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Section 1: DEF 14A (DEF 14A)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No.  )

Filed by the Registrant ☒
Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under §240.14a-12

Retail Properties of America, Inc.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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RETAIL PROPERTIES OF AMERICA, INC.
   
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

You are cordially invited to attend the 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Retail Properties of America, Inc. (the “Company”). The Annual Meeting will be held on May 24, 2018 at 8:00 a.m. Pacific Time at The Red Rock Casino Resort & Spa, 11011 W. Charleston Blvd., Las Vegas, Nevada 89135.

The Annual Meeting will be held for the following purposes:

1. To elect eight directors, nominated by the Board of Directors of the Company, to hold office until the 2019 annual meeting of stockholders and until their successors are elected and qualify;
2. To approve the Company’s executive compensation on an advisory basis;
3. To approve the Retail Properties of America, Inc. Amended and Restated 2014 Long-Term Equity Compensation Plan;
4. To ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2018; and
5. To transact any other business as may properly come before the meeting or any adjournments or postponements of the meeting.

The Board of Directors of the Company has fixed the close of business on March 20, 2018 as the record date for determining stockholders of record entitled to notice of and to vote at the meeting.

We hope to have the maximum number of stockholders present in person or by proxy at the meeting. To assure your representation at the meeting, please authorize your proxy by completing, signing, dating and mailing the enclosed proxy card. You may also authorize your proxy through the Internet or by calling a toll-free telephone number by following the procedures described on the enclosed proxy card. YOUR COOPERATION IN PROMPTLY SUBMITTING YOUR PROXY WILL BE VERY MUCH APPRECIATED. For specific instructions, please refer to the instructions on the proxy card. Proof of stock ownership and a form of photo identification will be required for admission to the Annual Meeting. For further information on admission, please refer to the question entitled “Who can attend the meeting?” on page 1 of the proxy statement which follows this notice.

Thank you for your continued support of and interest in our Company.

 
By order of the Board of Directors,
   
 
 
/s/ Ann M. Sharp
 
Ann M. Sharp
Dated: April 6, 2018
Secretary

Important Notice Regarding the Availability of Proxy Materials for Stockholder Meeting To Be Held on May 24, 2018:

The Proxy Statement, Annual Report to Stockholders and Proxy Card are available free of charge at www.rpai.com/proxy.

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RETAIL PROPERTIES OF AMERICA, INC.
2021 SPRING ROAD, SUITE 200
OAK BROOK, ILLINOIS 60523

PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2018

This proxy statement contains information related to the Annual Meeting of Stockholders (the “Annual Meeting”) of Retail Properties of America, Inc. (the “Company,” “we,” “our” or “us”), which will be held on May 24, 2018 at 8:00 a.m. Pacific Time at The Red Rock Casino Resort & Spa, 11011 W. Charleston Blvd., Las Vegas, Nevada 89135. Please contact our Investor Relations department via email at IR@rpai.com if you plan to attend.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Why did you send me this Proxy Statement?

We sent you this proxy statement and the proxy card because our Board of Directors (the “Board”) is soliciting a proxy from you to vote your shares at the Annual Meeting. This proxy statement contains information we are required to provide to you and is designed to assist you in voting your shares. On or about April 6, 2018, we will begin mailing the proxy materials to all stockholders of record as of the close of business on March 20, 2018, the record date fixed by the Board for determining the holders of record of our Class A common stock, $.001 par value per share, entitled to notice of and to vote at the Annual Meeting.

Why did some stockholders receive a Notice of Internet Availability of Proxy Materials?

Certain of our stockholders may receive a Notice of Internet Availability of Proxy Materials, or Notice, which was sent to stockholders on or about April 6, 2018, containing information on the availability of our proxy materials on the Internet. Stockholders who received the Notice by mail will not receive a printed copy of our proxy materials unless requested in the manner described in the Notice. The Notice explains how to access and review this proxy statement and our Annual Report to Stockholders, and how you may vote by proxy.

Who is entitled to vote?

If you were a stockholder of record as of the close of business on March 20, 2018, which is referred to as the record date, you are entitled to receive notice of the Annual Meeting and to vote the shares of Class A common stock that you held as of the close of business on the record date at the Annual Meeting. Each of the outstanding shares of Class A common stock, as of the record date, is entitled to one vote on all matters to be voted upon at the Annual Meeting. On the record date, there were 219,495,346 shares of Class A common stock issued and outstanding. We refer to our Class A common stock as our “common stock.”

Who can attend the meeting?

Only persons who are stockholders of record of shares of common stock of the Company at the close of business on the record date or their designated proxies or who are invited guests of the Company may attend and be admitted to the Annual Meeting. All stockholders attending the Annual Meeting will be required to show photo identification (a valid driver’s license, state identification or passport) prior to admission. If a stockholder’s shares are registered in the name of a broker, bank or other nominee, the stockholder must also bring a proxy or a letter from that broker, bank or other nominee or their most recent brokerage account statement that confirms that the stockholder was a beneficial owner of our shares as of the record date. We reserve the right to determine the validity of any purported proof of beneficial ownership. Please contact our Investor Relations department via email at IR@rpai.com if you plan to attend. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices will not be permitted to be used at the Annual Meeting.

How do I vote?

If some or all of your shares are registered in your own name with our transfer agent, you are a “stockholder of record” or “record holder” with respect to such shares, and you can vote those shares either in person at the Annual Meeting or by proxy without attending the Annual Meeting by any of the following methods:

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By Internet. Stockholders may authorize a proxy to vote via the Internet by using the website provided on their proxy card or Notice until 11:59 p.m. Eastern Time on May 23, 2018. The Internet proxy authorization procedures are designed to authenticate stockholders’ identities and to allow stockholders to authorize a proxy to vote their shares and confirm that their instructions have been properly recorded. If you vote via the Internet, you do not need to return your proxy card.

By Telephone. Stockholders may authorize a proxy to vote via touch-tone telephone by calling the toll-free telephone number provided on their proxy card or Notice until 11:59 p.m. Eastern Time on May 23, 2018. The touch-tone telephone proxy authorization procedures are designed to authenticate stockholders’ identities and to allow stockholders to authorize a proxy to vote their shares and confirm that their instructions have been properly recorded. If you vote via telephone, you do not need to return your proxy card.

By Mail. If you received printed materials and you choose not to authorize your proxy over the Internet or by touch-tone telephone, please complete the paper proxy card and return it to our transfer agent in the pre- addressed, postage-paid envelope provided with this proxy statement.

Please refer to the Notice or, if you received printed materials, the enclosed proxy card for voting instructions.

If you hold some or all of your shares in “street name,” you must either direct the bank, broker or other nominee as to how to vote your shares or obtain a proxy from the bank, broker or other nominee to vote at the Annual Meeting. Please refer to the voter instruction cards used by your bank, broker or other nominee for specific instructions on methods of voting, including using the Internet or by telephone.

Each executed and timely-returned proxy will be voted in accordance with the directions indicated on it. Except for “broker non-votes” described below, executed but unmarked proxies will be voted by the person(s) named thereon (i) for the election of the nominees named herein as directors (or a substitute for a nominee if such nominee is unable or refuses to serve); (ii) for the approval of an advisory resolution approving the Company’s executive compensation; (iii) for the approval of the Retail Properties of America, Inc. Amended and Restated 2014 Long-Term Equity Compensation Plan; (iv) for the ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2018; and (v) in the discretion of such person(s) upon such matters not presently known or determined that may properly come before the Annual Meeting.

Can I revoke or change my proxy?

Yes. If you are a stockholder of record, you may revoke or change your proxy at any time before the shares it represents are voted by (i) giving written notice of the revocation to our Secretary, (ii) delivering a later-dated proxy (which automatically revokes the earlier proxy), or (iii) voting in person at the Annual Meeting. For shares you hold beneficially in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or other nominee or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares, by attending the Annual Meeting and voting in person. If you are a stockholder of record as of the record date attending the Annual Meeting, you may vote in person whether or not a proxy has been previously submitted, but your presence (without further action) at the Annual Meeting will not constitute revocation of a previously submitted proxy.

What constitutes a quorum?

The presence, in person or by proxy, at the Annual Meeting of holders of a majority of our outstanding shares of common stock entitled to vote on the record date constitutes a quorum for the transaction of business at the Annual Meeting. If you have returned valid proxy instructions (in writing, by telephone or over the Internet) or attend the Annual Meeting and vote in person, your shares will be counted for purposes of determining whether there is a quorum. Abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum. A “broker non-vote” occurs when a nominee (such as a custodian or bank) holding shares for a beneficial owner returns a signed proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

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What vote is required to approve each Proposal assuming a quorum is present?

1. Election of Directors: The affirmative vote of a majority of the votes cast is required for the election of each of the eight directors to be elected at the Annual Meeting, which means that a director nominee will only be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. There are no cumulative voting rights in the election of directors.
2. Approval of Executive Compensation on an Advisory Basis: The affirmative vote of a majority of the votes cast is required to approve the Company’s executive compensation on an advisory basis.
3. Approval of the Retail Properties of America, Inc. Amended and Restated 2014 Long-Term Equity Compensation Plan: The affirmative vote of a majority of the votes cast is required for the approval of the Retail Properties of America, Inc. Amended and Restated 2014 Long-Term Equity Compensation Plan. In addition, the rules of the New York Stock Exchange (“NYSE”) require that the votes for the proposal must be at least a majority of all votes cast on the proposal, including votes for and against and abstentions.
4. Ratification of the Selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2018: The affirmative vote of a majority of the votes cast is required to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2018.

Abstentions and “broker non-votes” will not be counted as votes cast for purposes of Proposals 1, 2 and 4. With respect to Proposal 3, abstentions will be treated as votes cast, thus having the effect of a vote against the proposal, but “broker non-votes” will not be counted as votes cast. A “broker non-vote” occurs when a nominee (such as a custodian or bank) holding shares for a beneficial owner returns a signed proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters.

How do I learn the results of the vote?

Voting results of the Annual Meeting will be disclosed on a Form 8-K filed with the Securities and Exchange Commission (“SEC”) within four business days after the Annual Meeting.

What is the cost of proxy solicitation?

We will bear all expenses incurred in connection with the solicitation of proxies. In an effort to have as large a representation at the Annual Meeting as possible, special solicitations of proxies may, in certain circumstances, be made by the Company’s officers, directors and employees by mail, personal contact, telephone, facsimile or other electronic means. They will not receive any additional compensation for those activities, but they may be reimbursed for their out-of-pocket expenses. We may also reimburse brokers, banks, nominees and other fiduciaries for postage and reasonable clerical expenses of forwarding the proxy material to their principals who are beneficial owners of shares of our common stock.

Will stockholders be asked to vote on any other matters?

As of the date of this proxy statement, the above-referenced proposals are the only matters we are aware of that are to be voted upon at the Annual Meeting. If any other matter should properly come before the Annual Meeting, the persons appointed by you in your proxy will vote on those matters in accordance with the recommendation of the Board, or, in the absence of such a recommendation, in accordance with their discretion. The affirmative vote of a majority of the votes cast on any such other matter will be required for approval.

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How can I manage the number of Proxy Statements and Annual Reports I receive?

The rules of the SEC permit companies to provide a single copy of our proxy statement and annual report to households in which more than one stockholder resides. This process is known as householding. Stockholders who share an address and who have been previously notified that their broker, bank or other intermediary will be householding their proxy materials will receive only one copy of our proxy statement and annual report unless they have affirmatively objected to the householding notice.

Stockholders sharing an address who received only one set of these materials may request a separate copy which will be sent promptly at no cost by writing our Investor Relations department at: Investor Relations, Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, IL 60523 or by contacting us via email at IR@rpai.com. For future annual meetings, a stockholder may request separate proxy statements or annual reports, or the householding of such materials, by contacting us as noted above.

This proxy statement and our annual report to stockholders are available at www.rpai.com/proxy.

Where can I find more information about the Company?

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file with the SEC at their Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please contact the SEC at (800) SEC-0330 for further information regarding their public reference facilities. Our SEC filings are also available to the public on the SEC’s website at www.sec.gov.

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PROPOSAL 1 - ELECTION OF DIRECTORS

PROPOSAL NO. 1: ELECTION OF EIGHT INDIVIDUALS TO SERVE AS DIRECTORS TO HOLD OFFICE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFY.

The Board currently consists of nine directors, each of whom has a term that expires at the Annual Meeting. Based on the recommendation of the Nominating and Corporate Governance Committee (the “NCG Committee”), our Board has nominated each of our current Board members to stand for re-election at the Annual Meeting, except for Paul R. Gauvreau, who will not be standing for re-election as a member of the Board. Upon the expiration of Mr. Gauvreau’s term as a director at the Annual Meeting, the number of directors that will constitute our Board will be decreased from nine to eight.

Each nominee is currently serving as a director of the Company. We have no reason to believe that any of the nominees will be unable or unwilling to serve, if elected. However, should any nominee be unable or unwilling to accept the office of director, and if the Board shall designate a substitute nominee, the persons named as proxies will vote for the election of the substitute nominee designated by the Board, and if none, for such other persons as the Board shall determine. After an evaluation, the Board determined that all of the current directors of the Company satisfy the definition of “independent” under the NYSE’s listing standards, except for Steven P. Grimes.

The election of members of the Board is conducted on an annual basis. The individuals elected to the Board serve a one-year term and until their successors are elected and qualify. Accordingly, the term of office of each of our current directors will expire at the Annual Meeting. Information regarding the business experience of each nominee is provided below based upon information furnished to us by the individuals named.

Nominees for Election as Directors

The following sets forth information with regard to the nominees for election to the Board, with ages set forth as of March 20, 2018.

Name, Positions With RPAI and Age
Business Experience
GERALD M. GORSKI
   
Director since 2003 and Chairman of the Board since 2010
   
Age 74
Gerald M. Gorski has been one of our directors since 2003 and Chairman of the Board since 2010. Mr. Gorski was a Partner in the law firm of Gorski & Good LLP, Wheaton, Illinois from 1978 through 2016. Mr. Gorski’s practice focused on governmental law, and he represented numerous units of local government in Illinois. Mr. Gorski has served as a Special Assistant State’s Attorney and a Special Assistant Attorney General in Illinois. Mr. Gorski served as the Vice Chairman of the Board of Commissioners for the DuPage Airport Authority and the Chairman of the Board of Directors of the DuPage National Technology Park. Mr. Gorski has written numerous articles on various legal issues facing Illinois municipalities and has been a speaker at various municipal law conferences. Mr. Gorski is a National Association of Corporate Directors, or NACD, Board Leadership Fellow. Mr. Gorski received a B.A. from North Central College with majors in Political Science and Economics and a J.D. from DePaul University Law School.
   
 
BONNIE S. BIUMI
   
Director since 2015
   
Age 55
Bonnie S. Biumi has been one of our directors since 2015. Ms. Biumi has over 30 years of experience in public accounting and as a Chief Financial Officer or other senior-level financial position at both public and private companies. Most recently, Ms. Biumi served as President and Chief Financial Officer of Kerzner International Resorts, Inc., a developer, owner and operator of destination resorts, casinos and luxury hotels, from 2007 to 2012. Ms. Biumi also previously held senior-level financial positions at NCL Corporation, Ltd., which is listed on the

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Name, Positions With RPAI and Age
Business Experience
 
Nasdaq, Royal Caribbean Cruises, Ltd. and Neff Corporation, which are listed on the NYSE, Peoples Telephone Company, Inc. and Price Waterhouse. Ms. Biumi serves on the Board of Eldorado Resorts, Inc., a Nasdaq-listed company. Previously, from 2012 to 2017, Ms. Biumi served on the Board of Directors of Isle of Capri Casinos, a Nasdaq-listed company and from 2012-2015, she served on the Board of Directors of Home Properties, Inc., a NYSE-listed company. Ms. Biumi is a NACD Board Leadership Fellow. Ms. Biumi received a B.S. in Accounting from the University of Florida and is a certified public accountant.
   
 
FRANK A. CATALANO, JR.
   
Director since 2003
   
Age 56
Frank A. Catalano, Jr. has been one of our directors since our inception in 2003. Mr. Catalano has been President of Catalano & Associates, a real estate company that engages in brokerage and property management services and in the rehabilitation and leasing of office buildings, since 1999. Mr. Catalano served as Regional Vice President at Gateway Funding Diversified Mortgage Services, L.P., a residential mortgage banking company, from February 2008 to 2011 and as Vice President of American Home Mortgage Company from 2002 to August 2007. Mr. Catalano served as Regional Vice President of Flagstar Bank from January 2001 through March 2002 and as President and Chief Executive Officer of CCS Mortgage, Inc., which was sold to Flagstar Bank in 2000, from 1995 through 2000. Mr. Catalano is a member of the United Cerebral Palsy Seguin Board and formerly served as the Chairman of the Board of the Elmhurst Chamber of Commerce. Mr. Catalano is a NACD Board Leadership Fellow and holds a real estate broker’s license.
   
 
ROBERT G. GIFFORD
   
Director since 2016
   
Age 61
Robert G. Gifford has been one of our directors since 2016. Mr. Gifford served as President and Chief Executive Officer of AIG Global Real Estate (AIG) from 2009 through 2016, joining AIG one year after the U.S. Government took an equity interest in the company. In this role, Mr. Gifford executed on both the wind-down of $20 billion of legacy real estate assets under management, including retail and mixed-use development projects, and the subsequent strategic rebuilding of their real estate investment platform, committing over $2.5 billion of equity to $7.5 billion of new real estate projects with a focus on development and value-add acquisitions. Before joining AIG, Mr. Gifford was with AEW Capital Management, L.P. (AEW) for 22 years, where he was a Principal and led a team in creating and implementing an opportunistic investment strategy targeting value-add real estate acquisitions and development, including retail and mixed-use properties. Mr. Gifford was also involved in the structuring and marketing of specialized REIT funds and leading a $2 billion recapitalization of a super-regional shopping center portfolio at AEW. Mr. Gifford serves on the Board of Trustees of Liberty Property Trust, a NYSE-listed REIT, as a Director of Lehman Brothers Holding Inc., is a member of the Advisory Board of Aspen Heights Partners, a private developer and operator of student and multi-family housing in Austin, Texas, and is an active member of the Urban Land Institute where he formerly

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Name, Positions With RPAI and Age
Business Experience
 
served as Council Vice-Chair. Mr. Gifford received a B.A. from Dartmouth College and a Master’s Degree in Public and Private Management from Yale School of Management.
   
 
STEVEN P. GRIMES
   
Director since 2011; President and Chief Executive Officer since 2009
   
Age 51
Steven P. Grimes has served as President and Chief Executive Officer of the Company since 2009 and as a Director since 2011. Previously, Mr. Grimes was Chief Financial Officer of the Company since the internalization of our management in November 2007 to December 2011; Chief Operating Officer of the Company from November 2007 to October 2009 and Treasurer of the Company from October 2008 to December 2011. From February 2004 to November 2007, Mr. Grimes served as Principal Financial Officer and Treasurer and Chief Financial Officer of Inland Western Retail Real Estate Advisory Services, Inc., our former business manager/advisor. Previously, Mr. Grimes served as a Director with Cohen Financial, a mortgage brokerage firm, and as a senior manager with Deloitte & Touche LLP in their Chicago-based real estate practice, where he was a national deputy real estate industry leader. Mr. Grimes is an active member of various real estate trade associations, including NAREIT, ICSC and The Real Estate Roundtable. Mr. Grimes received a B.S. in Accounting from Indiana University.
   
 
RICHARD P. IMPERIALE
   
Director since 2008
   
Age 58
Richard P. Imperiale has been one of our directors since 2008. Mr. Imperiale is President and founder of the Uniplan Companies, a Milwaukee, Wisconsin-based investment advisory holding company that, together with its affiliates, manages and advises over $2.5 billion of assets. Mr. Imperiale founded Uniplan, Inc. in 1984, which specializes in managing equity-income, REIT and micro-cap specialty portfolios for clients. Mr. Imperiale began his career as a credit analyst for the First Wisconsin National Bank (now U.S. Bank). In 1983, Mr. Imperiale joined B.C. Ziegler & Company, a Midwest regional brokerage firm where he was instrumental in the development of portfolio strategies for one of the first hedged municipal bond mutual funds in the country. Mr. Imperiale serves as a Director of Reven Housing REIT, Inc., a Nasdaq-listed company, with a regional focus on single-family residential properties. Mr. Imperiale is widely quoted in local and national media on matters pertaining to investments and is the author of several books on investing, including “Real Estate Investment Trusts: New Strategies For Portfolio Management” published by John Wiley & Sons, 2002. Mr. Imperiale is a NACD Board Leadership Fellow. Mr. Imperiale received a B.S. in Finance from Marquette University Business School.
   
 
PETER L. LYNCH
   
Director since 2014
   
Age 66
Peter L. Lynch has been one of our directors since 2014. Mr. Lynch served as Chairman of the Board of Directors, President and Chief Executive Officer, from 2006 to March 2012, and Chief Executive Officer, from 2004 to 2006, of Winn-Dixie Stores, Inc., a supermarket chain operating approximately 485 combination food and drug stores throughout the South and a Nasdaq-listed company prior to its merger with BI-LO, LLC in December 2011. From 1998 through 2003, Mr. Lynch held various positions of increasing responsibility, including President and

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Name, Positions With RPAI and Age
Business Experience
 
Chief Operating Officer and Executive Vice President-Operations, with Albertson’s, Inc., a national retail food and drug chain comprised of 2,500 stores operating under the Albertson’s, Jewel/Osco, ACME, Sav-on and Osco names. While at Albertson’s Inc., Mr. Lynch spearheaded the successful merger of American Stores Company, which operated food and drug stores in the Midwest, into Albertson’s Inc. Mr. Lynch also held executive positions with Jewel/Osco, including President of the ACME division and Senior Vice President of Store Operations. Mr. Lynch began his career with Star Markets Company, a regional retailer, serving as Vice President of Operations and Vice President of Human Resources before being named its President. Mr. Lynch serves on the Board of Directors of Liquor Stores of N.A. Ltd., which is listed on the Toronto Stock Exchange. Mr. Lynch also serves on the Board of Sid Wainer & Son, a privately-held company, located in New Bedford, Massachusetts. Mr. Lynch is a member of the Board of Trustees of Nichols College and is a Trustee of the Willowbend Country Club. Mr. Lynch received a B.S. in Finance from Nichols College.
   
 
THOMAS J. SARGEANT
   
Director since 2013
   
Age 59
Thomas J. Sargeant has been one of our directors since 2013. Mr. Sargeant served as Chief Financial Officer of AvalonBay Communities, Inc., a NYSE-listed multifamily real estate investment trust, from 1995 until his retirement in May 2014. From 1986 through 1995, Mr. Sargeant held various finance positions with AvalonBay Communities, Inc.’s predecessor companies, including Chief Financial Officer, Secretary, Treasurer, Group Financial Officer and Controller. From 1984 to 1986, Mr. Sargeant held a finance position with Ingersoll Rand. From 1980 to 1984, Mr. Sargeant held various roles at Arthur Andersen & Company serving clients primarily in the real estate and construction industries. Mr. Sargeant is a member of the Board of Directors of Morgan Stanley Private Bank, N.A., a wholly-owned subsidiary of Morgan Stanley. Mr. Sargeant received a B.S. in Business Administration from the University of South Carolina and is a certified public accountant.

Director Qualifications. The NCG Committee takes into consideration many factors when identifying director nominees, including diversity, which has multiple dimensions such as age, professional experience, industry, geography, gender and race. On an annual basis, the NCG Committee performs a skill set analysis of existing members of the Board, and in conjunction with the strategic initiatives of the Company, determines what skill sets may be needed. Recent changes in the composition of the Board have been a direct result of this effort, specifically in the areas of gender, industry, financial and development expertise.

In concluding that each of the foregoing directors should serve as a director, the NCG Committee and the Board focused on each director’s participation and performance on the Board during his or her tenure, as well as each director’s experience, qualifications, attributes and skills discussed in each director’s individual biographies set forth above. In particular, with respect to each director, the NCG Committee and the Board noted the following:

Mr. Gorski’s experience as an attorney and focus on local government law gives the Board a valuable perspective on the numerous legal issues (including land-use law) that the Company faces, as well as local political issues;
Ms. Biumi’s financial experience, including her serving as chief financial officer or other senior-level financial position of both public and private companies, and experience as a certified public accountant, brings financial expertise to the Board and the Audit Committee;

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Mr. Catalano’s experience in leading a firm engaged in the brokerage, management, rehabilitation and leasing of commercial property coincides closely with the Company’s business;
Mr. Gifford’s significant leadership and real estate experience, including his serving as chief executive officer of a $20 billion real estate investment platform, brings a wealth of knowledge in creating strategic growth opportunities;
Mr. Grimes’ experience and position as the Company’s Chief Executive Officer;
Mr. Imperiale’s experience in the brokerage and investment advisory industries provides the Board with a REIT investor’s perspective as to the Company’s financial results and corporate messaging;
Mr. Lynch’s significant leadership experience, including his serving as president and chief executive officer of a retail grocer and Nasdaq-listed company, and his extensive knowledge of financial management, strategic business planning, mergers and acquisitions and both retail and non-retail operations; and
Mr. Sargeant’s financial and real estate experience, including his experience serving as chief financial officer of a NYSE-listed real estate investment trust, brings financial expertise to the Board and the Audit Committee.

Vote Required

The affirmative vote of a majority of the votes cast is required for the election of each of the eight directors to be elected at the Annual Meeting, which means that a director nominee will only be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. There are no cumulative voting rights in the election of directors. Broker non-votes, if any, and abstentions will not be treated as votes cast.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF ITS NOMINEES.

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CORPORATE GOVERNANCE AND BOARD MATTERS

Corporate Governance Profile

We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance structure include the following:

the Board is not staggered, with each of our directors subject to re-election annually;
of the nine persons who currently serve on the Board, eight have been affirmatively determined by the Board to be independent for purposes of the NYSE’s listing standards;
we have a majority voting standard for uncontested director elections;
three current members of our Audit Committee qualify as “audit committee financial experts” as defined by SEC rules;
we have an independent Chairman of the Board;
we have opted out of the Maryland business combination and control share acquisition statutes and we may not opt in without stockholder approval;
our bylaws may be amended by the affirmative vote of a majority of all votes entitled to be cast by stockholders of the issued and outstanding shares of common stock of the Company at a meeting of stockholders duly called and at which a quorum is present;
we do not have a stockholder rights plan and, in the future, we will not adopt a stockholder rights plan unless our stockholders approve in advance the adoption of a plan or, if adopted by the Board, we will submit the stockholder rights plan to our stockholders for a ratification vote within twelve (12) months of the adoption or the plan will terminate;
we have a robust anti-hedging and anti-pledging policy that prohibits such action by members of the Board or our Named Executive Officers (as defined herein);
we have stock ownership guidelines for members of the Board and our Chief Executive Officer and our other Named Executive Officers (as defined herein); and
we intend to conduct an annual stockholders’ advisory vote on executive compensation in accordance with the stockholders’ advisory vote on the frequency of executive compensation.

Board of Directors.   The Board is currently comprised of nine members. The current members of the Board are Mr. Gerald M. Gorski, Ms. Bonnie S. Biumi, Mr. Frank A. Catalano, Jr., Mr. Paul R. Gauvreau, Mr. Robert G. Gifford, Mr. Steven P. Grimes, Mr. Richard P. Imperiale, Mr. Peter L. Lynch and Mr. Thomas J. Sargeant. Upon the expiration of Mr. Gauvreau’s term as a director at the Annual Meeting, the number of directors that will constitute our Board will be decreased from nine to eight.

Board Leadership Structure.   Since its inception, the Company has had separate individuals serving in the positions of Chief Executive Officer and Chairman of the Board. The Board believes this structure best serves the Company by allowing our Chief Executive Officer to focus his efforts on setting the strategic direction and providing day-to-day leadership of the Company while the Chairman of the Board focuses on presiding at meetings of the Board and overall planning and relations with the directors. The Board believes that the needs of a company with the large portfolio of properties and the wide spectrum of business decisions that we face are best met by allowing these two different functions to be handled by two separate individuals.

Executive Sessions.   The independent directors meet in executive session without management present at least once per year at regularly scheduled meetings and at such other times as they deem appropriate. The Chairman of the Board acts as the presiding director for these executive sessions of independent directors provided that if the Chairman of the Board is not an independent director or is not present, the Chair of the NCG Committee shall act as the presiding director and if such chair is not present, the directors present at the executive session shall determine the director to preside at such executive session by majority vote.

Board Role in Risk Management.   The Board plays an important role in the risk oversight of the Company, primarily through direct decision-making authority with respect to significant matters and the oversight of management by the Board and its committees.

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In particular, the Board administers its risk oversight function through (1) the review and discussion of regular periodic reports to the Board and its committees on topics relating to the risks that we face, including, among others, market conditions, tenant concentrations and credit worthiness, leasing activity and lease expirations, compliance with debt covenants, management of debt maturities, access to debt and equity capital markets, existing and potential legal claims against us, cyber security and various other matters relating to our business, (2) the required approval by the Board (or a committee thereof) of significant transactions and other decisions, including, among others, significant acquisitions and dispositions of properties, certain new borrowings and the appointment of our executive officers, (3) the direct oversight of specific areas of our business by the Executive Compensation, Audit and NCG committees, and (4) regular periodic reports from our auditors and other outside consultants regarding various areas of potential risk, including, among others, those relating to our qualification as a REIT and our internal controls over financial reporting. The Board also relies on management to bring significant matters affecting the Company to its attention.

Pursuant to its charter, the Audit Committee is specifically responsible for discussing with management the guidelines and policies that govern the process by which the Company’s exposure to risk is assessed and managed. As part of this discussion, the Audit Committee may discuss or consider major financial risk exposures and the steps management has taken to monitor and control such exposures. In addition, our Non-Retaliation Policy enables anonymous and confidential submission by employees of complaints or concerns regarding violations of applicable laws, regulations, or business ethical standards or questionable accounting, internal control or auditing matters. These complaints or concerns may be submitted directly to the compliance officer who is responsible for administering the program, or if they involve the Company’s accounting, auditing or internal controls and disclosure practices, directly to the Audit Committee.

Given its role in the risk oversight of the Company, the Board believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to our operations. Although there are different leadership structures that could allow the Board to effectively oversee the management of such risks, and while the Board believes its current leadership structure enables it to effectively manage such risks, it was not the primary reason the Board selected its current leadership structure over other potential alternatives.

See the discussion under the heading “— Board Leadership Structure” above for a discussion of why the Board has determined that its current leadership structure is appropriate.

Board Meetings in 2017

The Board met eight times during 2017. Each incumbent director who was a director during 2017 attended more than 75% of the aggregate of (1) the total number of meetings of the Board (held during the period for which he or she has been a director) and (2) the total number of meetings of all committees of the Board on which the director served (during the period he or she served). We do not have a policy with regard to Board members’ attendance at annual stockholder meetings; however, each director who was a director at such time attended the 2017 annual meeting of stockholders of the Company.

Committees of the Board

The Board has established three standing committees: the Audit Committee, the Executive Compensation Committee (the “ECC”) and the NCG Committee. The composition of each of the Audit Committee, the ECC and the NCG Committee complies with the listing requirements and other rules and regulations of the NYSE, as amended or modified from time to time. In 2017, the Audit Committee held four (4) meetings, the ECC held five (5) meetings and the NCG Committee held four (4) meetings. All members of the committees described below are independent as such term is defined in the NYSE’s listing standards and as affirmatively determined by the Board.

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Board Committee
Chair
Members
Audit Committee
Thomas J. Sargeant
Bonnie S. Biumi
 
 
Paul R. Gauvreau
 
 
Robert G. Gifford
 
 
Richard P. Imperiale
 
 
 
Executive Compensation Committee
Bonnie S. Biumi
Frank A. Catalano, Jr.
 
 
Gerald M. Gorski
 
 
Richard P. Imperiale
 
 
Peter L. Lynch
 
 
Thomas J. Sargeant
 
 
 
Nominating and Corporate Governance Committee
Peter L. Lynch
Frank A. Catalano, Jr.
 
Paul R. Gauvreau
 
 
Robert G. Gifford
 
 
Gerald M. Gorski

Audit Committee

The Board has established an Audit Committee currently comprised of Ms. Biumi and Messrs. Gauvreau, Gifford, Imperiale and Sargeant (chair). The Board has determined that Ms. Biumi and Messrs. Gauvreau and Sargeant each qualify as an “audit committee financial expert” under the applicable SEC rules. The Audit Committee operates under a written charter approved by the Board. A copy of the charter is publicly available on our website at www.rpai.com under “Corporate Governance” in the Invest section.

The Audit Committee is responsible for the engagement of our independent registered public accounting firm, reviewing the plans and results of the audit engagement with our independent registered public accounting firm, approving services performed by, and the independence of, our independent registered public accounting firm, considering the range of audit and non-audit fees, and consulting with our independent registered public accounting firm regarding the adequacy of our internal controls over financial reporting.

Audit Committee Report. The members of the Audit Committee submit this report in connection with the committee’s review of the financial reports for the fiscal year ended December 31, 2017 as follows:

1. The Audit Committee has reviewed and discussed with management the audited financial statements for Retail Properties of America, Inc. for the fiscal year ended December 31, 2017.
2. The Audit Committee has discussed with representatives of Deloitte & Touche LLP the matters required to be discussed under applicable Public Company Accounting Oversight Board (“PCAOB”) standards.
3. The Audit Committee has received the written disclosures and the letter from the independent accountant required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountant the independent accountant’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for filing with the SEC.

Submitted by the Audit Committee

Thomas J. Sargeant (Chair)
Bonnie S. Biumi
Paul R. Gauvreau
Robert G. Gifford
Richard P. Imperiale

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Executive Compensation Committee

The Board has established an Executive Compensation Committee, or the ECC, currently comprised of Ms. Biumi (chair) and Messrs. Catalano, Gorski, Imperiale, Lynch and Sargeant. The ECC operates under a written charter approved by the Board. A copy of the charter is publicly available on our website at www.rpai.com under “Corporate Governance” in the Invest section.

The ECC provides assistance to the Board in discharging its responsibilities related to the compensation of our directors, executive officers and other employees, and develops and implements our compensation policies. The ECC’s responsibilities include, among others, (i) reviewing and approving corporate goals and objectives related to the compensation of the Chief Executive Officer, evaluating the performance of the Chief Executive Officer in light of these goals and objectives, and determining and approving the compensation of the Chief Executive Officer based on such evaluation, and (ii) determining and approving the compensation of all executive officers other than the Chief Executive Officer.

Executive Compensation Committee Interlocks and Insider Participation. None of the members of the ECC has any relationship with us requiring disclosure under Item 404 of Regulation S-K. No member of the ECC is a current or former officer or employee of ours or any of our subsidiaries. None of our executive officers serve as a member of the board of directors or compensation committee of any company that has one or more of its executive officers serving as a member of our Board or the ECC.

Nominating and Corporate Governance Committee

The Board has established an NCG Committee currently comprised of Messrs. Catalano, Gauvreau, Gifford, Gorski and Lynch (chair). The NCG Committee operates under a written charter approved by the Board. A copy of the charter is publicly available on our website at www.rpai.com under “Corporate Governance” in the Invest section. The NCG Committee will consider for recommendation to the Board nominations made by stockholders that comply with the procedures described below under the caption “Stockholder Proposals for the 2019 Annual Meeting,” including, without limitation, providing notice setting forth all information required by the rules of the SEC or Section 12 of our bylaws, as the case may be. We did not receive any stockholder recommendations for director candidates for election at the Annual Meeting.

The NCG Committee identifies possible director nominees (whether through a recommendation from a stockholder or otherwise) and makes an initial determination as to whether to conduct a full evaluation of the candidate(s). This initial determination is based on the information provided to the NCG Committee when the candidate is recommended, the NCG Committee’s own knowledge of the prospective candidate and information, if any, obtained by the NCG Committee’s inquiries. The preliminary determination is based primarily on the need for additional Board members to fill vacancies, expand the size of the Board or obtain representation in market areas or expertise without Board representation and the likelihood that the candidate can satisfy the evaluation factors described below. If the members of the NCG Committee determine that additional consideration is warranted, the NCG Committee may gather additional information about the candidate’s background and experience. The members of the NCG Committee take into account many factors, including (i) the nominee’s ability to make independent analytical inquiries, (ii) general understanding of finance, accounting, marketing and other elements relevant to the success of a public company in today’s business environment, (iii) understanding of the Company’s business on a technical level, and (iv) other community service, business, educational and professional experiences. Each director must also possess fundamental qualities of intelligence, honesty, good judgment, high ethics and standards of integrity, fairness and responsibility. In determining whether to recommend a director for re-election, the NCG Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board.

The members of the NCG Committee may consider all facts and circumstances that it deems appropriate or advisable, including, among others, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board. In connection with this evaluation, the members of the NCG Committee determine whether to interview the candidate, and if they decide that an interview is warranted, one or more of those members and others, as appropriate, interview the candidate in person or by telephone. After completing this evaluation and interview, upon the recommendation of the NCG Committee, the full Board would nominate such candidates for election. Other than circumstances in which we may be legally required by contract or otherwise to provide third parties with the ability to nominate directors, the NCG Committee will evaluate all proposed director candidates that it

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considers or who have been properly recommended to it by a stockholder based on the same criteria and in substantially the same manner, with no regard to the source of the initial recommendation of the proposed director candidate.

Guidelines on Corporate Governance and Code of Business Conduct and Ethics

The Board, upon the recommendation of the NCG Committee, has adopted guidelines on corporate governance establishing a common set of expectations to assist the Board in performing its responsibilities. Our corporate governance policies and guidelines address a number of topics, including, among other things, (i) director qualification standards and responsibilities, (ii) majority voting, (iii) the responsibilities and composition of the Board committees, (iv) director access to management and independent advisors, (v) director compensation, (vi) director and management stock ownership guidelines, (vii) director orientation and continuing education, (viii) management succession, (ix) evaluations of the performance of the Board and committees, (x) related person transaction approval and (xi) disclosure policies. Our guidelines on corporate governance meet the requirements of the NYSE’s listing standards and are publicly available on our website at www.rpai.com under “Corporate Governance” in the Invest section.

The Board has also adopted a code of business conduct and ethics, which includes a conflicts of interest policy that applies to all directors and executive officers. The code of business conduct and ethics meets the requirements of a “code of ethics” as defined by the rules and regulations of the SEC and is publicly available on our website at www.rpai.com under “Corporate Governance” in the Invest section. We intend to disclose on our website any amendment to, or waiver of, any provision of the code of business conduct and ethics applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE. A printed copy of our guidelines on corporate governance and the code of business conduct and ethics may also be obtained by any stockholder upon request.

Communications with the Board

Stockholders or other interested parties may communicate with any of the Company’s directors or the Board as a group by writing to them at [Name(s) of Director(s)/Board of Directors of Retail Properties of America, Inc.], Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, Illinois 60523.

Stockholders or other interested parties may communicate with independent directors of the Company as a group by writing to Independent Directors of Retail Properties of America, Inc., Retail Properties of America, Inc., 2021 Spring Road, Suite 200, Oak Brook, Illinois 60523.

All communications received as set forth in the preceding paragraphs will be opened by the Secretary of the Company for the sole purpose of determining the nature of the communication. Communications that constitute advertising, promotions of a product or service, or communications that do not relate to the Company or its business will not be forwarded to the directors. Other communications will be forwarded promptly to the addressee(s) as deemed appropriate.

Director Compensation

Directors who are employees of the Company do not receive compensation for their service as directors.

In 2017, our non-employee director compensation program was as follows:

an annual restricted stock award having a value of $115,000;
an additional annual restricted stock award having a value of $50,000 for service as Chairman of the Board;
an annual cash retainer of $75,000 for service as a director;
an additional annual cash retainer of $50,000 for service as Chairman of the Board;
an additional annual cash retainer of $25,000 for service as the chair of the Audit Committee;
an additional annual cash retainer of $15,000 for service as the chair of the ECC or the NCG Committee; and
an additional annual cash retainer of $10,000 for service as a non-chair member of the Audit, ECC or NCG Committee.

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The annual restricted stock awards are granted on the fifth business day after each annual meeting of stockholders and are subject to vesting on the earlier of the date of the next annual meeting of stockholders or the first anniversary of the grant date.

On June 2, 2017, each non-employee director elected at the 2017 annual meeting of stockholders received a restricted stock award of 9,320 shares, valued at a price of $12.34 per share, which was the closing price per share of our common stock on the NYSE on June 2, 2017. Mr. Gorski also received an additional restricted stock award of 4,052 shares, valued at a price of $12.34 per share, which was the closing price per share of our common stock on the NYSE on June 2, 2017, in connection with his service as Chairman of the Board. These equity awards are all subject to vesting on the earlier of the date of the Annual Meeting or the first anniversary of the grant date.

2017 Director Compensation Table

The following table sets forth a summary of the compensation we paid to our non-employee directors during 2017:

2017 Director Compensation
Name
Fees Earned Paid in Cash
Stock Awards ($)(1)
Total ($)
Gerald M. Gorski
$
145,000
 
$
165,010
 
$
310,010
 
Bonnie S. Biumi
 
100,000
 
 
115,009
 
 
215,009
 
Frank A. Catalano, Jr.
 
95,000
 
 
115,009
 
 
210,009
 
Paul R. Gauvreau
 
95,000
 
 
115,009
 
 
210,009
 
Robert G. Gifford
 
95,000
 
 
115,009
 
 
210,009
 
Richard P. Imperiale
 
95,000
 
 
115,009
 
 
210,009
 
Peter L. Lynch
 
100,000
 
 
115,009
 
 
215,009
 
Thomas J. Sargeant
 
110,000
 
 
115,009
 
 
225,009
 
(1) Represents the aggregate grant date fair value of restricted stock awards granted during the year ended December 31, 2017, calculated as the closing price per share of our common stock on the NYSE on the grant date multiplied by the number of shares granted. As of December 31, 2017, each of the non-employee directors held 9,320 unvested shares of restricted stock that had been granted by us as director compensation, with the exception of Mr. Gorski who held 13,372 unvested shares of restricted stock. As of December 31, 2017, Mr. Gorski held unexercised options to purchase 8,000 shares of common stock, Messrs. Catalano, Gauvreau and Imperiale held unexercised options to purchase 10,000 shares of common stock and Messrs. Gifford, Lynch, Sargeant and Ms. Biumi held no unexercised options.

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OUR EXECUTIVE OFFICERS

Biographies of our Executive Officers

The following sets forth information regarding our executive officers (other than Steven P. Grimes, the Chief Executive Officer and President, whose biography appears above under the caption, “Proposal 1Election of DirectorsNominees for Election as Directors”), with ages set forth as of March 20, 2018:

Name, Positions With RPAI and Age
Business Experience
SHANE C. GARRISON
   
Executive Vice President, Chief
Operating Officer and Chief
Investment Officer
   
Age 48
Shane C. Garrison serves as our Executive Vice President, Chief Operating Officer and Chief Investment Officer. Mr. Garrison is responsible for overseeing a number of operating functions within the Company, including leasing, property management, asset management, which includes acquisitions and dispositions, joint ventures and construction operations. Mr. Garrison has served as our Chief Operating Officer since 2012, as our Executive Vice President since 2010 and as our Chief Investment Officer since the internalization of our management in November 2007. Before November 2007, Mr. Garrison served as Vice President of Asset Management of Inland US Management LLC, a property management company affiliated with our former business manager/advisor, since 2004. In this role, Mr. Garrison underwrote over $1.2 billion of assets acquired by the Company and went on to spearhead our development and joint venture initiatives. Previously, Mr. Garrison served as Head of Asset Management for ECI Properties, a boutique owner of industrial and retail properties, and the General Manager of the Midwest region for Circuit City, formerly a large electronics retailer. Mr. Garrison received a B.S. in Business Administration from Illinois State University and an M.B.A. in Real Estate Finance from DePaul University.
   
 
JULIE M. SWINEHART
   
Executive Vice President, Chief
Financial Officer and Treasurer
   
Age 42
Julie M. Swinehart was appointed as our Executive Vice President, Chief Financial Officer and Treasurer on February 6, 2018. She has served as our Senior Vice President and Chief Accounting Officer since 2015, our Senior Vice President and Corporate Controller from April 2013 to July 2015 and held various accounting and financial reporting positions since joining the Company in 2008. Before joining the Company, Ms. Swinehart was a Manager of External Reporting at Equity Office Properties Trust for two years and she spent eight years in public accounting in the audit practices of Arthur Andersen LLP and Deloitte & Touche LLP. Ms. Swinehart received a B.S. in Accountancy from the University of Illinois at Urbana-Champaign and is a certified public accountant.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following discussion and analysis is set forth with respect to the compensation and benefits for our fiscal year ended December 31, 2017 for our Chief Executive Officer, Chief Financial Officer and the other executive officers included in the “Summary Compensation Table” below. In this “— Compensation Discussion and Analysis,” we refer to Messrs. Grimes and Garrison, Ms. Swinehart and Ms. Paula C. Maggio, who served as our Executive Vice President, General Counsel and Secretary through March 9, 2018, collectively, as our Named Executive Officers. See “—Potential Payments Upon Termination or Change-in-ControlDeparture of Ms. Maggio” for more information regarding Ms. Maggio’s departure. The discussion and analysis also covers compensation and benefits for 2017 for Mr. Heath R. Fear who resigned as our Executive Vice President, Chief Financial Officer and Treasurer during 2017. See “— Compensation Discussion and Analysis—Resignation of Mr. Fear and 2017 Compensation” for more information regarding Mr. Fear’s resignation. For all other sections included under “Executive Compensation,” Mr. Fear is also included in the term “Named Executive Officers.” Also, Ms. Swinehart was promoted to Executive Vice President, Chief Financial Officer and Treasurer, effective February 6, 2018.

Executive Summary

In 2017, our executive management team continued to focus their efforts on certain strategic objectives, including, among others, repositioning our portfolio by opportunistically increasing our concentration in certain markets and methodically decreasing our presence in certain non-core markets, efficiently recycling capital to enhance the strength of our portfolio and the quality of our long-term cash flow stream, and significantly improving our credit metrics and enhancing our financial flexibility to allow us to capitalize on internal and external growth opportunities. In 2017, we substantially completed the execution of our portfolio transformation by executing on over $1.1 billion in total transactions, with disposition proceeds used for acquisitions of high quality, multi-tenant retail assets, debt reduction and repurchases of our common stock.

Our executive compensation program and decisions for 2017 are designed to reward company and individual performance and achievements commensurate with our business results and the execution of our strategic objectives described above. We also believe that our executive compensation program and decisions for 2017 compensation encourage the alignment of management’s and stockholders’ interests and help us continue to attract, retain and motivate the key employees responsible for driving our long-term value creation.

The principles underlying our compensation policies and practices and the results of our compensation decisions for 2017 for our Named Executive Officers are included in “— 2017 Compensation Program Design” below.

2017 Executive Compensation Profile

Performance-Based Incentive Compensation – Over 75% of Total Target CEO Compensation. In 2017, target incentive compensation represented greater than 75% of the total target compensation of our Chief Executive Officer, Mr. Grimes, greater than 65% of the total target compensation of Mr. Garrison and Ms. Maggio, and greater than 50% of the total target compensation of Ms. Swinehart. We believe our pay-for-performance compensation structure incentivizes our Named Executive Officers to maximize the Company’s performance and aligns our Named Executive Officers’ interests with those of our stockholders.

Annual Cash Incentive Compensation —Formulaic Pay-For-Performance Plan Design. For 2017, each of our Named Executive Officers was eligible to earn cash incentive compensation if and to the extent that pre-established company and individual goals were achieved. In particular, the company goals used to determine the corporate component of cash incentive compensation for 2017 were based on (i) growth in our same store EBITDA, (ii) our Operating FFO per share, and (iii) our Net Debt to Adjusted EBITDA ratio, which we believe are each key financial metrics that appropriately reflect our progress and ongoing performance and measure the health of our balance sheet. Annual cash incentive compensation based on these company goals represents 75% of the target value of our Chief Executive Officer’s cash incentive compensation and 60% of the target value for each of our other Named Executive Officers’ cash incentive compensation, with the remainder of the target value of cash incentive compensation based on the achievement of individual goals.

Long-Term Equity Incentive Compensation — 75% Based on Relative Total Stockholder Return Over Three-Year Performance Period. For 2017, each of our Named Executive Officers was granted performance-based restricted

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stock units, which represented 75% (50% in the case of Ms. Swinehart in 2017; however, for 2018, Ms. Swinehart’s weighting of performance-based restricted stock units will also be 75%) of their long-term equity incentive compensation. The performance-based restricted stock units may be earned by our Named Executive Officers based on our relative total stockholder return compared to that of the peer companies in the NAREIT Shopping Center Index over a three-year performance period, which we believe further aligns the interests of our Named Executive Officers with those of our stockholders over the longer term, supports the objectives of long-term value creation, rewards management based on our relative performance compared to our peers and serves as a retention tool for our Named Executive Officers.

Clawback Policy. In 2017, we adopted a clawback policy that allows the Company to recoup cash and equity incentive compensation paid to, earned by or granted to our executive officers during the three-year period preceding a restatement of the Company’s financial statements if the financial results that are the subject of a restatement had been materially misstated due to fraud, intentional misconduct or gross negligence by any of our executive officers. In such circumstances, the Company may recoup the amount of cash and equity incentive compensation that was paid, earned or granted as a result of the incorrectly reported financial results of the Company that were the subject of the restatement that would not have been paid, earned or granted, as applicable, if determined based on the financial results of the Company set forth or reflected in the Company’s restated financial statements. Our clawback policy applies to all cash and equity performance-based incentive compensation with a performance period beginning on or after January 1, 2017.

Retention Agreements — Double-Trigger Vesting Acceleration; Cash Severance Based Solely on Annual Cash Compensation. The terms of our retention agreements with Messrs. Grimes and Garrison require a double-trigger for acceleration of vesting of time-based equity awards in connection with a change-in-control and limit cash severance to a multiple of base salary and annual cash incentive compensation, and are summarized below under “Executive Compensation – Retention Agreements.

Stock Ownership Guidelines. We have stock ownership guidelines that require our non-employee directors and each of Messrs. Grimes and Garrison (and, beginning in 2018, Ms. Swinehart, due to her promotion to Chief Financial Officer in 2018) to own certain levels of common stock in the Company.

Anti-Hedging and Anti-Pledging Policy. We have a formal anti-hedging and anti-pledging policy that prohibits our Named Executive Officers and directors from engaging in any hedging transactions or pledging any shares of our common stock.

Strong Stockholder Support for Executive Compensation. At our 2017 annual meeting, we received strong support for our say-on-pay vote approving the compensation paid to our named executive officers for 2016. Approximately 89% of the votes cast on the proposal were voted in favor of this proposal. The ECC viewed this result as an indication of stockholders’ overall satisfaction with our executive compensation programs.

2017 Compensation Program Design

The primary objectives of our executive compensation program are: (i) to attract, retain and reward experienced, highly-motivated executives who effectively lead and contribute to our long-term growth and profitability; (ii) to motivate, lead and direct the performance of management with clearly-defined goals and measures of achievement; and (iii) to align the interests of management with the interests of our stockholders. To achieve these objectives, we offer our executives the opportunity to earn a combination of cash and long-term equity-based compensation.

Overall, we designed our executive compensation program to achieve the objectives described above. In particular, consistent with our objectives, incentive compensation constitutes the majority of our total executive compensation. We also structured our annual cash incentive compensation and a significant majority of our long- term equity incentive compensation to be based on our actual performance compared to pre-established performance goals. The following table summarizes the primary components of our 2017 executive compensation program for our Named Executive Officers.

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Component
Form of Payout
Objective
Characteristic
Base Salary
Cash
Annual base salary compensation to help retain executive level talent
Competitive base salary compensation based on comparative market analysis
 
 
 
 
Annual Cash Incentive Compensation
Cash
Incentive to achieve annual company and individual objectives in support of annual performance goals related to corporate/financial performance as well as individual performance
Earned based on the achievement of annual company goals, including growth in our Same Store EBITDA, Operating FFO per share and Net Debt to Adjusted EBITDA ratio, as well as specific individual performance goals
 
 
 
 
Long-Term Equity Incentive Compensation
Performance-Based Restricted Stock Units/Time-Based Restricted Stock
Encourage alignment of interests with stockholders and long-term retention of executives and provide an incentive for long-term relative total stockholder return performance compared to peers
Awards vest over a three-year period, with (i) 75%, or 50% with respect to Ms. Swinehart’s 2017 award, earned based on the achievement of relative total stockholder return performance compared to the peer companies in the NAREIT Shopping Center Index over a three-year performance period, with one-third of the shares earned, if any, vesting following the performance period and the remaining two-thirds of the shares earned, if any, vesting one year thereafter, based on continued employment and (ii) 25%, or 50% with respect to Ms. Swinehart’s 2017 award, vesting over a three-year period, based on continued employment

Each of these components of our executive compensation is discussed in detail below, including a description of the particular component and how it fits into our overall executive compensation program and a discussion of the amounts of compensation paid to our Named Executive Officers for 2017 under each of these components. In the descriptions below, we highlight particular compensation objectives that are addressed by specific components of our executive compensation program; however, it should be noted that we have designed our compensation program so that the various components complement each other and collectively serve all of our executive compensation objectives described above. Accordingly, whether or not specifically mentioned below, we believe that, as a part of our overall executive compensation, each component, to a greater or lesser extent, serves each of our objectives.

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Base Salary

We pay our Named Executive Officers a base salary, which we review and determine annually. We believe that a competitive base salary is a necessary component of any compensation program that is designed to attract and retain talented and experienced executives. We also believe that base salaries can motivate and reward executives for their overall performance.

The following table sets forth the 2017 and 2016 annual base salaries for our Named Executive Officers:

Named Executive Officer
2017
Base Salary
2016
Base Salary
Percentage
Change
Steven P. Grimes
$
850,000
 
$
850,000
 
 
 
Shane C. Garrison
 
650,000
 
 
590,000
 
 
10
%
Paula C. Maggio(1)
 
450,000
 
 
400,000
 
 
12.5
%
Julie M. Swinehart(2)
 
275,000
 
 
275,000
 
 
 
(1) Ms. Maggio’s 2017 base salary was adjusted to $450,000 per annum, effective July 1, 2017, and has been annualized based on such increased amount. Ms. Maggio joined the Company on May 2, 2016 and her 2016 base salary has been annualized for the full year 2016.
(2) Ms. Swinehart’s 2016 base salary was adjusted to $275,000 per annum, effective July 1, 2016, and has been annualized based on such increased amount.

In determining base salaries and whether they are appropriate, the ECC considers a number of factors on a subjective basis, including, but not limited to, (i) the scope of the Named Executive Officer’s responsibilities within the Company; (ii) the experience of the Named Executive Officer within our industry and at the Company; (iii) the performance of the Named Executive Officer and his or her contributions to the Company; (iv) the peer benchmarking of the Named Executive Officer’s position, (v) a review of historical compensation information for each Named Executive Officer; (vi) a subjective determination of the compensation needed to motivate and retain that individual; and (vii) the recommendations of the Chief Executive Officer when determining base salary for the other Named Executive Officers.

To determine the increases to Mr. Garrison’s and Ms. Maggio’s base salaries, the ECC reviewed benchmarking data for the Company’s 2017 peer group as part of its annual executive compensation review with its compensation consultant, Steven Hall & Partners (“SH&P”). The increases in base salary for Mr. Garrison and Ms. Maggio were made based on a review of competitive market data and to reflect their contributions to the Company.

Incentive Compensation

We award our Named Executive Officers incentive compensation based on pre-established performance goals and target values, which we review and determine annually. We believe that incentive compensation is an essential component of our executive compensation program and it is designed to (i) motivate and direct the performance of management with clearly-defined company and individual goals and measures of achievement; (ii) further align the interests of our Named Executive Officers with our stockholders over the longer term; (iii) support the objective of long-term value creation; (iv) reward management based on our relative performance compared to our peers; and (v) serve as a retention tool for our Named Executive Officers.

Under our incentive compensation program for 2017, each of our Named Executive Officers (i) was eligible to receive a cash award up to a specified dollar value based on the achievement of pre-established company and individual goals, (ii) received a grant of performance-based restricted stock units which are earned based on the achievement of relative total stockholder return performance compared to members of the NAREIT Shopping Center Index over a three-year period, and (iii) received a grant of restricted stock subject to vesting over a three-year period based on continued employment with us.

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2017 Target Incentive Compensation

The following table sets forth a summary of the target dollar values of our annual cash incentive compensation and long-term equity incentive compensation for each Named Executive Officer for 2017:

 
 
2017 Target Long-Term
Equity Incentive Compensation
Named Executive Officer
2017 Target
Cash Incentive
Compensation
Performance-
Based
Restricted Stock
Units
Time-Based
Restricted Stock
Steven P. Grimes
$
1,250,000
 
$
1,818,750
 
$
606,250
 
Shane C. Garrison
 
585,000
 
 
967,500
 
 
322,500
 
Paula C. Maggio
 
325,000
 
 
450,000
 
 
150,000
 
Julie M. Swinehart
 
140,000
 
 
75,000
 
 
75,000
 

In 2017, target incentive compensation represented greater than 75% of the total target compensation for our Chief Executive Officer, Mr. Grimes, greater than 65% of the total target compensation for Mr. Garrison and Ms. Maggio, and greater than 50% for Ms. Swinehart.

For 2017, based on a review of competitive market data provided by SH&P and our desire to compensate at the median of our 2017 peer group, there was an increase in Mr. Garrison’s 2017 target cash incentive compensation and the 2017 long-term equity incentive compensation for Messrs. Grimes and Garrison and Ms. Swinehart was increased. For Ms. Maggio, the amount of her 2017 target cash incentive and long-term equity incentive compensation was consistent with the target incentive compensation established for her in connection with her hiring in 2016. In 2017, Ms. Swinehart received 50% of her long-term equity incentive compensation in the form of performance-based restricted stock units and 50% of her long-term equity incentive compensation in the form of time-based restricted stock.

Annual Cash Incentive Compensation

For 2017, each of our Named Executive Officers was eligible to earn cash incentive compensation if and to the extent that pre-established company and individual goals were achieved. The following summarizes the structure of our cash incentive compensation program for 2017 for our Named Executive Officers and the amounts earned by each of our Named Executive Officers pursuant to this program.

2017 Company and Individual Goals

For 2017, 75% of the target value of our Chief Executive Officer’s annual cash incentive compensation opportunity and 60% of the target value for each of our other Named Executive Officer’s annual cash incentive compensation opportunity was based on the achievement of company goals, with the remainder of the cash incentive compensation based on the achievement of individual goals. The following table sets forth the percentage of the target value of our cash incentive compensation for 2017 based on company and individual goals, respectively, for each Named Executive Officer:

 
Company Goals
 
Named Executive Officer
Same Store
EBITDA Growth
Operating FFO
per Share
Net Debt to
Adjusted
EBITDA
Individual Goals
Steven P. Grimes
 
45.00
%
 
22.50
%
 
7.50
%
 
25.00
%
Shane C. Garrison
 
36.00
%
 
18.00
%
 
6.00
%
 
40.00
%
Paula C. Maggio
 
36.00
%
 
18.00
%
 
6.00
%
 
40.00
%
Julie M. Swinehart
 
36.00
%
 
18.00
%
 
6.00
%
 
40.00
%

For 2017, the company goals were based on (i) growth in our same store EBITDA, (ii) our Operating FFO attributable to common shareholders per share, and (iii) our Net Debt to Adjusted EBITDA ratio. We selected these specific company goals because (i) growth in our same store EBITDA is the financial metric that we believe most accurately reflects the progress of our operational strategy as we continue to execute on our broader asset repositioning objectives, while also prudently managing corporate level expenses, (ii) our Operating FFO attributable to common shareholders per share is one of the most significant financial measures that we report to

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investors and use to evaluate our ongoing performance, and (iii) our Net Debt to Adjusted EBITDA ratio is a key financial metric measuring the health of our balance sheet. As each Named Executive Officer’s performance contributes to these metrics, we believe that they provide a fair and objective basis on which to evaluate each Named Executive Officer’s performance and to determine the majority of each Named Executive Officer’s cash incentive compensation.

For each of these company goals, the ECC established three different levels of performance, “threshold,” “target” and “maximum,” based on an assessment of the operating landscape for 2017, including consideration of portfolio size and expected leasing activity, which may result in variations in these established levels from year to year. Pursuant to these levels of performance, our Named Executive Officers could earn 50%, 100% or 200%, respectively, of the target amount of the portion of the cash incentive compensation attributable to that company goal. If performance for a company goal did not equal or exceed the threshold level established, then our Named Executive Officers were not entitled to receive any of the cash incentive compensation attributable to that company goal. To the extent performance fell between two of the established levels of performance, the percentage earned was to be determined based on straight-line interpolation between the percentages that would have been earned for the established levels of performance. Further, to the extent that performance exceeds the target level, the amount earned above target is capped at the lesser of (i) 20% of the amount by which the Operating FFO per share company goal is earned in excess of the target level, on an aggregated basis for the Company, or (ii) the maximum level of performance amount. The table below sets forth the goals established at each level of performance, actual performance for 2017 and the percentage of target earned for each company goal:

Company Goal
Threshold
(50%)
Target
(100%)
Maximum
(200%)
2017
Actual
Earned %
Same Store EBITDA Growth(1)
 
1.75
%
 
2.25
%
 
3.5
%
 
2.20
%
 
94.5
%
Operating FFO Per Share(2)
$
1.00
 
$
1.04
 
$
1.12
 
$
1.06
 
 
130.9
%
Net Debt to Adjusted EBITDA Ratio(3)
 
6.0x
 
 
5.6x
 
 
5.0x
 
 
5.5x
 
 
116.7
%
(1) Same store EBITDA is calculated by reducing our publicly reported same store net operating income (NOI) by general and administrative expenses, adjusted to exclude items that the ECC does not believe are representative of our ongoing operating performance. We define NOI as all revenues other than (i) straight-line rental income, (ii) amortization of lease inducements, (iii) amortization of acquired above and below market lease intangibles and (iv) lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense (non-cash) and amortization of acquired ground lease intangibles (non-cash). For the year ended December 31, 2017, our same store portfolio consisted of 102 retail operating properties acquired or placed in service and stabilized prior to January 1, 2016. Same store EBITDA growth was based on same store EBITDA for the year ended December 31, 2017 as compared to same store EBITDA for the prior year.
(2) Operating FFO attributable to common shareholders represents funds from operations attributable to common shareholders, or FFO, for the year ended December 31, 2017, excluding the impact of discrete non-operating transactions and other events which we do not consider representative of the comparable operating results of our real estate operating portfolio, which is our core business platform. FFO means net income (loss) computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate.
(3) Net Debt to Adjusted EBITDA ratio represents (i) our total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges as of December 31, 2017 divided by (ii) Adjusted EBITDA for the three months ended December 31, 2017, annualized. Adjusted EBITDA represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing performance.

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For 2017, the ECC established the following individual goals for our Named Executive Officers:

Named Executive Officer
Individual Goals
Steven P. Grimes
Goals relating to the execution and messaging of our strategic plan, including brand building and management of external constituents; the facilitation of executive goals that drive earnings and total return; and investor communication.
Shane C. Garrison
Goals relating to the long-term portfolio strategy, including contractual rent growth and annual base rent; execution of dispositions in connection with our strategic plan; execution of leasing plans; execution of key development projects; support of leadership development; and operation in accordance with budget.
Paula C. Maggio
Goals relating to management of the Company’s legal and human resources departments; corporate governance; development of key competencies in the legal department; support of leadership development; and operation in accordance with budget.
Julie M. Swinehart
Goals relating to management and oversight of the Company’s accounting department; coordination with corporate finance; succession planning; support of leadership development; and operation in accordance with budget.

For the individual goals, the ECC established three different levels of performance, “meets expectations,” “exceeds expectations” and “exceptional,” pursuant to which our Named Executive Officers could earn 80%, 100% or 200%, respectively, of the target amount of the portion of the cash incentive compensation attributable to the individual goals. If a Named Executive Officer’s performance for the individual goals did not meet expectations, then such Named Executive Officer was not entitled to receive any of the cash incentive compensation attributable to the individual goals. To the extent performance with respect to the individual goals fell between two of the established levels of performance, the percentage earned was to be determined based on straight-line interpolation between the percentages that would have been earned for the established levels of performance. In determining the component of cash incentive compensation awarded to each Named Executive Officer based on individual goals, the ECC assessed the performance of each Named Executive Officer against his or her individual goals and then made a subjective determination regarding the level of performance achieved upon which the payout for each Named Executive Officer was based. The ECC determined that Messrs. Grimes and Garrison and Mses. Maggio and Swinehart each exceeded expectations or were exceptional in their 2017 individual performance against their established individual objectives.

2017 Cash Incentive Award Amounts

The following table sets forth the cash incentive award amounts that were paid to each of our Named Executive Officers for 2017 based on the achievement of company and individual goals as described above.

Named Executive Officer
2017 Cash Incentive
Award Amounts ($)
Steven P. Grimes
$
1,488,000
 
Shane C. Garrison
 
741,000
 
Paula C. Maggio
 
399,000
 
Julie M. Swinehart
 
186,000
 

Long-Term Equity Incentive Compensation

For 2017, other than as set forth below, each of our Named Executive Officers received long-term equity incentive compensation awards comprised of performance-based restricted stock units and time-based restricted stock awards with target values as set forth above under “— 2017 Target Incentive Compensation.”

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We designed these awards primarily to (i) further align the interests of our executives with our stockholders over the longer term, (ii) support the objective of long-term value creation and reward our executives based on our relative performance compared to our peers, and (iii) serve as a retention tool for our executives. The following table sets forth the type of awards we granted, weighting (based on percentage of target value) allocated to each award type for each of our Named Executive Officers and vesting terms for our long-term equity incentive compensation for 2017:

Award Type for NEOs
Weighting
Vesting Terms
Performance-based restricted stock units
75%(1)
Earned based on our relative total stockholder return compared to that of the peer companies in the NAREIT Shopping Center Index over the three-year performance period ending December 31, 2019. One-third of the shares earned, if any, will be issued in common stock following the performance period, and two-thirds of the shares earned, if any, will be issued in restricted stock that will vest on December 31, 2020, subject to continued employment through such date.
Restricted stock
25%(1)
Vest in three equal annual installments commencing on January 4, 2018, subject to continued employment through such dates.
(1) Ms. Swinehart’s weighting is 50% for each of the performance-based restricted stock units and restricted stock; however, beginning in 2018, the weighting for Ms. Swinehart’s awards will be 75% performance-based restricted stock units and 25% restricted stock.

Performance-Based Restricted Stock Unit Awards

We granted performance-based restricted stock units to our Named Executive Officers in 2017 for 75% (50% in the case of Ms. Swinehart) of their long-term equity incentive compensation awards. The performance-based restricted stock units may be earned by our Named Executive Officers based on our relative total stockholder return compared to that of the peer companies in the NAREIT Shopping Center Index over a three-year performance period from January 1, 2017 to December 31, 2019. The number of units that will be earned, as a percentage of the target number of units granted, will be based on the percentile ranking of our total stockholder return over the performance period as compared to the total stockholder return of each of the peer companies that were in the NAREIT Shopping Center Index during the entire performance period, as set forth in the table below. If our total stockholder return performance does not equal or exceed the threshold level established, then our Named Executive Officers will not be entitled to earn any shares pursuant to these performance-based restricted stock units. To the extent performance falls between two of the established levels of performance, the percentage earned will be determined based on straight-line interpolation between the percentages that would have been earned for the established levels of performance.

Performance Level
Relative Performance
Percentage of
Target Earned
Maximum
90th Percentile
 
200
%
Target
Median
 
100
%
Threshold
25th Percentile
 
50
%

The performance-based restricted stock units that are earned will be settled in shares of our common stock shortly after the end of the performance period, with one-third of the shares earned being vested upon issuance and the remaining two-thirds of the shares earned being subject to vesting based on continued employment through December 31, 2020. Upon settlement of the performance-based restricted stock units, additional shares of common stock will also be issued in an amount equal to the accumulated value of the dividends that would have been paid during the performance period on the shares of our common stock that are earned pursuant to the performance-based restricted stock units divided by the then-current market price of our common stock.

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The following table sets forth the target dollar values of the performance-based restricted stock units granted to each of our Named Executive Officers for 2017 and the target number of units represented by each award:

 
2017 Target Amounts
Named Executive Officer
($)
(# of Units)(1)
Steven P. Grimes
$
1,818,750
 
 
117,188
 
Shane C. Garrison
 
967,500
 
 
62,339
 
Paula C. Maggio
 
450,000
 
 
28,995
 
Julie M. Swinehart
 
75,000
 
 
4,833
 
(1) The target number of units granted to each of our Named Executive Officers was determined based on the target dollar value divided by the estimated grant date fair value per unit using a third-party valuation.

Restricted Stock Awards

We also granted restricted stock awards to our Named Executive Officers for 2017. These awards comprise 25% (50% in the case of Ms. Swinehart) of their long-term equity incentive compensation awards and vest in three equal annual installments commencing on January 4, 2018, subject to continued employment through such dates. The following table sets forth the restricted stock awards granted to each of our Named Executive Officers for 2017.

 
2017 Restricted Stock Awards
Named Executive Officer
($)
(# of Shares)(1)
Steven P. Grimes
$
606,250
 
 
39,521
 
Shane C. Garrison
 
322,500
 
 
21,024
 
Paula C. Maggio
 
150,000
 
 
9,779
 
Julie M. Swinehart
 
75,000
 
 
4,890
 
(1) The number of shares granted to each of our Named Executive Officers was determined based on dividing the dollar value by the closing price of our common stock on the grant date.

Retention Agreements

We realize that consideration of an acquisition by another company or other change-in-control transaction as well as the possibility of an involuntary termination or reduction in responsibility can be a distraction to executives and can cause them to consider alternative employment opportunities. Accordingly, we believe that establishing pre-negotiated severance benefits for certain of our Named Executive Officers helps encourage their continued dedication and further aligns the interests of such Named Executive Officers and our stockholders in the event of a potentially attractive proposed change-in-control transaction following which one or more of such Named Executive Officers may be expected to be terminated. In addition, we believe that retention agreements, which specifically set forth severance terms and conditions that are agreed upon in advance with certain of our Named Executive Officers, make it easier for us to make changes in our senior executive team, if desired, without the need for protracted negotiations over severance.

We have retention agreements with Messrs. Grimes and Garrison and we had retention agreements with Ms. Maggio and Mr. Fear. The current term of each of these retention agreements is for three years, beginning on October 31, 2016, with automatic two-year renewals thereafter unless written notice of termination is provided by either party. These agreements, among other things, provide for severance payments and benefits to the applicable Named Executive Officer if his or her employment is terminated by us without cause or by the Named Executive Officer for good reason. These agreements also provide for the measurement of performance-based vesting conditions of any outstanding equity awards granted on or after the date of the retention agreements upon the occurrence of a change-in-control, but they do not include single-trigger acceleration of vesting of time-based equity awards in connection with a change-in-control. See “Executive Compensation — Retention Agreements” below for a summary of the retention agreements we entered into with certain of our Named Executive Officers.

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Resignation of Mr. Fear and 2017 Compensation

On September 20, 2017, Mr. Fear resigned as our Executive Vice President, Chief Financial Officer and Treasurer. As a result of Mr. Fear’s resignation, Mr. Fear was not entitled to receive any cash severance payments, acceleration of vesting or other severance benefits, and he forfeited all of his unvested long-term equity awards and the opportunity to earn a short-term cash incentive award related to 2017. Mr. Fear’s annual base salary during 2017 was $525,000 and his target cash incentive compensation was $430,000, which was structured in the same manner as the cash incentive compensation awards made to our Named Executive Officers. In addition, prior to Mr. Fear’s resignation, the ECC established a target value of $820,000 for his long-term equity incentive compensation awards, which were structured in the same manner as the awards received by our Named Executive Officers. Mr. Fear forfeited these awards upon his resignation. Mr. Fear’s base salary and target cash and long-term equity incentive compensation for 2017 were determined based on the same considerations as those for the same type of compensation received by our Named Executive Officers for 2017.

Broad-Based Benefits

In addition to the compensation programs described above, each of our Named Executive Officers was eligible to participate in the same benefits programs available to all of our employees: medical, dental and vision insurance; group term life insurance; short-term and long-term disability coverage and accidental death and dismemberment coverage; a tax-qualified 401(k) plan; and a pre-tax Section 125 cafeteria plan.

Stock Ownership Guidelines

In order to complement our equity incentive compensation program and further align the interests of our Named Executive Officers with those of our stockholders, our Board adopted stock ownership guidelines that apply to our Board and certain Named Executive Officers. See “Director and Officer Stock Ownership Guidelines” below for a summary of these guidelines.

Anti-Hedging and Anti-Pledging Policy

None of our Named Executive Officers has engaged in any hedging transactions with respect to our common stock or pledged any of his or her shares of common stock in us. Additionally, we have a formal anti-hedging and anti-pledging policy that prohibits all of our executive officers and directors, including our Named Executive Officers, from engaging in any hedging transactions or pledging any shares of our common stock.

Compensation Consultant Report and Benchmarking

In connection with the review by the ECC of our executive compensation programs and levels for 2017, the ECC retained compensation consultant SH&P. In July 2016, SH&P prepared a written report for the ECC providing a thorough analysis of our executive compensation programs, including (i) a marketplace review of compensation levels for our then-named executive officers relative to our 12-company peer group, and (ii) SH&P’s recommendations regarding the overall design of our executive compensation program for 2017.

Our peer group, along with other market data, used for benchmarking our executive compensation program for fiscal year 2017 was the same as our peer group for 2016. Our 2017 peer group, which had been developed by SH&P and represented companies with similar businesses and annual revenues and market capitalization comparable to ours, included the following companies:

Brixmor Property Group, Inc.
Federal Realty Investment Trust
Regency Centers Corporation
CBL & Associates Properties, Inc.
Kimco Realty Corp.
Tanger Factory Outlet Centers, Inc.
DDR Corp.
Macerich Co.
Taubman Centers, Inc.
Equity One, Inc.
Pennsylvania Real Estate Investment Trust
Weingarten Realty Investors

The 2017 peer group data presented to the ECC included information regarding base salary, annual cash incentives, total annual compensation and long-term equity and incentive compensation. For each of these categories, SH&P presented information comparing our compensation to the compensation paid by these companies at the 25th, 50th and 75th percentiles for comparable positions.

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In 2017, the ECC engaged SH&P for a similar analysis related to our 2018 executive compensation program for our Named Executive Officers, which resulted in a mid-year 2017 base salary adjustment for Ms. Maggio. The ECC also engaged SH&P to benchmark the compensation of our Board relative to the 2017 peer group, and to advise the Company on its long-term equity compensation plan.

2017 Advisory Resolution

At our 2017 annual meeting of stockholders, an advisory resolution approving the compensation paid to our named executive officers for 2016, as disclosed in our proxy statement for the 2017 annual meeting of stockholders, including the Compensation Discussion and Analysis, compensation tables and narrative discussions, was approved by our stockholders, with approximately 89% of the votes cast on the proposal being voted in favor of the proposal to approve such resolution. The ECC has considered the results of this vote and, as a result of the high percentage of votes cast in favor of this proposal, it viewed these results as an indication of stockholders’ overall satisfaction with the manner in which we compensated our named executive officers for 2016. Accordingly, in 2017 the ECC did not implement significant changes to our executive compensation programs as a result of the stockholder advisory vote.

Executive Compensation Process

For more information regarding our processes and procedures for considering and determining the compensation of our executives, including the role of any executive officers, see “Executive Compensation — Executive and Director Compensation Process.

Summary Compensation Table

The following table sets forth information with respect to all compensation paid or earned for services rendered to us by our Named Executive Officers for the years ended December 31, 2017, 2016 and 2015 presented in accordance with SEC rules.

Summary Compensation Table
Name and Principal Position
Year
Salary ($)
Bonus ($)
Stock Awards ($)
Non-Equity
Incentive Plan
Compensation
($)(1)
All Other
Compensation
($)(2)
Total ($)
Steven P. Grimes
President and Chief
Executive Officer
 
2017
 
 
850,000
 
 
 
 
2,425,010
(3) 
 
1,488,000
 
 
15,430
 
 
4,778,440
 
 
2016
 
 
850,000
 
 
 
 
2,025,000
(4) 
 
1,878,000
 
 
2,966
 
 
4,755,966
 
 
2015
 
 
850,000
 
 
 
 
5,550,000
(5) 
 
2,375,000
 
 
2,154
 
 
8,777,154
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shane C. Garrison
Executive Vice President,
Chief Operating Officer and
Chief Investment Officer
 
2017
 
 
650,000
 
 
 
 
1,290,009
(3) 
 
741,000
 
 
22,005
 
 
2,703,014
 
 
2016
 
 
590,000
 
 
 
 
1,050,000
(4) 
 
740,000
 
 
2,630
 
 
2,382,630
 
 
2015
 
 
590,000
 
 
 
 
2,560,000
(5) 
 
912,000
 
 
2,154
 
 
4,064,154
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Julie M. Swinehart
Executive Vice President,
Chief Financial Officer and Treasurer(7)
 
2017
 
 
275,000
 
 
 
 
304,027
(3)(6) 
 
186,000
 
 
22,989
 
 
788,016
 
 
2016
 
 
269,750
 
 
 
 
159,227
(4) 
 
189,000
 
 
2,248
 
 
620,225
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Paula C. Maggio
Former Executive Vice
President, General Counsel
and Secretary(8)
 
2017
 
 
425,000
 
 
 
 
600,012
(3) 
 
399,000
 
 
23,158
 
 
1,447,170
 
 
2016
 
 
261,538
 
 
 
 
600,000
(4) 
 
439,000
 
 
263
 
 
1,300,801
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heath R. Fear
Former Executive Vice
President, Chief Financial
Officer and Treasurer(9)
 
2017
 
 
379,615
 
 
 
 
 
 
 
 
42,142
 
 
421,757
 
 
2016
 
 
482,500
 
 
 
 
460,000
(4) 
 
581,000
 
 
2,533
 
 
1,526,033
 
 
2015
 
 
160,769
 
 
25,912
 
 
960,000
(5) 
 
630,088
 
 
 
 
1,776,769
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Amounts reported reflect annual cash incentive awards earned by our Named Executive Officers related to the respective year’s performance, which was paid in February of the following year. Additional information regarding our annual cash incentive awards is described above under “— Compensation Discussion and Analysis.
(2) The amounts shown in this column for 2017 include the following:

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Name
Company
Contribution
to Health
Savings
Account ($)
Executive
Wellness
Benefit
($)
Health
Insurance
Premiums
($)
Company
Match to
401(k) Plan
($)
Accrued
Vacation
Payout ($)
Group
Disability and
Term Life
Insurance
Premiums(a)
($)
Total
($)
Steven P. Grimes
 
 
 
4,325
 
 
7,209
 
 
2,500
 
 
 
 
1,396
 
 
15,430
 
Shane C. Garrison
 
 
 
 
 
18,109
 
 
2,500
 
 
 
 
1,396
 
 
22,005
 
Julie M. Swinehart
 
1,500
 
 
 
 
17,762
 
 
2,500
 
 
 
 
1,227
 
 
22,989
 
Paula C. Maggio
 
1,500
 
 
 
 
17,762
 
 
2,500
 
 
 
 
1,396
 
 
23,158
 
Heath R. Fear
 
1,500
 
 
 
 
12,980
 
 
2,500
 
 
24,231
 
 
931
 
 
42,142
 
(a) Amounts shown are the premiums for group disability and life insurance policies.
(3) Amounts reported in 2017 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2017, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2017. Assuming that maximum performance is achieved under the performance-based restricted stock units granted in 2017, the value at the grant date of these performance-based restricted stock units, calculated as the closing price per share of our common stock on the NYSE on the applicable date of grant multiplied by the number of units granted, would have been as follows: Mr. Grimes — $3,595,328; Mr. Garrison — $1,912,561; Ms. Swinehart— $148,276; and Ms. Maggio — $889,567. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2017 was calculated as the closing price per share of our common stock on the NYSE on the applicable date of grant multiplied by the number of shares granted. The value of awards granted to our Named Executive Officers in 2017 is reflected in the “2017 Grants of Plan-Based Awards” table.
(4) Amounts reported in 2016 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2016, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016. Ms. Swinehart did not receive an award of performance-based restricted stock units in 2016. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2016 was calculated as the closing price per share of our common stock on the NYSE on the applicable date of grant, or the day preceding the grant date, multiplied by the number of shares granted.
(5) Amounts reported in 2015 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2015, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2015 was calculated as the closing price per share of our common stock on the NYSE on the applicable date of grant, or the day preceding the grant date, multiplied by the number of shares granted.
(6) Amount includes a restricted stock award in the amount of $154,006 received by Ms. Swinehart on March 2, 2017 related to 2016 performance under the non-executive compensation program from which she transitioned out in 2017.
(7) Ms. Swinehart was promoted to Executive Vice President, Chief Financial Officer and Treasurer effective February 6, 2018. Prior to February 6, 2018, Ms. Swinehart served as our Senior Vice President and Chief Accounting Officer.
(8) Ms. Maggio served as our Executive Vice President, General Counsel and Secretary through March 9, 2018. See “—Potential Payments Upon Termination or Change-in-ControlDeparture of Ms. Maggio” for more information regarding Ms. Maggio’s departure.
(9) On September 20, 2017, Mr. Fear resigned as our Executive Vice President, Chief Financial Officer and Treasurer. In connection with his resignation, Mr. Fear was not entitled to receive any cash severance payments, acceleration of vesting or other severance benefits, and all of his equity awards that were unvested upon his resignation were forfeited.

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Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards to our Named Executive Officers for the year ended December 31, 2017.

2017 Grants of Plan-Based Awards
 
 
 
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
Grant Date
Fair Value
of Stock And
Option
Awards
($)(3)
Name
Grant
Date
Date of
Approval
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Steven P. Grimes
 
 
 
 
 
 
 
718,750
 
 
1,250,000
 
 
2,500,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39,521
(4) 
 
606,252
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
58,594
 
 
117,188
 
 
234,376
 
 
 
 
1,818,758
 
Shane C. Garrison
 
 
 
362,700
 
 
585,000
 
 
1,170,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,024
(4) 
 
322,508
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
31,170
 
 
62,339
 
 
124,678
 
 
 
 
967,501
 
Julie M. Swinehart
 
 
 
86,800
 
 
140,000
 
 
280,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/3/17
10/24/16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,890
(4) 
 
75,013
 
 
3/2/17
3/2/17
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,112
(5) 
 
154,006
 
 
1/3/17
10/24/16
 
 
 
 
 
 
 
 
 
 
2,417
 
 
4,833
 
 
9,666
 
 
 
 
75,008
 
Paula C. Maggio
 
 
 
201,500
 
 
325,000
 
 
650,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,779
(4) 
 
150,010
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
14,498
 
 
28,995
 
 
57,990
 
 
 
 
450,002
 
Heath R. Fear
 
 
 
266,600
 
 
430,000
 
 
860,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,364
(4) 
 
205,004
 
 
1/3/17
7/26/16
 
 
 
 
 
 
 
 
 
 
19,814
 
 
39,627
 
 
79,254
 
 
 
 
615,011
 
(1) Reflects the possible payouts of annual cash incentive compensation. “Threshold” amounts represent amounts that would be earned at the threshold level, which represents 50% of the target amounts for the portion of annual cash incentive compensation that was based on company goals and 80% of the target amounts for the portion of annual cash incentive compensation that was based on individual goals. The actual amounts that were paid are set forth in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” above. See also “— Compensation Discussion and Analysis — Incentive Compensation — Annual Cash Incentive Compensation.”
(2) Reflects performance-based restricted stock units granted during 2017. See “— Compensation Discussion and Analysis — Incentive Compensation — Long-Term Equity Incentive Compensation — Performance-Based Restricted Stock Unit Awards.” The performance-based restricted stock units granted to Mr. Fear during 2017 were unvested at the time of his resignation and, accordingly, were forfeited.
(3) Amounts disclosed in this column for equity awards are computed in accordance with FASB ASC Topic 718.
(4) Represents shares of restricted stock granted as incentive compensation for 2017. The shares granted to Messrs. Grimes, Fear and Garrison and Mses. Swinehart and Maggio are subject to vesting in equal installments on each of January 4, 2018, 2019 and 2020, subject to continued employment through such dates. The shares granted to Mr. Fear were unvested at the time of his resignation and, accordingly, were forfeited.
(5) Represents shares of restricted stock granted for year-end 2016 performance in March 2017. The shares granted to Ms. Swinehart are subject to vesting in equal installments on each of March 1, 2018, 2019 and 2020, subject to continued employment through such dates.

Discussion of Summary Compensation and Grants of Plan-Based Awards Tables

Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the 2017 Grants of Plan-Based Awards Table was paid or awarded, are described above under “— Compensation Discussion and Analysis.”

In 2017, we granted restricted stock awards and performance-based restricted stock units to each of our Named Executive Officers pursuant to our 2014 Long-Term Equity Compensation Plan, as described in the 2017 Grants of Plan-Based Awards table. The vesting of each award is subject to acceleration in connection with a change-in-control or certain termination triggering events as described below under “— Potential Payments Upon Termination or Change-in-Control.” Generally, we pay dividends to holders of all shares of restricted

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stock, whether vested or not, at the same rate per share as dividends per share paid to our common stockholders. In connection with the performance-based restricted stock units, if and when earned, additional shares of common stock will also be issued in an amount equal to the accumulated value of the dividends that would have been paid during the performance period on the shares of common stock and restricted stock issued at the end of the performance period divided by the then-current market price of our common stock.

The terms of the retention agreements that we have entered into with certain of our Named Executive Officers are described below under “— Potential Payments Upon Termination or Change-in-Control.”

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2017, with respect to our Named Executive Officers.

Outstanding Equity Awards at Fiscal Year-End 2017
 
Stock Awards
Name
Number of
Shares or
Units
of Stock That
Have Not
Vested (#)(1)
Market Value of
Shares or
Units of Stock
That Have Not
Vested ($)(2)
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)(3)
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not
Vested ($)(2)
Steven P. Grimes
 
190,062
 
 
2,554,433
 
 
346,230
 
 
4,653,331
 
Shane C. Garrison
 
85,261
 
 
1,145,908
 
 
181,103
 
 
2,434,024
 
Julie M. Swinehart
 
25,255
 
 
339,427
 
 
4,833
 
 
64,956
 
Paula C. Maggio
 
16,508
 
 
221,868
 
 
75,151
 
 
1,010,029
 
Heath R. Fear
 
 
 
 
 
 
 
 
(1) For Messrs. Grimes and Garrison and Mses. Swinehart and Maggio includes the following:
 
2017
Award(a)
Earned 2015
Performance-
Based
Restricted
Stock Unit
Award(b)
2016
CAO
Award(c)
2016
Award(d)
2015
CAO
Award(e)
2015
Award(f)
2014
CAO
Award(g)
2014
Award(h)
2012
Award(i)
TOTAL
Steven P. Grimes
 
39,521
 
 
44,469
 
 
 
 
 
26,627
 
 
 
 
 
9,167
 
 
 
 
 
60,862
 
 
9,416
 
 
190,062
 
Shane C. Garrison
 
21,024
 
 
20,213
 
 
 
 
 
13,807
 
 
 
 
 
4,167
 
 
 
 
 
22,597
 
 
3,453
 
 
85,261
 
Julie M. Swinehart
 
4,890
 
 
 
 
 
10,112
 
 
 
 
 
7,444
 
 
 
 
 
2,809
 
 
 
 
 
 
 
 
25,255
 
Paula C. Maggio
 
9,779
 
 
 
 
 
 
 
 
6,729
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16,508
 
(a) Represents unvested portion of restricted stock awards granted for 2017, with one-third scheduled to vest on each of January 4, 2018, 2019 and 2020, subject to continued employment through such dates.
(b) Represents unvested restricted stock issued in connection with performance-based restricted stock unit awards granted in 2015 with respect to the performance period beginning on January 1, 2015 and ending on December 31, 2017 (the “2015 Awards”). The 2015 Awards were earned at 76% of target performance based on our relative performance over the three-year performance period and two-thirds of the earned amount was issued in restricted stock that is scheduled to vest on December 31, 2018, subject to continued employment through such date. One-third of the earned amount was issued in common stock and, therefore, is not included in this table. These performance-based restricted stock unit awards provided the ability to earn and receive shares after the end of the three-year performance period based on our total stockholder return over the performance period compared to peers listed in the NAREIT Shopping Center Index.
(c) Represents unvested portion of restricted stock award granted for 2016, with one-third scheduled to vest on each of March 1, 2018, 2019 and 2020, subject to continued employment through such dates.
(d) Represents unvested portion of restricted stock awards granted for 2016, with one-fourth having vested on January 4, 2017 and one-fourth scheduled to vest on each of January 4, 2018, 2019 and 2020, subject to continued employment through such dates.
(e) Represents unvested portion of restricted stock award granted for 2015, with one-third having vested on February 19, 2017 and one-third scheduled to vest on each of February 19, 2018 and 2019, subject to continued employment through such dates.
(f) Represents unvested portion of restricted stock awards granted for 2015, with one-third having vested on each of January 4, 2016 and 2017 and one-third scheduled to vest on January 4, 2018, subject to continued employment through such date.
(g) Represents unvested portion of restricted stock award granted for 2014, with one-third having vested on each of February 20, 2016 and 2017 and one-third scheduled to vest on February 20, 2018, subject to continued employment through such date.

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(h) Represents unvested portion of restricted stock awards granted based on the achievement of company goals for 2014, with one-third having vested on each of February 20, 2016 and 2017 and one-third scheduled to vest on February 20, 2018, subject to continued employment through such date.
(i) Represents unvested portion of restricted stock awards granted for 2012, with 50% having vested on February 21, 2016 and 50% scheduled to vest on February 21, 2018, subject to continued employment through such date.
(2) Market value is based on a price of $13.44 per share, which was the closing price on the NYSE of our common stock on December 29, 2017.
(3) Reflects performance-based restricted stock units that were outstanding and for which the performance period had not ended as of December 31, 2017. The number of these performance-based restricted stock units held by each of Messrs. Grimes and Garrison and Mses. Swinehart and Maggio that were outstanding as of December 31, 2017, which equals the target amount that could be earned, is set forth in the table below. In accordance with SEC rules, the number of units set forth in the table above includes (i) the target amount of the 2017 performance-based restricted stock units and (ii) the maximum amount of the 2016 performance-based restricted stock units (i.e., 200% of the target amount).
 
2017 Performance-Based
Restricted
Stock Unit Award(a)
2016 Performance-Based
Restricted
Stock Unit Award(b)
Steven P. Grimes
 
117,188