UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Registrant ☒ Filed by a Party other than the
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Date Filed:
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4582 SOUTH ULSTER STREET, SUITE 1100
DENVER, COLORADO 80237
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
To Be Held On April 25, 2017
You are cordially invited to attend the 2017 Annual Meeting of Stockholders (the Meeting) of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY (Aimco or the Company) to be held on Tuesday, April 25, 2017, at 8:30 a.m. at Aimcos corporate headquarters, 4582 South Ulster Street, Suite 1100, Denver, CO 80237, for the following purposes:
1. To elect seven directors, for a term of one year each, until the next Annual Meeting of Stockholders
and until their successors are elected and qualify;
2. To ratify the selection of Ernst & Young
LLP, to serve as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2017;
3. To conduct an advisory vote on executive compensation;
4. To conduct an advisory vote on the frequency of future advisory votes on executive compensation; and
5. To transact such other business as may properly come before the Meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on February 24, 2017, will be entitled to notice of, and to vote at, the
Meeting or any adjournment(s) thereof.
We are again pleased to take advantage of Securities and Exchange Commission
(SEC) rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide our stockholders with the information they need, while lowering the costs of delivery and
reducing the environmental impact of our Meeting.
On or about March 14, 2017, we intend to mail our stockholders a notice
containing instructions on how to access our 2016 proxy statement (the Proxy Statement), Annual Report on Form
10-K
for the year ended December 31, 2016, and 2016 Corporate Citizenship Report and
vote online. The notice also provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in
e-delivery.
If you received your annual materials via email,
the email contains voting instructions and links to these documents on the Internet.
WHETHER OR NOT YOU EXPECT TO BE
AT THE MEETING, PLEASE VOTE AS SOON AS POSSIBLE TO ENSURE THAT YOUR SHARES ARE REPRESENTED.
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BY ORDER OF THE BOARD OF DIRECTORS
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Lisa R. Cohn
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Secretary
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March 3, 2017
Important Notice Regarding the Availability of Proxy Materials for
Aimcos Annual Meeting of Stockholders to be held on April 25, 2017.
This Proxy Statement, Aimcos Annual Report on Form
10-K
for the fiscal year ended December 31,
2016, and 2016 Corporate Citizenship Report are available free of charge at the following website:
www.edocumentview.com/aiv
.
Table of Contents
APARTMENT INVESTMENT AND MANAGEMENT COMPANY 4582 SOUTH ULSTER STREET, SUITE 1100 DENVER,
COLORADO 80237
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 2017
The Board of Directors (the Board) of Apartment Investment and Management Company (Aimco or the
Company) has made these proxy materials available to you on the Internet, or, upon your request, has delivered printed versions of these materials to you by mail. We are furnishing this Proxy Statement in connection with the solicitation
by our Board of proxies to be voted at our 2017 Annual Meeting (the Meeting), and at any and all adjournments or postponements thereof. The Meeting will be held on Tuesday, April 25, 2017, at 8:30 a.m. at Aimcos corporate
headquarters located at 4582 South Ulster Street, Suite 1100, Denver, Colorado 80237.
Pursuant to rules adopted
by the SEC, we are providing access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the Notice) to each stockholder entitled to vote at the Meeting. The mailing
of such Notice is scheduled to begin on or about March 14, 2017. All stockholders will have the ability to access the proxy materials over the Internet and request a printed copy of the proxy materials by mail. Instructions on how to access the
proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, the Notice includes instructions on how stockholders may request proxy materials in printed form by mail or electronically by email on an ongoing
basis.
This solicitation is made by mail on behalf of Aimcos Board. Costs of the solicitation will be borne by
Aimco. Further solicitation of proxies may be made by telephone, fax or personal interview by the directors, officers and employees of the Company and its affiliates, who will not receive additional compensation for the solicitation. The Company has
retained the services of Alliance Advisors LLC, for an estimated fee of $10,000, plus
out-of-pocket
expenses, to assist in the solicitation of proxies from brokerage
houses, banks, and other custodians or nominees holding stock in their names for others. The Company will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy
material to stockholders.
Holders of record of the Class A Common Stock of the Company (Common Stock) as
of the close of business on the record date, February 24, 2017 (the Record Date), are entitled to receive notice of, and to vote at, the Meeting. Each share of Common Stock entitles the holder to one vote. At the close of business on the
Record Date, there were 157,017,376 shares of Common Stock issued and outstanding.
Whether you are a stockholder of
record or hold your shares through a broker or nominee (
i.e.
, in street name) you may direct your vote without attending the Meeting in person.
If you are a stockholder of record, you may vote via the Internet by following the instructions in the Notice. If you request
printed copies of the proxy materials by mail, you may also vote by signing your proxy card and returning it by mail or by submitting your vote by telephone. You should sign your name exactly as it appears on the proxy card. If you are signing in a
representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity.
If you are the beneficial owner of shares held in street name, you may be eligible to vote your shares electronically over the
Internet or by telephone by following the instructions in the Notice. If you request printed copies of the proxy materials by mail, you may also vote by signing the voter instruction card provided by your bank or broker and returning it by mail. If
you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your broker or nominee as you have directed.
The persons named as proxies are officers of Aimco. All proxies properly
submitted in time to be counted at the Meeting will be voted in accordance with the instructions contained therein. If you submit your proxy without voting instructions, your shares will be voted in accordance with the recommendations of the Board.
Proxies may be revoked at any time before voting by filing a notice of revocation with the Corporate Secretary of the Company, by filing a later dated proxy with the Corporate Secretary of the Company or by voting in person at the Meeting.
You are entitled to attend the Meeting only if you were an Aimco stockholder or joint holder as of the Record Date or if you
hold a valid proxy for the Meeting. If you are not a stockholder of record but hold shares in street name, you should provide proof of beneficial ownership as of the Record Date, such as your most recent account statement prior to February 24, 2017,
a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership.
Brokers holding shares of record for customers generally are not entitled to vote on certain matters unless they receive
voting instructions from their customers. If you are a beneficial owner of shares and do not provide your broker, as stockholder of record, with voting instructions, your broker has authority under applicable stock market rules to vote those shares
for or against routine matters at its discretion. At the Meeting, the following matters are not considered routine: the election of directors, the advisory vote on executive compensation, and the advisory vote on the frequency of
advisory votes on executive compensation. Where a matter is not considered routine, shares held by your broker will not be voted (a broker
non-vote)
absent specific instructions from you, which
means your shares may go unvoted on those matters and not affect the outcome if you do not specify a vote.
The principal
executive offices of the Company are located at 4582 South Ulster Street, Suite 1100, Denver, Colorado 80237.
2
PROPOSAL 1:
ELECTION OF DIRECTORS
Pursuant to Aimcos Articles of Restatement (the Charter) and Amended and Restated Bylaws (the
Bylaws), directors are elected at each annual meeting of stockholders and hold office for one year, and until their successors are duly elected and qualify. Aimcos Bylaws currently authorize a Board consisting of not fewer than
three nor more than nine persons. The Board currently consists of seven directors.
The nominees for election to the Board
selected by the Nominating and Corporate Governance Committee of the Board and proposed by the Board to be voted upon at the Meeting are:
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Terry Considine
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Kathleen M. Nelson
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Thomas L. Keltner
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Michael A. Stein
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J. Landis Martin
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Nina A. Tran
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Robert A. Miller
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All of the nominees were elected to the Board at the last Annual Meeting of Stockholders.
Messrs. Keltner, Martin, Miller, and Stein and Mses. Nelson and Tran are not employed by, or affiliated with, Aimco, other than by virtue of serving as directors of Aimco. Unless authority to vote for the election of directors has been specifically
withheld, the persons named in the accompanying proxy intend to vote for the election of Messrs. Considine, Keltner, Martin, Miller, and Stein and Mses. Nelson and Tran to hold office as directors for a term of one year until their successors are
elected and qualify at the next Annual Meeting of Stockholders. All nominees have advised the Board that they are able and willing to serve as directors.
If any nominee becomes unavailable for any reason (which is not anticipated), the shares represented by the proxies may be
voted for such other person or persons as may be determined by the holders of the proxies (unless a proxy contains instructions to the contrary). In no event will the proxy be voted for more than seven nominees.
In an uncontested election at the meeting of stockholders, any nominee to serve as a director of the Company will be elected
if the director receives a vote of the majority of votes cast, which means that the number of shares voted for a director exceeds the number of votes against that director. With respect to a contested election, a plurality of
all the votes cast at the meeting of stockholders will be sufficient to elect a director. If a nominee who currently is serving as a director receives a greater number of against votes for his or her election than votes for
such election (a Majority Against Vote) in an uncontested election, Maryland law provides that the director would continue to serve on the Board as a holdover director. However, under Aimcos Bylaws, any nominee for
election as a director in an uncontested election who receives a Majority Against Vote is obligated to tender his or her resignation to the Nominating and Corporate Governance Committee of the Board for consideration. The Nominating and Corporate
Governance Committee will consider any resignation and recommend to the Board whether to accept it. The Board is required to take action with respect to the Nominating and Corporate Governance Committees recommendation.
For purposes of the election of directors, abstentions or broker
non-votes
as to the
election of directors will not be counted as votes cast and will have no effect on the result of the vote. Unless instructed to the contrary in the proxy, the shares represented by the proxies will be voted FOR the election of the seven nominees
named above as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE SEVEN NOMINEES.
3
PROPOSAL 2:
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The firm of Ernst & Young LLP, the Companys independent registered public accounting firm for the year ended
December 31, 2016, was selected by the Audit Committee to act in the same capacity for the year ending December 31, 2017, subject to ratification by Aimcos stockholders. The aggregate fees billed for services rendered by Ernst & Young
LLP during the years ended December 31, 2016 and 2015, are described below under the heading Principal Accountant Fees and Services.
In selecting and overseeing the Companys independent auditor, the Audit Committee considers, among other things:
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Ernst & Young LLPs historical and recent performance on the Aimco audit, including the results
of an internal survey of Ernst & Young LLPs service and quality;
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External data relating to audit quality and performance, including recent Public Company Accounting Oversight
Board (PCAOB) reports on Ernst & Young LLP and its peer firms;
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The appropriateness of Ernst & Young LLPs fees;
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Ernst & Young LLPs tenure as Aimcos independent auditor and its familiarity with
Aimcos operations and business, accounting policies and practices and internal control over financial reporting;
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The depths of Ernst & Young LLPs capabilities and resources to support our business in the
areas of accounting, auditing, internal control over financial reporting, tax and related matters; and
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Ernst & Young LLPs independence.
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Based on this evaluation, the Audit Committee believes that Ernst & Young LLP is independent and that it is in the
best interests of Aimco and our stockholders to retain Ernst & Young LLP to serve as our independent auditor for 2017.
Representatives of Ernst & Young LLP, including the lead engagement partner, who has served in such role for the
previous two years, will be present at the Meeting and will be given the opportunity to make a statement if they so desire and to respond to appropriate questions.
The affirmative vote of a majority of the votes cast regarding the proposal is required to ratify the selection of
Ernst & Young LLP. Abstentions or broker
non-votes
will not be counted as votes cast and will have no effect on the result of the vote on the proposal. Unless instructed to the contrary in the proxy,
the shares represented by the proxies will be voted for the proposal to ratify the selection of Ernst & Young LLP to serve as the Companys independent registered public accounting firm for the fiscal year ending December
31, 2017.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP.
PROPOSAL 3:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we provide our stockholders with the opportunity
to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers (NEOs) as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC. Since the 2011 annual
meeting of stockholders, the Board has asked stockholders for an annual advisory vote on executive compensation.
4
At Aimcos 2016 Annual Meeting of Stockholders, approximately 98% of the
votes cast in the advisory vote on executive compensation that were present and entitled to vote on the matter were in favor of the compensation of Aimcos NEOs (also commonly referred to as Say on Pay) as disclosed in Aimcos
2016 proxy statement. The Compensation and Human Resources Committee (the Committee) and management were pleased with these results and remain committed to extensive engagement with stockholders as part of their ongoing efforts to
formulate and implement an executive compensation program designed to align the long-term interests of our executive officers with our stockholders.
In 2016 and early 2017, we engaged with stockholders representing nearly
two-thirds
of
shares of Common Stock outstanding as of September 30, 2016, as part of our annual process of soliciting feedback on Aimcos executive compensation program. The Company has continued to receive broad support from stockholders on the structure
of its executive compensation program, the programs alignment of pay and performance, and the quantum of compensation delivered under the program as described in detail under the heading Compensation Discussion &
AnalysisStockholder Engagement Regarding Executive Compensation.
As described in detail under the heading
Compensation Discussion & Analysis, we seek to align closely the interests of our NEOs with the interests of our stockholders. Our compensation program is designed to reward our NEOs for the achievement of short-term and
long-term strategic and operational goals and the achievement of total shareholder return (TSR) greater than peers, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.
Here are further details of the Aimco program:
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All members of the Committee are independent directors. The Committee has established a thorough process for
the review and approval of Aimcos executive compensation program, including amounts awarded to executive officers. The Committee engages and receives advice from an independent, third-party compensation consultant. The Committee selects a peer
group of companies to compare Aimcos compensation of executive officers.
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Aimco sets target total cash compensation and target total compensation near the median of corresponding
targets among the peer group, both as a measure of fairness and also to provide an economic incentive to remain with Aimco. Consistent with Aimcos
pay-for-performance
philosophy, actual compensation is
based on Aimcos results.
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Aimco does not provide executives with more than minimal perquisites, such as reserved parking spaces.
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Aimco does not maintain or contribute to any defined benefit pension plan, supplemental pension plan or
nonqualified deferred compensation plan for its executive officers. Executive officers participate in Aimcos 401(k) plan on the same terms as available to all Aimco team members.
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Aimco does not maintain any employment or severance agreements with its executive officers (other than for
Mr. Considine, who was required to have an employment agreement in connection with Aimcos initial public offering in 1994; the agreement was amended in 2008).
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Aimcos compensation program, which, among other things, includes caps on cash compensation, shared
performance metrics across the organization, multiple performance metrics that align with Aimcos publicly communicated business strategy, the use of long-term incentive (LTI) compensation that is based on TSR, and stock ownership
guidelines with required holding periods after vesting, are aligned with the long-term interests of the Company.
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Consistent with Aimcos
pay-for-performance
philosophy,
Mr. Considines total compensation is highly variable from year to year, determined by Aimcos results. Mr. Considines base salary of $600,000 for 2016 has remained unchanged from 2006, and is well below the median for CEOs
of his experience, expertise and tenure. One hundred percent of Mr. Considines 2016 target short-term
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incentive (STI) compensation was at risk, based entirely on Aimcos performance against its corporate goals, as determined by the Committee. One hundred percent of
Mr. Considines LTI, which comprises over
two-thirds
of his target total compensation for 2016, is at risk, based on relative returns over a forward looking, three-year period.
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Here is how the Aimco program was applied in 2016:
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With strong 2016 results, executive officers were awarded STI amounts that were above target amounts.
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Aimcos 2016 performance highlights include the following:
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Aimco had 17.3% TSR in 2016, and outperformed the MSCI US REIT Index (REIT Index), the NAREIT
Apartment Index, and the Standard & Poors 500 Total Return Index (S&P 500 Index), in each case, over the
one-year,
three-year, and five-year periods ended December 31, 2016.
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Adjusted Funds from Operations (AFFO) per share, which is Aimcos primary measure of current
period performance, was $1.97, up 5% year-over-year.
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Economic Income, a measure of investment return representing the annual change in estimated Net Asset Value
(NAV) per share (computed based on Aimcos third quarter 2016 NAV compared to Aimcos third quarter 2015 NAV) plus cash dividends per share, and Aimcos primary measure of long-term performance, was $7 per share, or a 15%
return on NAV for the period.
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NAV per share increased by 12% to $52.
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Cash dividends per share increased by 12% to $1.32.
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Same Store net operating income (NOI) was up 6.2%.
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Aimco completed the
lease-up
of Vivo, located in Cambridge, MA, ahead
of plan, and significantly outperformed its expectations for the
lease-ups
of One Canal, located in Boston, MA, and Indigo, located in Redwood City, CA. The projected contribution to 2017 NOI from these
lease-up
communities is $0.13 per share, which is $0.01 per share greater than the Company had forecasted one year ago.
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Investment of $582 million in three redevelopment communities that reached NOI stabilization in 2016 is estimated to have created value of $170 million, an amount equal to 30% of Aimcos investment.
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Average revenue per apartment home was up 8%, to $1,978.
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Leverage, as measured by the ratio of Debt and Preferred Equity to Adjusted Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA), was down 0.1x, to 6.7x. Aimco ended the year with approximately $700 million in liquidity, including cash, restricted cash, and Aimcos largely unused bank line. Aimco held a pool of
assets that are not encumbered by debt valued at greater than $1.6 billion, providing Aimco additional financial flexibility.
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Aimco was recognized by The Denver Post as a Top Place to Work in Colorado for a fourth
consecutive year.
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The vote on this resolution is not intended to address any specific element of
compensation; rather, the vote relates to the overall compensation of our NEOs, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC.
The vote is advisory, which means that the vote is not binding on the Company, our Board or the Committee. However, as
described above, we take seriously the views of our stockholders, and to the extent there is any significant vote against our executive compensation as disclosed in this proxy statement, the Committee will evaluate whether any actions are necessary
to address the concerns of stockholders.
6
To be approved at the Meeting, Proposal 3 must receive the affirmative vote of a
majority of the total votes cast at the Annual Meeting. Abstentions and broker
non-votes
are not considered votes cast and will have no effect on the outcome of the vote.
We are asking the Companys stockholders to approve, on an advisory basis, the following resolution: RESOLVED, that the
compensation of the named executive officers, as disclosed in the Companys Proxy Statement for the 2017 Annual Meeting of Stockholders pursuant to Item 402 of SEC Regulation
S-K,
including the
Compensation Discussion & Analysis, the 2016 Summary Compensation Table and the other related tables and disclosure, is hereby APPROVED.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS
PROXY STATEMENT.
PROPOSAL 4:
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act provides that stockholders must be given the opportunity to
vote, on a
non-binding,
advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our NEOs as disclosed in accordance with the compensation
disclosure rules of the SEC, which we refer to as an advisory vote on executive compensation. By voting with respect to this Proposal 4, stockholders may indicate whether they would prefer that we conduct future advisory votes on executive
compensation once every one, two, or three years. Stockholders also may, if they wish, abstain from casting a vote on this proposal. We currently hold an advisory vote on executive compensation every year.
Our Board continues to believe that an annual advisory vote on executive compensation will allow our stockholders to provide
timely, direct input on the Companys executive compensation philosophy, policies and practices as disclosed in the proxy statement each year. The Board believes that an annual vote remains consistent with the Companys efforts to engage
in an ongoing dialogue with our stockholders on executive compensation and corporate governance matters.
The Company
recognizes that stockholders may have different views as to the best approach for the Company, and therefore we look forward to hearing from our stockholders as to their preferences on the frequency of an advisory vote on executive compensation.
This vote is advisory and not binding on the Company or our Board in any way. However, the Board and the Compensation and
Human Resources Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation. The Board may decide that it is in the best interests of our stockholders and the Company to
hold an advisory vote on executive compensation more or less frequently than the current recommendation of the Board or the frequency receiving the most votes cast by our stockholders.
The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or
three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR AN ANNUAL ADVISORY VOTE ON EXECUTIVE COMPENSATION.
7
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The executive officers of the Company and the nominees for election as directors of the Company, their ages, dates they were
first elected an executive officer or director, and their positions with the Company or on the Board are set forth below.
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Name
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Age*
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First Elected
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Position
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Terry Considine
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69
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July 1994
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Chairman of the Board and Chief Executive Officer
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Paul Beldin
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43
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September 2015
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Executive Vice President and Chief Financial Officer
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John E. Bezzant
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54
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January 2011
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Executive Vice President and Chief Investment Officer
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Lisa R. Cohn
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48
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December 2007
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Executive Vice President, General Counsel and Secretary
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Miles Cortez
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73
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August 2001
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Executive Vice President and Chief Administrative Officer
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Patti K. Fielding
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53
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February 2003
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Executive Vice President Redevelopment and Debt Financing, Treasurer
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Keith M. Kimmel
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45
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January 2011
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Executive Vice President, Property Operations
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Thomas L. Keltner
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70
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April 2007
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Director, Chairman of the Compensation and Human Resources Committee
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J. Landis Martin
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71
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July 1994
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Director, Lead Independent Director
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Robert A. Miller
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71
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April 2007
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Director, Chairman of the Redevelopment and Construction Committee
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Kathleen M. Nelson
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71
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April 2010
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Director, Chairman of the Nominating and Corporate Governance Committee
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Michael A. Stein
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67
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October 2004
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Director, Chairman of the Audit Committee
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Nina A. Tran
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48
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March 2016
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Director
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The following is a biographical summary of the current directors and executive officers of the
Company.
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Terry Considine.
Mr. Considine has been Chairman of the Board and Chief Executive Officer
since July 1994. Mr. Considine also serves on the board of directors of Intrepid Potash, Inc., a publicly held producer of potash. Mr. Considine has over 45 years of experience in the real estate and other industries. Among other real
estate ventures, in 1975 Mr. Considine founded and subsequently managed the predecessor companies that became Aimco at its initial public offering in 1994.
|
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Paul L. Beldin.
Mr. Beldin joined Aimco in 2008 as Senior Vice President and Chief
Accounting Officer. Prior to joining Aimco, from October 2007 to March 2008, Mr. Beldin served as Chief Financial Officer of APRO Residential Fund. Prior to that, from May 2005 to September 2007, Mr. Beldin served as Chief Financial
Officer of America First Apartment Investors, Inc., then a publicly traded company. From 1996 to 2005, Mr. Beldin was with the firm of Deloitte & Touche, LLP, serving in numerous roles, including Audit Senior Manager and in the
firms national office as an Audit Manager in SEC Services. Mr. Beldin is a certified public accountant.
|
8
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|
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|
|
John E. Bezzant.
Mr. Bezzant was appointed Executive Vice President and Chief Investment
Officer in August 2013. Prior to that, he served as Executive Vice President, Transactions beginning in January 2011. He joined Aimco as Senior Vice President-Development in June 2006. Mr. Bezzant serves as chairman of Aimcos investment
committee. He is also responsible for development activities and portfolio management. Prior to joining the Company, Mr. Bezzant spent over 20 years with Prologis, Inc. and Catellus Development Corporation in a variety of executive positions,
including those with responsibility for transactions, fund management, asset management, leasing, and operations.
|
|
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|
Lisa R. Cohn.
Ms. Cohn was appointed Executive Vice President, General Counsel and
Secretary in December 2007. In addition to serving as general counsel, Ms. Cohn has responsibility for insurance and risk management, human resources, compliance and asset quality and service. She is also responsible for certain of Aimcos
acquisition and disposition activities. Ms. Cohn has previously served as chairman of Aimcos investment committee. From January 2004 to December 2007, Ms. Cohn served as Senior Vice President and Assistant General Counsel. She joined
Aimco in July 2002 as Vice President and Assistant General Counsel. Prior to joining the Company, Ms. Cohn was in private practice with the law firm of Hogan & Hartson LLP with a focus on public and private mergers and acquisitions,
venture capital financing, securities and corporate governance.
|
|
|
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|
Miles Cortez.
Mr. Cortez was appointed Executive Vice President and Chief Administrative
Officer in December 2007. He is responsible for administration, government relations, communications and special projects. Mr. Cortez joined Aimco in August 2001 as Executive Vice President, General Counsel and Secretary. Prior to joining the
Company, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver, Colorado law firm, from December 1997 through September 2001. He served as president of the Colorado Bar Association from 1996 to 1997
and the Denver Bar Association from 1982 to 1983.
|
|
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|
Patti K. Fielding.
Ms. Fielding was appointed Executive Vice President Securities
and Debt in February 2003 and Treasurer in January 2005. In 2014, she assumed responsibility for redevelopment. In addition to redevelopment, she remains responsible for debt financing and treasury. Ms. Fielding has previously served as
chairman of Aimcos investment committee. From January 2000 to February 2003, Ms. Fielding served as Senior Vice President Securities and Debt. Ms. Fielding joined the Company as a Vice President in February 1997. Prior to
joining the Company, Ms. Fielding was with Hanover Capital from 1996 to1997, and from 1993 to 1995 she was Vice Chairman, Senior Vice President and
Co-Founder
of CapSource Funding Corp. She was also a
Group Vice President with Duff & Phelps Rating Company from 1987 to 1993 and a commercial real estate appraiser with American Appraisal for three years.
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Keith M. Kimmel.
Mr. Kimmel was appointed Executive Vice President of Property Operations
in January 2011. From September 2008 to January 2011, Mr. Kimmel served as the Area Vice President of property operations for the western region. Prior to that, from March 2006 to September 2008, he served as the Regional Vice President of
property operations for California. He joined Aimco in March of 2002 as a Regional Property Manager. Prior to joining Aimco, Mr. Kimmel was with Casden Properties from 1998 through 2002, and was responsible for the operation of the new
construction and
high-end
product line. Mr. Kimmel began his career in the multi-family real estate business in 1992 as a leasing consultant and
on-site
manager.
|
9
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|
Thomas L. Keltner.
Mr. Keltner was first elected as a Director of the Company in April 2007
and is currently chairman of the Compensation and Human Resources Committee. He is also a member of the Audit, Nominating and Corporate Governance, and Redevelopment and Construction Committees. Mr. Keltner served as Executive Vice President
and Chief Executive Officer Americas and Global Brands for Hilton Hotels Corporation from March 2007 through March 2008, which concluded the transition period following Hiltons acquisition by The Blackstone Group. Mr. Keltner
joined Hilton Hotels Corporation in 1999 and served in various roles. Mr. Keltner has more than 20 years of experience in the areas of hotel development, acquisition, disposition, franchising and management. Prior to joining Hilton Hotels
Corporation, from 1993 to 1999, Mr. Keltner served in several positions with Promus Hotel Corporation, including President, Brand Performance and Development. Before joining Promus Hotel Corporation, he served in various capacities with Holiday
Inn Worldwide, Holiday Inns International and Holiday Inns, Inc. In addition, Mr. Keltner was President of Saudi Marriott Company, a division of Marriott Corporation, and was a management consultant with Cresap, McCormick and Paget, Inc.
Mr. Keltner brings particular expertise to the Board in the areas of property operations, marketing, branding, development and customer service.
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J. Landis Martin.
Mr. Martin was first elected as a Director of the Company in July 1994
and serves as the Lead Independent Director. Mr. Martin is also a member of the Audit, Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees. He is a former chairman of the
Compensation and Human Resources Committee. Mr. Martin is the Founder and Managing Director of Platte River Equity LLC, a private equity firm. In November 2005, Mr. Martin retired as Chairman and CEO of Titanium Metals Corporation, a
publicly held integrated producer of titanium metals, where he served since January 1994. Mr. Martin served as President and CEO of NL Industries, Inc., a publicly held manufacturer of titanium dioxide chemicals, from 1987 to 2003.
Mr. Martin is also the
non-executive
chairman and a director of Crown Castle International Corporation, a publicly held wireless communications company. He is lead director of Halliburton Company, a
publicly held provider of products and services to the energy industry, and Intrepid Potash, Inc., a publicly held producer of potash. As a former chief executive of four NYSE-listed companies and lawyer, Mr. Martin brings particular expertise
to the Board in the areas of operations, finance and governance.
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|
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|
Robert A. Miller.
Mr. Miller was first elected as a Director of the Company in April 2007
and is currently Chairman of the Redevelopment and Construction Committee. Mr. Miller is also a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Miller served as Executive Vice
President and Chief Operating Officer, International of Marriott Vacations Worldwide Corporation (MVWC) from 2011 to 2012, when he retired from this position, and serves as President of RAMCO Advisors LLC, an investment advisory and
business consulting firm. Mr. Miller served as the President of Marriott Leisure from 1997 to November 2011, when Marriott International elected to
spin-off
its subsidiary entity, Marriott Ownership
Resorts, Inc., by forming a new parent entity, MVWC, as a new publicly held company. Prior to his role as President of Marriott Leisure, from 1984 to 1988, Mr. Miller served as Executive Vice President & General Manager of Marriott
Vacation Club International and then as its President from 1988 to 1997. In 1984, Mr. Miller and a partner sold their company, American Resorts, Inc., to Marriott. Mr. Miller
co-founded
American
Resorts, Inc. in 1978, and it was the first business model to encompass all aspects of timeshare resort development, sales, management and operations. Prior to founding American Resorts, Inc., from 1972 to 1978, Mr. Miller was Chief Financial
Officer of Fleetwing Corporation, a regional retail and wholesale petroleum company. Prior to joining Fleetwing, Mr. Miller served for five years as a staff accountant for Arthur Young & Company. Mr. Miller is past Chairman and
currently a director of the American Resort Development Association (ARDA) and currently serves as Chairman and director of the ARDA International Foundation. Mr. Miller also currently serves as a director on the board of Welk
Hospitality Group, Inc. As a successful real estate entrepreneur and corporate executive, Mr. Miller brings particular expertise to the Board in the areas of operations, management, marketing, sales, and development, as well as finance and
accounting.
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10
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Kathleen M. Nelson.
Ms. Nelson was first elected as a Director of the Company in April 2010
and is currently Chairman of the Nominating and Corporate Governance Committee and a member of the Audit, Compensation and Human Resources, and Redevelopment and Construction Committees. Ms. Nelson has an extensive background in commercial real
estate and financial services with over 40 years of experience, including 36 years at
TIAA-CREF.
She held the position of Managing Director/Group Leader and Chief Administrative Officer for TIAA-CREFs
mortgage and real estate division. Ms. Nelson developed and staffed TIAAs real estate research department. She retired from this position in December 2004 and founded and serves as president of KMN Associates LLC, a commercial real estate
investment advisory and consulting firm. In 2009, Ms. Nelson
co-founded
and serves as Managing Principal of Bay Hollow Associates, LLC, a commercial real estate consulting firm, which provides counsel to
institutional investors. Ms. Nelson served as the International Council of Shopping Centers chairman for the
2003-04
term and has been an ICSC Trustee since 1991. She is a member of various ICSC
committees. Ms. Nelson serves on the Board of Directors of CBL & Associates Properties, Inc., which is a publicly held REIT that develops and manages retail shopping properties. Ms. Nelson is also on the Board of Directors and a
member of the Risk Committee of Dime Community Bankshares, Inc., a publicly traded bank holding company, based in Brooklyn, New York. She is a member of Castagna Realty Company Advisory Board and has served as an advisor to the Rand Institute Center
for Terrorism Risk Management Policy and on the board of the Greater Jamaica Development Corporation. Ms. Nelson serves on the Advisory Board of the Beverly Willis Architectural Foundation and is a member of the Anglo American Real Property
Institute. Ms. Nelson brings to the Board particular expertise in the areas of institutional real estate investing, real estate finance and investment.
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Michael A. Stein.
Mr. Stein was first elected as a Director of the Company in October 2004
and is currently the Chairman of the Audit Committee. Mr. Stein is also a member of the Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees. From January 2001 until its
acquisition by Eli Lilly in January 2007, Mr. Stein served as Senior Vice President and Chief Financial Officer of ICOS Corporation, a biotechnology company based in Bothell, Washington. From October 1998 to September 2000, Mr. Stein was
Executive Vice President and Chief Financial Officer of Nordstrom, Inc. From 1989 to September 1998, Mr. Stein served in various capacities with Marriott International, Inc., including Executive Vice President and Chief Financial Officer from
1993 to 1998. Mr. Stein serves on the Board of Directors of InvenTrust Properties Corp., an
open-air
shopping center REIT headquartered in Oak Brook, Illinois. He also serves on the InvenTrust audit and
nominating and corporate governance committees. Mr. Stein previously served on the Boards of Directors of Nautilus, Inc., Getty Images, Inc., and Providence Health & Services. As the former audit committee chairman or audit committee
member of two NYSE-listed companies, the former chief financial officer of two NYSE-listed companies, and having served in various capacities with Arthur Andersen from 1971 to 1989, including as a partner from 1981 to 1989, Mr. Stein brings
particular expertise to the Board in the areas of corporate and real estate finance, and accounting and auditing for large and complex business operations.
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11
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Nina A. Tran.
Ms. Tran was first elected as a Director of the Company effective in March
2016 and is currently a member of the Audit, Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees. Ms. Tran has over 25 years of real estate and financial management experience,
building and leading finance and accounting teams. Ms. Tran currently serves as the Chief Financial Officer for Veritas Investments, a real estate investment manager that owns and operates
mixed-use
real
estate properties in the San Francisco Bay Area. Since January 2013 until its merger with Colony American Homes, Inc. in January 2016, Ms. Tran served as the Chief Financial Officer of Starwood Waypoint Residential Trust, a leading
publicly-traded REIT that owns and operates single-family rental homes. Prior to joining Starwood Waypoint, Ms. Tran spent 18 years at AMB Property Corporation (now Prologis, Inc.), the largest publicly-traded global industrial REIT.
Ms. Tran served as Senior Vice President and Chief Accounting Officer, and most recently as Chief Global Process Officer, where she helped lead the merger integration between AMB and Prologis. Prior to joining AMB, Ms. Tran was a Senior
Associate with PricewaterhouseCoopers, one of the big four public accounting firms. Ms. Tran is a certified public accountant (CPA) (inactive). Ms. Tran serves on the Advisory Board of the Asian Pacific Fund, as well as Mynd, a property
management company. Ms. Tran brings particular expertise to the Board in the areas of accounting, financial control and business processes.
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Summary of
Director
Qualifications
and Expertise
|
|
Mr. Considine
|
|
Mr. Keltner
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|
Mr. Martin
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|
Mr. Miller
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|
Ms. Nelson
|
|
Mr. Stein
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|
Ms.
Tran
|
Accounting and Auditing for Large Business Organizations
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
X
|
Business Operations
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Capital Markets
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
X
|
|
X
|
Corporate Governance
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
X
|
|
|
Customer Service
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
Development
|
|
X
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
Executive
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Financial Expertise and Literacy
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Information Technology
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
X
|
Investment and Finance
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Legal
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
|
Marketing and Branding
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
Property Management and Operations
|
|
X
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
X
|
Real Estate
|
|
X
|
|
X
|
|
|
|
X
|
|
X
|
|
X
|
|
X
|
Talent Development and Management
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
12
CORPORATE GOVERNANCE MATTERS
This chart provides a summary overview of Aimcos governance practices, each of which is described in more detail in the
information that follows.
|
What Aimco Does
|
Supermajority Independent Board.
The only member of management who serves on the Board is the Companys founder, chairman and
chief executive officer. Six of the seven members of the Board, or 85.7% of the Board members, are independent.
|
Independent Standing Committees.
Only independent directors serve on the standing committees, including Audit, Compensation and Human
Resources, Nominating and Corporate Governance, and Redevelopment and Construction Services.
|
Each Independent Director Serves on Each Standing Committee.
To ensure that each independent director hears all information unfiltered
and to ensure the most efficient functioning of the Board, each independent director serves on each standing committee.
|
Lead Independent Director.
The Company has a lead independent director who presides over regular independent director executive
sessions.
|
Board Refreshment.
The Nominating and Corporate Governance Committee has structured the Board such that there are directors of varying
tenures and perspectives, with new directors joining the Board every few years, including in 2016, while retaining the institutional memory of longer-tenured directors. Of the original independent directors on the Aimco Board, one remains. During
early 2016 a new director joined the Board, and later in the year a director of 16 years tenure left the Board. The Company has added a new director roughly every 2.5 to 6 years.
|
Regular Access to and Involvement with Management.
In addition to regular access to management during Board and committee meetings, the
independent directors have regular and direct access to members of management and to the Aimco business. This includes Mr. Millers involvement with site visits and analysis of redevelopment projects, Mr. Steins involvement with
accounting and finance matters, Mr. Keltners involvement with compensation and personnel matters, Ms. Nelsons involvement with governance matters, and Mr. Martins involvement with agenda setting and board
materials.
|
Engaged Board.
In addition to regular access to management, the independent directors meet at least quarterly and receive written
updates from Mr. Considine at least monthly.
|
Stockholder Engagement.
Under the direction of the Board, including the participation of Board members when requested by stockholders,
Aimco regularly engages with stockholders on governance, pay and business matters.
|
Director Stock Ownership.
By the completion of five years of service, an independent director is expected to own, at a minimum, the
lesser of 27,500 shares or shares having a value of at least $550,000.
|
Risk Assessment.
The Board conducts an annual risk assessment. Areas involving risk that are reported on by management and considered
by the Board, include: operations, liquidity, leverage, finance, financial statements, the financial reporting process, accounting, legal matters, regulatory compliance, compensation and human resources.
|
Majority Voting with a Resignation Policy.
Since inception, Aimcos directors have been elected annually, and Aimco requires its
directors to be elected by a majority of the votes cast. Directors failing to get a majority of the votes cast are expected to tender their resignation.
|
Proxy Access.
Following a 2015 stockholder vote in favor of proxy access and after extensive engagement with stockholders, the Board
amended the Companys bylaws to provide proxy access. A stockholder or a group of up to 20 stockholders, owning at least 3% of our shares for three years, may submit nominees for up to 20% of the Board, or two nominees, whichever is greater,
for inclusion in our proxy materials, subject to complying with the requirements contained in our bylaws.
|
|
What Aimco Does Not Do
|
Related Party Transactions.
The Nominating and Corporate Governance Committee maintains a related party transaction policy to ensure
that Aimcos decisions are based on considerations only in the best interests of Aimco and its stockholders. Since the beginning of 2016 and to date, there have been no related person transactions that required review under the
policy.
|
Pledging or hedging shares held to satisfy stock ownership requirements.
The Companys insider trading policy places restrictions
on the Companys directors and executive officers regarding entering into hedging transactions with respect to the Companys securities and from holding the Companys securities in margin accounts or otherwise pledging such securities
as collateral for loans. Pledging or hedging transactions are permitted only in very limited circumstances, and only with respect to shares held in excess of stock ownership requirements. No directors or executive officers have in place any hedging
transactions.
|
Interlocking Directorships.
No Aimco director or member of Aimco management serves on a Board or a compensation committee of a company
at which an Aimco director is also an employee.
|
Overboard Directors.
Aimcos corporate governance guidelines and committee charters limit the number of other boards and the
number of other audit committees on which an Aimco director may serve.
|
Retirement Age or Term Limits.
Rather than imposing arbitrary limits on service, the Company regularly (and at least annually) reviews
each directors continued role on the Board and the need for periodic board refreshment.
|
Staggered Board.
All Aimco directors have always been elected annually.
|
13
Independence of Directors
The Board has determined that to be considered independent, an outside director may not have a direct or indirect material
relationship with Aimco or its subsidiaries (directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). A material relationship is one that impairs or inhibits, or has the potential to impair or
inhibit, a directors exercise of critical and disinterested judgment on behalf of Aimco and its stockholders. In determining whether a material relationship exists, the Board considers all relevant facts and circumstances, including whether
the director or a family member is a current or former employee of the Company, family member relationships, compensation, business relationships and payments, and charitable contributions between Aimco and an entity with which a director is
affiliated (as an executive officer, partner or substantial stockholder). The Board consults with the Companys counsel to ensure that such determinations are consistent with all relevant securities and other laws and regulations regarding the
definition of independent director, including but not limited to those categorical standards set forth in Section 303A.02 of the listing standards of the New York Stock Exchange as in effect from time to time.
Consistent with these considerations, the Board affirmatively has determined that Messrs. Keltner, Martin, Miller, and Stein
and Mses. Nelson and Tran are independent directors (collectively the Independent Directors).
Meetings and
Committees
The Board held five meetings during the year ended December 31, 2016. During 2016, there were four
committees: Audit; Compensation and Human Resources; Nominating and Corporate Governance; and Redevelopment and Construction. During 2016, no director attended fewer than 75% of the aggregate total number of meetings of the Board and each committee
on which such director served.
The Corporate Governance Guidelines, as described below, provide that the Company
generally expects that the Chairman of the Board will attend all annual and special meetings of the stockholders. Other members of the Board are not required to attend such meetings. All of the members of the Board attended the Companys 2016
Annual Meeting of Stockholders, and the Company anticipates that all of the members of the Board will attend the Meeting this year.
Below is a table illustrating the current standing committee memberships and chairmen. Additional detail on each committee
follows the table.
|
|
|
|
|
|
|
|
|
Director
|
|
Audit
Committee
|
|
Compensation
and
Human
Resources
Committee
|
|
Nominating
and
Corporate
Governance
Committee
|
|
Redevelopment
and
Construction
Committee
|
Terry Considine
|
|
|
|
|
|
|
|
|
Thomas L. Keltner
|
|
X
|
|
|
|
X
|
|
X
|
J. Landis Martin*
|
|
X
|
|
X
|
|
X
|
|
X
|
Robert A. Miller
|
|
X
|
|
X
|
|
X
|
|
|
Kathleen M. Nelson
|
|
X
|
|
X
|
|
|
|
X
|
Michael A. Stein
|
|
|
|
X
|
|
X
|
|
X
|
Nina A. Tran
|
|
X
|
|
X
|
|
X
|
|
X
|
X
|
indicates a member of the committee
|
|
indicates the committee chairman
|
*
|
indicates lead independent director
|
14
Audit Committee
The Audit Committee currently consists of the Independent Directors. Mr. Stein serves as the chairman of the Audit
Committee. The Audit Committee has a written charter that is reviewed annually and was last amended in October 2016. In addition to the work of the Audit Committee, Mr. Stein has regular and recurring conversations with Mr. Beldin,
Aimcos Chief Financial Officer (CFO), Ms. Cohn, Aimcos General Counsel, Andrew Higdon, Aimcos Chief Accounting Officer, the head of Aimcos internal audit function, and representatives of Ernst &
Young LLP. The Audit Committees charter is posted on Aimcos website (www.aimco.com) and is also available in print to stockholders, upon written request to Aimcos Corporate Secretary.
Pursuant to its charter, the Audit Committee is responsible for overseeing Aimcos accounting and financial reporting
processes and audits of Aimcos financial statements. The Audit Committee is directly responsible for the appointment, compensation, and oversight of the independent auditors and the lead engagement partner and makes its appointment based on a
variety of factors, including those described in Proposal 2.
Among other matters, the Audit Committee also:
|
|
|
Reviews the scope, and overall plans for and results of the annual audit and internal audit activities;
|
|
|
|
Oversees managements negotiation with Ernst & Young LLP concerning fees;
|
|
|
|
Consults with management and Ernst & Young LLP with respect to Aimcos processes for risk
assessment and risk management. Areas involving risk that are reported on by management and considered by the Audit Committee, the other Board committees, or the Board, include: operations, liquidity, leverage, finance, financial statements, the
financial reporting process, accounting, legal matters, regulatory compliance, and human resources;
|
|
|
|
Consults with management and Ernst & Young LLP and provides oversight for Aimcos financial
reporting process, internal control over financial reporting, the Companys internal audit function and, in conjunction with the Board, the Companys enterprise risk management processes;
|
|
|
|
Reviews and approves the Companys policy about the hiring of former employees of independent auditors
providing service to the Company;
|
|
|
|
Reviews and approves the Companys policy for the
pre-approval
of
audit and permitted
non-audit
services by the independent auditor;
|
|
|
|
Receives reports pursuant to Aimcos policy for the submission and confidential treatment of
communications from team members and others concerning accounting, internal control and auditing matters;
|
|
|
|
Reviews and discusses quarterly earnings releases prior to their issuance and quarterly reports on
Form 10-Q
and annual reports on Form
10-K
prior to their filing;
|
|
|
|
Reviews the responsibilities and performance of the Companys internal audit function, approves the
hiring, promotion, demotion or termination of the lead internal auditor, and oversees the lead internal auditors periodic performance review and changes to his or her compensation;
|
|
|
|
Reviews with management the scope and effectiveness of the Companys disclosure controls and procedures,
including for purposes of evaluating the accuracy and fair presentation of the Companys financial statements in connection with the certifications made by the CEO and CFO;
|
|
|
|
Meets regularly with members of Aimco management and with Ernst & Young LLP;
|
|
|
|
Performs an annual review of the Companys independent auditor, including the lead engagement partner and
the potential successors for that role, including an assessment of the firms experience, expertise, communication, cost, value, and efficiency; and
|
|
|
|
Periodically evaluates independent audit service providers, including a 2015 request for proposal process to
assess the best firm to serve as Aimcos independent auditor.
|
15
The Audit Committee held five meetings during the year ended December 31, 2016.
As set forth in the Audit Committees charter, no director may serve as a member of the Audit Committee if such director serves on the audit committee of more than two other public companies, unless the Board determines that such simultaneous
service would not impair the ability of such director to effectively serve on the Audit Committee. No member of the Audit Committee serves on the audit committee of more than two other public companies.
Audit Committee Financial Expert
Aimcos Board has designated Mr. Stein as an audit committee financial expert. In addition, all of the
members of the audit committee qualify as audit committee financial experts. Each member of the Audit Committee is independent, as that term is defined by Section 303A of the listing standards of the New York Stock Exchange relating to audit
committees.
Compensation and Human Resources Committee
The Compensation and Human Resources Committee currently consists of the Independent Directors. Mr. Keltner serves as the
chairman of the Compensation and Human Resources Committee. Mr. Keltner meets regularly with Ms. Cohn, Aimcos General Counsel and with Jennifer Johnson, Aimcos Senior Vice President of Human Resources. Mr. Keltner also has
regular conversations with the Compensation and Human Resources Committees independent compensation consultant, Board Advisory, LLC (Board Advisory). The Compensation and Human Resources Committee has a written charter that is
reviewed annually and was last amended in October 2016. The Compensation and Human Resources Committees charter is posted on Aimcos website (www.aimco.com) and is also available in print to stockholders, upon written request to
Aimcos Corporate Secretary.
The Compensation and Human Resources Committees purposes are to:
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Provide for succession planning in all leadership positions, both in the short term and the long term, with
particular focus on CEO succession in the short term and the long term;
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Oversee the Companys management of the talent pipeline process;
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Oversee the goals and objectives of the Companys executive compensation plans;
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Annually evaluate the performance of the CEO;
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Determine the CEOs compensation;
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Review the decisions made by the CEO as to the compensation of the other executive officers;
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Approve and grant any equity compensation;
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Consider the results of stockholder advisory votes on executive compensation and take such results into
consideration in connection with the review and approval of executive officer compensation;
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Review and discuss the Compensation Discussion & Analysis with management;
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Review compensation arrangements to evaluate whether incentive and other forms of pay encourage unnecessary or
excessive risk taking;
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Review and approve the terms of any compensation clawback or similar policy or agreement between
the Company and the Companys executive officers;
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Review periodically the goals and objectives of the Companys executive compensation plans, and amend, or
recommend that the Board amend, these goals and objectives if appropriate; and
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Oversee the Companys culture, with a particular focus on collegiality, collaboration and team-building.
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16
One of the most important responsibilities of the Compensation and Human
Resources Committee is to ensure a succession plan is in place for key members of the Companys executive management team, including the CEO. Based on the work of the Compensation and Human Resources Committee, the Board has a succession plan
for the CEO position, is prepared to act in the event of a CEO vacancy in the short term, and has identified candidates for succession over the long term. The Board will select the successor taking into consideration the needs of the organization,
the business environment, and each candidates skills, experience, expertise, leadership and fit. The Company maintains a robust succession planning process, as highlighted in the following chart.
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Management Succession
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The Company maintains an executive talent pipeline for every executive officer position, including the CEO position, and every other officer
position within the organization.
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The executive talent pipeline includes interim, ready now, and under development candidates for each
position. The Company has an intentional focus on those formally under development for executive roles. Management is also focused on attracting, developing and retaining strong talent across the organization.
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The executive talent pipeline is formally updated annually and is the main topic of at least one of the Compensation and Human Resources
Committees meetings each year. The Compensation and Human Resources Committee also reviews the pipeline in connection with
year-end
performance and compensation reviews for every executive officer
position. The pipeline is discussed regularly at the management level, as well.
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Talent development and succession planning is a coordinated effort among the CEO, the Compensation and Human Resources Committee, and the
Companys Human Resources team, as well as each succession candidate.
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The Board is provided exposure to succession candidates for executive officer positions.
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Multiple internal succession candidates have been identified for the CEO position.
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Each CEO succession candidate has been with Aimco at least 11 years and has at least 15 years of industry experience and at least six years
of executive management experience.
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All executive succession candidates have formal development plans.
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All CEO succession candidates receive
one-on-one
development
from a professional executive coach.
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All CEO succession candidates receive annual
360-degree
feedback.
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Mr. Considine provides formal updates to the Compensation and Human Resources Committee annually, and informal updates at least
quarterly, on CEO succession candidates development plan progress.
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The executive coach provides formal updates to the Compensation and Human Resources Committee annually, and informal updates more frequently,
on CEO succession candidates development plan progress.
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The Company maintains a forward-looking approach to
succession. Positions are filled considering the business strategy and needs at the time of a vacancy and the candidates skills, experience, expertise, leadership and fit.
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The Company has a proven track record on succession, for example with the CFO and Chief Accounting Officer transitions in 2015.
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The Compensation and Human Resources Committee held five meetings during the year ended
December 31, 2016.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee currently consists of the Independent Directors. Ms. Nelson serves as
the chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee has a written charter that is reviewed annually and was last amended in October 2016. The Committees charter is posted on
Aimcos website (www.aimco.com) and is also available in print to stockholders, upon written request to Aimcos Corporate Secretary.
17
Among other matters, the Nominating and Corporate Governance Committee:
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Focuses on Board candidates and nominees, and specifically:
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Plans for Board refreshment and succession planning for directors;
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Identifies and recommends to the Board individuals qualified to serve on the Board;
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Identifies, recruits, and, if appropriate, interviews candidates to fill positions on the Board, including
persons suggested by stockholders or others; and
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Reviews each Board members suitability for continued service as a director when his or her term expires
and when he or she has a change in professional status and recommends whether or not the director should be
re-nominated.
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Focuses on Board composition and procedures as a whole and recommends, if necessary, measures to be taken so
that the Board reflects the appropriate balance of knowledge, experience, skills, and expertise required for the Board as a whole;
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Develops and recommends to the Board a set of corporate governance principles applicable to Aimco and its
management;
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Maintains a related party transaction policy and oversees any potential related party transactions;
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Oversees a systematic and detailed annual evaluation of the Board, committees and individual directors in an
effort to continuously improve the function of the Board; and
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Considers corporate governance issues that may arise and develops appropriate recommendations, including
providing the forum for the Board to consider important matters of public policy and vet stockholder input on a variety of issues.
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The Nominating and Corporate Governance Committee held four meetings during the year ended December 31, 2016.
Redevelopment and Construction Committee
The Redevelopment and Construction Committee currently consists of the Independent Directors. Mr. Miller serves as the
chairman of the Redevelopment and Construction Committee. Mr. Miller meets regularly with Aimcos redevelopment and construction leadership and tours projects undergoing redevelopment to assess the process of redevelopment and project
status. The Redevelopment and Construction Committees purposes are to provide oversight and guidance to the Companys management regarding redevelopment and construction projects by reviewing work process, policies and standards,
recommending modifications thereto and directing related analytical and progress reporting. The Redevelopment and Construction Committee held four meetings during the year ended December 31, 2016.
Board Composition, Board Refreshment and Director Tenure
The Nominating and Corporate Governance Committee selects nominees for director based on, among other things, breadth and depth
of experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries, understanding of Aimcos business environment and willingness to devote adequate time and effort to Board responsibilities. In considering
nominees for director, the Nominating and Corporate Governance Committee seeks to have a diverse range of experience and expertise relevant to Aimcos business. The Nominating and Corporate Governance Committee places a premium on directors who
work well in the collegial and collaborative nature of the Board (which is also consistent with the Aimco culture) and yet also requires directors who think and act independently and can clearly and effectively communicate their convictions. The
Nominating and Corporate Governance Committee assesses the appropriate balance of criteria required of directors and makes recommendations to the Board.
18
The Nominating and Corporate Governance Committee has specifically considered the
feedback of some stockholders as well as the discussions of some commentators that suggest lengthy Board tenure should be balanced with new perspectives. Specific to Aimco, the Nominating and Corporate Governance Committee has structured the Board
such that there are directors of varying tenures, with new directors and perspectives joining the Board every few years while retaining the institutional memory of longer-tenured directors. Longer-tenured directors, balanced with less-tenured
directors, enhance the Boards oversight capabilities. Aimcos directors work effectively together, coordinate closely with senior management, comprehend Aimcos challenges and opportunities, and frame Aimcos business strategy.
Aimcos Board members have established relationships that allow the Board to apply effectively its collective business savvy in guiding the Aimco enterprise.
When formulating its Board membership recommendations, the Nominating and Corporate Governance Committee also considers advice
and recommendations from others, including stockholders, as it deems appropriate. Such recommendations are evaluated based on the same criteria noted above. The Nominating and Corporate Governance Committee will consider as nominees to the Board for
election at next years annual meeting of stockholders persons who are recommended by stockholders in writing, marked to the attention of Aimcos Corporate Secretary, no later than July 1, 2017. During 2016, no Aimco stockholder
(other than the existing directors) expressed interest in serving on the Board or recommended anyone to serve on the Board.
The Board is responsible for nominating members for election to the Board and for filling vacancies on the Board that may
occur between annual meetings of stockholders. Based on recommendations from the Nominating and Corporate Governance Committee, the Board determined to nominate Messrs. Considine, Keltner, Martin, Miller, and Stein and Mses. Nelson and Tran for
re-election.
Board Leadership Structure
At this time, Aimcos Board believes that combining the Chairman and CEO role is most effective for the Companys
leadership and governance. Having one person as Chairman and CEO provides unified leadership and direction to the Company and strengthens the ability of the CEO to develop and implement strategic initiatives and respond efficiently in various
situations. The Board also believes the combination of Chairman and CEO positions is appropriate in light of the independent oversight provided by the Board.
Aimco has a Lead Independent Director, currently Mr. Martin, who in this capacity:
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Presides over executive sessions of independent directors, which are held regularly and not less than four
times per year;
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Serves as a liaison between the chairman and independent directors;
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Helps frame and approves meeting agendas and schedules;
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Reviews information sent to directors;
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Regularly calls meetings of independent directors; and
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Is available for direct communication with stockholders.
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In addition to the Lead Independent Director, the Board has a majority of independent directors. Six out of the seven director
nominees are independent. All four standing committees (Audit; Compensation and Human Resources; Nominating and Corporate Governance; and Redevelopment and Construction) are composed solely of independent directors.
Separate Sessions of
Non-Management
Directors and Lead Independent Director
Aimcos Corporate Governance Guidelines (described below) provide that the
non-management
directors shall meet in executive session without management on a regularly scheduled basis, but no less than four times
19
per year. The
non-management
directors, which group currently is made up of the six Independent Directors, met in executive session without management four
times during the year ended December 31, 2016. Mr. Martin was the Lead Independent Director who presided at such executive sessions in 2016, and he has been designated as the Lead Independent Director who will preside at such executive
sessions in 2017.
The following table sets forth the number of meetings held by the Board and each committee during the
year ended December 31, 2016.
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Board
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Non-
Management
Directors
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Audit
Committee
|
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|
Compensation
and Human
Resources
Committee
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|
Nominating
and
Corporate
Governance
Committee
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Redevelopment
and
Construction
Committee
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Number of Meetings
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5
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4
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5
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5
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4
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4
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Majority Voting for the Election of Directors
In an uncontested election at the meeting of stockholders, any nominee to serve as a director of the Company will be elected if
the director receives a majority of votes cast, which means that the number of shares voted for a director exceeds the number of shares voted against that director. With respect to a contested election, a plurality of all the
votes cast at the meeting of stockholders will be sufficient to elect a director. If a nominee who currently is serving as a director receives a greater number of against votes for his or her election than votes for such
election (a Majority Against Vote) in an uncontested election, Maryland law provides that the director would continue to serve on the Board as a holdover director. However, under Aimcos Bylaws, any nominee for election
as a director in an uncontested election who receives a Majority Against Vote is obligated to tender his or her resignation to the Nominating and Corporate Governance Committee for consideration. The Nominating and Corporate Governance Committee
will consider any resignation and recommend to the Board whether to accept it. The Board is required to take action with respect to the Nominating and Corporate Governance Committees recommendation. Additional details are set out in Article
II, Section 2.03 (Election and Tenure of Directors; Resignations) of Aimcos Bylaws.
Proxy Access
At our 2015 annual meeting, a proxy access stockholder proposal received the support of a majority of the votes cast. That
proposal requested that the Board to adopt a bylaw that would require the Company to include in its proxy materials nominees for director proposed by a stockholder or group that owns at least 3% of our outstanding shares for at least three years.
Following that meeting, through the summer and fall of 2015 and into 2016, we engaged in extensive stockholder outreach and discussed proxy access with stockholders representing over 66% of shares of Common Stock outstanding as of September 30,
2015, including all 10 of Aimcos largest stockholders as of that date.
Although our stockholders expressed varying
views on proxy access generally, and on the specific terms of a proxy access bylaw, many stockholders indicated that they viewed proxy access as an important stockholder right. At the same time, many stockholders expressed concern that stockholders
with a small economic interest could abuse proxy access and impose unnecessary costs on the Company. In particular, stockholders expressed support for a reasonable limit on the number of stockholders who could come together to form a nominating
group, with a consensus around a 20 stockholder limit, so long as certain related funds were counted as one stockholder for this purpose. In addition, many stockholders expressed support for the principle that a proxy access bylaw provide for a
minimum of two candidates, with that principle being more meaningful to stockholders than the percentage of the board used to calculate the number of permitted proxy access candidates.
Stockholders expressed general flexibility concerning most other proxy access terms, including counting directors nominated as
access candidates who are elected and
re-nominated
by the Board when determining the limit on access candidates for a limited number of years, and eliminating proxy access at the same annual
20
meeting for which a nomination notice outside of proxy access has been submitted by another stockholder. Also, stockholders indicated that post-meeting holding requirements would be considered
overly restrictive, but that a statement regarding post-meeting intentions that did not require continued ownership was acceptable.
The feedback received from stockholders was reported to the Nominating and Corporate Governance Committee and to the Board.
Following a review of that feedback, corporate governance best practices and trends and the Companys particular facts and circumstances, the Board amended the Companys bylaws to provide a proxy access right to stockholders. As a result,
a stockholder or a group of up to 20 stockholders, owning at least 3% of our shares for three years, may submit nominees for up to 20% of the Board, or two nominees, whichever is greater, for inclusion in our proxy materials, subject to complying
with the requirements contained in our bylaws.
Director Compensation
In formulating its recommendation for director compensation, the Nominating and Corporate Governance Committee reviews director
compensation for independent directors of companies in the real estate industry and companies of comparable market capitalization, revenue and assets and considers compensation trends for other NYSE-listed companies and S&P 500 companies. The
Nominating and Corporate Governance Committee considers the relatively small size of the Aimco board as compared to other boards, the participation of each Independent Director on each committee, and the resulting workload on the directors. In
addition, the Nominating and Corporate Governance Committee considers the overall cost of the Board to the Company and the per director cost.
2016
For 2016, compensation for each of the Independent Directors included a fixed annual cash retainer of $25,000 and an award of
4,600 shares of Common Stock, in each case, prorated for any Independent Director who joined the Board during the year. No meeting fees were paid to Independent Directors for attending meetings of the Board and the committees on which they serve.
For the year ended December 31, 2016, Aimco paid the directors serving on the Board during that year as follows:
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Name
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|
Fees Earned
or Paid in
Cash
($) (1)
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Stock
Awards
($) (2)
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|
Option
Awards
($)
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|
Non-Equity
Incentive Plan
Compensation
($)
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Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
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All Other
Compensation
($)
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Total
($)
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Terry Considine (3)
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Thomas L. Keltner (4)
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25,000
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178,158
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203,158
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J. Landis Martin
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25,000
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178,158
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203,158
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Robert A. Miller
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25,000
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178,158
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203,158
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Kathleen M. Nelson (5)
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25,000
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178,158
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203,158
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Michael A. Stein
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25,000
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178,158
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203,158
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Nina A. Tran
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18,750
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140,070
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158,820
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(1)
|
For 2016, each Independent Director received a cash retainer of $25,000, except that Ms. Tran, who joined the Board on March 1, 2016, received a prorated cash retainer of $18,750.
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(2)
|
For 2016, Messrs. Keltner, Martin, Miller and Stein and Ms. Nelson were each awarded 4,600 shares of Common Stock, which shares were awarded on January 26, 2016, based on the closing price of Aimcos
Common Stock on that date, of $38.73. Ms. Tran, who joined the Board on March 1, 2016, was awarded a prorated amount of 3,450 shares of Common Stock on April 26, 2016, based on the closing price of Aimcos Common Stock on that
date, of $40.60. The dollar value shown above represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and is
calculated based on the closing price of Aimcos Common Stock on the date of grant.
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(3)
|
Mr. Considine, who is not an Independent Director, does not receive any additional compensation for serving on the Board.
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(4)
|
Mr. Keltner holds an option to acquire 4,429 shares, which is fully vested and exercisable.
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(5)
|
Ms. Nelson holds an option to acquire 3,000 shares, which is fully vested and exercisable.
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21
2017
Compensation for each of the Independent Directors in 2017 is an annual fee of 3,000 shares of Common Stock, which shares were
awarded on January 31, 2017. The closing price of Aimcos Common Stock on the New York Stock Exchange on January 31, 2017, was $44.07. The Independent Directors also received an annual cash retainer of $90,000. Directors will not receive
meeting fees in 2017.
Code of Ethics
The Board has adopted a code of ethics entitled Code of Business Conduct and Ethics that applies to the members of
the Board, all of Aimcos executive officers and all team members of Aimco or its subsidiaries, including Aimcos principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct and
Ethics is posted on Aimcos website (www.aimco. com) and is also available in print to stockholders, upon written request to Aimcos Corporate Secretary. If, in the future, Aimco amends, modifies or waives a provision in the Code of
Business Conduct and Ethics, rather than filing a Current Report on Form
8-K,
Aimco intends to satisfy any applicable disclosure requirement under Item 5.05 of Form
8-K
by posting such information on Aimcos website (www.aimco.com), as necessary.
Corporate Governance Guidelines and
Director Stock Ownership
The Board has adopted and approved Corporate Governance Guidelines. These guidelines are
available on Aimcos website (www.aimco.com) and are also available in print to stockholders, upon written request to Aimcos Corporate Secretary. In general, the Corporate Governance Guidelines address director qualification standards,
director responsibilities, the lead independent director, director access to management and independent advisors, director compensation, director orientation and continuing education, management succession, stock ownership guidelines and retention
requirements, and an annual performance evaluation of the Board.
With respect to stock ownership guidelines for the
Independent Directors, the Corporate Governance Guidelines provide that by the completion of five years of service, an Independent Director is expected to own, at a minimum, the lesser of 27,500 shares or shares having a value of at least $550,000.
Each of the Independent Directors has holdings well in excess of this amount, with the exception of Ms. Tran who joined the Board on March 1, 2016.
Communicating with the Board of Directors
Any interested parties desiring to communicate with Aimcos Board, the Lead Independent Director, any of the other
Independent Directors, Aimcos Chairman of the Board, any committee chairman, or any committee member may directly contact such persons by directing such communications in care of Aimcos Corporate Secretary. All communications received as
set forth in the preceding sentence will be opened by the office of Aimcos General Counsel for the sole purpose of determining whether the contents represent a message to Aimcos directors. Any contents that are not in the nature of
advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the General Counsels office will
make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope or
e-mail
is addressed.
To contact Aimcos Corporate Secretary, correspondence should be addressed as follows:
Corporate Secretary
Office of the General Counsel
Apartment Investment and Management Company
4582 South Ulster Street, Suite 1100
Denver, Colorado 80237
22
AUDIT COMMITTEE REPORT TO STOCKHOLDERS
The Audit Committee oversees Aimcos financial reporting process on behalf of the Board. Management has the primary
responsibility for the financial statements and the reporting process, including internal control over financial reporting and disclosure controls and procedures. A written charter approved by the Audit Committee and ratified by the Board governs
the Audit Committee. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the Annual Report on Form
10-K
with management, including a discussion of the
quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an
opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, its judgment as to the quality, not just the acceptability, of the Companys accounting principles. The Audit
Committee also has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301,
Communications with Audit Committees
, issued by the Public Company Accounting
Oversight Board. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and letter required by Public Company Accounting Oversight Board Ethics and Independence Rule 3526, has
discussed with the independent registered public accounting firm its independence from the Company and its management, and has considered whether the independent registered public accounting firms provision of
non-audit
services to the Company is compatible with maintaining such firms independence.
The Audit Committee discussed with the Companys independent registered public accounting firm the overall scope and
plans for its audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of its examination, its evaluation of the Companys internal control over
financial reporting, and the overall quality of the Companys financial reporting. The Audit Committee held five meetings during 2016.
None of the Audit Committee members have a relationship with the Company that might interfere with the exercise of the
members independence from the Company and its management.
In reliance on the reviews and discussions referred to
above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements and managements report on internal control over financial reporting be included in the Annual Report on Form
10-K
for the year ended December 31, 2016, for filing with the SEC. The Audit Committee has also determined that provision by Ernst & Young LLP of other
non-audit
services is compatible with maintaining Ernst & Young LLPs independence. The Audit Committee and the Board have also recommended, subject to stockholder ratification, the selection of Ernst & Young LLP as the Companys
independent registered public accounting firm for the year ending December 31, 2017.
Date: February 22, 2017
MICHAEL A. STEIN (CHAIRMAN)
THOMAS L. KELTNER
J. LANDIS MARTIN
ROBERT A. MILLER
KATHLEEN M. NELSON
NINA A. TRAN
The above report will not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates the same by reference.
23
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Principal Accountant Fees
Below is information on the fees billed for services rendered by Ernst & Young LLP during the years ended December 31, 2016 and
2015.
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Year Ended December 31,
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2016
|
|
2015
|
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|
Aggregate fees billed for services
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|
$2.32 million
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|
$2.49 million
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Audit Fees:
Including fees associated with the audit of Aimcos annual financial statements, internal controls, interim reviews of financial
statements, registration statements, comfort letters and consents
|
|
$1.10 million
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|
$1.13 million
|
Audit-Related
Fees:
Including fees related to benefit plan audits
|
|
$0.03 million
|
|
$0.03 million
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|
Tax Fees:
Including fees for tax compliance services for the Company and subsidiaries or affiliates and for tax planning services ($0.15 million and
$0.36 million for 2016 and 2015, respectively)
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|
$1.09 million
|
|
$1.33 million
|
|
|
|
All other fees
|
|
$0.10 million
|
|
$0
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Audit Committee Pre-Approval Policies
The Audit Committee has adopted the Audit and
Non-Audit
Services
Pre-Approval
Policy (the
Pre-approval
Policy). A summary of the
Pre-approval
Policy is as follows:
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|
The
Pre-approval
Policy describes the Audit, Audit-related, Tax and
Other Permitted services that have the general
pre-approval
of the Audit Committee.
|
|
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|
Pre-approvals
are typically subject to a dollar limit of $50,000.
|
|
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|
The term of any general
pre-approval
is generally 12 months from the
date of
pre-approval.
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|
At least annually, the Audit Committee reviews and
pre-approves
the
services that may be provided by the independent registered public accounting firm without obtaining specific
pre-approval
from the Audit Committee.
|
|
|
|
As set forth in the
Pre-approval
Policy, unless a type of service has
received general
pre-approval
and is anticipated to be within the dollar limit associated with the general
pre-approval,
it will require specific
pre-approval
by the Audit Committee if it is to be provided by the independent registered public accounting firm.
|
|
|
|
For both types of
pre-approval,
the Audit Committee will consider
whether such services are consistent with the rules on independent registered public accounting firm independence.
|
|
|
|
The Audit Committee will also consider whether the independent registered public accounting firm is best
positioned to provide the most effective and efficient service, for reasons such as its familiarity with Aimcos business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance Aimcos
ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor will necessarily be determinative.
|
All of the services described in the Principal Accountant Fee section above were approved pursuant to the annual engagement
letter or in accordance with the
Pre-approval
Policy; none were approved pursuant to
Rule 2-01(c)(7)(i)(C)
of SEC Regulation
S-X.
24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information available to the Company, as of February 24, 2017, with
respect to Aimcos equity securities beneficially owned by (i) each director, the chief executive officer, the chief financial officer and the three other most highly compensated executive officers who were serving as executive officers at
the end of the last completed fiscal year, and (ii) all directors and executive officers as a group. The table also sets forth certain information available to the Company, as of February 24, 2017, with respect to shares of Common Stock
held by each person known to the Company to be the beneficial owner of more than 5% of such shares. This table reflects options that are exercisable within 60 days. Unless otherwise indicated, each person has sole voting and investment power with
respect to the securities beneficially owned by that person. The business address of each of the following directors and executive officers is 4582 South Ulster Street, Suite 1100, Denver, Colorado 80237, unless otherwise specified. None of the
securities reflected in this table are the subject of any hedging transaction.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Number of
shares of
Common
Stock (1)
|
|
|
Percentage
of Common
Stock
Outstanding (2)
|
|
|
Number of
Partnership
Units (3)
|
|
|
Percentage
Ownership of the
Company (4)
|
|
Directors, Director Nominees & Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry Considine
|
|
|
949,648
|
(5)
|
|
|
0.60
|
%
|
|
|
2,530,539
|
(6)
|
|
|
2.11
|
%
|
Paul L. Beldin
|
|
|
80,895
|
(7)
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Lisa R. Cohn
|
|
|
150,740
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
John E. Bezzant
|
|
|
107,101
|
(8)
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Keith Kimmel
|
|
|
100,411
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Thomas L. Keltner
|
|
|
43,767
|
(9)
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
J. Landis Martin
|
|
|
53,313
|
(10)
|
|
|
*
|
|
|
|
34,646
|
(11)
|
|
|
*
|
|
Robert A. Miller
|
|
|
74,703
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Kathleen M. Nelson
|
|
|
44,850
|
(12)
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Michael A. Stein
|
|
|
38,000
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
Nina A. Tran
|
|
|
6,450
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
All directors and executive officers as a group (13 persons)
|
|
|
1,883,521
|
(13)
|
|
|
1.20
|
%
|
|
|
2,569,954
|
(14)
|
|
|
2.70
|
%
|
5% or Greater Holders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Vanguard Group, Inc.
|
|
|
26,649,021
|
(15)
|
|
|
16.97
|
%
|
|
|
|
|
|
|
16.19
|
%
|
100 Vanguard Blvd.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malvern, Pennsylvania 19355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cohen & Steers, Inc.
|
|
|
18,624,645
|
(16)
|
|
|
11.86
|
%
|
|
|
|
|
|
|
11.31
|
%
|
280 Park Avenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York, New York 10017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
13,627,320
|
(17)
|
|
|
8.68
|
%
|
|
|
|
|
|
|
8.28
|
%
|
245 Summer Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boston, Massachusetts 02210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackrock, Inc.
|
|
|
12,061,581
|
(18)
|
|
|
7.68
|
%
|
|
|
|
|
|
|
7.33
|
%
|
40 East 52nd Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York, New York 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State Street Corporation
|
|
|
8,186,829
|
(19)
|
|
|
5.21
|
%
|
|
|
|
|
|
|
4.97
|
%
|
State Street Financial Center
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One Lincoln Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boston, Massachusetts 02111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes shares of Common Stock issuable upon redemption of common OP Units or Class I High Performance
Units (HPUs).
|
25
(2)
|
Represents the number of shares of Common Stock beneficially owned by each person divided by the total number
of shares of Common Stock outstanding. Any shares of Common Stock that may be acquired by a person within 60 days upon the exercise of options, warrants, rights or conversion privileges or pursuant to the power to revoke, or the automatic
termination of, a trust, discretionary account or similar arrangement are deemed to be beneficially owned by that person and are deemed outstanding for the purpose of computing the percentage of outstanding shares of Common Stock owned by that
person, but not any other person.
|
(3)
|
Through wholly-owned subsidiaries, Aimco acts as general partner of AIMCO Properties, L.P., the operating
partnership in Aimcos structure. As of February 24, 2017, Aimco held approximately 95.4% of the common partnership interests in AIMCO Properties, L.P. Interests in AIMCO Properties, L.P. that are held by limited partners other than Aimco
are referred to as OP Units. Generally, after a holding period of 12 months, common OP Units may be tendered for redemption and, upon tender, may be acquired by Aimco for shares of Common Stock at an exchange ratio of one share of Common
Stock for each common OP Unit (subject to adjustment). If Aimco acquired all common OP Units and HPUs for Common Stock (without regard to the ownership limit set forth in Aimcos Charter), these shares of Common Stock would constitute
approximately 4.6% of the then outstanding shares of Common Stock. OP Units are subject to certain restrictions on transfer.
|
(4)
|
Represents the number of shares of Common Stock beneficially owned, divided by the total number of shares of
Common Stock outstanding, assuming, in both cases, that all 5,350,642 OP Units and 2,281,552 HPUs outstanding as of February 24, 2017, are redeemed in exchange for shares of Common Stock (notwithstanding any holding period requirements,
Aimcos ownership limit and, in the case of HPUs, that the units are not redeemed). See note (3) above. Excludes partnership preferred units issued by AIMCO Properties, L.P. and Aimco preferred securities.
|
(5)
|
Includes 460,570 shares held directly by Mr. Considine, and the following shares of which
Mr. Considine disclaims beneficial ownership: 33,695 shares held by Mr. Considines spouse; and 133,689 shares held by a
non-profit
foundation in which Mr. Considine has shared voting and
investment power. Also includes 321,694 shares subject to options that are exercisable within 60 days.
|
(6)
|
Includes 941,167 common OP Units and 1,589,372 HPUs that represent 17.59% of common OP Units outstanding and
69.66% of HPUs outstanding, respectively. The 941,167 common OP Units include 601,434 common OP Units held directly by Mr. Considine, 179,735 common OP Units held by an entity in which Mr. Considine has sole voting and investment power,
2,300 common OP Units held by Titahotwo Limited Partnership RLLLP (Titahotwo), a registered limited liability limited partnership for which Mr. Considine serves as the general partner and holds a 0.5% ownership interest, and 157,698
common OP Units held by Mr. Considines spouse, for which Mr. Considine disclaims beneficial ownership. All HPUs are held by Titahotwo. Mr. Considine has pledged 280,706 common OP Units as collateral for a loan. Even without
consideration of these common OP Units, Mr. Considines equity holdings are in excess of 38 times the applicable ownership requirement as described in more detail in the Compensation Discussion & Analysis.
|
(7)
|
Includes 3,644 shares subject to options that are exercisable within 60 days.
|
(8)
|
Includes 4,180 shares subject to options that are exercisable within 60 days.
|
(9)
|
Includes 4,429 shares subject to options that are exercisable within 60 days.
|
(10)
|
Includes 23,923 shares held directly by Mr. Martin and 29,390 shares held by Martin Enterprises LLC, of
which Mr. Martin is the sole manager. Members of Martin Enterprises LLC include Mr. Martin and trusts, of which Mr. Martin is the sole trustee, formed solely for the benefit of his children.
|
(11)
|
Includes 280.5 common OP Units, which represent less than 1% of the class outstanding. Also includes 34,365
HPUs held by Martin Enterprises LLC. These HPUs represent 1.5% of the class outstanding.
|
(12)
|
Includes 3,000 shares subject to options that are exercisable within 60 days.
|
(13)
|
Includes 336,947 shares subject to options that are exercisable within 60 days.
|
(14)
|
Includes 941,448 common OP Units and 1,628,506 HPUs, which represent 17.60% of common OP Units outstanding and
71.38% of HPUs outstanding, respectively.
|
(15)
|
Beneficial ownership information is based on information contained in an Amendment No. 14 to Schedule 13G
filed with the SEC on February 13, 2017, by The Vanguard Group, Inc. According to the schedule, The
|
26
|
Vanguard Group, Inc. has sole voting power with respect to 407,677 shares and sole dispositive power with respect to 26,263,290 of the shares and shared dispositive power with respect to 385,731
of the shares.
|
(16)
|
Beneficial ownership information is based on information contained in an Amendment No. 14 to Schedule 13G
filed with the SEC on February 14, 2017, by Cohen & Steers, Inc. on behalf of itself and affiliated entities. According to the schedule, included in the securities listed above as beneficially owned by Cohen & Steers, Inc. are
12,928,184 shares and 12,886,237 shares over which Cohen & Steers, Inc. and Cohen & Steers Capital Management, Inc. (which is held 100% by Cohen & Steers, Inc.), respectively, have sole voting power and 18,624,645 shares
and 18,486,003 shares, respectively, over which such entities have sole dispositive power. Also included in the securities listed above are 41,947 shares over which Cohen & Steers UK Limited has sole voting power and 138,642 shares over
which Cohen & Steers UK Limited has sole dispositive power.
|
(17)
|
Beneficial ownership information is based on information contained in a Schedule 13G filed with the SEC on
February 14, 2017, by FMR LLC.
|
(18)
|
Beneficial ownership information is based on information contained in an Amendment No. 7 to Schedule 13G
filed with the SEC on January 19, 2017, by Blackrock, Inc. According to the schedule, Blackrock, Inc. has sole voting power with respect to 11,129,289 of the shares.
|
(19)
|
Beneficial ownership information is based on information contained in Schedule 13G filed with the SEC on
February 9, 2017, by State Street Corporation.
|
27
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION & ANALYSIS (CD&A)
This CD&A addresses the following:
|
|
|
Stockholder Engagement Regarding Executive Compensation;
|
|
|
|
Overview of Aimcos
Pay-for-Performance
Philosophy and 2016
Performance Results;
|
|
|
|
Summary of Executive Compensation Program and Governance Practices;
|
|
|
|
What We Pay and Why: Components of Executive Compensation;
|
|
|
|
Total Compensation for 2016;
|
|
|
|
Post-Employment Compensation and Severance Arrangements;
|
|
|
|
Other Benefits; Perquisite Philosophy;
|
|
|
|
Stock Ownership Guidelines and Required Holding Periods After Vesting;
|
|
|
|
Role of Outside Consultants;
|
|
|
|
Base Salary, Incentive Compensation, and Equity Grant Practices;
|
|
|
|
2017 Compensation Targets.
|
Stockholder Engagement Regarding Executive Compensation
At Aimcos 2016 Annual Meeting of Stockholders, approximately 98% of the votes cast in the advisory vote on executive
compensation that were present and entitled to vote on the matter were in favor of the compensation of Aimcos NEOs (also commonly referred to as Say on Pay) as disclosed in Aimcos 2016 proxy statement. The Compensation and
Human Resources Committee (the Committee) and management were pleased with these results, and remain committed to extensive engagement with stockholders as part of their ongoing efforts to formulate and implement an executive
compensation program designed to align the long-term interests of our executive officers with our stockholders.
In 2016
and early 2017, we engaged with stockholders representing nearly
two-thirds
of shares of Common Stock outstanding as of September 30, 2016, as part of our annual process of soliciting feedback on Aimcos
executive compensation program. The following chart summarizes the feedback we received, and what actions we have taken in response.
|
|
|
|
|
What Aimco Heard
|
|
|
|
How Aimco
Responded
|
Overall Program.
The Company has continued to receive broad support from stockholders on the structure of its executive compensation program, the programs
alignment of pay and performance, and the quantum of compensation delivered under the program.
|
|
|
|
The Company is making no changes
to the structure of the program, and is continuing its long-standing practice of setting target total compensation near the median of target total compensation for the Companys peers.
|
Disclosure.
Stockholders
appreciate the disclosure, and encouraged Aimco to continue to disclose the connection between metrics and incentives. One stockholder encouraged Aimco to continue to add graphics, and another encouraged Aimco to shorten the CD&A.
|
|
|
|
The Company has maintained
detailed disclosure of the connection between metrics and incentives. The Company has replaced written sections with more graphics.
|
STI Plan.
Stockholders are broadly pleased with the STI plan goals and disclosure of results. One stockholder encouraged the Company to further reduce the
number of goals, and to add a separate STI performance metric for the CEO on management development.
|
|
|
|
Given that the Companys STI
goals, which are directly aligned with the Companys five areas of strategic focus, have received broad support from stockholders, the Company has retained the same number of STI goals. For 2017 STI, the Committee has added a separate
performance metric for the CEO. Disclosure on this separate metric will appear in the Companys proxy statement for the 2018 annual meeting of stockholders.
|
28
|
|
|
|
|
What Aimco Heard
|
|
|
|
How Aimco
Responded
|
LTI Plan.
The Companys three-year, forward looking plan measured upon relative TSR continues to receive broad support from stockholders. Most
stockholders continue to be of the opinion that relative TSR should be the only LTI metric. Some stockholders have stated they would be open to another LTI metric but that it is not necessary. One stockholder encouraged the Company to add another
LTI metric because of managements general lack of control over TSR. Another stockholder expressed that changing from a backward looking LTI plan to a forward looking LTI plan has added complexity and reduced transparency, and would like to see
a shift back to backward looking LTI plans.
|
|
|
|
At this time, the Company is not
making any changes to its LTI plan, which continues to receive broad support from stockholders. However, the Company will continue its ongoing dialogue with stockholders on LTI plan structure and metrics.
|
Overview of Aimcos
Pay-for-Performance
Philosophy and 2016 Performance
Results
Aimco is a
pay-for-performance
organization. Aimco starts by setting
target total compensation near the median of target total compensation for Aimcos peers as identified on page 37, both as a measure of fairness and also to provide an economic incentive to remain with Aimco. Actual compensation is determined
based on Aimcos results. Every officers annual cash incentive compensation, or STI, is based in part on Aimcos performance against its annual corporate goals. The more senior level the officer, the greater the percentage of his or
her STI that is based on Aimcos performance against its corporate goals. Aimcos LTI compensation follows a similar tiered structure. Every officers LTI is based in part on relative returns, with executive officers having a greater
share of their LTI based on relative returns. In the case of Mr. Considine, his entire LTI award is at risk based on Aimcos relative returns. LTI is measured and vests over time, typically a period of four years, so that
officers bear longer term exposure to decisions made. Aimco also requires substantial equity holdings by executive officers in order to increase their alignment with stockholders.
Aimco had 17.3% TSR in 2016
. Aimco outperformed the REIT Index, the NAREIT Apartment Index, and the S&P 500 Index,
in each case, over the
one-year,
three-year, and five-year periods ended December 31, 2016, as shown in the following graph in which TSR is shown as an annualized compounded annual growth rate.
29
The following graph compares cumulative total returns for Aimcos Common
Stock, the REIT Index, the NAREIT Apartment Index and the S&P 500 Index. The graph assumes the investment of $100 in Aimcos Common Stock and in each index on December 31, 2013, and that all dividends paid have been reinvested.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the fiscal years ended December 31,
|
|
Index
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
Aimco (1)
|
|
$
|
100.00
|
|
|
$
|
148.04
|
|
|
$
|
164.54
|
|
|
$
|
192.98
|
|
MSCI US REIT Index (1)
|
|
|
100.00
|
|
|
|
130.38
|
|
|
|
133.67
|
|
|
|
145.16
|
|
NAREIT Apartment Index (2)
|
|
|
100.00
|
|
|
|
139.02
|
|
|
|
162.60
|
|
|
|
167.24
|
|
S&P 500 Total Return Index (1)
|
|
|
100.00
|
|
|
|
113.69
|
|
|
|
115.26
|
|
|
|
129.05
|
|
|
(1)
|
Source: SNL Financial LC, Charlottesville, VA
©
2017
|
|
(2)
|
Source: National Association of Real Estate Investment Trusts
|
30
Highlights for 2016 included the following:
Aimco made good progress in 2016 on its five areas of strategic focus.
31
Specifically, key results for the period ending December 31, 2016, within
Aimcos areas of strategic focus are set forth below.
STRATEGIC OBJECTIVE
: Produce above-average operating results through focus on customer satisfaction,
resident retention and superior cost control.
RESULTS:
Aimco NOI
6.2% over the past year, and 17% over the past three years
Lease-Up
Communities
- During 2016, Aimco completed the
lease-up
of Vivo, located in Cambridge, MA, ahead of plan and significantly outperformed our expectations for the
lease-up
of One Canal, located in Boston, MA, and Indigo
located in Redwood City, CA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Apt. Homes
Occupied
Year-End
2016
|
|
|
|
Stabilized
Occupancy
|
|
|
|
Stabilized NOI
|
|
|
|
|
Total Apt.
Homes
|
|
|
|
2016
Outlook
|
|
|
|
2016
Actual
|
|
|
|
2016
Outlook
|
|
|
|
2017
Outlook
|
|
|
|
2016
Outlook
|
|
|
|
2017
Outlook
|
ONE CANAL,
BOSTON
|
|
|
|
310
|
|
|
|
65%
|
|
|
|
86%
|
|
|
|
3Q 2017
|
|
|
|
1Q 2017
|
|
|
|
4Q 2018
|
|
|
|
2Q 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDIGO,
BAY AREA
|
|
|
|
463
|
|
|
|
40%
|
|
|
|
77%
|
|
|
|
3Q 2017
|
|
|
|
2Q 2017
|
|
|
|
4Q 2018
|
|
|
|
3Q 2018
|
With the accelerated leasing pace and rental rate achievement consistent with underwriting, the projected
contribution to 2017 NOI from these
lease-up
communities is $0.13 per share, $0.01 per share greater than we had forecasted one year ago.
32
|
|
|
|
|
REDEVELOPMENT & DEVELOPMENT
|
STRATEGIC OBJECTIVES:
Add value by repositioning communities in special locations with expected higher
rates of revenue growth and some protection against competitive new supply. Invest selectively through development in desirable locations where accretive redevelopment or acquisition opportunities are not readily available.
RESULTS:
During 2016, Aimco achieved NOI stabilization at three redeveloped communities in coastal California: Lincoln Place in Venice;
Ocean House on Prospect in La Jolla; and Preserve at Marin in Corte Madera. In total, these redevelopments are estimated to have added value of $170M, an amount equal to 30% of Aimcos investment.
|
|
|
|
|
|
|
|
|
NOI Stabilized Properties
|
|
PROJECT SCOPE
|
|
Redevelopment Projects
|
|
|
3
|
|
|
Net Investment
|
|
$
|
582M
|
|
|
Apartment homes redeveloped
|
|
|
974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALUE CREATION
|
|
Redevelopment value creation
($M)
(1)
|
|
$
|
170M
|
|
|
As a % of investment
|
|
|
30%
|
|
(1) Based on stabilized Gross Asset Value as computed by Aimco as of the
quarter of NOI stabilization.
|
|
STRATEGIC OBJECTIVES:
Own and operate a portfolio of properties diversified by both geography and price
point to limit exposure to competitive new supply. Add value by making accretive paired trades selling lower-rated properties to fund investment in higher-rated properties, increasing returns as measured by free cash flow internal rate of return and
improving portfolio quality as measured by average revenue per apartment home.
RESULTS:
Average revenue per apartment home was up
8% in 2016, to $1,978. On average, the communities sold in 2016 had a free cash flow cap rate of 4.9%. Had we held these communities for ten years, we would have expected them to generate a free cash flow internal rate of return (FCF
IRR) of approximately 6.6%. Proceeds from these sales were reinvested in redevelopment and development projects, acquisitions, and property upgrades at a weighted average FCF IRR approximately 300 basis points higher than the communities sold
to fund them.
During the last three years, Aimco significantly upgraded the quality of its portfolio, while maintaining its geographic
and price point diversification.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-End
2013
|
|
|
Year-End
2016
|
|
|
% Change
|
FOOTPRINT
|
|
Communities
|
|
|
162
|
|
|
|
134
|
|
|
- 17%
|
|
Apartment Homes
|
|
|
50,486
|
|
|
|
37,922
|
|
|
- 25%
|
|
% NOI in Target Markets
|
|
|
88%
|
|
|
|
88%
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUALITY
|
|
Revenue per Apartment Home
|
|
$
|
1,469
|
|
|
$
|
1,978
|
|
|
+ 35%
|
|
Percentage A
|
|
|
38%
|
|
|
|
52%
|
|
|
+ 37%
|
|
Percentage B
|
|
|
37%
|
|
|
|
34%
|
|
|
- 8%
|
|
Percentage C+
|
|
|
18%
|
|
|
|
14%
|
|
|
- 22%
|
|
Percentage C
|
|
|
7%
|
|
|
|
0%
|
|
|
-100%
|
33
STRATEGIC OBJECTIVE:
Maintain a safe, flexible balance sheet with abundant liquidity, rated
investment grade by both S&P and Fitch, with the capacity to take advantage of opportunities created by a future real estate down-cycle.
RESULTS:
During the last three years, Aimco has reduced leverage and added financial flexibility by creating a pool of assets that are
not encumbered by debt. For example, at year end, leverage, as measured by the ratio of Debt and Preferred Equity to Adjusted EBITDA, was down 0.1x, to 6.7x, from the prior year. Aimco ended the year with approximately $700 million in liquidity,
including cash, restricted cash, and Aimcos largely unused bank line. Aimco held an unencumbered pool of communities valued at greater than $1.6 billion, providing Aimco additional financial flexibility.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-End 2013
|
|
|
Year-End 2016
|
|
|
% Change
|
|
DEBT TO EBITDA
|
|
|
7.1x
|
|
|
|
6.3x
|
|
|
|
- 11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEBT AND PREFERRED EQUITY TO EBITDA
|
|
|
7.3x
|
|
|
|
6.7x
|
|
|
|
- 8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALUE OF UNENCUMBERED ASSETS
|
|
$
|
0.4B
|
|
|
$
|
1.6B
|
|
|
|
+300
|
%
|
STRATEGIC OBJECTIVE:
Add value through operational excellence, redevelopment, and improving portfolio
quality. The underpinning of Aimcos success is a strong, stable team focused on a collaborative and productive culture.
RESULTS:
Aimco is one of only three
mid-sized
companies recognized as a Top Place to Work in Colorado for the past four consecutive years. Aimco has maintained team engagement scores averaging above a 4
out of 5 score across the company for the past four years.
Our definitions of portfolio quality, specifically the classification of apartment communities
within A, B and C price points, is described under the Portfolio Management heading within Part I, Item 7 in our Annual Report on Form
10-K
for the year ended
December 31, 2016.
Various of the key financial indicators we use in managing our business and in evaluating our
financial condition and operating performance are
non-GAAP
measures. Key
non-GAAP
measures we use are defined, described and, where appropriate, reconciled to the most
comparable financial measures computed in accordance with GAAP under the
Non-GAAP
Measures heading within Part I, Item 7 in our Annual Report on Form
10-K
for the year
ended December 31, 2016.
As set forth in detail below beginning on page 40, Aimco outperformed on its corporate
goals for 2016, resulting in 2016 cash incentive payouts above target.
34
Summary of Executive Compensation Program and Governance Practices
Below we summarize certain executive compensation program and governance practices both the practices we have
implemented to drive performance and the practices we avoid because we do not believe they would serve our stockholders long-term interests.
|
What Aimco Does
|
Pays for performance.
A significant portion of executive pay is not guaranteed, but rather is at risk and tied to key financial and
value creation metrics that are disclosed to stockholders. All of the incentive compensation (both STI and LTI) for Mr. Considine is subject to the achievement of various performance objectives. For the other NEOs, all STI compensation, and
two-thirds
of target LTI compensation, is subject to the achievement of various performance objectives.
|
Balances short-term and long-term incentives.
The incentive programs provide an appropriate balance of annual and longer-term
incentives, with LTI compensation comprising a substantial percentage of target total compensation.
|
Uses multiple performance metrics.
These mitigate the risk of the undue influence of a single metric by utilizing multi-year vesting
for equity awards, multiple performance measures, and different performance measures for STI and LTI.
|
Caps award payouts.
Amounts or shares that can be earned under the STI plan and LTI plan are capped.
|
Uses market-based approach for determining NEO target pay.
Target compensation for NEOs is set near the median for peer comparators.
The Committee reviews the peer comparator group annually.
|
Maintains share ownership guidelines and holding periods after vesting until ownership guidelines are met.
The Company has the
following minimum share ownership requirements: CEO lesser of five times base salary or 150,000 shares; CFO lesser of five times base salary or 75,000 shares; and other executive officers lesser of four times base salary or
25,000 shares. All officers meet these requirements except for Mr. Beldin, who held approximately 23,000 shares at the time of his election to executive officer, now holds 40,422 shares, and is expected to be in compliance by
2018.
|
Includes double-trigger change in control provisions.
Equity awards include double trigger provisions requiring both a
change in control and a subsequent termination of employment (other than for cause) for accelerated vesting to occur.
|
Uses an independent compensation consulting firm.
The Company engages an independent compensation consulting firm that specializes in
the REIT industry. The Committee engages a separate independent compensation consultant.
|
Maintains a clawback policy.
In the event of a financial restatement resulting from misconduct by an executive, the clawback policy
allows the Company to recoup incentive compensation paid to the executive based on the misstated financial information. The policy covers all forms of bonus, incentive and equity compensation.
|
Conducts a risk assessment.
The Committee annually conducts a compensation risk assessment to determine whether the compensation
policies and practices, or components thereof, create risks that are reasonably likely to have a material adverse effect on the Company.
|
Acts through an independent Compensation Committee.
The Committee consists entirely of independent directors.
|
|
What Aimco Does Not Do
|
Guarantee salary increases, bonuses or equity grants.
The Company does not guarantee annual salary increases or bonuses to anyone. The
Company has no guaranteed commitments to grant any equity-based awards.
|
Provide excise tax
gross-up
payments.
The Company will not enter into any new contractual
agreements that include excise tax
gross-up
payments.
|
Reprice options.
The Company has never repriced or otherwise reduced the per-share exercise price of any outstanding stock options.
Repricing of stock options is not permitted under the 2015 Stock Award and Incentive Plan (the 2015 Plan) without first obtaining approval from the stockholders of the Company. The Company and the Committee will not reprice underwater
options without the consent of the Companys stockholders.
|
Pay dividends or dividend equivalents on unearned performance shares.
Performance share award agreements do not provide for the payment
of dividends until the shares are earned. Dividends accrue during the performance period and are paid on earned shares at the time of vesting.
|
Provide more than minimal personal benefits.
The Company does not provide executives with more than minimal perquisites, such as
reserved parking spaces.
|
35
What We Pay and Why: Components of Executive Compensation
Total compensation for Aimcos executive officers is comprised of the following components:
|
|
|
|
|
Compensation Component
|
|
Form
|
|
Purpose
|
Base Salary
|
|
Cash
|
|
Provide a salary that is competitive with market.
|
STI
|
|
Cash
|
|
Reward executive for achieving
short-term business objectives.
|
LTI
|
|
Restricted stock and/or stock options, subject to performance and/or time vesting,
typically over four years
|
|
Align executives
compensation with stockholder objectives, and provide an incentive to take a longer-term view of Aimcos performance.
|
LTI compensation directly ties the interests of executives to the interests of our
stockholders, and comprises a substantial proportion of compensation for the NEOs, as follows:
CEO Pay Overview
The Committee determines the compensation for Mr. Considine. Mr. Considines target total compensation for 2016
approximated the median for CEOs at Aimcos peers as discussed on page 37. The Committee devised a compensation plan for Mr. Considine that is approximately 11% base salary, 21% based on Aimcos performance against its corporate
goals, and 68% based on relative TSR, making more of Mr. Considines target compensation tied to TSR than most of his peers. Mr. Considines target compensation mix is illustrated as follows:
36
How the Committee determines the amount of target total compensation for executive officers
In addition to reviewing the performance of, and determining the compensation for, the CEO, the Committee also reviews
the decisions made by the CEO as to the compensation of Aimcos other executive officers. Base salary, target STI, and target LTI are generally set near the median base salary, target STI, and target LTI for peer comparators. In particular,
target total compensation for executives relatively new to their positions is set below the median, and target total compensation for seasoned executives is set near the median.
How peer comparators are identified
Aimco considers enterprise Gross Asset Value (GAV), as reported by Green Street Advisors, to be an imprecise, but
reasonable representation of the complexity of a real estate business and of the responsibilities of its leaders. In addition to GAV, Aimco also reviews other factors, including gross revenues, number of properties, and number of employees, to
determine if these factors provide any additional insight into the size and complexity factors of its analysis. Based on this analysis, Aimco included as peers for 2016 compensation the following 20 real estate companies:
|
|
|
Peer Group
|
Alexandria Real Estate Equities, Inc.
|
|
Host Hotels & Resorts
|
Brixmor Property Group, Inc.
|
|
Kilroy Realty Corp.
|
Camden Property Trust
|
|
Kimco Realty
|
CBL & Associates Properties, Inc.
|
|
Liberty Property Trust
|
DDR Corp.
|
|
Macerich Company
|
Digital Realty Trust, Inc.
|
|
Mid-America
Apartment Communities Inc.
|
Douglas Emmett, Inc.
|
|
Omega Healthcare Investors
|
Duke Realty Corp.
|
|
Regency Centers Corp.
|
Essex Property Trust
|
|
Taubman Centers, Inc.
|
Federal Realty Investment Trust
|
|
UDR, Inc.
|
At the time 2016 compensation targets were established, approximately half of these real
estate companies had a larger GAV, and approximately half of these real estate companies had a smaller GAV, than Aimco. For Mr. Kimmel, whose position as Executive Vice President, Property Operations, does not have a good benchmark outside of
the multi-family industry, Aimco included as peers for 2016 compensation the following eight multi-family real estate companies: AvalonBay Communities, Inc., Camden Property Trust, Essex Property Trust, Equity Residential, Home
Properties, Inc.,
Mid-America
Apartment Communities, Inc., Post Properties, Inc., and UDR, Inc. These multi-family companies provide a useful benchmark for Mr. Kimmels position.
Risk analysis of Aimcos compensation programs
The Committee considers risk-related issues when making decisions with respect to executive compensation and has determined
that neither Aimcos executive compensation program nor any of its
non-executive
compensation programs create risk-taking incentives that are reasonably likely to have a material adverse effect on the
organization. Aimcos compensation programs align with the long-term interests of the Company.
|
Aimcos
Compensation Program Discourages Excessive Risk-Taking
|
Limits on STI.
The compensation of executive officers and other team members is not overly weighted
toward STI. Moreover, STI is capped.
|
Use of LTI.
LTI
is included in target total compensation for all officers and typically vests over a period of four years. The vesting period encourages officers to focus on sustaining Aimcos long-term performance. Executive officers with more responsibility
for strategic and operating decisions have a greater percentage of their target total compensation allocated to LTI. LTI is capped at two times target, or 200%, for the CEO, and 1.67 times target, or 167%, for other
NEOs.
|
37
|
Aimcos
Compensation Program Discourages Excessive Risk-Taking
|
Stock ownership guidelines and required holding periods after vesting.
Aimcos stock ownership
guidelines require all executive officers to hold a specified amount of Aimco equity. Any executive officer who has not yet satisfied the stock ownership requirements for his or her position must retain LTI after its vesting until stock ownership
requirements are met. These policies ensure each executive officer has a substantial amount of personal wealth tied to long-term holdings in Aimco stock.
|
Shared performance metrics across the organization.
A portion of STI for all officers and corporate team
members is based upon Aimcos performance against its publicly communicated corporate goals, which are core to the long-term strategy of Aimcos business and are reviewed and approved by the Board. One hundred percent of
Mr. Considines STI, and 50% of the STI for the other NEOs, is based upon Aimcos performance against its corporate goals. In addition, having shared performance metrics across the organization is consistent with Aimcos focus on
a collegial and collaborative team environment.
|
LTI based on TSR.
A portion of LTI for all officers is based on relative returns. The more senior level
the officer, the greater the percentage of LTI that is based on relative returns. One hundred percent of Mr. Considines LTI, and a substantial proportion of the LTI for the other NEOs, is based on relative returns.
|
Multiple performance
metrics.
Aimco had eight corporate goals for 2016. In addition, through Aimcos performance management program, Managing Aimco Performance, or MAP, which sets and monitors performance objectives for every team member, each
team member has several different individual performance goals that are set at the beginning of the year and approved by management. Each of the NEOs other than Mr. Considine (whose individual goals were identical to Aimcos corporate
goals) had an average of eight individual goals for 2016. Having multiple performance metrics inherently reduces excessive or unnecessary risk-taking, as incentive compensation is spread among a number of metrics rather than concentrated in a
few.
|
Total Compensation for 2016
For 2016, total compensation is the sum of base compensation, STI and LTI.
Base Compensation for 2016
For 2016, Mr. Considines base compensation was $600,000, and has been unchanged from 2006. For 2016, base
compensation for all other NEOs was set between $350,000 and $400,000, near the median base compensation paid by peer comparators for similar positions.
Short-Term Incentive Compensation for 2016
The Committee determined Mr. Considines STI by the extent to which Aimco met eight designated corporate goals, which
are described below and are referred to as Aimcos Key Performance Indicators, or KPI.
For the other NEOs,
calculation of STI is determined by the following two components, each representing 50% of the target STI: Aimcos performance against the KPI; and each individual officers achievement of his or her MAP goals. For example, if an
executives target STI is $400,000, then 50% of that amount, or $200,000, varies based on KPI results and 50% of that amount, or $200,000, varies based on MAP results. If KPI results are 75%, then the executive receives 75% of $200,000
($150,000) for that portion of his STI, and if MAP results are 100%, then the executive receives 100% of the $200,000, for a total STI payment of $350,000.
38
Aimcos KPI reflect Aimcos five strategic areas of focus, as set forth
above on page 31. Said another way, Aimco compensates its leadership on exactly the same business strategy communicated to stockholders and analysts. Specifically, Aimcos KPI consisted of the following eight corporate goals that were reviewed
with, and approved by, the Committee, each weighted as described.
These goals aligned executive officers with the publicly communicated, long-term goals of
the Company without encouraging them to take unnecessary and excessive risks. For most goals, threshold performance paid out at 50%; target performance paid out at 100%; and maximum performance paid out at 200%.
Performance below threshold resulted in no payout. For some goals, where performance was between threshold and target or
between target and maximum, the proportion of the award earned was interpolated.
39
The following is a tabular presentation of the performance criteria and results for 2016,
explained in detail in the paragraphs that follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measures
|
|
Goal
Weighting
|
|
|
Sub-Goal
Weighting
|
|
|
Threshold
50%
|
|
Target
100%
|
|
Maximum
200%
|
|
Actual
|
|
Payout
|
|
Property Operations
|
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Same Store NOI Achievement
|
|
|
30
|
%
|
|
|
|
|
|
3%<Budget
|
|
Budget
|
|
3%>Budget
|
|
0.12% unfavorable
|
|
|
29.40
|
%
|
Lease-up
of three newly-constructed communities
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indigo Leased Percentage
|
|
|
|
|
|
|
5.0
|
%
|
|
1 Mo.<Budget
|
|
Budget
|
|
1 Mo.>Budget
|
|
Several Mos.>Budget
|
|
|
10.00
|
%
|
One Canal Leased Percentage
|
|
|
|
|
|
|
4.0
|
%
|
|
1 Mo.<Budget
|
|
Budget
|
|
1 Mo.>Budget
|
|
Several Mos.>Budget
|
|
|
8.00
|
%
|
Vivo Leased Percentage
|
|
|
|
|
|
|
1.0
|
%
|
|
1 Mo.<Budget
|
|
Budget
|
|
1 Mo.>Budget
|
|
2 Mos.>Budget
|
|
|
2.00
|
%
|
Customer
Satisfaction Scores
|
|
|
5
|
%
|
|
|
|
|
|
4.00
|
|
4.10
|
|
4.25
|
|
4.18
|
|
|
7.67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Operations Subtotal:
|
|
|
57.07
|
%
|
Redevelopment and
Development & Portfolio
Management
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redevelopment and Development Investment and Returns, and Transactions That Improve Aimcos Portfolio Quality
|
|
|
10
|
%
|
|
|
|
|
|
|
|
Based on estimated value creation for the project or acquisition, and completion of projects on time and on budget.
|
|
|
|
Invested $183M in development and redevelopment projects in 2016. Completed One Canal development, made solid progress on multi-year projects, and started redevelopments at four communities. Projects were on time,
on budget. Leasing achieved average rents at or above underwriting. Acquired the limited partners interest in two consolidated real estate partnerships that own seven
low-income
housing tax credit
communities.
|
|
|
20.00
|
%
|
|
|
|
|
|
|
|
|
|
|
Redevelopment and Development & Portfolio Management Subtotal:
|
|
|
20.00
|
%
|
Balance Sheet
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage Ratios and Balance Sheet Activities Adding Financial Flexibility
|
|
|
5
|
%
|
|
|
|
|
|
|
|
Based on Ratio of Debt and Preferred Equity to Adjusted EBITDA, and balance sheet activities that add financial flexibility
|
|
|
|
Ratio of Debt and Preferred Equity to Adjusted EBITDA for 2016 was 6.7x, down from 6.8x for 2015. Restructured bank line, extending its maturity and lowering borrowing costs.
Lowered weighted average cost of debt capital by closing $394M of fixed-rate, amortizing property loans that have a weighted average term to maturity of 9.4 years and a blended interest rate of 3.19%.
|
|
|
8.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Subtotal:
|
|
|
8.00
|
%
|
Business and Culture
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Team Member Engagement Scores
|
|
|
5
|
%
|
|
|
|
|
|
4.00
|
|
4.25
|
|
4.75
|
|
4.19
|
|
|
4.40
|
%
|
|
|
|
|
|
|
|
|
On-Site
Team Engagement, Retention and Efficiency
|
|
|
5
|
%
|
|
|
|
|
|
|
|
Based on
On-Site
Team Engagement Scores, Team Member Retention Ratios, and Efficiency Gains
|
|
|
|
Implemented efficiencies in leasing offices and maintained prior year levels of team member retention.
On-site
team member engagement
for 2016 was 4.18.
|
|
|
6.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business and Culture Subtotal:
|
|
|
10.40
|
%
|
Financial Results
|
|
30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO Per
Share
|
|
|
30
|
%
|
|
|
|
|
|
$1.90
|
|
$2.00
|
|
$2.10
|
|
$1.98
1
|
|
|
27.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results Subtotal:
|
|
|
27.00
|
%
|
Total
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122.47%
|
|
1
|
Full year AFFO as reported in Aimcos Fourth Quarter 2016 Earnings Release dated February 2, 2017,
was $1.97 per share, or $0.01 lower. There are a very limited number of items that are unusual, infrequent, or otherwise deemed by management and the Committee to be appropriate to exclude from the calculation of AFFO for purposes of Aimcos
compensation plan, in order to neither unjustly reward nor unjustly penalize participants. The additions and subtractions to reported AFFO are reviewed and approved by the Committee. For 2016, this process resulted in a net upward adjustment of
$0.01 to reported AFFO.
|
40
For all numeric goals, the target performance metrics were Aimcos 2016
budget goals. Aimco has a rigorous budgeting process that includes an evaluation of prior performance, market data, and peer performance. Aimcos budget strategy is to set ambitious, achievable goals. Aimcos 2016 performance which
included conventional Same Store revenue and NOI growth of 4.7% and 6.2%, respectively, and 17.3% TSR is a reflection of Aimcos effective and successful budgeting strategy.
An explanation of the objective of each goal and performance levels and payouts for each goal is set forth in the paragraphs
below.
Same Store NOI Achievement (30% of KPI).
The primary objective of this goal was to fulfill Aimcos
strategic objective of producing above-average operating results through focus on customer satisfaction, resident retention, and superior cost control. For 2016, the range for the Same Store NOI achievement goal was as follows: Threshold
equated to achievement of three percent unfavorable to 2016 budgeted Same Store NOI; Target equated to achievement of 2016 budgeted Same Store NOI; and Maximum equated to three percent favorable to 2016 budgeted Same Store
NOI. Aimcos Same Store NOI achievement for 2016 was 0.12% unfavorable to budgeted Same Store NOI. This resulted in a payout on the Same Store NOI achievement goal of 29.40% for each of the NEOs.
Lease-Up
of Three Newly Constructed Communities (10% of KPI).
The primary
objective of this goal was to achieve underwritten leasing pace for the
lease-ups
of Vivo, One Canal, and Indigo. For 2016, the range for the
lease-up
goal was as
follows: Threshold equated to leased percentage one month or less behind the budgeted leased percentage; Target equated to leased percentage at the budgeted leased percentage; and Maximum equated to leased
percentage one month or more ahead of budget. For 2016, Aimco completed the
lease-up
of Vivo two months ahead of budget, and completed the year several months ahead of budget for the
lease-ups
of both One Canal and Indigo, as discussed in more detail on page 32. This resulted in a payout on the
lease-up
goal of 20.00% for each of the NEOs.
Customer Satisfaction Scores (5% of KPI).
The primary objective of this goal was to enhance customer satisfaction, a
key component of Aimcos strategic objective of producing above-average operating results. Aimco customers are surveyed at several touch points in the customer lifecycle through Aimcos partnership with a third-party company that
administers customer surveys on behalf of many companies in the real estate industry. Aimcos customer satisfaction score for the full year consisted of the average score across all surveys covering six different touch points for overall
satisfaction, on a scale of 1 to 5. For 2016, the range for the resident satisfaction scores goal was as follows: Threshold equated to a 4.00; Target equated to a 4.10; and Maximum equated to a 4.25. These
ranges were set higher for 2016 than for 2015, during which Threshold, Target, and Maximum equated to a 3.95, a 4.0, and a 4.10, respectively. For 2016, Aimcos customer satisfaction score, from approximately
85,000 survey responses, was 4.18, resulting in a payout of 7.67% for each of the NEOs.
Redevelopment and Development
Investment and Returns, and Transactions That Improve Aimcos Portfolio Quality (10% of KPI)
. The primary objective of this goal was to fulfill Aimcos strategic objectives for redevelopment and development and for portfolio
management, two of Aimcos five areas of strategic focus. Large and/or complex redevelopment and development projects provided increased weighting toward the total goal weighting of 10%, with smaller scale projects provided lower weighting
toward the total goal weighting. Achievement for each project was determined with reference to the 2016 budgeted investment and scope for the project, and was based on the extent to which the project work was completed on time and within budget, as
well as expected returns on investment. For 2016, Aimco completed the development of One Canal, made solid progress on its multi-year redevelopment projects, and started redevelopments at four communities. The project work was on time and within
budget. Leasing in 2016 achieved average rents at or above underwriting. Additionally, Aimco acquired the limited partners interest in two consolidated real estate partnerships that own seven
low-income
housing tax credit communities. With these acquisitions, Aimco now controls the real estate and entity decisions. This resulted in a payout of 20.00% for each of the NEOs.
41
Leverage Ratios and Other Balance Sheet Activities Adding Financial
Flexibility (5% of KPI).
The primary objective of this goal was to fulfill Aimcos strategic objective of maintaining a safe, flexible balance sheet with abundant liquidity and the capacity to take advantage of opportunities created by a
future real estate down-cycle. Achievement was based on the ratio of Debt and Preferred Equity to Adjusted EBITDA and balance sheet activities that added financial flexibility. Aimcos ratio of Debt and Preferred Equity to Adjusted EBITDA for
2016 was 6.7x, down from 6.8x for 2015. Additionally, Aimco amended its $600 million revolving credit facility, extending its maturity to January 2022. Borrowings under the credit agreement will bear interest at LIBOR plus 1.20%, a savings of
15 basis points from the prior facility. Aimco lowered its weighted average cost of debt capital by closing $394 million of fixed-rate, amortizing property loans that have a weighted average term to maturity of 9.4 years and a blended interest
rate of 3.19%. Aimco also took advantage of the favorable interest rate environment and put refunding plans in place for $89 million of its 2017 property debt maturities. This resulted in a payout on the balance sheet goal of 8.00% for each of
the NEOs.
AFFO Per Share (30% of KPI).
The primary objective of the AFFO goal was to increase Aimcos current
period performance. Funds from Operations (FFO) is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts (NAREIT) defines as net income, computed in accordance with GAAP,
excluding gains from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Aimco computes FFO in accordance
with the guidance set forth by NAREIT. Pro forma FFO represents FFO as defined above, excluding preferred equity redemption related amounts (adjusted for
non-controlling
interests). Preferred equity redemption
related amounts (gains or losses) are items that periodically affect net income attributable to Aimco common stockholders computed in accordance with GAAP. Aimco excludes preferred equity redemption related amounts (gains or losses) from its
computation of Pro forma FFO because such amounts are not representative of operating performance. AFFO represents Pro forma FFO reduced by capital replacements (also adjusted for
non-controlling
interests)
and is Aimcos primary measure of current period performance.
For 2016, the range for the AFFO goal was as follows:
Threshold equated to $1.90 per share; Target equated to $2.00 per share, the 2016 budgeted amount; and Maximum equated to $2.10 per share. Aimcos AFFO was $1.98 per share
.
2
This resulted in a payout on the AFFO per share goal of 27.00% for each of the NEOs.
Team Member Engagement Scores (5% of KPI).
The primary objective of this goal was to maintain a highly engaged,
satisfied workforce, which drives stronger results across all of Aimcos areas of strategic focus. Every team member is surveyed via a third-party, confidential survey on his or her annual anniversary of employment. The team member engagement
score consists of the average of the responses to the questions that comprise the engagement index for all team members who complete the survey during the year. For 2016, the range for team member engagement scores was as follows:
Threshold equated to 4.00; Target equated to 4.25; and Maximum equated to 4.75. These ranges were set higher for 2016 than for 2015, during which Threshold, Target, and Maximum
equated to 3.50, 4.00, and 4.50, respectively. For 2016, Aimcos team member engagement score was 4.19, resulting in a payout of 4.40% for each of the NEOs.
On-Site
Team Engagement, Retention, and Efficiency (5% of KPI).
The primary
objective of this goal was to maintain a highly engaged, stable workforce at our communities, enhanced by innovations in efficiency, all of which further Aimcos strategic objective of producing above-average operating results. Achievement was
based on
on-site
team engagement scores, team member retention ratios, and efficiency gains. Aimco implemented a number of efficiencies in its leasing offices in 2016, while maintaining prior year levels of
on-site
team member retention.
On-site
team member engagement remained steady at 4.18. This resulted in a payout on the
on-site
engagement, retention, and efficiency goal of 6.00% for each of the NEOs.
42
Due to Aimcos outperformance on multiple goals, Aimcos overall KPI
performance was 122.47%. Accordingly, each executive officer was awarded 122.47% of the portion of his or her target STI attributable to KPI.
Long-Term Incentive Compensation Awards for 2016
Under the 2016 LTI program, 100% of the LTI award for the CEO, and
two-thirds
of the
LTI awards for the other NEOs, are performance based, or at risk, and measured on a forward looking, three-year performance period. The remaining
one-third
of the LTI awards granted to the other NEOs in 2016
are time-based, with grants vesting 25% on each anniversary of the grant date.
The relative metrics under the performance-based LTI awards granted in 2016 are as follows:
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|
Metric and Performance Level
(1)
(relative performance stated as basis
points above or below index
performance)
(2)
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|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Relative to NAREIT Apartment Index
|
|
|
-250 bps
|
|
|
|
+50 bps
|
|
|
|
+400 bps
|
|
Relative
to MSCI US REIT Index
|
|
|
-350 bps
|
|
|
|
+50 bps
|
|
|
|
+500 bps
|
|
|
(1)
|
The relative metrics above reflect the metrics used for the awards made in 2016 for the performance period
ending on December 31, 2018.
|
|
(2)
|
If absolute TSR were negative, any portion of the LTI award achieved above target would not begin vesting
until absolute TSR is once again positive.
|
Threshold performance will pay out at 50%; target
performance will pay out at 100%; and maximum performance will pay out at 200%. Performance below threshold will result in no payout. The performance-based portion of the LTI awards for Messrs. Considine, Beldin and Kimmel and Ms. Cohn (i.e.,
the entire LTI award in the case of Mr. Considine, and
two-thirds
of the LTI award in the case of Messrs. Beldin and Kimmel and Ms. Cohn) will be determined solely according to the relative TSR
metrics set forth above. Mr. Considine determined that Mr. Bezzants 2016 LTI would have two components. Fifty percent of the performance-based portion of Mr. Bezzants LTI, or
one-third
of the overall award, will be determined according to the relative TSR metrics set forth above. Fifty percent of the performance-based portion of Mr. Bezzants LTI, or another
one-third
of the overall award, will be determined according to development objectives.
43
The LTI awards made in 2016 have a forward looking, three-year performance
period, with grants vesting 50% following the end of the three-year performance period (based on attainment of TSR targets or, in the case of Mr. Bezzant, TSR targets and development objectives), and 50% one year later, for a four-year plan
from start to finish, illustrated below.
LTI awards for 2016 were granted on January 26, 2016, in the form of restricted stock
and stock options. The share award agreements to which the performance-based restricted shares were granted do not provide for the payment of dividends until the shares are earned. Dividends accrue during the performance period and are paid on
earned shares at the time of vesting.
For the purpose of calculating the number of shares of restricted stock to be
granted, the dollar amount allocated to restricted stock was divided by $37.61 per share, which was the average of the closing trading prices of Aimcos Common Stock on the five trading days up to and including the grant date. The
five-day
average was used to mute the effect of any single day spikes or declines. For the purpose of calculating the number of shares subject to the stock options to be granted, the dollars allocated to stock
options were divided by $9.94, which price was calculated by a third party financial firm with particular expertise in the valuation of options. The stock options have an exercise price of $38.73, which is equal to the fair market value of
Aimcos Common Stock on January 26, 2016 (pursuant to the 2015 Plan, fair market value is defined as the closing price of Aimcos Common Stock on the grant date).
NEO Compensation for 2016
CEO Compensation.
Mr. Considines STI for 2016 was based entirely on Aimcos performance against the
eight designated corporate goals. Mr. Considines STI was calculated by multiplying his STI target of $1.20 million by 122.47%, which was the Committees payout determination having reviewed Aimcos overall performance on
the eight corporate goals. Mr. Considines LTI was granted in the form of restricted stock and stock options on January 26, 2016, for the three-year performance period from January 1, 2016, through December 31, 2018, and is
entirely at risk, based on relative returns over the performance period. Mr. Considines 2016 target compensation and incentive compensation is summarized as follows:
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|
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|
|
|
|
|
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|
|
Target Total
|
|
|
|
|
|
|
2016 Incentive Compensation
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|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
STI
|
|
|
|
|
LTI
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|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-Based
Equity Restricted
Stock ($) (2)
|
|
|
|
|
Performance-Based
Equity Stock
Options ($) (2)
|
|
Target Total
Compensation ($)
|
|
|
|
Paid
Base ($)
|
|
|
|
|
STI ($)
|
|
|
|
|
|
LTI ($)
|
|
|
|
|
|
|
($)(1)
|
|
|
|
|
Time-Based
Equity ($)
|
|
|
|
|
|
|
|
5,625,000
|
|
|
|
|
600,000
|
|
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
3,825,000
|
|
|
|
|
|
|
|
1,469,640
|
|
|
|
|
|
|
|
|
|
|
|
1,912,500
|
|
|
|
|
|
1,912,500
|
|
(1)
|
Amount shown reflects the amount of 2016 STI paid to Mr. Considine.
|
(2)
|
Amount shown reflects a 100% payout resulting from achieving target performance. Actual payout will be in a range of 0% to 200% of this amount depending on performance results over the forward looking,
three-year performance period ending December 31, 2018. The number of shares that vest, if any, will vest 50% following the end of the three-year performance period and 50% one year later, for a four-year vesting period.
|
44
Other NEO Compensation.
As noted above, for Messrs. Beldin, Bezzant and
Kimmel and Ms. Cohn, an allocation of the target STI was made as follows: 50% of the target STI was calculated based on Aimcos performance against the KPI and 50% of the target STI was calculated based on each executives achievement
of his or her individual MAP goals. As noted above, Aimcos KPI performance was 122.47%. Accordingly, each executive officer was awarded 122.47% of the portion of his or her STI attributable to KPI (
i.e.
, 50% of the target STI amount
shown below).
In determining the MAP achievement component of 2016 STI, Mr. Considine determined that:
Mr. Beldins MAP achievement would be paid at 150% for his contributions to finance, accounting, and tax, and to Aimcos balance sheet; Ms. Cohns MAP achievement would be paid at 150% for her leadership over legal matters,
insurance, risk management, asset quality and service, commercial/ancillary income, compliance, and human resources; Mr. Bezzants MAP achievement would be paid at 117% for his contributions to Aimcos portfolio management, and
particularly, acquisitions and dispositions; and Mr. Kimmels MAP achievement would be paid at 293% for his contributions to Aimcos operating results, including significant outperformance on
lease-ups.
The Committee reviewed Mr. Considines determinations. As described in detail beginning on page 43 above, LTI for the NEOs was granted on January 26, 2016, in the form of
restricted stock and/or stock options. Target compensation and incentive compensation for 2016 for the other NEOs is summarized as follows:
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Target Total
Incentive
Compensation
|
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|
|
|
|
|
2016 Incentive Compensation ($)
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|
|
|
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|
|
|
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|
|
|
|
|
|
STI
|
|
|
|
|
LTI
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|
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|
|
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|
Performance-
Based
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|
|
|
|
Performance-
Based
|
|
|
Target Total
Compensation ($)
|
|
|
|
Paid
Base ($)
|
|
|
|
STI ($)
|
|
|
|
|
LTI ($)
|
|
|
|
|
|
|
($)(1)
|
|
|
|
|
Time-Based
Equity ($) (2)
|
|
|
|
|
Equity Restricted
Stock ($) (3)
|
|
|
|
|
Equity Stock
Options ($) (3)
|
|
Mr. Beldin
|
|
|
1,300,000
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|
|
|
|
|
350,000
|
|
|
|
|
|
350,000
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
476,823
|
|
|
|
|
|
200,000
|
|
|
|
|
|
310,000
|
|
|
|
|
|
90,000
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|
Mr. Bezzant
|
|
|
1,500,000
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|
|
|
|
|
400,000
|
|
|
|
|
|
400,000
|
|
|
|
|
|
700,000
|
|
|
|
|
|
|
|
710,660
|
|
|
|
|
|
233,333
|
|
|
|
|
|
396,667
|
|
|
|
|
|
70,000
|
|
Ms. Cohn
|
|
|
1,650,000
|
|
|
|
|
|
400,000
|
|
|
|
|
|
500,000
|
|
|
|
|
|
750,000
|
|
|
|
|
|
|
|
681,175
|
|
|
|
|
|
250,000
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
Mr. Kimmel
|
|
|
1,400,000
|
|
|
|
|
|
350,000
|
|
|
|
|
|
325,000
|
|
|
|
|
|
725,000
|
|
|
|
|
|
|
|
674,818
|
|
|
|
|
|
241,667
|
|
|
|
|
|
410,833
|
|
|
|
|
|
72,500
|
|
(1)
|
Amount shown reflects the amount of 2016 STI paid to each of Messrs. Beldin and Kimmel and Ms. Cohn. For
Mr. Bezzant, the amount shown includes $478,940 representing 2016 STI and $231,720 representing a payout in 2016 pursuant to the portion of his 2015 STI bonus that was contingent upon the closing of an acquisition.
|
(2)
|
Comprises
one-third
of the LTI target, vesting ratably over four
years, and is for the purpose of attracting and retaining key talent integral to the success of Aimco.
|
(3)
|
Comprises
two-thirds
of the LTI target. Amounts shown reflect a 100%
payout of the performance-based shares resulting from achieving target performance. Actual payouts will be in a range of 0% to 200% of these amounts, depending on performance results for the three-year performance period from
January 1, 2016, through December 31, 2018.
|
Other Compensation
From time to time, Aimco determines to provide executive officers with additional compensation in the form of discretionary
cash or equity awards. Aimco did not provide any such awards to the NEOs in 2016.
Post-Employment Compensation and Severance Arrangements
401(k)
Aimco provides a 401(k) plan that is offered to all Aimco team members. In 2016, Aimco matched 25% of participant contributions
to the extent of the first 4% of the participants eligible compensation. For 2016, the maximum match by Aimco was $2,650, which was the amount that Aimco matched for each of Messrs. Considine, Beldin, Bezzant and Kimmel and
Ms. Cohns 2016 401(k) contributions. Aimco provided an additional discretionary match in the amount of $1,000 to all team members in 2017 for Aimcos achievement of greater than 115% on its 2016 corporate goals. Aimcos prior
year discretionary match was $650.
45
Other than the 401(k) plan, Aimco does not provide post-employment benefits.
Aimco does not have a pension plan, a Supplemental Executive Retirement Plan or any other similar arrangements.
Executive Severance
Arrangements
Aimco has an executive severance policy that provides that Aimco shall seek stockholder approval or
ratification of any future severance agreement for any senior executive officer that provides for benefits, such as
lump-sum
or future periodic cash payments or new equity awards, in an amount in excess of
2.99 times such executive officers base salary and bonus. Compensation and benefits earned through the termination date, the value of vesting or payment of any equity awards outstanding prior to the termination date, pro rata vesting of any
other long-term awards, or benefits provided under plans, programs or arrangements that are applicable to one or more groups of employees in addition to senior executives are not subject to the policy. It has been Aimcos longstanding practice
not to enter into agreements with senior executives to provide excessive severance arrangements.
Executive Employment Arrangements
On July 29, 1994, as required in connection with Aimcos initial public offering, Aimco entered into an
employment agreement with Mr. Considine. On December 29, 2008, Aimco entered into an employment agreement with Mr. Considine to replace his 1994 employment agreement and the 2002
non-competition
and
non-solicitation
agreement between Mr. Considine and Aimco. The 2008 employment agreement was entered into to reflect current practice and update Aimcos agreement with Mr. Considine, which
had not been formally revised since the Companys initial public offering in 1994, and to make the compensation arrangements compliant with certain Internal Revenue Service requirements, primarily Section 409A of the Code, which required
documentary compliance by December 31, 2008. In connection with the execution of the employment agreement, Mr. Considine did not receive any additional equity awards or signing bonus. The Committee evaluated the terms of
Mr. Considines employment agreement in comparison to those of the CEOs of Aimcos peers and other comparable companies.
The 2008 employment agreement was for an initial five-year term, with automatic renewal for successive
one-year
terms until the year in which Mr. Considine reaches age 70, or 2017. The 2008 employment agreement eliminated the evergreen term in the prior employment agreement.
Mr. Considines employment agreement provides for a base pay of not less than $600,000, subject to future increase.
Mr. Considine also continues to be eligible to participate in Aimcos performance-based incentive compensation plan with a target total incentive compensation amount of not less than $3.9 million, which may be paid in cash or in
equity. For 2016, Mr. Considines target incentive opportunity was set at $5.025 million.
The employment
agreement provides severance payments to Mr. Considine upon his termination of employment by Aimco without cause, by Mr. Considine for good reason and upon a termination for reason of disability.
Mr. Considine is not entitled to any additional or special payments upon the occurrence of a change in control.
Mr. Considines walk right under the 1994 employment agreement (that is, his right to severance payments upon his terminating employment with the Company within two years following a change in control) was eliminated. The
definition of change in control was also narrowed to increase the required percentage of change in ownership and to require the occurrence of the applicable change in control event, rather than just stockholder approval of such event.
46
Upon termination of his employment by Aimco without cause, by Mr. Considine
for good reason, or upon a termination for reason of disability, Mr. Considine is generally entitled to (a) a lump sum cash payment equal to two times the sum of base salary at the time of termination and $1.65 million, subject to
certain reductions, including a reduction of the sum by 1/24 for each complete month of employment following his attainment of age 68, (b) any STI earned but unpaid for a prior fiscal year, (c) a
pro-rata
portion of a $1.65 million STI amount for the fiscal year in which the termination occurs, and (d) immediate full acceleration of any outstanding unvested stock options and equity awards with certain limitations on the term thereof.
In the event of Mr. Considines death, the Company will pay or provide to Mr. Considines estate any
earned but unpaid base salary and vested accrued benefits and any STI earned but unpaid for a prior fiscal year, and all equity-based and other LTI awards granted to Mr. Considine will become immediately fully vested and payable, as applicable,
and all outstanding stock option awards will remain exercisable subject to certain limitations on the term thereof.
Under
the employment agreement, in the event payments to Mr. Considine are subject to the excise tax imposed by Section 4999 of the Code, Mr. Considine is entitled to receive a limited
gross-up
payment, subject to a maximum of $5 million. If covered payments are less than 10% over the permitted limit, Mr. Considine is required to reduce his payments to avoid triggering a
gross-up
payment.
At the time the employment agreement was entered into, the limited
gross-up
payment was intended to balance the interests of Aimcos stockholders, eliminate the incentive for the early exercise of stock
options and reflect competitive practice.
The employment agreement also contains customary confidentiality provisions, a
limited mutual
non-disparagement
provision, and
non-competition,
non-solicitation
and
no-hire
provisions.
None of Messrs. Beldin, Bezzant, or Kimmel or Ms. Cohn
has an employment agreement or severance arrangement.
The restricted stock and/or stock option agreements pursuant to
which restricted stock and/or stock option awards have been made to Messrs. Considine, Beldin, Bezzant, Kimmel and Ms. Cohn provide that, upon a change in control, all outstanding shares of restricted stock shall not become immediately and
fully vested and all unvested stock options shall not become immediately and fully vested and remain exercisable (along with all options already vested) for the remainder of the term of the option unless there is also a subsequent qualifying
termination of employment of the executive officer.
Other Benefits; Perquisite Philosophy
Aimcos executive officer benefit programs are substantially the same as for all other eligible officers and employees.
Aimco does not provide executives with more than minimal perquisites, such as reserved parking places.
Stock Ownership Guidelines and Required Holding
Periods After Vesting
Aimco believes that it is in the best interest of Aimcos stockholders for Aimcos
executive officers to own Aimco stock. Every year, the Committee and Mr. Considine review Aimcos stock ownership guidelines, each executive officers holdings in light of the stock ownership guidelines, and each executive
officers accumulated realized and unrealized stock option and restricted stock gains.
Equity ownership guidelines
for all executive officers are determined as a minimum of the lesser of a multiple of the executives base salary or a fixed number of shares. The Committee and management have established the following stock ownership guidelines for
Aimcos executive officers:
|
|
|
Officer Position
|
|
Ownership Target
|
Chief Executive Officer
|
|
Lesser of 5x base salary or 150,000 shares
|
Chief Financial Officer
|
|
Lesser of 5x base salary or 75,000 shares
|
Other Executive Vice Presidents
|
|
Lesser of 4x base salary or 25,000 shares
|
47
Any executive who has not satisfied the stock ownership guidelines must, until
the stock ownership guidelines are satisfied, hold 50% of after tax shares of restricted stock for at least three years from the date of vesting, and hold 50% of shares acquired upon option exercises (50% calculated after exercise price plus taxes)
for at least three years from the date of exercise.
Each of Messrs. Considine, Bezzant and Kimmel and Ms. Cohn
exceed the ownership targets established in Aimcos stock ownership guidelines. Mr. Beldin, promoted to Chief Financial Officer on September 14, 2015, does not yet meet the ownership targets, with holdings of 40,422 shares.
Mr. Beldin held approximately 23,000 shares at the time of his election to executive officer, and is expected to be in compliance by 2018.
Role
of Outside Consultants
The Committee has the authority under its charter to engage the services of outside advisors,
experts and others to assist the Committee. In 2016, the Committee engaged Board Advisory as its independent compensation consultant. At the direction of the Committee, Board Advisory coordinated and consulted with Ms. Cohn and Ms. Johnson
regarding executive compensation matters. Board Advisory provided the Committee with an independent view of both market data and plan design. Aimco management has engaged FPL Associates, L.P. (FPL) to review Aimcos executive
compensation plan. Neither Board Advisory nor FPL provided other services to the Company. The Committee has assessed the independence of Board Advisory and FPL pursuant to SEC rules and has concluded that there are no conflicts of interest.
Base Salary, Incentive Compensation, and Equity Grant Practices
Base salary adjustments typically take effect on January 1. The Committee (for Mr. Considine), and Mr. Considine, in
consultation with the Committee (for the other executive officers), determine incentive compensation in late January or early February. STI is typically paid in February or March. LTI is granted on a date determined by the Committee, typically in
late January or in February.
Aimco grants equity in three scenarios: in connection with incentive compensation, as
discussed above; in connection with certain
new-hire
or promotion packages; and for purposes of retention.
With respect to LTI, the Committee sets the grant date for the restricted stock and stock option grants. The Committee sets
grant dates at the time of its final compensation determination, generally in late January or in February. The date of determination and date of award are not selected based on share price. In the case of
new-hire
packages that include equity awards, grants are made on the employees start date or on a date designated in advance based on the passage of a specific number of days after the employees
start date. For
non-executive
officers, as provided for in the 2015 Plan, the Committee has delegated the authority to make equity awards, up to certain limits, to the Chief Financial Officer (Mr. Beldin)
and/or Corporate Secretary (Ms. Cohn). The Committee and Mr. Beldin and Ms. Cohn time grants without regard to the share price or the timing of the release of material
non-public
information and
do not time grants for the purpose of affecting the value of executive compensation.
2017 Compensation Targets
Based on comparison to compensation paid to CEOs at Aimcos peers, the Committee set Mr. Considines target
total compensation (base compensation, STI and LTI) for 2017 at $6.125 million. Mr. Considine set target total compensation (base compensation, STI and LTI) for 2017 for the other NEOs as follows: Mr. Beldin $1.55 million;
Mr. Bezzant $1.03 million; Ms. Cohn $1.9 million; and Mr. Kimmel $1.45 million. Aimco performance will determine the amounts paid for 2017 STI and the portion of LTI awards that vest, and such
amounts may be less than, or in excess of, these target amounts. STI will be paid in cash, and LTI was granted in January 2017 in the form of restricted stock, Long Term Incentive Plan units and/or stock options.
48
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT TO STOCKHOLDERS
The Compensation and Human Resources Committee held five meetings during fiscal year 2016. The Compensation and Human
Resources Committee has reviewed and discussed the Compensation Discussion & Analysis with management. Based upon such review, the related discussions and such other matters deemed relevant and appropriate by the Compensation and Human
Resources Committee, the Compensation and Human Resources Committee has recommended to the Board that the Compensation Discussion & Analysis be included in this Proxy Statement to be delivered to stockholders.
Date: February 22, 2017
THOMAS L. KELTNER (CHAIRMAN)
J. LANDIS MARTIN
ROBERT A. MILLER
KATHLEEN M. NELSON
MICHAEL A. STEIN
NINA A. TRAN
The above report will not be deemed to be incorporated by reference into any filing by Aimco under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Aimco specifically incorporates the same by reference.
49
SUMMARY COMPENSATION TABLE
The table below summarizes the compensation attributable to the principal executive officer, principal financial officer, and
the three other most highly compensated executives in 2016, for the years 2016, 2015 and 2014.
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Name and Principal
Position
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Year
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Salary
($)
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Bonus
($)
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Stock
Awards
($)(1)
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Option
Awards
($)(2)
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Non-Equity
Incentive Plan
Compensation
($)(3)
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All Other
Compensation
($)(4)
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Total
($)
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Terry Considine Chairman of the Board of Directors, President and Chief Executive
Officer
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2016
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600,000
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2,013,191
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(5)
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1,912,506
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(5)
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1,469,640
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3,650
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5,998,987
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2015
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600,000
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5,104,785
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(6)
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1,662,554
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(6)
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1,566,600
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3,835
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8,937,774
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2014
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600,000
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2,342,345
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1,339,485
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2,600
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4,284,430
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Paul Beldin Executive Vice President and Chief Financial Officer
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2016
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350,000
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809,264
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(7)
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90,007
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(7)
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476,823
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3,650
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1,729,744
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2015
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273,565
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131,520
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292,721
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3,835
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701,641
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John Bezzant Executive Vice President and Chief Investment Officer
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2016
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400,000
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588,503
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(8)
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70,007
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(8)
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901,473
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3,650
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1,963,633
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2015
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400,000
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150,000
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(9)
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854,901
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(10)
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703,663
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3,835
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2,111,749
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2014
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350,000
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164,397
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518,123
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2,600
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1,035,120
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Lisa R. Cohn Executive Vice President, General Counsel and Secretary
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2016
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400,000
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783,826
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(11)
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681,175
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3,650
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1,868,651
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2015
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400,000
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1,337,931
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(12)
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561,100
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3,835
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2,302,866
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2014
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375,000
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431,508
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433,309
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2,600
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1,242,417
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Keith Kimmel Executive Vice President of Property Operations
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2016
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350,000
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681,360
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(13)
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72,502
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(13)
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674,818
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3,650
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1,782,330
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2015
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325,000
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754,765
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(14)
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350,688
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3,835
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1,434,288
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2014
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300,000
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341,114
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276,081
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2,600
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919,795
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(1)
|
This column represents the aggregate grant date fair value of stock awards in the year granted computed in
accordance with FASB ASC Topic 718. Except as otherwise noted, the amounts shown for compensation year 2014 are attributable to LTI in respect of compensation year 2013. Except as otherwise noted, the amounts shown for compensation year 2015 are
attributable to LTI in respect of both compensation years 2014 and 2015, due to Aimcos transition in 2015 from a backward looking LTI plan to a forward looking LTI plan. For additional information on the valuation assumptions with respect to
the grants reflected in this column for 2016, refer to the Share-Based Compensation footnote to Aimcos consolidated financial statements in its Annual Report on Form
10-K
for the year ended
December 31, 2016.
|
50
(2)
|
This column represents the aggregate grant date fair value of the option awards in the year granted computed
in accordance with FASB ASC Topic 718. The amount shown for compensation year 2015 is attributable to compensation year 2014. For additional information on the valuation assumptions with respect to the grants reflected in this column for 2016, refer
to the Share-Based Compensation footnote to Aimcos consolidated financial statements in its Annual Report on Form
10-K
for the year ended December 31, 2016.
|
(3)
|
For 2016, the amounts in this column for Messrs. Considine, Beldin and Kimmel and Ms. Cohn represent the
2016 STI amounts that were paid on February 28, 2017. For Mr. Bezzant, the amount shown includes $478,940 representing the STI bonus that was paid to him on February 28, 2017; $231,720 representing a payout in 2016 pursuant to the
portion of his 2015 STI bonus that was contingent upon the closing of an acquisition; and $190,813 representing payouts in 2016 pursuant to prior year long-term cash grants.
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(4)
|
Represents discretionary matching contributions under Aimcos 401(k) plan.
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(5)
|
Equity awards for Mr. Considine in 2016 include a 2016 LTI award consisting of 50,851 shares of
performance-based restricted stock and a performance-based
non-qualified
stock option to purchase 192,405 shares for the forward looking, three-year performance period from January 1, 2016, through
December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later. The value of the performance-based restricted stock award of $39.59 per share was
calculated by a third-party consultant using a Monte Carlo valuation model. The option has a term of ten years and was valued at $9.94 per underlying share, based on a calculation by a third-party consultant using a Monte Carlo valuation model. The
value of the performance-based awards, if earned at maximum and valued at the closing price of our Common Stock on the NYSE on the date of grant, is $7,763,920.
|
(6)
|
Equity awards for Mr. Considine in 2015 include the following: (i) an LTI award that was granted in
2015 based on 2014 performance, 50% of which was awarded in time-based restricted stock and 50% of which was awarded in stock options, consisting of 43,083 shares of restricted stock, vesting 25% on each anniversary of the grant date and a
non-qualified
stock option to acquire 238,530 shares; and (ii) 86,163 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2015, through
December 31, 2017, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later.
|
(7)
|
Equity awards for Mr. Beldin in 2016 include the following: (i) a 2015 LTI award that was granted in
2016 based on 2015 performance pursuant to the backward looking LTI plan that governs LTI awards for officers below the executive officer level as this plan had applied to Mr. Beldin prior to his promotion to CFO in September 2015, consisting
of 7,151 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) a 2016 LTI award consisting of 5,318 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (iii) a
2016 LTI award consisting of 8,243 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2016, through December 31, 2018, with the number of shares that vest, if any, vesting
50% following the end of the three-year performance period and 50% one year later; and (iv) a 2016 LTI award consisting of a performance-based
non-qualified
stock option to purchase 9,055 shares for the
forward looking, three-year performance period from January 1, 2016, through December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later. The
value of the time-based restricted stock awards is based solely on the closing price of our Common Stock on the NYSE on the date of grant. The value of the performance-based restricted stock award of $39.59 per share was calculated by a third-party
consultant using a Monte Carlo valuation model. The option has a term of ten years and was valued at $9.94 per underlying share, based on a calculation by a third-party consultant using a Monte Carlo valuation model. The value of the
performance-based awards, if earned at maximum and valued at the closing price of our Common Stock on the NYSE on the date of grant, is $818,468.
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(8)
|
Equity awards for Mr. Bezzant in 2016 include the following: (i) a 2016 LTI award consisting of
6,205 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) a 2016 LTI
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51
|
award consisting of 4,343 shares of performance-based restricted stock based on relative TSR performance for the forward looking, three-year performance period from January 1, 2016, through
December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later; (iii) a 2016 LTI award consisting of 6,205 shares of performance-based restricted
stock based on the achievement of development objectives for the forward looking, three-year performance period from January 1, 2016, through December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of
the three-year performance period and 50% one year later; (iv) a 2016 LTI award consisting of a performance-based
non-qualified
stock option to purchase 7,043 shares based on relative TSR performance for
the forward looking, three-year performance period from January 1, 2016, through December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later; and
(v) a portion of the 2015 LTI award relating to acquisition and development objectives for the 2016 performance year, consisting of 2,419 shares of performance-based restricted stock that may be earned based on the achievement of such
objectives, with the number of shares that vest, if any, vesting 50% on the later of the third anniversary of the grant date and the date performance is determined (but no later than March 15, 2018) and 50% on the fourth anniversary of the
grant date. The value of the time-based restricted stock award is based solely on the closing price of our Common Stock on the NYSE on the date of grant. The value of the 2016 performance-based restricted stock award based on relative TSR
performance of $39.59 per share was calculated by a third-party consultant using a Monte Carlo valuation model. The value of the 2016 performance-based restricted stock award based on the achievement of development objectives is based on the
probable outcome of the performance conditions determined in accordance with ASC Topic 718, or
one-third
of the award calculated at target (i.e., 2,069 shares) multiplied by the closing price of our Common
Stock on the NYSE on the date of grant. The option has a term of ten years and was valued at $9.94 per underlying share, based on a calculation by a third-party consultant using a Monte Carlo valuation model. The value of the portion of the 2015 LTI
award relating to development objectives for the 2016 performance year is based on the probable outcome of the performance conditions determined in accordance with ASC Topic 718, calculated at target (i.e., 2419 shares) multiplied by the closing
price of our Common Stock on the NYSE on the date of grant. The aggregate value of the performance-based awards, if earned at maximum and valued at the closing price of our Common Stock on the NYSE on the date of grant, is $824,054.
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(9)
|
On January 26, 2015, Mr. Considine awarded Mr. Bezzant a discretionary cash award in the amount
of $150,000 for Mr. Bezzants significant contributions to improving Aimcos portfolio.
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(10)
|
Stock awards for Mr. Bezzant in 2015 included the following: (i) a 2014 LTI award that was granted
in 2015 based on 2014 performance consisting of 6,047 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) a 2015 LTI award consisting of 3,628 shares of time-based restricted stock, vesting 25% on each
anniversary of the grant date; (iii) a 2015 LTI award consisting of 7,256 shares of performance-based restricted stock based on relative TSR performance for the forward looking, three-year performance period from January 1, 2015, through
December 31, 2017, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later; and (iv) 7,256 shares of performance-based restricted stock based on the achievement of
acquisitions and development objectives for the forward looking, three-year performance period from January 1, 2015, through December 31, 2017, with the number of shares that vest, if any, vesting 50% following the end of the three-year
performance period and 50% one year later (with the portion of such award relating to acquisitions and development objectives for the 2015 performance year being reported in 2015 when the Committee established such objectives).
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(11)
|
Stock awards for Ms. Cohn in 2016 include a 2016 LTI award consisting of the following: (i) 6,648 shares
of time-based restricted stock, vesting 25% on each anniversary of the grant date; and (ii) 13,295 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2016, through
December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later. The value of the time-based restricted stock award is based solely on the closing price
of our Common Stock on the NYSE on the date of grant.
|
52
|
The value of the performance-based restricted stock award of $39.59 per share was calculated by a third-party consultant using a Monte Carlo valuation model. The value of the performance-based
award, if earned at maximum and valued at the closing price of our Common Stock on the NYSE on the date of grant, is $1,029,792.
|
(12)
|
Stock awards for Ms. Cohn in 2015 included the following: (i) a 2014 LTI award that was granted in
2015 based on 2014 performance, consisting of 15,873 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) a 2015 LTI award consisting of 3,628 shares of time-based restricted stock, vesting 25% on each
anniversary of the grant date; and (iii) a 2015 LTI award consisting of 14,512 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2015, through December 31, 2017, with
the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later.
|
(13)
|
Equity awards for Mr. Kimmel in 2016 include a 2016 LTI award consisting of the following: (i) 6,426
shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) 10,924 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2016, through
December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later; and (iv) a performance-based
non-qualified
stock option to purchase 7,294 shares for the forward looking, three-year performance period from January 1, 2016, through December 31, 2018, with the number of shares that vest, if any, vesting 50% following the end of the three-year
performance period and 50% one year later. The value of the time-based restricted stock award is based solely on the closing price of our Common Stock on the NYSE on the date of grant. The value of the performance-based restricted stock award of
$39.59 per share was calculated by a third-party consultant using a Monte Carlo valuation model. The option has a term of ten years and was valued at $9.94 per underlying share, based on a calculation by a third-party consultant using a Monte Carlo
valuation model. The value of the performance-based awards, if earned at maximum and valued at the closing price of our Common Stock on the NYSE on the date of grant, is $991,178.
|
(14)
|
Stock awards for Mr. Kimmel in 2015 included the following: (i) a 2014 LTI award that was granted in
2015 based on 2014 performance consisting of 8,163 shares of time-based restricted stock, vesting 25% on each anniversary of the grant date; (ii) a 2015 LTI award consisting of 2,203 shares of time-based restricted stock, vesting 25% on each
anniversary of the grant date; and (iii) a 2015 LTI award consisting of 8,811 shares of performance-based restricted stock for the forward looking, three-year performance period from January 1, 2015, through December 31, 2017, with
the number of shares that vest, if any, vesting 50% following the end of the three-year performance period and 50% one year later.
|
53
GRANTS OF PLAN-BASED AWARDS IN 2016
The following table provides details regarding plan-based awards granted to the NEOs during the year ended December 31,
2016.
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Estimated Future
Payouts Under
Non-Equity
Incentive Plan
Awards(1)
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Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2)
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All
Other
Stock
Awards:
Number of
Shares of
Stock
or Units
(#)(3)
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All other Option
Awards
Number of
Securities
Underlying
Options(4)
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Exercise
or Base
Price of
Option
Awards
($/Sh)
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Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)(5)
|
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Name
|
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|
Grant
Date
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Threshold
($)
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Target
($)
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Maximum
($)
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Threshold
(#)
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Target
(#)
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Maximum
(#)
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Threshold
(#)
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Target
(#)
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Maximum
(#)
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|
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Terry Considine
|
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1/25/2016
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600,000
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|
1,200,000
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|
2,400,000
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|
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|
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|
|
|
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|
|
1/26/2016
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25,426
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|
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|
50,851
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|
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|
101,702
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
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|
2,013,191
|
|
|
|
|
|
|
1/26/2016
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|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
96,203
|
|
|
|
|
|
192,405
|
|
|
|
|
|
384,809
|
|
|
|
|
|
38.73
|
|
|
|
|
|
1,912,506
|
|
Paul Beldin
|
|
|
|
|
1/25/2016
|
|
|
|
|
|
175,000
|
|
|
|
|
|
350,000
|
|
|
|
|
|
700,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
205,966
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
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7,151
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|
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|
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|
|
|
|
|
|
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|
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|
276,958
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|
|
1/26/2016
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4,122
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8,243
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|
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|
16,485
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326,340
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|
|
|
|
|
1/26/2016
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4,528
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|
9,055
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|
|
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|
|
18,109
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|
|
|
|
|
38.73
|
|
|
|
|
|
90,007
|
|
John Bezzant
|
|
|
|
|
1/25/2016
|
|
|
|
|
|
200,000
|
|
|
|
|
|
400,000
|
|
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240,320
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,172
|
|
|
|
|
|
4,343
|
|
|
|
|
|
8,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
171,939
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,103
|
|
|
|
|
|
6,205
|
|
|
|
|
|
12,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,250
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,419
|
|
|
|
|
|
4,839
|
|
|
|
|
|
9,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,994
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,702
|
|
|
|
|
|
7,043
|
|
|
|
|
|
14,085
|
|
|
|
|
|
38.73
|
|
|
|
|
|
70,007
|
|
Lisa R. Cohn
|
|
|
|
|
1/25/2016
|
|
|
|
|
|
250,000
|
|
|
|
|
|
500,000
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
257,477
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,648
|
|
|
|
|
|
13,295
|
|
|
|
|
|
26,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
526,349
|
|
Keith Kimmel
|
|
|
|
|
1/25/2016
|
|
|
|
|
|
162,500
|
|
|
|
|
|
325,000
|
|
|
|
|
|
650,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248,879
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,462
|
|
|
|
|
|
10,924
|
|
|
|
|
|
21,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
432,481
|
|
|
|
|
|
|
1/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,647
|
|
|
|
|
|
7,294
|
|
|
|
|
|
14,588
|
|
|
|
|
|
38.73
|
|
|
|
|
|
72,502
|
|
(1)
|
On January 25, 2016, the Committee made determinations of target total incentive compensation for 2016
based on achievement of Aimcos eight corporate goals for 2016, and achievement of specific individual objectives. Target total incentive compensation amounts were as follows: Mr. Considine $5.025 million; Mr. Beldin
$950,000; Mr. Bezzant $1.10 million; Ms. Cohn $1.25 million; and Mr. Kimmel $1.05 million. The awards in this column indicate the 2016 STI portion of these target total incentive amounts
at threshold, target and maximum performance levels. The actual 2016 STI awards earned by each of Messrs. Considine, Beldin, Bezzant, and Kimmel and Ms. Cohn are as disclosed in the Summary Compensation Table under
Non-Equity
Incentive Plan Compensation. See the discussion above under CD&A Total Compensation for 2016 Short-Term Incentive Compensation for 2016.
|
(2)
|
For each of Messrs. Considine, Beldin and Kimmel and Ms. Cohn the amounts in this column include the
number of shares of performance restricted stock granted pursuant to their 2016 LTI award that may vest at threshold, target and maximum performance levels based on relative TSR (60% of each award is based on the Companys TSR
relative to the NAREIT Apartment Index and 40% of each award is based on the Companys TSR relative to the REIT Index) over a three-year period from January 1, 2016 to December 31, 2018. A vesting portion of each award of performance
restricted stock will be determined based on the TSR results, and the restrictions on such vesting portion will lapse as to 50% of the vesting portion on the later of the third anniversary of the grant date and the date the vesting portion is
determined (but no later than March 15, 2019) and as to the remaining 50% on the fourth anniversary of the grant date. Solely with respect to Mr. Bezzant, the amounts shown in this column include (i) his 2016 LTI award which consists
of the following two separate awards: (a) an award, as first shown in this column, which vests as described above and (b) an award, as second shown in this column, comprised of performance-based restricted stock awards that may be earned
at threshold, target and maximum performance levels based on the achievement of development objectives over the three-year period from January 1, 2016 to December 31, 2018, with those objectives established annually by the
Committee for each of the 2016, 2017 and 2018 performance years, and to the extent those objectives are achieved for such performance year, the earned award will be subject to time-based vesting with 50% vesting on the later of the third anniversary
of the
|
54
|
grant date and the date performance is determined (but no later than March 15, 2019) and the remaining 50% vesting on the fourth anniversary of the grant date, and (ii) as third shown
in this column, the portion of his 2015 LTI award comprised of performance-based restricted stock awards that may be earned at threshold, target and maximum performance levels based on the achievement of development objectives for each
of the 2016 and 2017 performance years, and to the extent those objectives are achieved for such performance year, the earned award will be subject to time-based vesting with 50% vesting on the later of the third anniversary of the grant date and
the date performance is determined (but no later than March 15, 2018) and the remaining 50% vesting on the fourth anniversary of the grant date.
|
(3)
|
The amounts in this column reflect the number of shares of time-based restricted stock granted pursuant to the
2016 LTI award, vesting 25% on each anniversary of the grant date. For Mr. Beldin, the amount in this column also includes 7,151 shares of time-based restricted stock granted pursuant to his 2015 LTI award based on determination of
year-end
2015 goals pursuant to the backward looking LTI plan that governs LTI awards for officers below the executive officer level, and was the plan applied to Mr. Beldin prior to his promotion to CFO in
September 2015. All of the foregoing equity awards vest ratably over four years beginning with the first anniversary of the grant date. The number of shares of restricted stock was determined based on the average of the closing trading prices of
Aimcos Common Stock on the NYSE on the five trading days up to and including the grant date, or $37.61.
|
(4)
|
The amounts in this column reflect the number of performance-based
non-qualified
stock options granted pursuant to the 2016 LTI award that may vest at threshold, target and maximum performance levels based on relative TSR (60% of each award is based on the
Companys TSR relative to the NAREIT Apartment Index and 40% of each award is based on the Companys TSR relative to the REIT Index) over a three-year period from January 1, 2016 to December 31, 2018. A vesting portion of each
award of performance-based stock options will be determined based on the TSR results, and the restrictions on such vesting portion will lapse as to 50% of the vesting portion on the later of the third anniversary of the grant date and the date the
vesting portion is determined (but no later than March 15, 2019) and as to the remaining 50% on the fourth anniversary of the grant date. The options were valued at approximately $9.94 per underlying share, based on a calculation by a third
party consultant using a Monte Carlo valuation model.
|
(5)
|
This column represents the aggregate grant date fair value of stock awards in the year granted computed in
accordance with FASB ASC Topic 718. For additional information on the valuation assumptions with respect to the grants reflected in this column, refer to the Share-Based Compensation footnote to Aimcos consolidated financial statements in its
Annual Report on Form
10-K
for the year ended December 31, 2016.
|
55
OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
2016
The following table shows outstanding stock option awards
classified as exercisable and unexercisable as of December 31, 2016, for the NEOs, other than those awards that have been transferred for value. The table also shows unvested and unearned stock awards assuming a market value of $45.45 per share
(the closing market price of the Companys Common Stock on the New York Stock Exchange on December 30, 2016).
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
Stock Awards
|
|
Name
|
|
|
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(1)
|
|
|
|
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)
|
|
|
|
|
Equity
Incentive Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
|
|
|
Option
Exercise
Price
($) (1)
|
|
|
|
|
Option
Expiration
Date
|
|
|
|
|
Number
of Shares
or Units of
Stock That
Have Not
Vested (#)
|
|
|
|
|
Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($) (2)
|
|
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested (#)
|
|
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested ($)
|
|
Terry Considine
|
|
|
|
|
0
|
(3)
|
|
|
|
|
|
|
|
|
|
|
384,809
|
(3)
|
|
|
|
|
38.73
|
|
|
|
|
|
1/26/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,702
|
(4)
|
|
|
|
|
4,622,356
|
|
|
|
|
|
|
59,632
|
(5)
|
|
|
|
|
178,898
|
(5)
|
|
|
|
|
|
|
|
|
|
|
39.05
|
|
|
|
|
|
2/12/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
172,325
|
(6)
|
|
|
|
|
7,832,171
|
|
|
|
|
|
|
202,429
|
(7)
|
|
|
|
|
0
|
(7)
|
|
|
|
|
|
|
|
|
|
|
8.92
|
|
|
|
|
|
2/3/2019
|
|
|
|
|
|
32,313
|
(8)
|
|
|
|
|
1,468,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,013
|
(9)
|
|
|
|
|
2,000,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,870
|
(10)
|
|
|
|
|
1,357,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul Beldin
|
|
|
|
|
0
|
(11)
|
|
|
|
|
|
|
|
|
|
|
18,109
|
(11)
|
|
|
|
|
38.73
|
|
|
|
|
|
1/26/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,485
|
(12)
|
|
|
|
|
749,243
|
|
|
|
|
|
|
3,644
|
(13)
|
|
|
|
|
0
|
(13)
|
|
|
|
|
|
|
|
|
|
|
8.92
|
|
|
|
|
|
2/3/2019
|
|
|
|
|
|
7,151
|
(14)
|
|
|
|
|
325,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,318
|
(15)
|
|
|
|
|
241,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,526
|
(16)
|
|
|
|
|
114,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,671
|
(17)
|
|
|
|
|
75,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,101
|
(18)
|
|
|
|
|
50,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Bezzant
|
|
|
|
|
0
|
(19)
|
|
|
|
|
|
|
|
|
|
|
14,085
|
(19)
|
|
|
|
|
38.73
|
|
|
|
|
|
1/26/2026
|
|
|
|
|
|
2068
|
(20)
|
|
|
|
|
93,991
|
|
|
|
|
|
2068
|
(21)
|
|
|
|
|
93,991
|
|
|
|
|
|
|
4,180
|
(22)
|
|
|
|
|
0
|
(22)
|
|
|
|
|
|
|
|
|
|
|
28.33
|
|
|
|
|
|
1/29/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,686
|
(23)
|
|
|
|
|
394,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,512
|
(24)
|
|
|
|
|
659,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7256
|
(25)
|
|
|
|
|
329,785
|
|
|
|
|
|
1210
|
(26)
|
|
|
|
|
54,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,205
|
(27)
|
|
|
|
|
282,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,721
|
(28)
|
|
|
|
|
123,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,536
|
(29)
|
|
|
|
|
206,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,089
|
(30)
|
|
|
|
|
140,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,797
|
(31)
|
|
|
|
|
81,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,097
|
(32)
|
|
|
|
|
95,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa R. Cohn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,589
|
(33)
|
|
|
|
|
1,208,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,024
|
(34)
|
|
|
|
|
1,319,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,648
|
(35)
|
|
|
|
|
302,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,721
|
(28)
|
|
|
|
|
123,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,905
|
(36)
|
|
|
|
|
541,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,108
|
(37)
|
|
|
|
|
368,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,503
|
(38)
|
|
|
|
|
250,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith Kimmel
|
|
|
|
|
(0
|
)(39)
|
|
|
|
|
|
|
|
|
|
|
14,588
|
(39)
|
|
|
|
|
38.73
|
|
|
|
|
|
1/26/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,848
|
(40)
|
|
|
|
|
992,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,622
|
(41)
|
|
|
|
|
800,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,426
|
(42)
|
|
|
|
|
292,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,653
|
(43)
|
|
|
|
|
75,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,123
|
(44)
|
|
|
|
|
278,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,413
|
(45)
|
|
|
|
|
336,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,703
|
(46)
|
|
|
|
|
122,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,835
|
(47)
|
|
|
|
|
83,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Pursuant to the anti-dilution provisions of the plan pursuant to which the options were granted, the number of
shares subject to the then outstanding options and the exercise price of such options were adjusted, where applicable, to reflect the special dividends paid in January 2008, August 2008, December 2008, and January 2009. The footnotes to each option
award provide the original number of shares subject to the option and the original exercise price on the grant date.
|
(2)
|
Amounts reflect the number of shares of restricted stock that have not vested multiplied by the market value
of $45.45 per share, which was the closing market price of Aimcos Common Stock on December 30, 2016.
|
56
(3)
|
This option was granted for the purchase of 192,405 shares at target, at an exercise price of $38.73 per share
and vests 50% following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date of January 26, 2016. The amount shown in
the table is the award at maximum.
|
(4)
|
This restricted stock award was granted on January 26, 2016, for 50,851 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown in the table is the award at maximum.
|
(5)
|
This option was granted for the purchase of 238,530 shares at an exercise price of $39.05 per share and vests
25% on each anniversary of the grant date of February 12, 2015.
|
(6)
|
This restricted stock award was granted on February 12, 2015, for 86,163 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown in the table is the award at maximum.
|
(7)
|
This option was granted for the purchase of 809,717 shares at an exercise price of $8.92 per share and vested
25% on each anniversary of the grant date of February 3, 2009; the option was exercised in part for 202,430 shares on May 6, 2010, for 202,429 shares on February 8, 2011, and for 202,429 shares on February 28, 2012.
|
(8)
|
This restricted stock award was granted on February 12, 2015, for a total of 43,083 shares and vests 25%
on each anniversary of the grant date.
|
(9)
|
This restricted stock award was granted on January 27, 2014, for a total of 88,025 shares and vests 25%
on each anniversary of the grant date.
|
(10)
|
This restricted stock award was granted on January 28, 2013, for a total of 119,479 shares and vested 25%
on each anniversary of the grant date.
|
(11)
|
This option was granted for the purchase of 9,055 shares at target, at an exercise price of $38.73 per share
and vests 50% following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date of January 26, 2016. The amount shown in
the table is the award at maximum.
|
(12)
|
This restricted stock award was granted on January 26, 2016, for 8,243 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown in the table is the award at maximum.
|
(13)
|
This option was granted for the purchase of 3,644 shares at an exercise price of $8.92 per share and vested
25% on each anniversary of the grant date of February 3, 2009.
|
(14)
|
This restricted stock award was granted on January 26, 2016, for a total of 7,151 shares and vests 25% on
each anniversary of the grant date.
|
(15)
|
This restricted stock award was granted on January 26, 2016, for a total of 5,318 shares and vests 25% on
each anniversary of the grant date.
|
(16)
|
This restricted stock award was granted on February 12, 2015, for a total of 3,368 shares and vests 25%
on each anniversary of the grant date.
|
(17)
|
This restricted stock award was granted on January 27, 2014, for a total of 3,341 shares and vests 25% on
each anniversary of the grant date.
|
(18)
|
This restricted stock award was granted on January 28, 2013, for a total of 4,402 shares and vested 25%
on each anniversary of the grant date.
|
(19)
|
This option was granted for the purchase of 7,043 shares at target, at an exercise price of $38.73 per share
and vests 50% following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date of January 26, 2016. The amount shown in
the table is the award at maximum.
|
(20)
|
This restricted stock award was granted on January 26, 2016, for 6,205 shares at target with vesting
determined according to development-related objectives. The amount shown is the target amount for the portion of the award relating to the 2016 performance year, which will vest 50% following the end of the three-year forward looking performance
period, and 50% on the fourth anniversary of the grant date.
|
57
(21)
|
This restricted stock award was granted on January 26, 2016, for 6,205 shares at target with vesting
determined according to development-related objectives. To the extent the extent the objectives are achieved for the performance years, this award vests 50% following the end of the three-year forward looking performance period, and 50% on the
fourth anniversary of the grant date. The amount shown is the award at threshold for the portion of the award relating to the 2017 and 2018 performance years.
|
(22)
|
This option was granted for the purchase of 2,972 shares at an exercise price of $39.85 per share and vested
25% on each anniversary of the grant date of January 29, 2008.
|
(23)
|
This restricted stock award was granted on January 26, 2016, for 4,343 shares at target and vests 50%
following the end of the three-year forward looking performance period subject to the relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown is the award at maximum.
|
(24)
|
This restricted stock award was granted on February 12, 2015, for 7,256 shares at target and vests 50%
following the end of the three-year forward looking performance period subject to the relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown is the award at maximum.
|
(25)
|
This restricted stock award was granted on February 12, 2015, for 7,256 shares at target with vesting
determined according to acquisition-related objectives. The amount shown is the maximum amount for the portion of the award relating to the 2015 performance year, and the target amount for the portion of the award relating to the 2016 performance
year, which, in each case, will vest 50% following the end of the three-year forward looking performance period, and 50% on the fourth anniversary of the grant date.
|
(26)
|
This restricted stock award was granted on February 12, 2015, for 7,256 shares at target with vesting
determined according to acquisition-related objectives. To the extent the extent the objectives are achieved for the performance years, this award vests 50% following the end of the three-year forward looking performance period, and 50% on the
fourth anniversary of the grant date. The amount shown is the award at threshold for the portion of the award relating to the 2017 performance year.
|
(27)
|
This restricted stock award was granted on January 26, 2016, for a total of 6,205 shares and vests 25% on
each anniversary of the grant date.
|
(28)
|
This restricted stock award was granted on February 12, 2015, for a total of 3,628 shares and vests 25%
on each anniversary of the grant date.
|
(29)
|
This restricted stock award was granted on February 12, 2015, for a total of 6,047 shares and vests 25%
on each anniversary of the grant date.
|
(30)
|
This restricted stock award was granted on January 27, 2014, for a total of 6,178 shares and vests 25% on
each anniversary of the grant date.
|
(31)
|
This restricted stock award was granted on January 28, 2013, for a total of 8,385 shares and vests 25% on
each anniversary of the grant date.
|
(32)
|
This restricted stock award was granted on January 28, 2013, for a total of 7,187 shares and vested 25%
on each anniversary of the grant date.
|
(33)
|
This restricted stock award was granted on January 26, 2016, for 13,295 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown in the table is the award at maximum.
|
(34)
|
This restricted stock award was granted on February 12, 2015, for 14,512 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown is the award at maximum.
|
(35)
|
This restricted stock award was granted on January 26, 2016, for a total of 6,648 shares and vests 25% on
each anniversary of the grant date.
|
(36)
|
This restricted stock award was granted on February 12, 2015, for a total of 15,873 shares and vests 25%
on each anniversary of the grant date.
|
58
(37)
|
This restricted stock award was granted on January 27, 2014, for a total of 16,216 shares and vests 25%
on each anniversary of the grant date.
|
(38)
|
This restricted stock award was granted on January 28, 2013, for a total of 22,010 shares and vested 25%
on each anniversary of the grant date.
|
(39)
|
This option was granted for the purchase of 7,294 shares at target, at an exercise price of $38.73 per share
and vests 50% following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date of January 26, 2016. The amount shown in
the table is the award at maximum.
|
(40)
|
This restricted stock award was granted on January 26, 2016, for 10,924 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown in the table is the award at maximum.
|
(41)
|
This restricted stock award was granted on February 12, 2015, for 8,811 shares at target, and vests 50%
following the end of the three-year forward looking performance period, subject to relative TSR metrics set forth earlier in this proxy, and 50% on the fourth anniversary of the grant date. The amount shown is the award at maximum.
|
(42)
|
This restricted stock award was granted on January 26, 2016, for a total of 6,426 shares and vests 25% on
each anniversary of the grant date.
|
(43)
|
This restricted stock award was granted on February 12, 2015, for a total of 2,203 shares and vests 25%
on each anniversary of the grant date.
|
(44)
|
This restricted stock award was granted on February 12, 2015, for a total of 8,163 shares and vests 25%
on each anniversary of the grant date.
|
(45)
|
This restricted stock award was granted on January 27, 2014, for a total of 5,406 shares and vests 25% on
each anniversary of the grant date.
|
(46)
|
This restricted stock award was granted on January 27, 2014, for a total of 7,413 shares and vests 50% on
each of August 1, 2017 and August 1, 2018.
|
(47)
|
This restricted stock award was granted on January 28, 2013, for a total of 7,337 shares and vested 25%
on each anniversary of the grant date.
|
OPTION EXERCISES AND STOCK VESTED IN 2016
The following table sets forth certain information regarding options and stock awards exercised and vested, respectively,
during the year ended December 31, 2016, for the persons named in the Summary Compensation Table above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
|
|
|
Number of
Shares
Acquired on
Exercise
(#)
|
|
|
|
|
|
Value
Realized on
Exercise ($) (1)
|
|
|
|
|
|
Number of
Shares
Acquired on
Vesting (#)
|
|
|
|
|
|
Value
Realized on
Vesting ($) (2)
|
|
Terry Considine
|
|
|
|
|
|
|
909,196
|
|
|
|
|
|
|
|
10,737,823
|
|
|
|
|
|
|
|
91,871
|
|
|
|
|
|
|
|
3,512,272
|
|
Paul Beldin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
3,854
|
|
|
|
|
|
|
|
146,370
|
|
John Bezzant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
7,085
|
|
|
|
|
|
|
|
266,296
|
|
Lisa R. Cohn
|
|
|
|
|
|
|
8,102
|
|
|
|
|
|
|
|
138,301
|
|
|
|
|
|
|
|
19,046
|
|
|
|
|
|
|
|
721,127
|
|
Keith Kimmel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
7,315
|
|
|
|
|
|
|
|
275,216
|
|
(1)
|
Amounts reflect the difference between the exercise price of the option and the market price at the time of
exercise.
|
(2)
|
Amounts reflect the market price of the stock on the day the shares of restricted stock vested.
|
59
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
In the table and discussion that follows, payments and other benefits payable upon early termination and change in control
situations are set out as if the conditions for payments had occurred and/or the terminations took place on December 31, 2016. In setting out such payments and benefits, amounts that had already been earned as of the termination date are not
shown. Also, benefits that are available to all full-time regular employees when their employment terminates are not shown. The amounts set forth below are estimates of the amounts which could be paid out to the NEOs upon their termination. The
actual amounts to be paid out can only be determined at the time of such NEOs separation from Aimco.
Mr. Considines
2008 Employment Agreement
Under his 2008 employment agreement, Mr. Considine is not entitled to any additional or
special payments upon the occurrence of a change in control. Mr. Considines walk right under the 1994 employment agreement (that is, his right to severance payments upon his terminating employment with the Company within two
years following a change in control) was eliminated. The definition of change in control was also narrowed to increase the required percentage of change in ownership and to require the occurrence of the applicable change in control
event, rather than just stockholder approval of such event.
In the event Mr. Considines employment is
terminated without cause by Aimco, by Mr. Considine for good reason, or for reason of disability, Mr. Considine will be entitled to: a lump sum cash payment equal to two times the sum of his base salary at the time of termination and
$1.65 million, subject to certain reductions, including a reduction of the sum by 1/24 for each complete month of employment following his attainment of age 68; the amount of any STI earned but unpaid for the fiscal year preceding the
termination date; a
pro-rata
portion of a $1.65 million STI amount for the fiscal year in which the termination occurs; continued medical coverage at Aimcos expense until the earlier of
(a) eighteen months following the date of termination, or (b) Mr. Considine becoming eligible for coverage under the medical plans of a subsequent employer, provided that in the event Mr. Considines medical coverage
terminates pursuant to (a), he will be entitled to a lump sum payment equal to six times the monthly COBRA premium then in effect; and immediate and full acceleration of any unvested stock awards and outstanding unvested stock options, with all
outstanding stock options (along with all options already vested) remaining exercisable until the earliest to occur of the fifth anniversary of the date of termination or the expiration of the applicable option term.
In the event of Mr. Considines disability, the lump sum cash payment described above shall be offset by any
long-term disability benefits received under Aimcos long-term disability insurance plan.
In the event of
Mr. Considines death, Aimco will pay or provide to Mr. Considines estate the amount of any STI earned but unpaid for the prior fiscal year, and all equity-based and other long-term incentive awards granted to Mr. Considine
will become immediately fully vested and payable, as applicable, and all outstanding stock option awards will remain exercisable until the earliest to occur of the fifth anniversary of the date of termination or the expiration of the applicable
option term.
Under the employment agreement, in the event payments to Mr. Considine are subject to the excise tax
imposed by Section 4999 of the Code, Mr. Considine is entitled to receive a limited
gross-up
payment, subject to a maximum of $5 million. If covered payments are less than 10% over the permitted
limit, Mr. Considine is required to reduce his payments to avoid triggering a
gross-up
payment.
Double Trigger Vesting Upon Change in Control
Beginning with the equity grants made in 2015 for compensation year 2014, the restricted stock and stock option agreements
pursuant to which restricted stock and/or stock option awards have been made to Messrs. Considine, Beldin, Bezzant and Kimmel and Ms. Cohn provide that upon a change in control, all outstanding
60
shares of restricted stock shall not become immediately and fully vested and all unvested stock options shall not become immediately and fully vested and remain exercisable (along with all
options already vested) for the remainder of the term of the option unless there is also a subsequent termination of employment of the executive officer. Aimcos LTI plan provides that performance shares will vest based on the higher of actual
or target TSR performance through the truncated performance period ending on the date of the change in control.
Accelerated Vesting
upon Termination of Employment Due to Death or Disability
As set forth above, in the event Mr. Considines
employment is terminated for reason of disability, Mr. Considine will be entitled to immediate and full acceleration of any unvested stock awards and outstanding unvested stock options, with all outstanding stock options (along with all options
already vested) remaining exercisable until the earliest to occur of the fifth anniversary of the date of termination or the expiration of the applicable option term. In the event of Mr. Considines death, all equity-based and other LTI
awards granted to Mr. Considine will become immediately fully vested and payable, as applicable, and all outstanding stock option awards will remain exercisable until the earliest to occur of the fifth anniversary of the date of termination or
the expiration of the applicable option term.
The restricted stock and stock option agreements pursuant to which
restricted stock and/or stock option awards have been made to Messrs. Beldin, Bezzant and Kimmel and Ms. Cohn provide that upon termination of employment due to death or disability, all outstanding shares of restricted stock become
immediately and fully vested and all unvested stock options become immediately and fully vested and remain exercisable (along with all options already vested) for the remainder of the term of the option.
Notwithstanding the foregoing, Aimcos LTI plan provides that performance shares will vest based on the higher of actual
or target TSR performance through the truncated performance period ending on the date of death or disability.
Non-Competition
and
Non-Solicitation
Agreements
Effective in January 2002 for Mr. Considine, and in connection with their employment and/or promotions by Aimco for
Messrs. Beldin, Bezzant and Kimmel and Ms. Cohn, Aimco entered into certain
non-competition
and
non-solicitation
agreements with each executive.
Mr. Considines 2002
non-competition
and
non-solicitation
agreement was replaced by his December 2008 employment agreement. Pursuant to the agreements, each of
these NEOs agreed that during the term of his or her employment with the Company and for a period of two years following the termination of his or her employment, except in circumstances where there was a change in control of the Company, he or she
could not (i) be employed by a competitor of the Company named on a schedule to the agreement, (ii) solicit other employees to leave the Companys employment, or (iii) solicit customers of Aimco to terminate their relationship
with the Company. The agreements further required that the NEOs protect Aimcos trade secrets and confidential information. For Messrs. Beldin, Bezzant and Kimmel and Ms. Cohn, the agreements provide that in order to enforce the
above-noted
non-competition
condition following the executives termination of employment by the Company without cause, each such executive will receive, for a period not to extend beyond the earlier of
24 months following such termination or the date of acceptance of employment with a
non-competitor,
(i) severance pay in an amount, if any, to be determined by the Company in its sole discretion and
(ii) a monthly payment equal to
two-thirds
(2/3) of such executives monthly base salary at the time of termination. For purposes of these agreements, cause is defined to mean, among
other things, the executives (i) breach of the agreement, (ii) failure to perform required employment services, (iii) misappropriation of Company funds or property, (iv) indictment, conviction, plea of guilty or plea of no
contest to a crime involving fraud or moral turpitude, or (v) negligence, fraud, breach of fiduciary duty, misconduct or violation of law.
61
The following table summarizes the potential payments under various scenarios if
they had occurred on December 31, 2016.
|
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|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
Value of Accelerated Stock and Stock Options ($)(1)
|
|
|
|
|
|
Severance ($)
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Change in
Control
|
|
|
|
|
|
Death or
Disability
|
|
|
|
|
|
Termination
Without
Cause
|
|
|
|
|
|
Termination
With Good
Reason
|
|
|
|
|
|
Change
in
Control
|
|
|
|
|
|
Death
|
|
|
|
|
|
Disability
|
|
|
|
|
|
Termination
Without
Cause
|
|
|
|
|
|
Termination
For Good
Reason
|
|
|
|
|
|
Non-
Compete
Payments
($)(2)
|
|
Terry Considine
|
|
|
|
|
|
|
13,491,803
|
|
|
|
|
|
|
|
13,491,803
|
|
|
|
|
|
|
|
13,491,803
|
|
|
|
|
|
|
|
13,491,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,436,895(3)(4)
|
|
|
|
|
|
|
|
2,436,895(4)
|
|
|
|
|
|
|
|
2,436,895(4)
|
|
|
|
|
|
|
|
|
|
Paul Beldin
|
|
|
|
|
|
|
1,243,004
|
|
|
|
|
|
|
|
1,243,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
466,667
|
|
John Bezzant
|
|
|
|
|
|
|
2,115,531
|
|
|
|
|
|
|
|
2,115,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
533,333
|
|
Lisa R. Cohn
|
|
|
|
|
|
|
2,849,351
|
|
|
|
|
|
|
|
2,849,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
533,333
|
|
Keith Kimmel
|
|
|
|
|
|
|
2,134,625
|
|
|
|
|
|
|
|
2,134,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
466,667
|
|
(1)
|
Amounts reflect value of accelerated stock and options using the closing market price on December 30,
2016, of $45.45 per share.
|
(2)
|
Amounts assume the agreements were enforced by the Company and the payments extended for 24 months following
the executives termination of employment by the Company without cause.
|
(3)
|
Amount does not reflect the offset for long-term disability benefit payments in the case of a qualifying
disability under Aimcos long-term disability insurance plan.
|
(4)
|
Amount consists of a lump sum cash payment equal to (a) two times the sum of Mr. Considines
base salary and $1.65 million, reduced by 1/24 for each complete month of employment following his attainment of age 68, (b) $1.65 million STI for 2016, and (c) 24 months of medical coverage reimbursement at an estimated amount of $21,895.
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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Information on equity compensation plans as of the end of the 2016 fiscal year under which equity securities of the Company
are authorized for issuance is set forth in the following table.
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Plan Category
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Number of
Securities To
Be Issued upon
Exercise
of
Outstanding
Options
Warrants and
Rights
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Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants and
Rights
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Number of Securities
Remaining Available
for Future Issuance
under Equity
Compensation
Plans
(Excluding
Securities Subject
to Outstanding
Unexercised Grants)
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Equity compensation plans approved by security holders
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890,105
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$
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31.77
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1,018,940
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Equity compensation plans not approved by security holders
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies and Procedures for Review, Approval or Ratification of Related Person Transactions
Aimco recognizes that related person transactions can present potential or actual conflicts of interest and create the
appearance that Aimcos decisions are based on considerations other than the best interests of Aimco and its stockholders. Accordingly, as a general matter, it is Aimcos preference to avoid related person transactions. Nevertheless, Aimco
recognizes that there are situations where related person transactions may be in, or may not be inconsistent with, the best interests of Aimco and its stockholders. The Nominating and Corporate Governance Committee, pursuant to a written policy
approved by the Board, has oversight for related person transactions. The Nominating and Corporate Governance Committee will review transactions, arrangements or relationships in which (1) the aggregate amount involved will or may be expected
to exceed $100,000 in any calendar year, (2) Aimco (or any Aimco entity) is a participant, and (3) any related party has or will have a direct or indirect interest (other than an interest arising solely as a result of being a director of
another corporation or organization that is a party to the transaction or a less than 10 percent beneficial owner of another entity that is a party to the transaction). The Nominating and Corporate Governance Committee has also given its
standing approval for certain types of related person transactions such as certain employment arrangements, director compensation, transactions with another entity in which a related persons interest is only by virtue of a
62
non-executive
employment relationship or limited equity position, and transactions in which all stockholders receive pro rata benefits. Since the beginning
of 2016, there were no related person transactions that required review under the policy.
OTHER MATTERS
S
ection 16(a) Beneficial Ownership Reporting Compliance
.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Aimcos executive officers and directors, and persons who own more than ten percent of a registered class of Aimcos equity securities, to file reports (Forms
3, 4 and 5) of stock ownership and changes in ownership with the SEC and the New York Stock Exchange. Executive officers, directors and beneficial owners of more than ten percent of Aimcos registered equity securities are required by SEC
regulations to furnish Aimco with copies of all such forms that they file.
Based solely on Aimcos review of the
copies of Forms 3, 4 and 5 and the amendments thereto received by it for the year ended December 31, 2016, or written representations from certain reporting persons that no Forms 5 were required to be filed by those persons, Aimco believes
that during the period ended December 31, 2016, all filing requirements were complied with by its executive officers and directors.
S
tockholders
Proposals
.
Proposals of stockholders intended to be presented at Aimcos Annual Meeting of Stockholders to be held in 2018 must be received by Aimco, marked to the attention of the Corporate Secretary, no later than November 14, 2017, to be
included in Aimcos proxy statement and form of proxy for that meeting. Proposals must comply with the requirements as to form and substance established by the SEC for proposals in order to be included in the proxy statement. Nominations for
directors pursuant to proxy access provided for in the Companys bylaws must adhere to the terms of the bylaws and will be considered untimely if received by the Company before October 15, 2017, or after November 14, 2017.
Proposals of stockholders submitted to Aimco for consideration at Aimcos annual meeting of stockholders to be held in 2018 outside the processes of Rule
14a-8
(
i.e.
, the procedures for placing a
stockholders proposal in Aimcos proxy materials) will be considered untimely if received by the Company before December 26, 2017, or after January 25, 2018.
O
ther Business
.
Aimco knows of no other business that will come
before the Meeting for action. As to any other business that comes before the Meeting, the persons designated as proxies will have discretionary authority to act in their best judgment.
A
vailable Information
.
Aimco files annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that the Company files at the SECs public reference room in Washington, D.C. Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms. The Companys public filings are also available to the
public from commercial document retrieval services and on the internet site maintained by the SEC at http://www.sec.gov. Reports, proxy statements and other information concerning the Company also may be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
This Proxy Statement is dated March 3, 2017. You
should not assume that the information contained in the Proxy Statement is accurate as of any date other than that date.
THE BOARD OF DIRECTORS
March 3, 2017
Denver, Colorado
63
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods
outlined below to vote your proxy.
VALIDATION DETAILS ARE
LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or
telephone must be received by 1:00 a.m., Central Time, on April 25, 2017.
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Vote by Internet
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Go to
www.envisionreports.com/aiv
Or scan the QR code
with your smartphone
Follow the steps outlined on the secure
website
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch
tone telephone
Follow
the instructions provided by the recorded message
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Using a
black ink
pen, mark your votes with an
X
as shown in
this example. Please do not write outside the
designated areas.
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☒
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q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
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A
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Proposals The Board of Directors recommends a vote
FOR
all the nominees listed in Proposal 1,
FOR
Proposals 2 and 3, and
FOR
an annual advisory vote on executive compensation in Proposal
4.
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1. Election of Directors:
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For
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Against
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Abstain
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For
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Against
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Abstain
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For
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Against
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Abstain
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+
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01 - Terry Considine
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☐
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☐
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☐
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02 - Thomas L. Keltner
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☐
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☐
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☐
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03 - J. Landis Martin
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☐
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☐
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☐
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04 - Robert A. Miller
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☐
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☐
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☐
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05 - Kathleen M. Nelson
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☐
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☐
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☐
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06 -Michael A. Stein
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☐
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☐
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☐
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07 - Nina A. Tran
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☐
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☐
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☐
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For
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Against
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Abstain
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For
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Against
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Abstain
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2.
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Ratification of the selection of Ernst & Young LLP to serve as the independent registered public accounting firm for the year ending December 31, 2017.
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☐
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☐
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☐
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3.
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Advisory vote on executive compensation.
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☐
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☐
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☐
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1 Yr
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2 Yrs
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3 Yrs
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Abstain
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4.
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Advisory vote on the frequency of future advisory votes on executive compensation.
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☐
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☐
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☐
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☐
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Change of Address
Please print your new address below.
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Comments
Please print your comments below.
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Meeting Attendance
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Mark the box to the right if you plan to attend the Annual Meeting.
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☐
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
corporate officer, trustee, guardian, or custodian, please give full title.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/
/
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q
IF YOU HAVE
NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Proxy Apartment Investment and Management
Company
PROXY FOR COMMON STOCK
SOLICITED BY THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS APRIL 25, 2017
The undersigned hereby appoints Terry Considine, Paul L. Beldin
and Lisa R. Cohn and each of them the undersigneds true and lawful attorneys and proxies (with full power of substitution in each) to vote all Common Stock of Apartment Investment and Management Company (Aimco), standing in the
undersigneds name, at the Annual Meeting of Stockholders of Aimco to be held at Aimcos Corporate Office, 4582 S. Ulster Street, Suite 1100, Denver, CO 80237, on Tuesday, April 25, 2017, at 8:30 a.m., and any adjournment or postponement
thereof (the Stockholders Meeting), upon those matters as described in the Proxy Statement for the Stockholders Meeting. In their discretion, the proxies are authorized to vote upon such other business as may properly come
before the Stockholders Meeting (including any adjournment or postponement thereof).
IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL
BE VOTED FOR EACH OF THE SEVEN DIRECTOR NOMINEES IN PROPOSAL 1,FOR PROPOSALS 2 AND 3, AND FOR THE ANNUAL OPTION IN PROPOSAL 4.
PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS.
(Items to be voted appear on reverse side).
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