STRATUS PROPERTIES INC. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On
The Executive Annual Incentive Plan: The purpose of the AIP is to provide the
framework under which annual incentive awards based on the achievement of
pre-established performance goals may be paid to Stratus' executive officers and
other key employees, if designated by the Committee. The AIP is effective for
calendar years beginning
Following the end of the year, the Committee will review actual performance as measured against the pre-established performance goals and will determine (i) whether the performance goals applicable to a participant have been achieved, making any adjustments that the Committee deems appropriate, and (ii) the resulting amount of each individual participant's annual incentive award, if any. The Committee has the discretion to decrease or eliminate the amount of the annual incentive award that is payable under the AIP, including elimination of amounts payable under the AIP as required under the terms of the LTIP, as described below.
The Long-Term Incentive Plan: The LTIP amends and restates Stratus' Profit
Participation Incentive Plan, which was previously adopted in
The LTIP, like the PPIP, provides incentive award opportunities tied to the success of Stratus' development projects to Stratus' executives and other key employees and consultants as designated by the Committee. Although substantially similar to the PPIP, the LTIP represents a more holistic approach to Stratus' short-term and long-term incentive programs for its executive officers and incorporates new features intended to further align the awards with the overall stockholder experience and the operating performance of Stratus.
Specifically, in connection with payouts to executive officers, the LTIP incorporates the following provisions that will result in reduction or forfeiture of payouts related to development projects under the LTIP: (i) if the required NAV-based results (which will be established by the Committee from time to time) have not been achieved at the time of payout of awards under the LTIP, the amounts payable shall be reduced by up to 25%, and (ii) if the average of the payouts under the AIP for the objective or operationally-focused metrics for the three-year period preceding the year of payout (or such shorter period of time that the AIP has been in effect or the participant has been a participant in the AIP) is below the target level, amounts payable to the participant under the LTIP shall be reduced by between 5% and 10%, with the percentage reduction in each case determined by the Committee. In addition, for executive officers who also participate in the AIP, for any given calendar year the executive shall receive the greater of the amounts payable under the LTIP or the amounts payable under the AIP, and shall not receive payments under both programs.
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The foregoing descriptions of the Plans are not intended to be complete and are
qualified in their entirety by reference to the full text of the Plans, copies
of which will be filed as exhibits to Stratus' Quarterly Report on Form 10-Q for
the quarter ended
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