ONE LIBERTY PROPERTIES, INC.
Stock Ownership Guidelines
March 12, 2018
The purpose of these Stock Ownership Guidelines (these “Guidelines”) is to set forth parameters for stock ownership by certain executive officers and directors of One Liberty Properties, Inc. (the “Company”) as a way to further align their interests with the interests of stockholders and promote the Company’s commitment to sound corporate governance.
These Guidelines apply to the Company’s chief executive officer, named executive officers (“NEOs”) and independent directors (each, a “Covered Individual” and collectively, the “Covered Individuals”).
These Guidelines establish the ownership requirements of shares of the Company’s common stock (“Shares”) determined as follows (see “Miscellaneous” as well):
Covered Individuals Position Share Ownership Guidelines
Chief Executive Officer 4 times base salary
Full Time Named Executive Officers (“NEOs”) 2 times base salary
Part Time NEOs An amount equal to the number of shares owned by a Full Time NEO. See item 1 of “Miscellaneous.”
Independent directors 3 times annual cash retainer for directors
All Covered Individuals will have five years from the date they become a CEO, NEO or independent director to reach the minimum ownership requirements for the position in which they are serving. If a Covered Individual becomes subject to a greater ownership amount, due to promotion or an increase in base salary or annual cash retainer, the Covered Individual is expected to meet the higher ownership amount within the later of the original five-year period or three years from the effective date of the promotion, salary, or retainer change. Once a Covered Individual has met the applicable minimum ownership requirement, such Covered Individual will be expected to continue to comply with the minimum ownership requirement, except when it is determined by the Compensation Committee that compliance would create severe hardship or prevent a Covered Individual from complying with law.
Calculating Share Ownership
Beneficial ownership of shares of common stock shall be determined, as of the last business day of a calendar year, pursuant to Rule 13d-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended; provided, however, that (i) shares shall be deemed to be beneficially owned notwithstanding a disclaimer of such ownership) and (ii) neither options nor restricted stock units (i.e. stock awards that vest only if, among other things, the Company achieves certain levels of performance with respect to certain metrics such as total stockholder return or return on capital) shall be included in such calculation.
Share Price Fluctuation
Share prices of all companies are volatile. It would be unfair to require Covered Individuals to increase their holdings because of a temporary decrease in the price of the Company’s Shares. Consequently, when calculating the number of Shares that a Covered Individual should hold under these Guidelines, the Covered Individual’s salary (or in the case of a director, the base cash retainer) will be determined by using the highest Share price over the prior 24-month period. Compliance will be evaluated on a once-per-year basis, as of December 31 of each year, and not on a running basis.
Administration and Enforcement
These Guidelines are administered and interpreted by the Compensation Committee. The Compensation Committee may delegate to management the responsibility for providing data regarding a Covered Individual’s compliance with these Guidelines.
If these Guidelines would place a severe hardship on a Covered Individual or prevent such Covered Individual from complying with law, such Covered Individual will submit a written explanation of the particular hardship or legal limitation to the Compensation Committee. The Compensation Committee, in its sole discretion, will make a determination regarding any revised ownership guideline or temporary relief from the existing ownership guideline for such Covered Individual.
1. The term NEO shall mean the officers referred to in Item 402 (a)(3)(ii) and (iii) of Regulation S-K. Full Time NEOs are NEOs who perform services for the Company, as reflected in the Company’s proxy statement, on a full-time basis, and Part Time NEOs are NEOs who perform services for the Company, as reflected in the Company’s proxy statement, on a part time basis. In the event there is more than one Full Time NEO (other than the CEO), the ownership requirement for the Part Time NEOs shall equal the number of shares owned by the Full Time NEO with the lowest annual base salary.
2. Annual base salary shall be the Covered Individual’s base salary for the applicable year. For example, in determining whether a Full Time NEO satisfied the ownership requirement for 2018, the number of shares owned will be measured as of December 31, 2018 and the base salary shall be such individual’s base salary for 2018.
3. Independent directors are those directors determined to be independent in accordance with the listing standards of NYSE for such year. The director’s annual base retainer means the amount paid to a director for serving on the Board, without regard to payments made to a director for attending meetings and/or serving on a committee and/or as a committee chair and/or as independent lead director.
4. The Board may amend or eliminate these Guidelines as it determines appropriate.
5. Non-compliance with these Guidelines does not constitute a violation of the Company’s Code of Business Conduct and Ethics or any of the Company’s organizational or governance documents.