
as the Committee shall determine. Restricted Share Awards will
otherwise be evidenced by notice thereof.
(C) Rights as a Shareholder. Upon
complying with Section 5(B), a participant shall have all
the rights of a shareholder with respect to the Restricted
Shares including voting and dividend rights, subject to
transferability restrictions and Company repurchase or
forfeiture rights described in this Section 5 and subject
to such other conditions contained in the written instrument
evidencing the Restricted Share Award. Unless the Committee
shall otherwise determine, certificates evidencing shares of
Restricted Shares shall remain in the possession of the Company
until such shares are vested as provided in Section 5(E)
below.
(D) Restrictions. Restricted
Shares may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of until the restrictions
thereon lapse pursuant to the provisions of Section 5(E).
(E) Vesting of Restricted
Shares. The Restricted Shares issued under
this Plan shall vest over the period determined by the Committee
in its discretion. Subsequent to such date or dates of vesting,
the Shares on which all restrictions have lapsed shall no longer
be Restricted Shares and shall be deemed “vested”.
(F) Waiver, Deferral and Reinvestment of
Dividends. The written instrument evidencing
the Restricted Share Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the
Restricted Shares, in a manner consistent with Section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”).
SECTION 6
RESTRICTED
SHARE UNIT AWARDS
(A) Nature of Restricted Share Unit
Award. A Restricted Share Unit represents a
right to receive Shares or cash at a specified time.
B-4
(B) Acceptance of Award. A
participant who is granted a Restricted Share Unit which
requires the making of a payment to the Company shall have no
rights with respect to such Award unless the participant shall
have accepted the Award within 60 days (or such shorter
date as the Committee may specify) following the award date by
making payment to the Company, if required, by certified or bank
check or other instrument or form of payment acceptable to the
Committee in an amount equal to the specified purchase price, if
any, of the Shares, covered by the Award and by executing and
delivering to the Company a written instrument that sets forth
the terms and conditions of the Restricted Share Unit in such
form as the Committee shall determine. Restricted Share Units
will otherwise be evidenced by notice thereof.
(C) Rights as a
Shareholder. Holders of Restricted Share
Units shall not have the rights of shareholders until Shares are
issued in satisfaction thereof, but may have dividend equivalent
rights, as determined by the Committee. The Interim Grant shall,
contingent upon shareholder approval of the Plan, include
dividend equivalent rights from the date of grant as determined
by the Committee.
(D) Restrictions. Restricted Share
Units may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of.
(E) Vesting and Payment of Restricted Share
Units. The Restricted Share Units issued
under this Plan shall be immediately vested upon the date of
grant, unless otherwise determined by the Committee in its
discretion. Payment for the Restricted Share Units shall be made
within 30 days following the Non-Employee Directors’
separation from service, within the meaning of Section 409A
of the Code.
(F) Waiver, Deferral and Reinvestment of Dividend
Equivalents. The written instrument
evidencing the Restricted Share Units may require or permit the
immediate payment, waiver, deferral or investment of dividend
equivalents paid on the Restricted Share Units, in a manner
consistent with Section 409A of the Code.
SECTION 7
ADJUSTMENT
AND SUBSTITUTION OF SHARES
If a dividend or other distribution shall be declared upon the
Shares payable in Shares, the number of Shares then subject to
any outstanding Share Options or Restricted Share Units, the
number of Shares to be subject to any Award thereafter granted
and the number of Shares which may be issued under the Plan but
are not then subject to outstanding Awards shall be adjusted by
adding thereto the number of Shares which would have been
distributable thereon if such Shares had been outstanding on the
date fixed for determining the shareholders entitled to receive
such dividend or distribution.
If the outstanding Shares shall be changed into or exchangeable
for a different number or kind of Shares or other securities of
the Company or another Company, whether through reorganization,
reclassification, recapitalization, stock
split-up,
combination of Shares, merger or consolidation, then there shall
be substituted for each share of the Shares subject to any then
outstanding Share Option or Restricted Share Unit, for each
Share which would otherwise be subject to any Award thereafter
granted, for each share of the Shares which may be issued under
the Plan but which is not then subject to any outstanding Share
Option or Restricted Share Unit and for each Restricted Share,
the number and kind of Shares or other securities into which
each outstanding Share shall be so changed or for which each
such share shall be exchangeable.
In case of any adjustment or substitution as provided for in
this Section 7, the aggregate Option Price for all Shares
subject to each then outstanding Share Option prior to such
adjustment or substitution shall be the aggregate Option Price
for all Shares of stock or other securities (including any
fraction) to which such Shares shall have been adjusted or which
shall have been substituted for such Shares. Any new Option
Price per share shall be carried to at least three decimal
places with the last decimal place rounded upwards to the
nearest whole number.
No adjustment or substitution provided for in this
Section 7 shall require the Company to issue or sell a
fraction of a share or other security. Accordingly, all
fractional Shares or other securities which result from any such
adjustment or substitution shall be eliminated and not carried
forward to any subsequent adjustment or substitution.
B-5
SECTION 8
ADDITIONAL
RIGHTS IN CERTAIN EVENTS
(A) Definitions.
For purposes of this Section 8, the term “Change of
Control” shall mean the occurrence of any one of the
following events:
(i) any “person”, as such term is used in
Sections 13(d) and 14(d) of the Act (other than
Wm. Polk Carey, the Carey Family, the
W. P. Carey Foundation, the Company, any of its
Subsidiaries, any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan of the
Company or any of its Subsidiaries), together with all
“affiliates” and “associates” (as such terms
are defined in
Rule 12b-2
under the Act) of such person, shall become the “beneficial
owner” (as such term is defined in
Rule 13d-3
under the Act), directly or indirectly, of securities of the
Company representing 25% o or more of either (A) the
combined voting power of the Company’s then outstanding
securities having the right to vote in an election of the
Company’s Board of Eligible Directors (“Voting
Securities”) or (B) the then outstanding Shares of the
Company (in either such case other than as a result of
acquisition of securities directly from the Company); or
(ii) persons (as defined in subsection (i) above) who,
as of the Effective Date, constitute the Company’s Board of
Eligible Directors (the “Incumbent Eligible
Directors”) cease for any reason, including without
limitation, as a result of a tender offer, proxy contest, merger
or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a Eligible Director of
the Company subsequent to the Effective Date whose election or
nomination for election was approved by a vote of at least a
majority of the Incumbent Eligible Directors shall, for purposes
of this Plan, be considered an Incumbent Eligible
Director; or
(iii) the Shareholders of the Company shall approve
(A) any consolidation or merger of the Company or any
Subsidiary where the shareholders of the Company, immediately
prior to the consolidation or merger, would not, immediately
after the consolidation or merger, beneficially own (as such
term is defined in
Rule 13d-3
under the Act), directly or indirectly, shares representing in
the aggregate 50% o or more of the voting equity of the entity
issuing cash or securities in the consolidation or merger (or of
its ultimate parent entity, if any), (B) any sale, lease,
exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company
other than to an entity with respect to which, following such
sale or disposition, the shareholders of the Company immediately
prior to the sale own more than eighty percent (80%) of,
respectively, the outstanding shares of stock and the combined
voting power of the outstanding voting securities entitled to
vote generally in the election of the board of such entity or
(C) any plan or proposal for the liquidation or dissolution
of the Company;
Notwithstanding the foregoing, a “Change of Control”
shall not be deemed to have occurred for purposes of the
foregoing clause (i) solely as the result of an acquisition
of securities by the Company which, by reducing the number of
Shares outstanding, increases (x) the proportionate number
of Shares beneficially owned by any person to 25% or more of the
Shares then outstanding or (y) the proportionate voting
power represented by the Shares beneficially owned by any person
to 25% or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if
any person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any
additional Shares or other Voting Securities (other than
pursuant to a Share split, Share dividend, or similar
transaction), then a “Change of Control” shall be
deemed to have occurred for purposes of the foregoing clause
(i). For purposes of the foregoing, “Carey Family”
shall mean Wm. Polk Carey, his spouse, and lineal descendants
and his brothers and
brothers-in-law,
sisters and
sisters-in-law
and each of their lineal descendants.
(B) Acceleration of the Exercise Date of Share Options and
Lapse of Restrictions
Notwithstanding any other provision contained in the Plan, in
case Change of Control occurs, all outstanding Share Options
shall become immediately and fully exercisable, whether or not
otherwise exercisable by their terms
B-6
and any restrictions on Restricted Shares and Restricted Share
Units shall lapse immediately; provided that the payment date of
any Awards that are considered deferred compensation shall not
be accelerated.
SECTION 9
EFFECT OF
THE PLAN ON THE RIGHTS OF COMPANY AND SHAREHOLDERS
Nothing in the Plan, in any Share Option, Restricted Share or
Restricted Share Unit granted under the Plan, or in any Share
Option or other Award agreement shall confer any right to any
person to continue as a Director of the Company or interfere in
any way with the rights of the shareholders of the Company or
the Board to elect and remove Directors.
SECTION 10
AMENDMENT
AND TERMINATION
The right to amend the Plan at any time and from time to time
and the right to terminate the Plan at any time are hereby
specifically reserved to the Board; provided always that no such
termination shall terminate any outstanding Share Options or
Restricted Shares or Restricted Share Units granted under the
Plan; and provided further that no amendment of the Plan shall
(a) be made without shareholder approval if shareholder
approval of the amendment is at the time required for Share
Options, Restricted Shares or Restricted Share Units under the
Plan to qualify for the exemption from Section 16(b) of the
1934 Act provided by
Rule 16b-3
or by the rules of the New York Stock Exchange or any stock
exchange on which the Shares may then be listed, or otherwise
amend the Plan in any manner that would cause Share Options,
Restricted Shares or Restricted Share Units under the Plan not
to qualify for the exemption provided by
Rule 16b-3.
No amendment or termination of the Plan shall, without the
written consent of the holder of a Share Option, Restricted
Shares or Restricted Share Units theretofore awarded under the
Plan, adversely affect the rights of such holder with respect
thereto.
Notwithstanding anything contained in the preceding paragraph or
any other provision of the Plan or any Share Option or other
Award agreement, the Board shall have the power to amend the
Plan in any manner deemed necessary or advisable for Share
Options, Restricted Shares or Restricted Share Units granted
under the Plan to qualify for the exemption provided by
Rule 16b-3
(or any successor rule relating to exemption from
Section 16(b) of the 1934 Act), and any such amendment
shall, to the extent deemed necessary or advisable by the Board,
be applicable to any outstanding Share Options, Restricted
Shares or Restricted Share Units theretofore granted under the
Plan notwithstanding any contrary provisions contained in any
Share Option or other Award agreement. In the event of any such
amendment to the Plan, the holder of any Share Option
outstanding under the Plan shall, upon request of the Committee
and as a condition to the exercisability of such option, execute
a conforming amendment in the form prescribed by the Committee
to the Share Option agreement referred to in Section 4(G)
within such reasonable time as the Committee shall specify in
such request.
SECTION 11
EFFECTIVE
DATE AND DURATION OF PLAN
The effective date (the “Effective Date”) of this Plan
shall be September 18, 2008, subject to approval of the
Company’s shareholders. No Awards may be granted under the
Plan subsequent to September 17, 2018.
SECTION 12
GOVERNING LAW
This Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York to the extent
applicable, without regard to conflicts of laws principles.
B-7
MELLON INVESTOR SERVICES
480 WASHINGTON BOULEVARD
JERSEY CITY, NJ 07310
480 WASHINGTON BOULEVARD
JERSEY CITY, NJ 07310
VOTE
BY INTERNET — www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by W. P. Carey & Co. LLC in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
If you would like to reduce the costs incurred by W. P. Carey & Co. LLC in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE — 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M14469-P71700 | KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| W. P. CAREY & CO. LLC | For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||
| The Board of Directors recommends a vote “FOR” the election of the nominees listed for the Board of Directors, and “FOR” Proposals 2 and 3. | o | o | o | |||||||||
| Vote On Directors | ||||||||||||
| 1. | Election of Directors | |||||||||||||||||
| Nominees: | ||||||||||||||||||
| 01) | Wm. Polk Carey | 07) | Benjamin H. Griswold, IV | |||||||||||||||
| 02) | Francis J. Carey | 08) | Lawrence R. Klein | |||||||||||||||
| 03) | Trevor P. Bond | 09) | Karsten von Köller | |||||||||||||||
| 04) | Nathaniel S. Coolidge | 10) | Robert E. Mittelstaedt, Jr. | |||||||||||||||
| 05) | Gordon F. DuGan | 11) | Charles E. Parente | |||||||||||||||
| 06) | Eberhard Faber, IV | 12) | Reginald Winssinger | |||||||||||||||
| Vote On Proposals | For | Against | Abstain | |||||||||||||||
| 2. | Approval of the 2009 Share Incentive Plan. | o | o | o | ||||||||||||||
| 3. | Approval of the 2009 Non-Employee Directors’ Incentive Plan. | o | o | o | ||||||||||||||
| For address changes and/or comments, please check this box and write them on the back where indicated. | o | |||||||||||
| Please indicate if you plan to attend this meeting. | o | o | ||||||||||
| Yes | No | |||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such. Joint owners should each sign
personally. All holders must sign. If a corporation or partnership, please sign in full corporate
or partnership name, by authorized officer.
Signature [PLEASE SIGN WITHIN BOX]
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Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
M14470-P71700
W. P. CAREY & CO. LLC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 2009
JUNE 11, 2009
The shareholder(s) hereby appoint(s) Thomas E. Zacharias and Mark J. DeCesaris, and each of them,
with full power of substitution, as proxy to vote all listed shares of W. P. Carey & Co. LLC that
the shareholder(s) is/are entitled to vote at the 2009 Annual Meeting of Shareholders of W. P.
Carey & Co. LLC to be held at TheTimesCenter, 242 West 41st Street, New York, NY on Thursday, June
11, 2009 at 4:00 p.m., and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH
DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE
REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR PROPOSALS 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED REPLY ENVELOPE
USING THE ENCLOSED REPLY ENVELOPE
Address Changes/Comments:
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse
side.)
Continued and to be signed on reverse side