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Share Name | Share Symbol | Market | Type |
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Duke Realty Corporation | NYSE:DRE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 48.20 | 0 | 01:00:00 |
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Sincerely,
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/s/ JAMES B. CONNOR
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James B. Connor
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President and Chief Executive Officer
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Page
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1. To elect ten directors to serve on the Company’s Board of Directors for a one-year term ending at the 2018 Annual Meeting of Shareholders;
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2. To vote on an advisory basis to approve the compensation of the Company’s named executive officers for 2016;
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3. To vote on an advisory basis to approve the frequency of shareholder votes on the compensation of named executive officers;
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4. To ratify the reappointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year 2017; and
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5. To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
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By order of the Board of Directors,
/s/ ANN C. DEE
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Indianapolis, Indiana
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Ann C. Dee
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March 15, 2017
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Executive Vice President, General Counsel and Corporate Secretary
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• Time and Date
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3:00 p.m. local time, April 26, 2017
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• Place
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The Conrad Indianapolis, 50 West Washington Street, Indianapolis, Indiana 46204
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• Record Date
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February 24, 2017
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• Voting
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All shareholders of record as of the close of business on the Record Date are entitled to vote at the Annual Meeting. Each share of common stock outstanding on the Record Date is entitled to one vote on each item submitted for consideration.
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• Quorum
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In order for any business to be conducted, the holders of a majority of the shares of common stock entitled to vote at the Annual Meeting must be present, either in person or represented by proxy. For the purpose of determining the presence of a quorum, abstentions and broker non-votes (which occur when shares held by brokers or nominees for beneficial owners are voted on some matters but not on others) generally will be counted as present. As of the Record Date, 355,560,004 shares of common stock were issued and outstanding.
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•
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Election of ten directors
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Advisory vote to approve named executive officer compensation
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Advisory vote on frequency of shareholder votes on the compensation of named executive officers
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Ratification of KPMG as auditors for 2017
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Transaction of other business that may properly come before the meeting
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(i)
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delivering written notice of revocation to the Company’s Corporate Secretary, Ms. Ann C. Dee, at 600 East 96
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Street, Suite 100, Indianapolis, Indiana 46240;
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(ii)
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submitting to the Company a duly executed proxy card bearing a later date;
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(iii)
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voting via the Internet or by telephone at a later date; or
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(iv)
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appearing at the Annual Meeting and voting in person.
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Board Vote Recommendation
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Page Reference (for more detail)
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Election of Directors
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FOR EACH DIRECTOR NOMINEE
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7
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Advisory Vote to Approve Compensation of Named Executive Officers
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FOR
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25
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Advisory Vote on Frequency of Shareholder Votes On Compensation of Named Executive Officers
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Every 1 Year
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26
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Ratification of KPMG as Auditors for 2017
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FOR
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60
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William Cavanaugh III,
Age 78
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Director Since:
1999; Lead director
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Board Committee:
Corporate Governance, Chairman
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Qualifications:
Mr. Cavanaugh, who served as the Chief Executive Officer of Progress Energy, Inc., a publicly-traded energy company, for eight years, brings corporate finance, operations, nuclear energy industry, public company, and executive leadership expertise to the Board of Directors.
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Mr. Cavanaugh served as the Chairman of the World Association of Nuclear Operators (WANO) from 2004 until 2009. He retired as Chairman and Chief Executive Officer of Progress Energy, Inc. in 2004, posts he had held since 1999 and 1996, respectively. Mr. Cavanaugh currently is a professor at the Institute for Advanced Discovery & Innovation at the University of South Florida.
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Alan H. Cohen,
Age 70
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Director Since:
2011
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Board Committee:
Executive Compensation, Chairman
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Qualifications:
As an attorney and co-founder of The Finish Line, Inc., a publicly-traded athletic wear retailer where he served in various executive positions including Chief Executive Officer and President, Mr. Cohen brings consumer goods industry, corporate operations, legal and executive leadership expertise to the Board of Directors.
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Mr. Cohen is the co-founder of The Finish Line, Inc. and served as its President from 1982 to 2003 and Chief Executive Officer from 1982 to 2008. He served as Chairman of the Board of Directors of The Finish Line, Inc. from 1992 to 2010 and as one of its directors from 1976 to 2010. Mr. Cohen is an attorney, and practiced law from 1973 to 1981.
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James B. Connor,
Age 58
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Director Since:
2015
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Board Committee:
N/A
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Qualifications:
Mr. Connor, who joined the Company in 1998, brings real estate industry, finance, operations, development, and executive leadership expertise to the Board of Directors.
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Mr. Connor was named the Company’s President and Chief Executive Officer, commencing January 1, 2016, and joined the Company’s Board of Directors in 2015. Prior to being named President and Chief Executive Officer, Mr. Connor held various senior management positions with the Company, including Senior Executive Vice President and Chief Operating Officer of the Company from 2013 to 2015, Senior Regional Executive Vice President of the Company from 2011 to 2013, and Executive Vice President of the Company’s Midwest region from 2003 to 2010. Prior to joining the Company in 1998, Mr. Connor held numerous executive and brokerage positions with Cushman & Wakefield, most recently serving as Senior Managing Director for the Midwest area. Mr. Connor serves on the Advisory Board of the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago. Mr. Connor is also a member of the Board of Governors of the National Association of Real Estate Investment Trusts and the Real Estate Round Table and serves as a director of the Central Indiana Corporate Partnership.
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Ngaire E. Cuneo,
Age 66
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Director Since:
1995
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Board Committees:
Audit and Finance
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Qualifications:
Ms. Cuneo brings finance, accounting, consulting, venture capital, corporate development, insurance industry, financial services industry, and executive management expertise to the Board of Directors.
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Since July 2016, Ms. Cuneo has been serving as an Executive Vice President of Silac, LLC, a private insurance company, and is on the Board of Directors of Sterling Life Insurance Company, also a private insurance company. In addition, Ms. Cuneo has been a partner of Red Associates, LLC, a venture capital firm in the financial services sector, since 2002. Ms. Cuneo also served as an Executive Vice President of Forethought Financial Group from 2006 until 2010. From 1992 through 2001, Ms. Cuneo was an Executive Vice President of Conseco, Inc., an owner, operator and provider of services to companies in the financial services industry. Ms. Cuneo has served as a director of Tributes, Inc. over the last five years. The Board of Directors has determined that Ms. Cuneo qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.
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Charles R. Eitel,
Age 67
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Director Since:
1999
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Board Committee:
Corporate Governance
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Qualifications:
Mr. Eitel brings consulting, business administration, finance, operations, manufacturing industry, and executive leadership expertise to the Board of Directors.
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Mr. Eitel is the Chief Executive Officer of WS Packaging Group, Inc., a privately owned producer of printed, packaged goods. Mr. Eitel also is a co-founder of Eitel & Armstrong, which is now North Inlet Partners, a consulting practice that provides hands-on operating and financial guidance to middle market companies. Prior to forming Eitel & Armstrong in 2009, Mr. Eitel served as Vice Chairman of the Board of Directors of the Simmons Bedding Company, an Atlanta-based manufacturer of mattresses, from 2008 to 2009. Mr. Eitel served as Chairman and Chief Executive Officer of the Simmons Bedding Company from 2000 until his appointment to Vice Chairman in 2008. On November 16, 2009, the Simmons Bedding Company filed for protection under Chapter 11 of the federal bankruptcy laws, from which it emerged on January 21, 2010. Mr. Eitel serves on the Board of Directors of WS Packaging Group, Inc. and American Fidelity Assurance Corporation, a provider of supplemental health insurance benefits and financial services to education employees, auto dealerships, health care providers and municipal workers across the United States.
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Melanie R. Sabelhaus,
Age 68
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Director Since:
2012
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Board Committee:
Executive Compensation
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Qualifications:
With business experience in both the private and public sectors, Ms. Sabelhaus brings public company, corporate governance, real estate industry, healthcare industry and executive leadership expertise to the Board of Directors.
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Ms. Sabelhaus has over 30 years of small business, corporate and federal government experience. Since 2005, Ms. Sabelhaus has been devoting her time to supporting non-profit organizations. Ms. Sabelhaus currently serves as a Senior Principal of Jerold Panas, Linzy & Partners, a consulting firm that provides philanthropic organizations with fundraising advice. Ms. Sabelhaus also serves as a trustee of Johns Hopkins Health System. Ms. Sabelhaus was Deputy Administrator of the U.S. Small Business Administration from 2002 to 2005, where she was responsible for policy development and program supervision. From 1998 until 2002, Ms. Sabelhaus dedicated her time to community fundraising and women’s business issues. In 1986, Ms. Sabelhaus founded Exclusive Interim Properties (EIP), a real estate company that specialized in short-term, furnished housing. Ms. Sabelhaus served as Chief Executive Officer of EIP from 1986 until the company merged with four similar firms in 1997 taking the company public and renaming it Bridgestreet Accommodations World Wide. From 1997 until 1998, Ms. Sabelhaus served as Vice President for Global Sales of Bridgestreet Accommodations World Wide. From 1972 to 1986, Ms. Sabelhaus worked at International Business Machine (IBM), during which time she aided in the launch of IBM’s consumer retail program. Ms. Sabelhaus served for 12 years as the Vice Chairman of the Board of Governors of the National American Red Cross.
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Peter M. Scott, III,
Age 67
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Director Since:
2011
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Board Committees:
Audit and Finance
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Qualifications:
Having held various management positions with Progress Energy, Inc. including Chief Financial Officer, Mr. Scott brings energy and telecommunications industry, public company finance, accounting, auditing and executive leadership expertise to the Board of Directors.
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Mr. Scott was Chief Financial Officer of Progress Energy, Inc. from 2000 to 2003 and from 2005 until his retirement in 2008. From 2004 to 2008, Mr. Scott was also President and Chief Executive Officer of Progress Energy Service Company LLC and had responsibility for all financial and administrative functions of Progress Energy, Inc. Mr. Scott also held various other management positions with Progress Energy, Inc. or its subsidiaries between 2000 and 2008, including responsibilities for its telecom and competitive energy subsidiaries. Before joining Progress Energy, Inc. in 2000, Mr. Scott was the President of Scott, Madden & Associates, Inc., a general management consulting firm that he founded in 1983. The firm served clients in a number of industries, including energy and telecommunications. From 1981 until 1983, Mr. Scott served as the Assistant to the Executive Vice President of Carolina Power & Light Company, Inc., a predecessor of Progress Energy, Inc. Prior to that, Mr. Scott was a principal and partner in Theodore Barry & Associates, Inc., a Los Angeles-based consulting firm, between 1977 and 1981. Mr. Scott served as Chairman of the Audit Committee and a member of the Compensation and Executive Committees of the Board of Directors of Cleco Corp., a public utility holding company until it was acquired by a private investment entity. Mr. Scott also serves as both Chairman of the Audit Committee and Vice Chairman of the Board of Governors at Research Triangle International, a not-for-profit organization that provides research and technical services. The Board of Directors has determined that Mr. Scott qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.
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Jack R. Shaw,
Age 74
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Director Since:
2003
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Board Committees:
Audit and Finance; Chairman of the Audit Committee
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Qualifications:
Mr. Shaw brings finance, accounting, auditing, and executive leadership expertise to the Board of Directors.
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Since 2002, Mr. Shaw has been affiliated with The Regenstrief Foundation, currently serving as a Board member. Mr. Shaw spent 35 years with Ernst & Young and also served as Partner, Partner-in-Charge, and Managing Partner of Ernst & Young’s Indianapolis office at various times throughout his career. Mr. Shaw has served on the Board of Directors of many community organizations including the Indiana Repertory Theatre, the Indianapolis Chamber of Commerce, the Indianapolis Convention and Visitors Association, the Children’s Museum of Indianapolis, United Way of Central Indiana, and the Central Indiana Corporate Partnership. In addition, Mr. Shaw served on the Dean’s Advisory Council of the Indiana University Kelley School of Business. The Board of Directors has determined that Mr. Shaw, who serves as Chairman of the Company’s Audit Committee, qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.
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Michael E. Szymanczyk,
Age 68
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Director Since:
2014
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Board Committees:
Audit and Finance
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Qualifications:
As the former Chief Executive Officer of a Fortune 500 company, Mr. Szymanczyk brings leadership, management and analytic skills as well as expertise in addressing governmental and regulatory matters to the Board of Directors.
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Mr. Szymanczyk was the Chairman of the Board and Chief Executive Officer of Altria Group, Inc. from 2008 until 2012. From 2002 through 2008, Mr. Szymanczyk served as Chairman, President and Chief Executive Officer of Philip Morris USA Inc. Prior to that, he served in various sales and marketing roles at Proctor & Gamble, Inc. and Kraft, Inc. Mr. Szymanczyk currently serves as Chief Executive Officer of Endurance Capital LLC, a family-owned real estate investment venture. Mr. Szymanczyk also serves on the Finance and Risk Oversight Committee and the Audit Committee of the Board of Directors of Dominion Resources, Inc., a publicly-traded provider of electricity, natural gas and related services to customers primarily in the eastern and western regions of the U.S. The Board of Directors has determined that Mr. Szymanczyk qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.
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Lynn C. Thurber,
Age 70
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Director Since:
2008
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Board Committee:
Executive Compensation
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Qualifications:
Ms. Thurber brings international business, asset management, investment management, finance, accounting, real estate industry, financial services industry, and executive management expertise to the Board of Directors.
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Since 2006, Ms. Thurber has served as the non-executive Chairman of LaSalle Investment Management, a subsidiary of Jones Lang LaSalle Inc. and a global real estate money management firm that invests in private real estate as well as publicly-traded real estate companies on behalf of institutional and individual investors. Prior to becoming Chairman, Ms. Thurber was the Chief Executive Officer of LaSalle Investment Management from 2000 to 2006. Ms. Thurber is the Chairman of the Board of Directors of Jones Lang LaSalle Income Property Trust, Inc., a non-listed REIT that owns and manages a diversified portfolio of office, retail, industrial and apartment properties, and is a trustee of Acadia Realty Trust, a real estate investment trust that primarily invests in retail properties. Ms. Thurber is a trustee of the Urban Land Institute, a non-profit organization that provides leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Ms. Thurber also previously served as a director of Jones Lang LaSalle Inc., a leading publicly-traded financial and professional services firm specializing in real estate.
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Executive
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Corporate
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Board
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Audit
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Compensation
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Finance
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Governance
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Thomas J. Baltimore, Jr.
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Member
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Member
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William Cavanaugh III
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Lead Director
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Chairman
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Alan H. Cohen
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Member
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Chairman
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James B. Connor
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Member
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Ngaire E. Cuneo
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Member
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Member
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Member
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Charles R. Eitel
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Member
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Member
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Martin C. Jischke, Ph.D. (1)
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Member
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Member
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Dennis D. Oklak
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Chairman
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Melanie R. Sabelhaus
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Member
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Member
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Peter M. Scott, III
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Member
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Member
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Member
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Jack R. Shaw
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Member
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Chairman
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Member
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Michael E. Szymanczyk (2)
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Member
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Member
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Chairman
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Lynn C. Thurber
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Member
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Member
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Robert J. Woodward Jr. (1)
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Member
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Member
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Member
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Number of 2016 Meetings
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4
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7
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5
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6
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4
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•
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an annual retainer of $90,000, payable in cash unless otherwise elected to be paid in shares of our common stock.
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•
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an annual supplemental retainer for the directors serving in the roles indicated in the following table:
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Service Description
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Annual Amount
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Lead Director/Corporate Governance Committee Chairman
(1)
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$25,000
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Audit Committee Chairman
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$20,000
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Executive Compensation Committee Chairman
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$12,500
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Finance Committee Chairman
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$12,500
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Director on more than one committee
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$5,000
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(1)
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The positions of Lead Director and Corporate Governance Committee Chairman are currently held by the same individual, who received one supplemental annual retainer in the amount of $25,000 for 2016.
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•
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an annual grant of restricted stock units, or RSUs, pursuant to the Duke Realty Corporation 2015 Non-Employee Directors’ Compensation Plan, or the 2015 Directors’ Plan. These RSUs were granted on February 10, 2016 and vested in full on the first anniversary of the grant date. The number of RSUs awarded was determined by dividing the grant value of $90,000 by the closing stock price on the grant date.
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Service Description
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Annual Amount
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Lead Director/Corporate Governance Committee Chairman
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$30,000
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Audit Committee Chairman
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$20,000
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Executive Compensation Committee Chairman
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$15,000
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Finance Committee Chairman
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$15,000
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Director on more than one committee
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$5,000
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•
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Deferred Stock Account
. This account allows the director, in effect, to invest his or her deferred compensation in shares of the Company’s common stock. Funds in this account are credited as hypothetical shares of the Company’s common stock based on the market price at the time the compensation would otherwise have been paid. Dividends on these hypothetical shares are deemed to be reinvested in additional hypothetical shares based upon the market price of the Company’s common stock on the date dividends are paid. Actual shares are issued only when a director ends his or her service on the Board of Directors.
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•
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Interest Account
. Through December 31, 2016, amounts in this account earned interest at a rate equal to 120% of the long-term applicable federal rate, as published by the Internal Revenue Service.
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Name
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Fees Earned or Paid in Cash
($) (1)
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Stock Awards
($) (2) (3) |
All Other Compensation ($) (4)
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Total
($)
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Thomas J. Baltimore, Jr.
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87,500
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90,000
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–
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177,500
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William Cavanaugh III
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112,500
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90,000
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–
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202,500
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Alan H. Cohen
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100,000
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90,000
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–
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190,000
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Ngaire E. Cuneo
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92,500
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90,000
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–
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182,500
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Charles R. Eitel
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87,500
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90,000
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1,000
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178,500
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Martin C. Jischke, Ph.D.
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65,000
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90,000
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–
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155,000
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Melanie R. Sabelhaus
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87,500
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90,000
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1,000
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178,500
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Peter M. Scott, III
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92,500
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90,000
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–
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182,500
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Jack R. Shaw
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112,500
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90,000
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–
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202,500
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Michael E. Szymanczyk
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98,750
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90,000
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–
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188,750
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Lynn C. Thurber
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87,500
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90,000
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1,000
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178,500
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Robert J. Woodward Jr.
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78,125
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90,000
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–
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168,125
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(1)
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Because we pay director fees in arrears on a quarterly basis, a portion of the cash fees paid to directors in 2016 was based on the prior year’s annual retainer amount. Messrs. Baltimore, Cavanaugh and Cohen, and Mses. Cuneo and Thurber each elected to receive payment of their annual cash retainer in shares of common stock as indicated in the following table. Furthermore, Mr. Cavanaugh and Ms. Cuneo elected to defer receipt of their shares for their annual retainer and any supplemental retainer pursuant to the Directors’ Deferred Compensation Plan of Duke Realty Corporation. The number of shares was determined by dividing the amount of the applicable retainer by the closing stock price on the date the retainer was earned.
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Name
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Total Number of Shares Received in 2016 for Annual Cash Retainer
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Thomas J. Baltimore, Jr
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3,634
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William Cavanaugh III
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4,677
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Alan H. Cohen
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3,634
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Ngaire E. Cuneo
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3,842
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Lynn C. Thurber
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3,634
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(2)
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Represents the aggregate grant date fair value of stock awards granted by the Company as computed under FASB ASC Topic 718. The fair value of the stock awards was equal to the stock price on the date of grant. Compensation in the form of stock awards includes RSUs granted in 2016.
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(3)
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No options were granted to directors in 2016, and there were no outstanding options held by the Company’s non-employee directors as of December 31, 2016. The following table sets forth the aggregate number of outstanding stock awards held by the Company’s non-employee directors as of December 31, 2016:
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Name
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Number of RSUs
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Thomas J. Baltimore, Jr.
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4,803
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William Cavanaugh III
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4,803
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Alan H. Cohen
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4,803
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Ngaire E. Cuneo
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4,803
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Charles R. Eitel
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4,803
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Melanie R. Sabelhaus
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4,803
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Peter M. Scott, III
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4,803
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Jack R. Shaw
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4,803
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Michael E. Szymanczyk
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4,803
|
Lynn C. Thurber
|
4,803
|
(4)
|
Represents the amount of matching charitable contributions provided under the Duke Realty Matching Gifts program.
|
•
|
Tax consulting services;
|
•
|
Audit services associated with SEC filings;
|
•
|
Consultations regarding the appropriate accounting or disclosure treatment of specific transactions or events;
|
•
|
Audits of the Company’s employee benefit plans; and
|
•
|
Accounting and compensation consulting services.
|
•
|
our former Executive Chairman, Mr. Dennis D. Oklak, who stepped down from that position on January 6, 2017, and is currently serving as the non-executive Chairman of the Board of Directors;
|
•
|
our President and Chief Executive Officer, Mr. James B. Connor;
|
•
|
our Executive Vice President and Chief Financial Officer, Mr. Mark A. Denien;
|
•
|
our Executive Vice President, General Counsel and Corporate Secretary, Ms. Ann C. Dee;
|
•
|
our Executive Vice President, Construction, Mr. Peter D. Harrington, since July 1, 2016; and
|
•
|
our former Executive Vice President, Construction, Mr. Steven R. Kennedy, who left the Company on June 30, 2016.
|
•
|
Our operational focus for 2016 was to grow adjusted funds from operations, or AFFO, through (1) increasing property occupancy and rental rates to achieve strong growth in same property net operating income; (2) managing capital expenditures on second generation leases; and (3) providing a full line of real estate services to our tenants and to third parties.
|
•
|
Our capital strategy was to improve our balance sheet and overall financial position by actively managing the components of our capital structure. This included utilizing proceeds from property dispositions to repay debt, opportunistically raising capital in the debt and equity markets when rates and pricing were favorable, maintaining investment grade ratings from our credit rating agencies and improving the key metrics that drive such credit ratings.
|
Executive Compensation Practices We Have Implemented:
|
|
•
Provide balanced pay opportunities consisting of (1) cash and equity, (2) annual and longer-term incentives, and
(3) fixed and variable pay
|
•
Align pay and performance
|
•
Use diverse performance measures
|
•
Have appropriate caps on performance-based bonus payouts
|
•
Provide limited perquisites with sound business rationale
|
•
Include “double-trigger” change in control provisions in equity awards
|
•
Apply share ownership and retention guidelines for senior executive officers and directors
|
•
Utilize an independent compensation adviser
|
•
Mitigate undue risk in compensation programs
|
•
Maintain a clawback policy
|
•
Maintain an anti-hedging/pledging policy
|
|
Executive Compensation Practices We Have Not Implemented:
|
|
•
No “liberal” change in control definition that would be activated on shareholder approval of a transaction
|
•
No tax gross-ups on perquisites (except for certain relocation costs that are available to all associates)
|
•
No tax gross-up protection for change in control excise taxes
|
•
No repricing of options or SARs (directly or indirectly) without prior shareholder approval
|
•
Generally do not utilize employment contracts though we do have severance agreements with certain officers
|
•
|
provide total compensation opportunities with a combination of compensation elements that are competitive,
|
•
|
tie a significant portion of each executive’s compensation to achieving our key business objectives, and
|
•
|
align shareholder interests and executive rewards by tying a significant portion of each executive’s compensation opportunity to pay for performance standards designed to increase long-term shareholder value.
|
•
|
fixed and variable pay;
|
•
|
short-term and long-term pay; and
|
•
|
cash and equity.
|
Compensation Element
|
Overview/Objectives
|
|
Base Salary
|
•
|
Fixed portion of an executive’s annual compensation that is intended to recognize fundamental market value for skills and experience of the individual relative to the responsibilities of his or her position.
|
Annual Cash Incentive
|
•
|
Annual cash incentives vary based on performance against pre-defined goals and are intended to reward short term performance including company, individual and in some cases division performance.
|
Long-term Incentive Awards (restricted stock units and performance share awards)
|
•
|
Stock-based incentives vary based on stock price, and, in the case of performance share awards, on the achievement of predefined goals. They are intended to reward performance over a multi-year
period, link executive’s interests to those of shareholders, and encourage retention through a multi-year vesting schedule.
|
|
|
Roles and Responsibilities
|
The Committee
|
•
|
Determines the Company's compensation strategy.
|
|
•
|
Oversees design, implementation and administration of Company equity programs.
|
|
•
|
Approves incentive programs and sets performance goals for executive officers.
|
|
•
|
Reviews the performance of the CEO.
|
|
•
|
Determines appropriate levels of compensation for our executive officers, including the CEO, by assessing their individual performance in addition to the financial and operational results of the Company against annual objectives.
|
|
|
|
FW Cook
|
•
|
Provides advice, research and analytical services on a variety of subjects, including compensation philosophy, trends and best practices, peer group selection, target competitive positioning, pay mix, and incentive program design.
|
CEO
|
•
|
Develops an assessment of individual performance for each of his direct reports.
|
|
•
|
Provides recommendations to the Committee regarding individual compensation levels for such executives.
|
|
•
|
Provides recommendations to the Committee regarding metrics and goal levels for incentive plans for Company, division and individual performance for himself and each of his direct reports.
|
|
|
|
Other Members of Management
|
•
|
Our Chief Human Resources Officer provides data and information relating to our compensation programs to the Committee and FW Cook to help facilitate the Committee’s review of competitive compensation practices.
|
|
•
|
Our Chief Financial Officer provides the Committee with reports on financial performance as it relates to key business drivers and performance measures included in incentive program designs.
|
Apartment Investment and Management Company
|
CBL & Associates Properties, Inc.
|
Federal Realty Investment Trust
|
Taubman Centers, Inc.
|
BioMed Realty Trust, Inc.
|
DDR Corporation
|
Kimco Realty Corporation
|
UDR, Inc.
|
Brixmor Property Group, Inc.
|
Digital Realty Trust, Inc.
|
Liberty Property Trust
|
|
Camden Property Trust
|
Douglas Emmett, Inc.
|
The Macerich Company
|
|
Name
|
Target Annual Bonus (as a % of Salary)
|
Actual Annual Bonus (as a % of Salary)
|
Dennis D. Oklak
|
100%
|
144.4%
|
James B. Connor
|
115%
|
175.1%
|
Mark A. Denien
|
110%
|
167.5%
|
Ann C. Dee
|
95%
|
134.1%
|
Peter D. Harrington
|
85%
|
111.9%
|
Steven R. Kennedy
|
105%
|
N/A
|
•
|
AFFO is calculated by first computing FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income (loss) excluding gains (losses) on sales of depreciable property, impairment charges related to depreciable real estate assets, and extraordinary items (computed in accordance with generally accepted accounting principles (“GAAP”)); plus real estate related depreciation and amortization, and after similar adjustments for unconsolidated joint ventures. Then, FFO computed in accordance with NAREIT is adjusted for certain items that are generally non-cash in nature or that materially distort the comparative measurement of company performance over time. The adjustments include gains on sale of undeveloped land, impairment charges not related to depreciable real estate assets, tax expense or benefit related to (i) changes in deferred tax asset valuation allowances, (ii) changes in tax exposure accruals that were established as the result of the previous adoption of new accounting principles, or (iii) taxable income (loss) related to other items excluded from FFO or Core FFO (collectively referred to as “other income tax items”), gains (losses) on debt transactions, adjustments on the repurchase or redemption of preferred stock, gains (losses) on and related cost of acquisitions, and severance charges related to major overhead restructuring activities. Although our calculation of Core FFO differs from NAREIT’s definition of FFO and may not be comparable to that of other REITS and real estate companies, we believe it provides a meaningful supplemental measure of our operating performance. AFFO is Core FFO less recurring building improvements and total second generation capital expenditures (the leasing of vacant space that had previously been under lease by the company is referred to as second generation lease activity) related to leases commencing during the reporting period, and adjusted for certain non-cash items including straight line rental income, noncash components of interest expense and stock compensation expense, and after similar adjustments for unconsolidated partnerships and joint ventures.
|
•
|
Average In-Service Occupancy (Lease-Up Basis) is the average square footage represented by executed leases, without regard to whether the leases have commenced, divided by the total average square footage of our in-service real estate portfolio.
|
•
|
Same-Property Net Operating Income represents the year-over-year percentage change in property level net
|
•
|
Fixed Charge Coverage Ratio means Core EBITDA divided by interest expense, preferred dividends and capitalized interest from the most recent quarter. In addition each component is adjusted to include the Company’s applicable share of such components from joint ventures. Core EBITDA is earnings before interest, taxes, depreciation and amortization adjusted to exclude gains or losses on land or other property sales, gains or losses pertaining to acquisitions, impairment charges, capital transactions, and severance charges related to major overhead restructuring activities. In the event that a major capital transaction (including the issuance or redemption of debt, preferred stock or common stock) occurs during the year, proforma adjustments are made to the applicable components of the leverage metric computations as if such capital transaction had occurred at the beginning of the year.
|
•
|
As the Company’s former Executive Chairman, Mr. Oklak had goals for 2016 that included assisting in the successful transition of Mr. Connor to the CEO role, working with the CEO and Governance Committee Chair on board member recruitment, and transitioning Mr. Connor into the Board of Governors of NAREIT and the Real Estate Roundtable.
|
•
|
As the Company’s Chief Executive Officer, Mr. Connor’s individual goals for 2016 were based upon successfully transitioning into his new role as CEO, working with the board and senior leadership team, completing a detailed review of our Information Technology organization, and developing and implementing the Company's 2017-2019 long-term strategy.
|
•
|
As the Company’s Chief Financial Officer, or CFO, Mr. Denien’s individual goals for 2016 focused on analyzing various strategic alternatives for our business, investor outreach and developing key personnel.
|
•
|
As the Company’s General Counsel, Ms. Dee’s individual goals for 2016 included succession planning, developing key personnel and providing leadership and oversight to company initiatives regarding sustainability, cybersecurity, and diversity and inclusion.
|
•
|
As the Company’s Executive Vice President, Construction, Mr. Harrington’s goals for 2016 focused on the construction organizational structure and personnel, project operations training for key personnel, and operational metrics and management reports.
|
•
|
As the former Executive Vice President, Construction, Mr. Kennedy had individual goals for 2016 tailored to reflect his responsibilities related to the Company’s construction matters, similar to those outlined above for Mr. Harrington.
|
|
Weighting for
Dennis D. Oklak |
Weighting for
James B. Connor and Mark A. Denien |
Weighting for Ann C. Dee
|
Weighting for Peter D. Harrington and Steven R. Kennedy
|
2016 Annual Incentive Targets
|
|
||||
|
|
|
|
|
Threshold
|
Target
|
Stretch
|
Superior
|
Actual
|
|
AFFO/Share
|
40%
|
37.5%
|
45%
|
22.5%
|
$1.02
|
$1.05
|
$1.08
|
$1.10
|
$1.06
|
|
Average In-Service Lease Up Occupancy
|
20%
|
18.75%
|
22.5%
|
11.25%
|
94.7%
|
95.9%
|
96.7%
|
97.0%
|
96.50%
|
|
Same-Property Net Operating Income (Industrial and MOB only)
|
20%
|
18.75%
|
22.5%
|
11.25%
|
2.0%
|
3.5%
|
4.7%
|
5.5%
|
6.00%
|
|
Fixed Charge Coverage Ratio
(Trailing 12 Months)
|
0%
|
15%
|
0%
|
0%
|
2.9x
|
3.2x
|
3.4x
|
3.6x
|
3.6x
|
|
Division Goals
|
0%
|
0%
|
0%
|
45%
|
For Mr. Harrington: Assessment of achievement against a mix of financial and operational goals applicable to our Construction Division, including: construction volume ($688.1 million target, $553.8 million actual), construction starts ($625 million target, $ 807.9 million actual), third party fee variance (0% target, 80.4% actual), development cost variance (2% target, 1.67% actual), and various project execution, overhead expense and diversity and inclusion metrics.
For Mr. Kennedy: Substantially the same goals as outlined for Mr. Harrington.
|
|
||||
Individual Goals
|
20%
|
10%
|
10%
|
10%
|
Subjective assessment of achievement of individual goals for 2016 as discussed above.
|
|
||||
Total
|
100%
|
100%
|
100%
|
100%
|
|
|
•
|
reward achievement over a multi-year period;
|
•
|
align the interests of executives with those of shareholders by focusing executives on the shareholder return performance of the Company; and
|
•
|
provide a retention mechanism through multi-year vesting.
|
Name
|
Target Long-Term Incentive Award Value (as a % of Salary)
|
Dennis D. Oklak
|
250%
|
James B. Connor
|
380%
|
Mark A. Denien
|
200%
|
Ann C. Dee
|
140%
|
Peter D. Harrington
|
65%
|
Steven R. Kennedy
|
125%
|
•
|
Fixed Charge Coverage Ratio, which is Core EBITDA divided by the sum of (a) interest expense (b) preferred dividends, and (c) capitalized interest.
|
•
|
Debt plus Preferred to EBITDA Ratio, which is (Company debt + preferred stock – cash) divided by Core EBITDA.
|
Relative Total Shareholder Return
|
||
Performance Level
|
Targets
|
Payout Percentage
|
Superior
|
≥ 80
th
Percentile
|
200%
|
Stretch
|
≥ 60
th
Percentile and < 80
th
Percentile
|
150%
|
Target
|
≥ 40
th
Percentile and < 60
th
Percentile
|
100%
|
Threshold
|
≥ 30
th
Percentile and < 40
th
Percentile
|
50%
|
|
< 30
th
Percentile
|
0%
|
DCT Industrial Trust Inc.
|
First Industrial Realty Trust, Inc.
|
Prologis, Inc.
|
STAG Industrial, Inc.
|
Healthcare Realty Trust, Inc.
|
EastGroup Properties, Inc.
|
Liberty Property Trust
|
Rexford Industrial Realty, Inc.
|
Terreno Realty Corporation
|
Healthcare Trust of America, Inc.
|
Annualized Total Shareholder Return
|
||
Performance Level
|
Targets
|
Payout Percentage
|
Superior
|
≥ 80
th
Percentile
|
200%
|
Stretch
|
≥ 65
th
Percentile and < 80
th
Percentile
|
150%
|
Target
|
≥ 45
th
Percentile and < 65
th
Percentile
|
100%
|
Threshold
|
≥ 30
th
Percentile and < 45
th
Percentile
|
50%
|
|
< 30
th
Percentile
|
0%
|
Brandywine Realty Trust
|
EastGroup Properties, Inc.
|
Highwoods Properties, Inc.
|
Parkway Properties, Inc.
(a)
|
PS Business Parks, Inc.
|
DCT Industrial Trust, Inc.
|
First Industrial Realty Trust, Inc.
|
Liberty Property Trust
|
Prologis, Inc.
|
STAG Industrial, Inc.
|
RISK MITIGATION FACTORS
|
•
Diversification of performance measures;
•
A balanced weighting of the various performance measures, to avoid excessive attention on achievement of one measure over another;
•
Fixed maximum award levels for performance-based awards;
•
An assortment of methods for delivering compensation, including cash and equity based incentives with different time horizons, to focus our executives on specific objectives that help us achieve our business plan and create an alignment with long-term shareholder interests;
•
Guidelines designed to assure the independence of compensation advisers who advise the Committee, as described below;
•
A compensation recoupment policy and equity grant procedures, as described below; and
•
Stock ownership and retention guidelines applicable to all executive officers and directors, as described below.
|
Position
|
Base Salary Multiple
|
Time to Attain
|
Executive Chairman
|
5x
|
5 years
|
Chief Executive Officer
|
6x
|
5 years
|
Executive Vice Presidents
|
4x
|
5 years
|
(1)
|
Mr. Oklak stepped down from the Executive Chairman of the Board position, effective January 6, 2017, and became the non-executive Chairman of the Board, effective January 7, 2017. Mr. Oklak plans to serve as the non-executive Chairman of the Board until the Annual Meeting.
|
(2)
|
Represents base salary earned during the fiscal year. For Mr. Kennedy, the amount shown for 2016 represents his annual base salary that was paid until his termination of employment on June 30, 2016.
|
(3)
|
This column reflects the aggregate grant date fair value in the applicable year for (a) RSUs granted under the 2005 Incentive Plan or the 2015 Incentive Plan and (b) performance shares granted under the PSP, as computed under FASB ASC Topic 718. It also includes the grant date fair value for any LTIP units granted in lieu of RSUs and/or PSP awards, as elected by the executive officer. In 2016, Mr. Connor elected to receive LTIP units in lieu of PSP awards, and Mr. Denien and Ms. Dee elected to receive LTIP units in lieu of both RSUs and PSP awards. The grant value for all such awards is equal to the fair market value of our stock as of the grant date. Pursuant to SEC rules, the amounts shown in the Summary Compensation Table for awards subject to financial performance conditions are based on the probable outcome as of the date of grant and exclude the impact of estimated forfeitures. The following table sets forth the grant date fair values of the 2016 PSP grant, in
|
|
|
2016 PSP Awards
|
|
|
|
Grant Date
Fair Value
($)
|
Value Assuming Highest Level of Performance
($)
|
|
|
|
|
Dennis D. Oklak
|
|
562,500
|
1,125,000
|
James B. Connor
|
|
1,235,000 (a)
|
2,470,000
|
Mark A. Denien
|
|
430,000 (a)
|
860,000
|
Ann C. Dee
|
|
262,500 (a)
|
525,000
|
Peter D. Harrington
|
|
–
|
–
|
Steven R. Kennedy
|
|
223,750
|
447,500
|
(a)
|
Represents the grant date fair value of LTIP units awarded in lieu of PSP awards upon election by the executive officer. See the discussion of LTIP units awarded in lieu of PSP awards under the section entitled “Performance Share Awards” included in the discussion of long-term incentive awards in the CD&A.
|
(4)
|
Represents the aggregate annual cash incentive bonus that is based upon the Company’s attainment of certain corporate performance goals as compared to predetermined targets established at the beginning of each calendar year, as well as an individual and in certain cases a division performance component.
|
(5)
|
All other compensation for 2016 includes the value of Company matching and profit sharing contributions to the Company's 401(k) plan and profit sharing plan, and the value of term life insurance premium payments made by the Company, each valued at $10,000 or less for all named executive officers. In addition, all other compensation includes the following perquisites: (1) an automobile allowance and cell phone allowance of $3,000 and $600 each, respectively, for each named executive officer except Mr. Kennedy whose automobile and phone allowances for 2016 were $1,750 and $350 respectively, (2) payments for personal financial planning services in the amount of $15,750 each for Messrs. Connor and Denien, $11,000 for Mr. Oklak and $13,250 for Ms. Dee, and (3) payments for executive medical examinations for Messrs. Oklak, Connor and Denien and Ms. Dee. For Mr. Oklak, all other compensation also includes $14,382, the incremental cost to the company for the personal use of corporate aircraft as approved by the Executive Compensation Committee on January 26, 2016. For Mr. Kennedy, all other compensation includes $179,000 of severance in accordance with his severance arrangement with the Company. See further discussion under
“
Other Potential Post-Employment Payments.
”
|
(6)
|
Mr. Harrington was appointed Executive Vice President, Construction, effective July 1, 2016.
|
Name
|
Grant Date
|
Compensation Committee Approval Date
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#) (3)
|
Grant Date Fair Value of Stock and Option Awards
($)
|
|||||
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|
|
|
||||
Dennis D. Oklak
|
|
|
|
270,000
|
450,000
|
810,000
|
|
|
|
|
|
|
|
|
2/10/16
|
1/27/16
|
|
|
|
|
|
14,565
|
29,130
|
58,260
|
|
|
562,500
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
29,130
|
562,500
|
||
James B. Connor
|
|
|
|
411,125
|
747,500
|
1,420,250
|
|
|
|
|
|
|
|
|
2/10/16
|
1/27/16
|
|
|
|
|
|
31,978
|
63,956
|
127,912
|
|
|
1,235,000
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
63,956
|
1,235,000
|
||
Mark A. Denien
|
|
|
|
278,300
|
506,000
|
961,400
|
|
|
|
|
|
|
|
|
2/10/16
|
1/27/16
|
|
|
|
|
|
11,134
|
22,268
|
44,536
|
|
|
430,000
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
22,268
|
430,000
|
||
Ann C. Dee
|
|
|
|
203,775
|
370,500
|
703,950
|
|
|
|
|
|
|
|
|
2/10/16
|
1/27/16
|
|
|
|
|
|
6,797
|
13,594
|
27,188
|
|
|
262,500
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
13,594
|
262,500
|
||
Peter D. Harrington
|
|
|
|
140,250
|
255,000
|
484,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
–
|
–
|
|
|
–
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
9,089
|
175,500
|
||
Steven R. Kennedy
|
|
|
|
–
|
–
|
–
|
|
|
|
|
|
|
|
|
2/10/16
|
1/27/16
|
|
|
|
|
|
5,794
|
11,587
|
23,174
|
|
|
223,750
|
||
2/10/16
|
1/27/16
|
|
|
|
|
|
|
|
|
|
11,587
|
223,750
|
(1)
|
Represents the 2016 annual cash incentive bonus opportunities for each executive. See the description of the annual cash incentive award in the CD&A.
|
(2)
|
Represents the number of shares that could be earned under performance shares granted during 2016 under the PSP,
or the number of limited partnership units in our operating partnership that could be earned under LTIP units granted in lieu of PSP awards. All of the performance share awards have a three-year performance measurement period. See pertinent details regarding the payout of awards under the PSP in the section entitled “Performance Share Awards” included in the discussion of long-term incentive awards in the CD&A.
|
(3)
|
Represents the number of RSUs granted during 2016 under the 2015 Incentive Plan, or the number of LTIP units granted in lieu of RSUs. See the description of the RSUs and LTIP units in the section entitled “RSUs” included in the discussion of long-term incentive awards in the CD&A.
|
Outstanding Equity Awards at 2016 Fiscal Year End
|
||||||||||
|
||||||||||
The following table contains information concerning outstanding equity awards held by each of the named executive officers as of December 31, 2016:
|
||||||||||
|
|
Option Awards
|
|
Stock Awards
|
|
|||||
Named Executive Officer
|
Grant Date
|
Number of Securities Underlying Unexercised Options (#) Exercisable (1)
|
Number of Securities Underlying Unexercised Options (#) Unexercisable (1)
|
Option Exercise Price ($/sh)(1)
|
Option Expiration Date
|
|
Number of Shares or Units of Stock Granted That Have Not Vested (#) (2)
|
Market Value of Shares or Units of Stock Granted That Have Not Vested (2)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (3)
|
Dennis D. Oklak
|
2/10/07
|
86,987
|
–
|
47.68
|
2/10/17
|
|
–
|
–
|
–
|
–
|
|
2/10/12
|
–
|
–
|
–
|
–
|
|
21,287
|
565,388
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
42,347
|
1,124,728
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
63,304
|
1,681,365
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
51,469
|
1,367,018
|
154,679
|
4,108,274
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
30,019
|
797,308
|
60,130
|
1,597,053
|
James B. Connor
|
2/10/12
|
–
|
–
|
–
|
–
|
|
5,125
|
136,118
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
11,343
|
301,259
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
21,019
|
558,276
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
16,266
|
432,025
|
52,663
|
1,398,729
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
65,908
|
1,750,520
|
131,426
|
3,490,675
|
Mark A. Denien
|
2/10/12
|
–
|
–
|
–
|
–
|
|
1,550
|
41,180
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
2,655
|
70,506
|
–
|
–
|
|
5/10/13
|
–
|
–
|
–
|
–
|
|
1,472
|
39,083
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
14,479
|
384,572
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
11,032
|
293,010
|
35,411
|
940,516
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
22,268
|
591,438
|
45,759
|
1,215,359
|
Ann C. Dee
|
2/10/12
|
–
|
–
|
–
|
–
|
|
1,038
|
27,578
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
1,829
|
48,567
|
–
|
–
|
|
5/10/13
|
–
|
–
|
–
|
–
|
|
1,563
|
41,510
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
8,242
|
218,907
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
6,932
|
184,125
|
20,835
|
553,378
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
13,594
|
361,057
|
27,935
|
741,954
|
Peter D. Harrington
|
2/10/12
|
–
|
–
|
–
|
–
|
|
2,536
|
67,363
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
4,350
|
115,529
|
–
|
–
|
|
5/10/13
|
–
|
–
|
–
|
–
|
|
1,486
|
39,474
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
6,497
|
172,558
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
5,502
|
146,127
|
–
|
–
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
9,366
|
248,772
|
–
|
–
|
|
|
Option Awards
|
|
Stock Awards
|
||||||
Named Executive Officer
|
Grant Date
|
Number of Securities Underlying Unexercised Options (#) Exercisable (1)
|
Number of Securities Underlying Unexercised Options (#) Unexercisable (1)
|
Option Exercise Price ($/sh)(1)
|
Option Expiration Date
|
|
Number of Shares or Units of Stock Granted That Have Not Vested (#) (2)
|
Market Value of Shares or Units of Stock Granted That Have Not Vested (2)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3)
|
|
Steven R. Kennedy
|
2/10/07
|
25,092
|
–
|
47.68
|
2/10/17
|
|
–
|
–
|
–
|
–
|
|
2/10/12
|
–
|
–
|
–
|
–
|
|
4,575
|
121,524
|
–
|
–
|
|
2/10/13
|
–
|
–
|
–
|
–
|
|
7,797
|
207,095
|
–
|
–
|
|
2/10/14
|
–
|
–
|
–
|
–
|
|
11,608
|
308,305
|
–
|
–
|
|
2/10/15
|
–
|
–
|
–
|
–
|
|
7,364
|
195,600
|
22,134
|
587,879
|
|
2/10/16
|
–
|
–
|
–
|
–
|
|
11,941
|
317,144
|
23,918
|
635,262
|
(1)
|
As of December 31, 2016, there were no unvested stock options. All unexercised stock options were granted under the 2005 Incentive Plan and vested and became exercisable in five equal annual installments beginning on the first anniversary of the grant date, subject to the holder's continued employment.
|
(2)
|
For Messrs. Oklak, Harrington and Kennedy, represents the number and market value of all outstanding RSUs granted pursuant to the 2005 Incentive Plan and 2015 Incentive Plan, including accumulated dividend equivalent RSUs. For Mr. Connor, represents the number and market value of outstanding RSUs granted pursuant to the 2005 Incentive Plan for the years 2012 through 2014 and pursuant to the 2015 Incentive Plan for 2016, including dividend equivalent RSUs; for Mr. Denien, represents the number and market value of outstanding RSUs granted pursuant to the 2005 Incentive Plan for the years 2012 through 2014, including accumulated dividend equivalent RSUs; and for Ms. Dee, represents the number and market value of outstanding RSUs granted pursuant to the 2005 Incentive Plan for the years 2012 through 2015, including dividend equivalent RSUs. The dividend equivalent RSUs vest as they accrue but are paid out when the host award vests or, if the host award fails to vest and is forfeited, are paid out as soon as practical after such forfeiture, including any delay necessary to comply with Section 409A of the Code. For Messrs. Connor and Denien, the awards dated February 10, 2015 represent the number of LTIP units granted in lieu of RSUs pursuant to the executive’s election, and for Mr. Denien and Ms. Dee, the awards dated February 10, 2016 represent the number of LTIP units granted in lieu of RSUs pursuant to the executive's election. See pertinent details regarding LTIP units granted in lieu of RSUs, including cash distributions and certain other vesting requirements, included in the discussion of long-term incentive awards in the CD&A. In all cases, the market value indicated is based upon the closing price of the Company’s common stock on December 31, 2016 of $26.56 per share. The RSUs granted prior to January 2015 vest in five equal annual installments beginning on the first anniversary of the grant date, subject to the holder’s continued employment. The RSUs and LTIP units granted beginning in January 2015 and after vest in three equal installments beginning on the first anniversary of the grant date, subject to the holder’s continued employment and in the case of the LTIP units, subject to certain other vesting requirements.
|
(3)
|
Represents the number of shares that would be earned at the superior payout level, including dividend equivalent shares, for the awards granted in 2015 pursuant to the PSP for each executive officer except for Messrs. Denien and Harrington and for the awards granted in 2016 for Messrs. Oklak and Kennedy. For Mr. Denien, with regard to the LTIP units granted in 2015 and 2016 in lieu of PSP awards, and for Mr. Connor and Ms. Dee and with regard to LTIP units granted in 2016 in lieu of PSP awards, the amount represents the number of common units in Duke Realty Limited Partnership that would be earned at the superior payout level, plus additional LTIP units that would be earned in place of unpaid cash distributions. All such amounts are represented at a market value based upon the closing price of the Company’s common stock on December 31, 2016 of $26.56 per share. Mr. Harrington was not granted any PSP awards in 2015 or 2016. The PSP awards have a three-year performance measurement period. Further details regarding awards granted under the PSP, including LTIP units, are found under the section entitled “Performance Share Awards” included in the discussion of long-term incentive awards in the CD&A.
|
|
|
Option Awards
|
|
Stock Awards
|
||
Name
|
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($)(1)
|
|
Number of Shares Acquired on Vesting (#)(2)
|
Value Realized on Vesting ($)(2)
|
Dennis D. Oklak
|
|
330,594
|
$995,088
|
|
207,188
|
4,811,572(a)
|
James B. Connor
|
|
–
|
–
|
|
58,208
|
1,397,845(a)
|
Mark A. Denien
|
|
–
|
–
|
|
33,836
|
836,000
|
Ann C. Dee
|
|
–
|
–
|
|
23,448
|
559,252
|
Peter D. Harrington
|
|
–
|
–
|
|
12,238
|
243,365
|
Steven R. Kennedy
|
|
74,384
|
184,472
|
|
39,628
|
916,751(a)
|
Name
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting ($)
|
Dennis D. Oklak
|
106,741
|
2,835,044
|
James B. Connor
|
35,441
|
941,301
|
Mark A. Denien
|
24,415
|
648,466
|
Ann C. Dee
|
13,899
|
369,156
|
Peter D. Harrington
|
–
|
–
|
Steven R. Kennedy
|
19,574
|
519,893
|
Name
|
Name of Plan
|
Executive Contributions in Last FY
($) (1)
|
Registrant Contributions in Last FY
($)
|
Aggregate Earnings
in Last FY ($) (2) |
Aggregate Withdrawals/ Distributions
($)
|
Aggregate Balance
at Last FYE
($) (3)
|
||||||||
Dennis D. Oklak
|
DC Plan
|
–
|
–
|
2,728,900
|
–
|
15,762,963
|
||||||||
2000 PSP
|
–
|
–
|
283,470
|
–
|
1,221,719
|
|||||||||
James B. Connor
|
DC Plan
|
–
|
–
|
–
|
–
|
–
|
||||||||
2000 PSP
|
–
|
–
|
80,972
|
–
|
348,977
|
|||||||||
Mark. A. Denien
|
DC Plan
|
–
|
–
|
–
|
–
|
–
|
||||||||
2000 PSP
|
–
|
–
|
–
|
–
|
–
|
|||||||||
Ann C. Dee
|
DC Plan
|
374,336
|
–
|
53,467
|
–
|
786,902
|
||||||||
2000 PSP
|
–
|
–
|
–
|
–
|
–
|
|||||||||
Peter D. Harrington
|
DC Plan
|
191,106
|
–
|
119,492
|
–
|
540,195
|
||||||||
2000 PSP
|
–
|
–
|
–
|
–
|
–
|
|||||||||
Steven R. Kennedy
|
DC Plan
|
–
|
–
|
17,209
|
(356,710)
|
–
|
||||||||
2000 PSP
|
–
|
–
|
141,700
|
–
|
610,710
|
(1)
|
Messrs. Oklak, Connor, Denien and Kennedy did not defer any of their salary, incentive bonus, or vesting RSU and PSP awards in 2016
.
|
(2)
|
Aggregate earnings are not includable in the Summary Compensation Table because such earnings were not preferential or above-market.
|
(3)
|
The aggregate balance at December 31, 2016 includes the following amounts of employee contributions representing compensation earned and deferred in prior years that was reported in the Summary Compensation Table for the year in which earned or would have been so reported if the officer had been a named executive officer in such year. Amounts in the following table include contributions to the DC Plan and the value of vested awards and dividend equivalents under the 2000 PSP.
|
Name
|
Total ($)
|
Dennis D. Oklak
|
7,883,773
|
James B. Connor
|
208,511
|
Mark A. Denien
|
–
|
Ann C. Dee
|
599,336
|
Peter D. Harrington
|
399,068
|
Steven R. Kennedy
|
613,683
|
Named Executive Officer
|
Executive Leaves Voluntarily with No Change in Control
($)
|
Termination by Company without Cause and with No Change in Control
($)
|
Termination by Company For Cause
($)
|
Executive Leaves for “Good Reason” or Termination by Company following Change in Control
($)
|
Dennis D. Oklak
|
–
|
–
|
–
|
–
|
James B. Connor
|
475,000
|
2,858,320
|
10,000
|
4,287,480
|
Mark A. Denien
|
430,000
|
2,236,000
|
10,000
|
3,354,000
|
Ann C. Dee
|
375,000
|
1,814,480
|
10,000
|
2,721,720
|
Peter D. Harrington
|
270,000
|
1,128,080
|
10,000
|
1,692,120
|
Steven R. Kennedy
|
358,000
|
–
|
–
|
–
|
Named Executive Officer
|
RSUs
($) (1)
|
PSP Award ($) (2)
|
Total
($)
|
Dennis D. Oklak
|
5,031,048
|
2,852,657
|
7,883,705
|
James B. Connor
|
3,015,357
|
2,444,693
|
5,460,050
|
Mark A. Denien
|
1,363,165
|
1,077,948
|
2,441,113
|
Ann C. Dee
|
832,497
|
647,662
|
1,480,159
|
Peter D. Harrington
|
726,841
|
–
|
726,841
|
(1)
|
Represents the value of the unvested awards at December 31, 2016.
|
(2)
|
Represents awards granted in 2015 and 2016 under the PSP. The value of the awards granted in 2015 would be fixed at the target level in the event of a change in control prior to January 1, 2017, and the value of the awards granted in 2016 would be fixed at the target level in the event of a change in control prior to January 1, 2018. The above table assumes a change of control occurring on December 31, 2016, with the result that both the 2015 and 2016 awards would pay out at the target level.
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(A)
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
($)(B)
|
Weighted-Average Remaining Term of Outstanding Options, Warrants and Rights
(C)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))
(D)
|
Equity compensation plans approved by shareholders
|
4,075,007
|
46.14
|
0.17
|
7,655,281
|
Equity compensation plans not approved by shareholders (E)
|
–
|
–
|
–
|
–
|
Total
|
4,075,007
|
46.14
|
0.17
|
7,655,281
|
(A)
|
Includes shares of our common stock issuable pursuant to the exercise of stock options and conversion of full-value awards (i.e. RSUs and performance shares).
|
(B)
|
Because our full-value awards do not have an exercise price, the aggregate number of shares of common stock issuable pursuant to such awards, or 3,893,494 shares, is not included in the calculation of weighted average exercise price.
|
(C)
|
The average remaining term of all outstanding options is 0.17 years. Because vesting of our full-value awards is based upon time or Company performance, the remaining terms of full-value awards are excluded from this calculation.
|
(D)
|
Represents the number of remaining shares available for grant under the Company’s 2015 Incentive Plan, all of which may be used for grants of either options or full-value awards.
|
(E)
|
All of the Company’s equity plans have been approved by its shareholders.
|
•
|
each of our named executive officers;
|
•
|
each of our directors;
|
•
|
our current directors and executive officers as a group; and
|
•
|
each person or group known to us to be holding more than 5% of such common stock.
|
Beneficial Owner
|
|
Shares and Units Beneficially Owned (1)(14)
|
|
Shares Issuable Upon Exercise of Stock Options (2)
|
|
Total
|
|
Percent of
Class |
Dennis D. Oklak (3)
|
|
211,666
|
|
–
|
|
211,666
|
|
*
|
James B. Connor (4)
|
|
160,919
|
|
–
|
|
160,919
|
|
*
|
Mark A. Denien (5)
|
|
72,575
|
|
–
|
|
72,575
|
|
*
|
Ann C. Dee (6)
|
|
49,586
|
|
–
|
|
49,586
|
|
*
|
Peter D. Harrington
|
|
56,450
|
|
–
|
|
56,450
|
|
*
|
Steven R. Kennedy (7)
|
|
46,560
|
|
–
|
|
46,560
|
|
*
|
Thomas J. Baltimore, Jr. (8)
|
|
66,382
|
|
–
|
|
66,382
|
|
*
|
William Cavanaugh III
|
|
44,401
|
|
–
|
|
44,401
|
|
*
|
Alan H. Cohen
|
|
43,078
|
|
–
|
|
43,078
|
|
*
|
Ngaire E. Cuneo
|
|
36,740
|
|
–
|
|
36,740
|
|
*
|
Charles R. Eitel
|
|
–
|
|
–
|
|
–
|
|
*
|
Melanie R. Sabelhaus
|
|
26,263
|
|
–
|
|
26,263
|
|
*
|
Peter M. Scott, III (9)
|
|
22,881
|
|
–
|
|
22,881
|
|
*
|
Jack R. Shaw
|
|
7,313
|
|
–
|
|
7,313
|
|
*
|
Michael E. Szymanczyk
|
|
31,839
|
|
–
|
|
31,839
|
|
*
|
Lynn C. Thurber
|
|
90,601
|
|
–
|
|
90,601
|
|
*
|
All directors and executive officers as a group (16 persons)
|
|
945,396
|
|
–
|
|
945,396
|
|
*
|
The Vanguard Group, Inc. (10)
|
|
81,820,360
|
|
–
|
|
81,820,360
|
|
23.01%
|
BlackRock, Inc. (11)
|
|
40,341,759
|
|
–
|
|
40,341,759
|
|
11.35%
|
FMR LLC (12)
|
|
41,460,183
|
|
–
|
|
41,460,183
|
|
11.66%
|
State Street Corp. (13)
|
|
17,976,143
|
|
–
|
|
17,976,143
|
|
5.06%
|
(1)
|
The number of shares and units in this column represents the number of shares of common stock and/or partnership units the person “beneficially owns,” as determined by the rules of the SEC, other than shares issuable upon the exercise of
|
(2)
|
As of February 24, 2017, there are no outstanding stock options owned by any of our named executive officers or directors.
|
(3)
|
As required by SEC rules, Mr. Oklak is included in this table because he is identified in this proxy statement as a named executive officer, even though he was not an executive officer on February 24, 2017. In addition, he is still a director, but was not nominated to stand for re-election.
|
(4)
|
Includes 8,653 shares owned by family members and 16,266 partnership units.
|
(5)
|
Includes 18,456 partnership units.
|
(6)
|
Includes 1,237 shares owned by family members and 4,532 partnership units.
|
(7)
|
Includes 726 shares owned by family members. As required by SEC rules, Mr. Kennedy is included in this table because he is identified in this proxy statement as a named executive officer, even though he was not an executive officer on February 24, 2017.
|
(8)
|
As required by SEC rules, Mr. Baltimore is included in this table because he is currently a director although he has informed the Board of Directors that he will not be standing for re-election.
|
(9)
|
Includes 2,500 shares owned by family members.
|
(10)
|
The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. This information is based solely on two Schedule 13G/As filed by The Vanguard Group and Vanguard Specialized Funds-Vanguard REIT Index Fund with the SEC on February 9, 2017 and February 13, 2017, respectively. The Vanguard Group has the sole power to vote 739,346 shares and dispose of 54,478,432 shares, including 26,613,330 shares reported by Vanguard REIT Index Fund, and shared power to vote 448,484 shares and dispose of 728,598 shares.
|
(11)
|
The address of BlackRock, Inc. is 55 East 52
nd
Street, New York, NY 10055. This information was obtained from Schedule 13G/A filed with the SEC on January 9, 2017. Total shares beneficially owned include 36,858,431 shares with sole voting power and 40,341,759 shares with sole dispositive power.
|
(12)
|
The address of FMR LLC is 245 Summer Street, Boston, MA 02210. This information was obtained from Schedule 13G/A filed with the SEC on February 13, 2017. Total shares beneficially owned include 25,872,980 shares with sole voting power and 41,460,183 shares with sole dispositive power.
|
(13)
|
The address of State Street Corporation is One Lincoln Street, Boston, MA 02111. This information was obtained from Schedule 13G/A filed with the SEC on February 6, 2017. Total shares beneficially owned include 17,976,143 with shared voting power and shared dispositive power.
|
(14)
|
While not included in the table above, shares deferred into our Directors’ Deferred Compensation Plan by members of the Board of Directors are considered to be shares owned for purposes of each director’s target ownership requirement pursuant to the Company’s Stock Ownership Guidelines, which are described on page 18. Shares owned by individual directors in the Directors’ Deferred Compensation Plan are as follows:
|
Name
|
Number of Deferred Shares
|
William Cavanaugh III
|
113,161
|
Ngaire E. Cuneo
|
153,527
|
Charles R. Eitel
|
42,063
|
Peter M. Scott, III
|
19,515
|
Jack R. Shaw
|
71,017
|
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