|FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018|
Indemnification; Directors and Officers Insurance
Pursuant to the terms of the merger agreement, the Companys directors and officers will be entitled to certain ongoing indemnification and coverage under directors and officers liability insurance policies. See the section below entitled Indemnification; Directors and Officers Insurance for a description of such ongoing indemnification and coverage obligations.
Other Compensation Matters
Under the merger agreement, the Company may implement ordinary course increases in annual salary for any employee, including any executive officer, but with such increases not to exceed 3% in the aggregate for all employees.
In addition, if the effective time occurs on or before December 31, 2018, Parent will approve payments, including to our executive officers, in respect to the Companys 2018 annual bonuses in accordance with the Companys applicable bonus plans and based on actual achievement of performance criteria (using target for individual criteria) and bonus opportunities established by the Company for the 2018 annual bonuses. If the effective time has not occurred by December 31, 2018, the Company may make such payments with respect to 2018 annual bonuses. Prior to the effective time, Parent, or with Parents permission the Company, may enter into employment or other arrangements with the executive officers and/or provide for payments (or the right to future payment) in connection with the merger.
From and for a period of six years after the effective time, Parent or the Surviving Corporation will indemnify and hold harmless, to the fullest extent permitted by law, each present and former director and officer of the Company and its subsidiaries and certain other personnel performing similar functions at another organization at the request of the Company against any costs or expenses, judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, proceeding or investigation arising out of or related to their service in such capacity prior to the effective time, whenever asserted, including the merger and the other transactions contemplated by the merger agreement and actions to enforce the indemnification pursuant to the merger agreement. In the event of any such claim, Parent or the Surviving Corporation will advance to the person to be indemnified reasonable and documented expenses incurred in the defense of any such claim, provided that such advances are subject to repayment if it is ultimately determined that such person is not entitled to indemnification.
The Company will, prior to the effective time or the Surviving Corporation will as of the effective time, obtain and fully pay the premium for tail insurance policies for the extension of (i) the directors and officers liability coverage of the Companys existing directors and officers insurance policies and (ii) the Companys existing fiduciary liability insurance policies, in each case for a claims reporting or discovery period of at least six years from and after the effective time from one or more insurance carriers meeting the credit rating criteria set forth in the merger agreement, with terms at least as favorable to the insureds as the Companys existing policies with respect to matters existing or occurring at or prior to the effective time. If such tail insurance policies cannot be obtained for any reason as of the effective time, the Surviving Corporation will continue to maintain (or purchase policies that are comparable to) the directors and officers liability insurance and fiduciary liability insurance policies in place as of the date of the merger agreement with terms at least as favorable to the insureds as provided in the Companys existing policies as of the date of the merger agreement for the same six-year period starting from the effective time. Pursuant to the merger agreement, the premium of such insurance coverage will not exceed 300% of the current annual premium paid by the Company for such purpose.
We are unaware of any material U.S. federal, state or foreign regulatory requirements or approvals that are required for the execution of the merger agreement or the completion of the merger, other than the filing of