UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Ramco-Gershenson Properties Trust

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RAMCO-GERSHENSON PROPERTIES TRUST
31500 NORTHWESTERN HIGHWAY, SUITE 300
FARMINGTON HILLS, MICHIGAN 48334

 

Dear Shareholder:

 

We invite you to attend the 2009 Annual Meeting of Shareholders of Ramco-Gershenson Properties Trust (the “Trust”). The meeting will be held on Wednesday, June 10, 2009 at The Community House, 380 S. Bates Street, Birmingham, Michigan 48009 at 10:00 a.m., Eastern time. During the 2009 annual meeting, shareholders will have the opportunity to vote on each item of business described in the enclosed notice of the 2009 annual meeting and accompanying proxy statement. Your Board of Trustees and management look forward to greeting personally those shareholders who are able to attend.

 

At the 2009 annual meeting, you will be asked to elect four persons to our Board of Trustees. As previously announced, on May 12, 2009 we reached agreement with Equity One, Inc. to settle the proxy contest in connection with the 2009 annual meeting. We are pleased that we could arrive at an equitable solution in order to avoid a prolonged and costly proxy fight. Please see the accompanying proxy statement for further information regarding the settlement.

 

It is important that your shares be represented and voted at the annual meeting, whether or not you plan to attend. You may vote in one of four ways as further described in the accompanying proxy statement: (1) via the telephone; (2) via the Internet; (3) by signing, dating and returning the enclosed proxy card; or (4) by casting your vote in person at the annual meeting.

 

If you have any questions or require any assistance with voting your shares, please contact:

 

INNISFREE M&A INCORPORATED

Shareholders Call Toll-Free: (888) 750-5834

Banks and Brokers Call Collect: (212) 750-5833

 

Your continued interest and participation in the affairs of the Trust are greatly appreciated.

 

Sincerely,

 

Dennis E. Gershenson
Chairman, President and Chief Executive Officer

 

May 14, 2009

RAMCO-GERSHENSON PROPERTIES TRUST

 

NOTICE OF 2009 ANNUAL MEETING OF SHAREHOLDERS
JUNE 10, 2009

 

 

 

To the Shareholders of Ramco-Gershenson Properties Trust:

 

Notice is hereby given that the 2009 Annual Meeting of Shareholders of Ramco-Gershenson Properties Trust will be held at The Community House, 380 S. Bates Street, Birmingham, Michigan 48009 at 10:00 a.m., Eastern time, for the following purposes:

 

(1) To elect four Trustees, with three Trustees having terms that expire at the 2012 annual meeting of shareholders and one Trustee having a term that expires at the 2011 annual meeting;

 

(2) To ratify the appointment of Grant Thornton LLP as the Trust’s independent registered public accounting firm for the year ending December 31, 2009;

 

(3) To approve the 2009 Omnibus Long-Term Incentive Plan; and

 

(4) To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

Your Board of Trustees recommends a vote FOR Proposals 1, 2 and 3. The accompanying proxy statement contains additional information for your careful review. A copy of the Trust’s annual report for 2008 is also enclosed.

 

Shareholders of record of the Trust’s common shares of beneficial ownership at the close of business on April 15, 2009 are entitled to receive notice of, and to vote at, the annual meeting and any adjournment or postponement thereof. Your vote is important. You may vote in one of four ways as further described in the accompanying proxy statement: (1) via the telephone; (2) via the Internet; (3) by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided; or (4) by casting your vote in person at the annual meeting.

 

By Order of the Board of Trustees

 

Richard J. Smith
Chief Financial Officer and Secretary

TABLE OF CONTENTS

 

RAMCO-GERSHENSON PROPERTIES TRUST
31500 NORTHWESTERN HIGHWAY, SUITE 300
FARMINGTON HILLS, MICHIGAN 48334

 

 

 

 

PROXY STATEMENT

 

 

 

 

2009 ANNUAL MEETING OF SHAREHOLDERS

 

 

 

 

The Board of Trustees (the “Board”) of Ramco-Gershenson Properties Trust (the “Trust”) is soliciting proxies for use at the 2009 annual meeting of shareholders of the Trust and any adjournment or postponement thereof. The annual meeting will be held at The Community House, 380 S. Bates Street, Birmingham, Michigan 48009 on Wednesday, June 10, 2009 at 10:00 a.m., Eastern time. The Trust expects to first mail these proxy materials on or about May 19, 2009 to shareholders of record of the Trust’s common shares of beneficial interest (the “Shares”).

 

What is the purpose of the 2009 annual meeting of shareholders?

 

At the 2009 annual meeting, shareholders will act upon the matters outlined in the accompanying Notice of Meeting, including (1) the election of four Trustees, with three Trustees having terms that expire at the 2012 annual meeting of shareholders and one Trustee having a term that expires at the 2011 annual meeting, (2) the ratification of the appointment of Grant Thornton LLP (“Grant Thornton”) as the Trust’s independent registered public accounting firm for the year ending December 31, 2009, and (3) the approval of the 2009 Omnibus Long-Term Incentive Plan (the “2009 Omnibus Plan”).

 

In addition, management will report on the performance of the Trust and will respond to questions from shareholders. The Trust expects that representatives of Grant Thornton will be present at the annual meeting and will be available to respond to questions. Such representatives will also have an opportunity to make a statement.

 

Why are we electing four Trustees at the 2009 annual meeting?

 

As previously announced, on May 12, 2009, the Trust reached agreement with Equity One, Inc. (“Equity One”) to settle the proxy contest in connection with the 2009 annual meeting in order to avoid a prolonged and costly proxy fight. Under the terms of the settlement agreement, among other things (a) the Trust will expand the Board to nine members and appoint Equity One’s two proposed nominees, David J. Nettina and Matthew L. Ostrower, to the Board prior to the 2009 annual meeting and (b) Messrs. Nettina and Ostrower are being nominated by the Board for election at the 2009 annual meeting. The Board has also nominated Messrs. Blank and Pashcow, two Class III Trustees whose three-year terms are expiring at the 2009 annual meeting. Messrs. Blank, Pashcow and Ostrower have been nominated for three-year terms ending at the 2012 annual meeting of shareholders (Class III Trustees) and Mr. Nettina has been nominated for a two-year term ending at the 2011 annual meeting of shareholders (Class II Trustee).

 

What are the Board’s recommendations?

 

The Board recommends a vote:

 

Proposal 1 — FOR the election of the Board-nominated slate of Trustees.

 

Proposal 2 — FOR the ratification of Grant Thornton as the Trust’s independent registered public accounting firm for the year ending December 31, 2009.

 

Proposal 3 — FOR the approval of the 2009 Omnibus Plan.

Who is entitled to vote?

 

Only record holders of Shares at the close of business on the record date of April 15, 2009 are entitled to receive notice of the annual meeting and to vote the Shares that they held on the record date. Each outstanding Share is entitled to one vote on each matter to be voted upon at the annual meeting.

 

What constitutes a quorum?

 

The presence at the annual meeting, in person or by proxy, of the holders of a majority of the Shares outstanding on the record date will constitute a quorum for all purposes. As of the record date, 18,698,476 Shares were outstanding. Broker non-votes (defined below), and proxies marked with abstentions or withhold votes, will be counted as present in determining whether or not there is a quorum.

 

What is the difference between holding Shares as a shareholder of record and a beneficial owner?

 

Shareholders of Record.  If your Shares are registered directly in your name with the Trust’s transfer agent, American Stock Transfer & Trust Company, you are considered the shareholder of record with respect to those Shares, and these proxy materials (including a proxy card) are being sent directly to you by the Trust. As the shareholder of record, you have the right to grant your voting proxy directly to the Trust through the enclosed proxy card, through the Internet or by telephone, or to vote in person at the annual meeting.

 

Beneficial Owners.  Many of the Trust’s shareholders hold their Shares through a broker, trustee, bank or other nominee rather than directly in their own name. If your Shares are so held, you are considered the beneficial owner of Shares, and these proxy materials (including a voting instruction card) are being forwarded to you by your broker, trustee, bank or nominee who is considered the shareholder of record with respect to those Shares. As the beneficial owner, you have the right to direct your broker, trustee, bank or nominee on how to vote and are also invited to attend the annual meeting. However, since you are not the shareholder of record, you may not vote these Shares in person at the annual meeting unless you obtain a proxy from your broker, trustee, bank or nominee and bring such proxy to the annual meeting. Your broker, trustee, bank or nominee has enclosed a voting instruction card for you to use in directing the broker, trustee, bank or nominee on how to vote your Shares.

 

May I vote my Shares in person at the annual meeting?

 

Even if you plan to be present at the meeting, the Trust encourages you to vote your Shares prior to the meeting.

 

You will need to present photo identification, such as a driver’s license, and proof of Ramco-Gershenson Properties Trust share ownership as of the record date when you arrive at the meeting. If you hold your shares through a bank, broker or other holder of record and you plan to attend the annual meeting, you must present proof of your ownership of Ramco-Gershenson Properties Trust shares, such as a bank or brokerage account statement, in order to be admitted to the meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the annual meeting.

 

Shareholders of Record.  If you are a shareholder of record and attend the annual meeting, you may deliver your completed proxy card or vote by ballot in person at the annual meeting.

 

Beneficial Owners.  If you hold your Shares through a broker, trustee, bank or other nominee and want to vote such Shares in person at the annual meeting, you must obtain a proxy from your broker, trustee, bank or other nominee giving you the power to vote such Shares.

 

Can I vote my shares without attending the annual meeting?

 

By Mail.  You may vote by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

By telephone or through the Internet.  You may vote by telephone or through the Internet as indicated on your enclosed proxy card.

Can I change my vote after I return my proxy card or voting instruction card?

 

Shareholders of Record.  You may change your vote at any time before the proxy is exercised by filing with the Secretary of the Trust either a notice revoking the proxy or a new proxy that is dated later than the proxy card. You may also change your vote through the Internet, by telephone or by taking action at the annual meeting. If you attend the annual meeting, the individuals named as proxy holders in the enclosed proxy card will nevertheless have authority to vote your Shares in accordance with your instructions on the proxy card unless you properly file such revocation notice or new proxy.

 

Beneficial Owners.  If you hold your Shares through a bank, trustee, broker or other nominee, you should contact such person prior to the time such voting instructions are exercised.

 

What does it mean if I receive more than one proxy card or voting instruction card?

 

If you receive more than one proxy card or voting instruction card, it means that you have multiple accounts with banks, trustees, brokers, other nominees and/or the Trust’s transfer agent. Please sign and deliver each proxy card and voting instruction card that you receive. The Trust recommends that you contact such persons to consolidate as many accounts as possible under the same name and address.

 

What if I do not vote for some of the items listed on my proxy card or voting instruction card?

 

Shareholders of Record.  If you return your signed proxy card but do not provide voting instructions on certain matters, your shares will be voted in accordance with the recommendations of the Board on such matters. With respect to any matter not set forth on the proxy card that properly comes before the annual meeting, the proxy holders named in the proxy card will vote as the Board recommends or, if the Board gives no recommendation, in their own discretion.

 

Beneficial Owners.  If you hold your Shares in street name through a broker, trustee, bank or other nominee and do not return the voting instruction card, such nominee will determine if it has the discretionary authority to vote your Shares. Under applicable law and the New York Stock Exchange (“NYSE”) rules and regulations, brokers have the discretion to vote on routine matters, such as the uncontested election of trustees and the ratification of the appointment of the Trust’s independent registered public accounting firm, but do not have discretion to vote on non-routine matters. The approval of the 2009 Omnibus Plan may be considered a non-routine matter. “Broker non-votes” are Shares held by a broker or other nominee that are represented at the shareholder meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such Shares to vote on the particular proposal and the broker does not have discretionary voting power on such proposal. Shares subject to broker non-votes will be considered present at the meeting for purposes of determining whether there is a quorum but the broker non-votes will not be considered votes cast with respect to such proposals.

 

We urge you to provide instructions to your broker or other nominee so that your votes may be counted for each item of business at the 2009 annual meeting.

 

What vote is required to approve each item?

 

Proposal 1 — Election of Trustees.  The four nominees who receive the most votes cast “FOR” at the annual meeting will be elected as Trustees. The slate of nominees nominated by the Board consists of three nominees, Messrs. Blank, Pashcow and Ostrower, nominated for three-year terms ending at the 2012 annual meeting of shareholders (Class III Trustees) and one nominee, Mr. Nettina, nominated for a two-year term ending at the 2011 annual meeting of shareholders (Class II Trustee). Withheld votes and broker non-votes will have no effect on the outcome of the vote.

 

Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm.  The affirmative vote of a majority of the votes cast at the annual meeting will be necessary to ratify the Audit Committee’s appointment of Grant Thornton as the Trust’s independent registered public accounting firm for the year ending December 31, 2009. Abstentions will not be counted as votes cast at the annual meeting and will have no effect on the result of the vote. Although shareholder ratification of the appointment is not required by law and is

not binding on the Trust, the Audit Committee will take the appointment under advisement if such appointment is not so ratified.

 

Proposal 3 — Approval of 2009 Omnibus Plan.  The affirmative vote of a majority of the votes cast at the annual meeting will be necessary to approve the 2009 Omnibus Plan, provided that the total votes cast on the proposal represents more than 50% of the outstanding Shares entitled to vote on the proposal. Accordingly, a broker non-vote will have the same effect as a vote against the proposal, unless holders of more than 50% of the outstanding Shares entitled to vote on the proposal cast votes (in which case, broker non-votes will not have an effect on the result of the vote). In accordance with NYSE regulations, an abstention will be counted as a vote cast for purposes of the proposal and will have the same effect as a vote against the proposal.

 

Other Matters.  If any other matter is properly submitted to the shareholders at the annual meeting, its adoption will generally require the affirmative vote of a majority of the votes cast at the annual meeting. The Board of Trustees does not propose to conduct any business at the annual meeting other than as stated above.

 

Who will count the votes?

 

A representative of Innisfree M&A Incorporated will tabulate the votes and act as the inspector of election.

 

How do I find out the voting results?

 

Voting results will be announced after they are certified by our independent inspector of elections and will also be published in the Trust’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2009.

 

Who can I contact if I have questions or need assistance in voting my shares?

 

Please contact Innisfree M&A Incorporated, the firm assisting the Trust in the solicitation of proxies, at:

 

INNISFREE M&A INCORPORATED

Shareholders Call Toll-Free: (888) 750-5834

Banks and Brokers Call Collect: (212) 750-5833

 

How can I access the Trust’s proxy materials and annual report on Form 10-K?

 

As a holder of Shares, you should have received a copy of the 2008 Annual Report to Shareholders (which includes the Annual Report on Form 10-K, excluding exhibits) together with this proxy statement. Such proxy materials are also available at http://www.snl.com/IRWebLinkX/GenPage.aspx?IID=103013&gkp=1073743352.

 

The “Investor Info — SEC Filings” section of the Trust’s website, www.rgpt.com, provides access, free of charge, to Securities and Exchange Commission (“SEC”) reports as soon as reasonably practicable after the Trust electronically files such reports with, or furnishes such reports to, the SEC, including proxy materials, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports. In addition, a copy of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2008 will be sent to any shareholder, without charge, upon written request sent to the Trust’s executive offices: Investor Relations, Ramco-Gershenson Properties Trust, 31500 Northwestern Highway, Suite 300, Farmington Hills, MI 48334. Further, the SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including the Trust, at www.sec.gov.

 

The references to the website addresses of the Trust and the SEC in this proxy statement are not intended to function as a hyperlink and, except as specified herein, the information contained on such websites are not part of this proxy statement.

 

The following table sets forth information regarding the beneficial ownership of the Shares as of April 15, 2009 with respect to (i) each trustee, nominee and named executive officer, (ii) all of our trustees and executive officers as a group, and (iii) to our knowledge, each beneficial owner of more than 5% of the outstanding Shares. Unless otherwise indicated, each owner has sole voting and investment powers with respect to the Shares listed below.

 

 

 

 

The Board of Trustees currently consists of seven Trustees serving three-year staggered terms. Prior to the annual meeting, the Board will expand to nine and Messrs. Nettina and Ostrower will be appointed to the Board. Three Class III Trustees are to be elected at the 2009 annual meeting to serve until the annual meeting of shareholders in 2012 and one Class II Trustee is to be elected at the 2009 annual meeting to serve until the annual meeting of shareholders in 2011, or in each case until such Trustee’s earlier resignation, retirement or other termination of service. The four nominees who receive the most votes cast at the annual meeting will be elected as Trustees. The Board recommends that you vote FOR the election of the Board’s nominees set forth below.

 

Each of the nominees below has consented to serve a three-year or two-year term, respectively, and has consented to be named in this proxy statement. If for any reason any of the nominees becomes unavailable for election, the Board may designate a substitute nominee. In such case, the persons named as proxies in the accompanying proxy card will vote for the Board’s substitute nominee.

 

On May 12, 2009, the Trust and Equity One agreed to settle the proxy contest in connection with the Trust’s 2009 annual meeting. The settlement agreement by and between the Trust and Equity One was entered into as of May 12, 2009 (the “Support Agreement”). Pursuant to the Support Agreement, the parties agreed to the following, among other things:

 

 

The table below sets forth information regarding the Trustee nominees. The years of Trustee service include service for the Trust’s predecessors.

 

The remaining Trustees, set forth below, are Class I Trustees (term expires in 2010) or Class II Trustees (term expires in 2011). The years of Trustee service include service for the Trust’s predecessors.

 

 

The following persons are the other executive officers of the Trust. Executive officers serve at the pleasure of the Board.

 

 

 

The Board has general oversight responsibility of the Trust’s affairs and the Trustees, in exercising their fiduciary duties, represent and act on behalf of the shareholders. Although the Board does not have responsibility for the Trust’s day-to-day management, it stays regularly informed about the Trust’s business and provides guidance to management through periodic meetings and other informal communications. The Board is significantly involved in, among other things, the Trust’s strategic and financial planning process, leadership development, as well as other functions carried out through the Board committees as described below.

 

The Board had intended to propose to shareholders that they approve an amendment to the Declaration of Trust to declassify the Board. The Board has determined that it is not currently in the best interests of the Trust and its shareholders to propose to declassify the Board at this time in light of the recent indications of interest from third

parties regarding potential transactions, including from Equity One and the Board’s determination to undertake a review of potential strategic and financial alternatives to enhance shareholder value. The Board intends to reconsider such a proposal in the future following completion of its exploration of financial and strategic alternatives. The range of alternatives which may be considered includes potential financing and restructuring transactions, asset sales, and strategic transactions with third parties. Merrill Lynch & Co., the Trust’s financial advisor, has been requested to assist in this process. The Trust intends to complete its review of potential alternatives as promptly as practicable. However, there can be no assurances that any particular alternative will be pursued or that any transaction will occur, or on what terms. The Trust does not plan to release additional information about the status of its review until the review process is completed or terminated.

 

Meetings.  During 2008, the Board consisted of seven Trustees and held eight meetings. Non-management Trustees hold regularly scheduled executive sessions in which non-management Trustees meet without the presence of management. These executive sessions generally occur around regularly scheduled meetings of the Board of Trustees. Mr. Blank serves as Lead Trustee in accordance with the Trust’s Corporate Governance Guidelines and therefore presides at such executive sessions. In furtherance of his role, Mr. Blank attended two RiskMetrics’ accredited director education programs in 2008: the Annual Boardroom Summit and the Board Committee Peer Exchange, each in New York, New York. For information on how you can communicate with the Trust’s non-management Trustees, including the Lead Trustee, see “— Communicating with the Board.”

 

Trustees are expected to attend all Board and committee meetings, as well as the Trust’s annual meeting of shareholders. In 2008, all of the Trustees attended at least 75% of the aggregate of the meetings of the Board of Trustees and all committees of the Board on which they served. All of the Trustees attended the 2008 annual meeting of shareholders.

 

Trustee Independence.  The NYSE listing standards set forth objective requirements for a trustee to satisfy, at a minimum, in order to be determined independent by the Board. In addition, the NYSE listing standards require the Board to consider all relevant facts and circumstances, including the trustee’s commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, and such other criteria as the Board may determine from time to time. The Board has determined, after considering all of the relevant facts and circumstances, that each of Messrs. Blank, Goldberg, Meister, Pashcow, Rosenfeld and Ward, and therefore a majority of the Trustees, are independent Trustees in accordance with the NYSE listing standards and the Trust’s Corporate Governance Guidelines. The Board has also determined, after considering all of the relevant facts and circumstances known as of the date hereof, that upon appointment prior to the 2009 annual meeting each of Messrs. Nettina and Ostrower will be independent Trustees in accordance with the NYSE listing standards and the Trust’s Corporate Governance Guidelines. In particular, the Board considered the following matters:

 

 

The Audit Committee, Compensation Committee, and Nominating and Governance Committee are composed entirely of independent Trustees. In addition, after considering all of the relevant facts and circumstances, the Board has determined that each member of the Audit Committee of the Board qualifies under the Audit Committee independence standards established by the SEC and NYSE.

 

The Board has delegated various responsibilities and authority to Board committees and each committee regularly reports on its activities to the Board. Each committee, except the Executive Committee, has regularly scheduled meetings. Each committee operates under a written charter approved by the Board, which is reviewed annually by the respective committees and the Board and is available on the Trust’s website under “Investor Info —

Corporate Overview — Governance Documents” at www.rgpt.com. The table below sets forth the membership (in 2008 and as of the date hereof) and 2008 meeting information for the four standing committees of the Board:

 

 

 

 

Pursuant to the settlement agreement with Equity One, the Trust has agreed to appoint one or both of Messrs. Nettina and Ostrower to each of the Audit, Compensation and Nominating & Governance Committees. In addition, if the Board subsequently delegates the task of evaluating financial and strategic alternatives to a newly-constituted or existing committee, the Board will consider in good faith adding one of such persons to that committee, subject to the Board’s fiduciary duties.

 

Audit Committee.  The Trust has a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is responsible for monitoring the integrity of the Trust’s consolidated financial statements, the Trust’s system of internal controls, the Trust’s risk management, the qualifications, performance and independence of the Trust’s independent registered public accounting firm, the performance of the Trust’s internal audit function and the Trust’s compliance with legal and regulatory requirements. The Audit Committee also has the sole authority and responsibility to appoint, determine the compensation of, evaluate and, when appropriate, replace the Trust’s independent registered public accounting firm. See “Audit Committee Disclosure,” “Report of the Audit Committee” and the Audit Committee’s charter for additional information on the responsibilities and activities of the Audit Committee.

 

The Board has determined that Messrs. Blank, Rosenfeld and Goldberg are each financially literate and have the accounting or related financial management expertise in accordance with NYSE listing standards, and are each an audit committee financial expert as defined in the rules and regulations of the SEC. See “— Trustees and Executive Officers” for a description of their relevant business experience.

 

Compensation Committee.  The Compensation Committee administers the executive compensation program of the Trust. The Compensation Committee’s responsibilities include recommending and overseeing compensation and benefit plans and policies, approving equity grants and otherwise administering share-based plans, and reviewing annually all compensation decisions relating to the Trust’s executive officers. See “Compensation Discussion and Analysis,” “Compensation Committee Report” and the Compensation Committee’s charter for additional information on the responsibilities and activities of the Compensation Committee.

 

Role of Management.  Similar to prior years, in 2008 the Compensation Committee took significant direction from the recommendations of Mr. Gershenson with respect to the design and implementation of the Trust’s executive compensation program. See “Compensation Discussion and Analysis — Advisors Utilized in Compensation Determinations” for further information.

 

Role of Compensation Consultants.  The Compensation Committee has the sole authority to engage outside advisors and establish the terms of such engagement, including compensatory fees. The Compensation Committee determined to re-engage Mercer (US) Inc. (“Mercer”) as its compensation consultant for 2008 with respect to executive compensation program generally. Mercer provides additional compensation-related services to the Trust, primarily related to financial reporting for the expense associated with the long-term incentive grants.

The Compensation Committee works with management to determine Mercer’s responsibilities and direct its work product, but the Compensation Committee is responsible for the formal approval of the annual work plan. With respect to the 2008 executive compensation program, the Compensation Committee engaged Mercer to provide the following services: (A) discuss best-practices and market trends in compensation; (B) assess the Trust’s competitive position regarding compensation of Messrs. Gershenson and Smith (provided in December 2007 regarding 2008 compensation levels); and (C) assist in revising the long-term incentive program to ensure external competitiveness and appropriate alignment of pay and performance.

 

In addition to the foregoing, the Trust has engaged FPL Associates Compensation (“FPL”) to assist Mr. Gershenson in providing his recommendations to the Compensation Committee with respect to the named executive officers other than Messrs. Gershenson and Smith. Mr. Gershenson directs FPL’s work product, which for the 2008 compensation program consisted of an assessment of the Trust’s competitive positioning regarding the compensation of the named executive officers other than Messrs. Gershenson and Smith. The Compensation Committee is provided with the FPL market data when assessing Mr. Gershenson’s compensation recommendations for the applicable named executive officers.

 

Nominating and Governance Committee.  The Nominating and Governance Committee is responsible for identifying and nominating individuals qualified to serve as Board members, recommending Trustees for each Board committee and overseeing the Trust’s Corporate Governance Guidelines and related corporate governance issues. The Nominating and Governance Committee also is responsible for the Trust’s Code of Business Conduct and Ethics and considers any requests for waivers from such code. See the Nominating and Governance Committee’s charter for additional information on its responsibilities and activities.

 

Generally, the Nominating and Governance Committee will re-nominate incumbent Trustees who continue to satisfy its criteria for members on the Board, who it believes will continue to make important contributions to the Board and who consent to continue their service on the Board. If a vacancy on the Board occurs, the Nominating and Governance Committee will review the experience, mix of skills and background, independence and other qualities of a nominee to assure appropriate Board composition after taking into account the current Board members and the specific needs of the Trust and Board.

 

The Nominating and Governance Committee generally relies on multiple sources for identifying and evaluating nominees, including referrals from the Trust’s Board and management. The Nominating and Governance Committee does not solicit Trustee nominations, but will consider nominee recommendations by shareholders with respect to elections to be held at an annual meeting, so long as such recommendations are timely made and otherwise in accordance with the Trust’s Bylaws and applicable law. Such recommendations will be evaluated against the same criteria used to evaluate other nominees.

 

Shareholder recommendations for nominees to be considered by the Nominating and Governance Committee should be submitted to the Chairman of the Nominating and Governance Committee at 31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan 48334. See “Additional Information — Shareholder Proposals at 2010 Annual Meeting” for information on making shareholder nominations at the annual meeting.

 

Executive Committee.  The Executive Committee is permitted to exercise all of the powers and authority of the Board, except as limited by applicable law and by the Trust’s Bylaws.

 

The Nominating and Governance Committee annually reviews Trustee compensation and makes recommendations to the Board, the body responsible for approving Trustee compensation, as appropriate. The Nominating and Governance Committee has not engaged a compensation consultant with respect to the Trustee compensation program. The Nominating and Governance Committee and Board believe that Trustees should receive a mix of cash and equity. Compensation paid to the non-employee Trustees is intended to provide incentives to such persons to continue to serve on the Board of Trustees, to further align the interests of the Board and shareholders and to attract new Trustees with outstanding qualifications. Trustees who are employees or officers of the Trust or any of its subsidiaries do not receive any compensation for serving on the Board or any committees thereof; therefore, Mr. Gershenson is excluded from the Trustee compensation table below.

Stock Ownership Guidelines.  Effective September 2008, the Committee approved stock ownership guidelines for the trustees. The guidelines require such persons to hold a number of Shares equal to three times the then current annual stock grant denominated in Shares for all trustees. Trustees have a five-year period to comply with the guidelines, with the initial compliance deadline being September 2013. The Committee will review the minimum equity holding level and other market trends and practices on a periodic basis. The Compensation Committee has confirmed that all trustees currently satisfy the guidelines or are making significant progress toward the guidelines.

 

2008 Compensation Program.  The Board approved the following changes in 2007 with respect to the non-employee Trustee compensation program effective beginning in 2008: (1) an annual grant of 2,000 shares of restricted stock on June 30th, vesting pro rata over three years, under the Ramco-Gershenson Properties Trust 2008 Restricted Share Plan for Non-Employee Trustees (approved by shareholders at the 2008 annual meeting), which replaced the annual grant of 2,000 stock options and quarterly grant of 250 Shares (although such quarterly grants were made in the first two quarters of 2008, and therefore, the non-employee Trustees only received 1,500 shares of restricted stock on June 30, 2008), and (2) non-employee Trustees on the Executive Committee receive an additional annual cash retainer of $2,500. With respect to the two quarterly equity grants in 2008, the Board approved the payment of cash to Mr. Ward in lieu of the quarterly equity retainer due to his substantial ownership of securities that are exchangeable for Shares.

 

Cash Retainer.  In 2008, each non-employee Trustee earned $3,750 each quarter (paid in advance). In addition, the chair of the Audit Committee earned an additional annual retainer fee of $10,000 and the other members of the Audit Committee earned an additional annual retainer of $5,000. Further, the Lead Trustee (Mr. Blank) earned an additional $6,250 each quarter (paid in advance). Additionally, non-employee Executive Committee members receive an additional annual cash retainer of $2,500.

 

Equity Retainer.  In 2008, each non-employee Trustee was granted (i) 250 Shares in each of the first two quarters (paid in advance), although as noted above Mr. Ward received cash in lieu thereof, and (ii) 1,500 shares of restricted stock under the Trust’s 2008 Restricted Share Plan for Non-Employee Trustees on June 30, 2008.

 

Meeting Fees.  In 2008, each non-employee Trustee received $1,500 per meeting attended in person or $500 per meeting attended via telephone.

 

Required Attendance.  Additional retainer fees paid to each Audit and Executive Committee member are conditioned upon attendance by such Trustee at 75% or more of the meetings of the Audit and Executive Committee, respectively.

 

Other.  The Trust reimburses all Trustees for expenses incurred in attending meetings or performing their duties as Trustees. The Trust does not provide any perquisites to Trustees.

 

2008 Trustee Compensation

 

 

 

 

Changes for 2009 Compensation Program.  In 2008, the Board approved the Ramco-Gershenson Properties Trust Deferred Fee Plan for Trustees, a Trustee may elect to defer fees earned for services provided during a subsequent calendar year (“Deferral Year”) by completing and filing a proper deferred fee agreement with the Secretary of the Trust no later than December 31 of the year prior to the Deferral Year. A Trustee may elect to credit any cash fees to a stock account or a cash account. Stock fees deferred may only be credited to the stock account. Shares in the stock account will receive distributions, which at the Trustee’s election will either be paid in cash or will be reinvested in Shares. Cash in the cash account will accrue interest at JP Morgan Chase’s prime rate. A Trustee may modify or revoke his or her existing fee deferral election only on a prospective basis, and only for fees to be earned in a subsequent calendar year, and only if the Trustee executes a new deferred fee agreement or revokes his or her existing deferred fee agreement in writing by December 31 of the year preceding the calendar year for which such modification or revocation is to be effective. The Trustee must elect the end of the deferral period at the time of such election and, except for a few circumstances, no Trustee shall have any right to make any early withdrawals from the Trustee’s deferred fee accounts.

 

The Board and management are committed to responsible corporate governance to ensure that the Trust is managed for the benefit of its shareholders. To that end, the Board and management periodically review and update its corporate governance policies and practices as appropriate or required by applicable law, the NYSE listing standards or SEC regulations.

 

The Trust has adopted a Code of Business Conduct and Ethics which sets forth basic principles to guide the conduct of Trustees and the Trust’s employees, including its principal executive officer, principal financial officer, principal accounting officer or controller and persons serving similar functions. The code covers numerous topics including illegal or unethical behavior, conflicts of interest, compliance with laws, corporate opportunities and confidentiality. A copy of the Trust’s Code of Business Conduct and Ethics is available on the Trust’s website under “Investor Info — Corporate Overview — Governance Documents” at www.rgpt.com. Any waiver that relates to the Trustees or certain executive officers of the Trust will be publicly disclosed in such subsection on the Trust’s website. See “Related Person Transactions” for additional information regarding policies and procedures specifically addressing related person transactions.

 

The Trust has also adopted Corporate Governance Guidelines, which address, among other things, a Trustee’s responsibilities, qualifications (including independence), compensation and access to management and advisors. The Nominating and Governance Committee is responsible for overseeing and reviewing these guidelines and recommending any changes to the Board. A copy of the Trust’s Corporate Governance Guidelines is available on the Trust’s website under “Investor Info — Corporate Overview — Governance Documents” at www.rgpt.com.

 

The Trust is required to comply with the NYSE listing standards applicable to corporate governance and on June 30, 2008, the Trust timely submitted the NYSE’s Annual CEO Certification pursuant to Section 303A.12 of the

NYSE’s listing standards, whereby Mr. Dennis Gershenson certified that he is not aware of any violation by the Trust of the NYSE’s corporate governance listing standards as of the date of the certification. In addition, the Trust has filed with the SEC, as exhibits to its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2008, respectively, and its Annual Report on Form 10-K for the year ended December 31, 2008, certifications by the Trust’s CEO and CFO in accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

 

A copy of the Trust’s committee charters, Code of Business Conduct and Ethics and Corporate Governance Guidelines will be sent to any shareholder, without charge, upon written request sent to the Trust’s executive offices: Investor Relations, Ramco-Gershenson Properties Trust, 31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan 48334.

 

Any shareholder or interested party who desires to communicate with the Board or any specific Trustee(s) may write to the Board at the following address: Board of Trustees (or Lead Trustee), c/o Secretary, Ramco-Gershenson Properties Trust, 31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan 48334. All communications received by the Trust’s Secretary which are addressed to the Board of Trustees will be forwarded directly to the members of the Board.

 

Shareholders, Trust employees, officers, Trustees or any other interested persons who have concerns or complaints regarding accounting or auditing matters of the Trust are encouraged to contact, anonymously or otherwise, the Chairman of the Audit Committee (or any Trustee who is a member of the Audit Committee). Such admissions will be treated confidentially.

 

The Compensation Committee of the Board (referred to as the “Committee” in this section), composed entirely of independent Trustees, administers the executive compensation program of the Trust. The Committee’s responsibilities include recommending and overseeing compensation and benefit plans and policies, reviewing and approving equity grants and otherwise administering share-based compensation plans, and reviewing and approving annually all compensation decisions relating to the Trust’s executive officers, including the Chief Executive Officer, the Chief Financial Officer and the other executive officers named in the “Summary Compensation Table” (the “named executive officers”). This section of the proxy statement explains how the Trust’s compensation programs are designed and operated in practice with respect to the named executive officers.

 

Executive Summary

 

Compensation Program and Philosophy

 

The Trust’s compensation program for named executive officers is designed to:

 

 

In furtherance of the foregoing, the Trust’s compensation program for named executive officers generally consists of base salary, an annual bonus, long-term incentive compensation and certain other benefits. The Trust also provides certain deferred compensation and severance arrangements, although the Trust does not maintain any defined benefit pension plans or defined benefit SERPs for such persons. The following table sets forth how each element of compensation in the 2008 executive compensation program is intended to satisfy one or more of the Trust’s compensation objectives, as well as key features of the compensation elements that address such objectives.

 

 

Determining Compensation for Named Executive Officers

 

The Committee recognizes that a compensation program must be flexible to address all of its objectives. Therefore, the Trust uses market data as a guideline, and also considers Trust performance, individual performance reviews, hiring and retention needs and other market pressures in finalizing its compensation determinations.

 

The named executive officers will earn target compensation only to the extent target performance measures are achieved. To the extent target performance measures are not achieved or are exceeded, the named executive officers generally will earn compensation below or above the target compensation, respectively. Notwithstanding the foregoing, the Committee retains the discretion to revise compensation for extraordinary circumstances or individual performance differences, to give discretionary bonuses or long-term grants and to provide other compensation. In particular, the Committee utilized such discretion for the 2008 compensation program to provide an additional restricted stock grant to the named executive officers as part of the 2008 bonus program.

 

The Committee customarily takes significant direction from the recommendations of Mr. Gershenson (which include market data from FPL) and the market data provided by Mercer to determine the amount and form of

compensation utilized in the executive compensation program. See “— Advisors Utilized in Compensation Determinations” below.

 

2008 Compensation Summary for Named Executive Officers

 

Revision to Long-Term Incentive Program.  From 2004 to 2007, the Long-Term Incentive Program (the “LTI Program”) consisted of a long-term incentive dollar target that was divided into three components: stock option grants, cash target awards and performance-based restricted stock target awards (generally 25%, 25% and 50%, respectively, of the long-term incentive dollar target). In March 2008, the Committee determined to substantially revise the LTI Program primarily to reduce its complexity and thereby improve its effectiveness. Beginning in 2008, the LTI Program consists of service-based restricted stock and performance-based restricted stock. In 2008, the Committee determined that service-based restricted stock grants and performance-based restricted stock grants each would correspond to 50% of the long-term incentive dollar target. See “— 2008 Compensation Components for Named Executive Officers — Long-Term Incentive Compensation” for further information regarding the revised LTI Program.

 

2008 Target Compensation.  Base salaries of named executive officers were increased by 3% to 5% from 2007. Messrs. Gershenson and Smith remained subject to discretionary bonuses, while the target bonuses (as a percentage of base salary) of the other named executive officers remained the same as 2007. The long-term dollar incentive target (as a percentage of base salary) also remained the same as 2007, although the LTI Program changed as noted above.

 

Advisors Utilized in Compensation Determinations

 

Management and Other Employees.  The Committee takes significant direction from the recommendations of Mr. Gershenson regarding the design and implementation of the executive compensation program because he has significant involvement in and knowledge of the Trust’s business goals, strategies and performance, the overall effectiveness of the executive officers and each person’s individual contribution to the Trust’s performance. For each named executive officer, the Committee is provided a compensation recommendation as well as information regarding historical earned compensation, the individual’s experience, current performance, potential for advancement and other subjective factors. Mr. Gershenson also provides recommendations for the performance metrics to be utilized in the incentive compensation programs, the appropriate performance targets and an analysis of whether such performance targets have been achieved (including recommended adjustments). The Committee retains the discretion to modify the recommendations of Mr. Gershenson and reviews such recommendations for their reasonableness based on the Trust’s compensation philosophy and related considerations.

 

Generally, the Committee sets the meeting dates and agendas for Committee meetings and Mr. Gershenson is invited to attend many of such meetings. The Committee also meets regularly in executive session outside the presence of management to discuss compensation issues generally, as well as to review the performance of and determine the compensation of Mr. Gershenson. The Trust’s legal advisors, human resources department and corporate accounting department support the Committee in its work in developing and administering the compensation plans and programs.

 

Third-Party Consultants.  The Committee customarily utilizes a compensation consultant to assist in the development and implementation of its executive compensation program, and to assess the Trust’s competitive position regarding the compensation of Messrs. Gershenson and Smith. The Committee engaged Mercer to provide the foregoing services for the 2008 compensation program. In addition to the foregoing, the Trust engaged FPL to provide market data for the other named executive officers to assist Mr. Gershenson in providing his recommendations to the Committee. See “Proposal 1 — Election of Trustees — Committees of the Board — Compensation Committee — Role of Compensation Consultant” for information regarding fees and services provided by Mercer and FPL.

 

Benchmarking.  The Committee and Mr. Gershenson use market data as an important guideline in establishing target compensation, with the objective of having various compensation elements at or slightly above the market median. For purposes of the 2008 compensation program, the Committee obtained market data from Mercer regarding Messrs. Gershenson and Smith in December 2007, while Mr. Gershenson obtained market data for the

other named executive officers from FPL. The Committee anticipates obtaining similar market surveys every few years, as appropriate, to ensure the Committee is properly reflecting market conditions. Mercer and FPL each compiled data for one comparator group based upon compensation set forth in 2007 proxy statements and therefore generally reflected 2006 compensation data.

 

Mercer utilized one comparator group, set forth below, consisting of size-based peers whose properties are primarily shopping centers. FPL utilized the same comparator group, except they excluded Kite Realty Group Trust.

 

 

Mercer matched Messrs. Gershenson and Smith to other chief executive officers and chief financial officers, respectively, and FPL matched the other named executive officers by position titles and responsibilities. Mercer also analyzed the Trust’s historical financial performance relative to the comparator group (based on revenues, FFO, EPS, total shareholder return and return on average assets, and related growth in such metrics) in order to assist the establishment of performance targets for the annual bonus program and LTI Program.

 

Mercer indicated that Mr. Gershenson’s base salary and annual and long-term incentives were below the market median. In addition, Mr. Smith’s base salary was competitive, while annual incentives were below market and long-term incentives were above market. Mercer also recommended diversifying long-term incentive vehicles, including replacing stock options with service-based restricted stock because full shares would provide better alignment with shareholders, including in down markets.

 

2008 Compensation Components for Named Executive Officers

 

In 2008, the principal components of compensation for the named executive officers were base salary, an annual bonus (including discretionary awards), long-term incentive awards, perquisites, contributions to defined contribution plans and customary benefits provided to all salaried employees. The Trust also provides certain named executive officers with deferred compensation arrangements. Further, Mr. Gershenson has an employment agreement with the Trust (which includes specified severance benefits), while all named executive officers are beneficiaries of the Trust’s change in control policy adopted in July 2007. The Trust does not maintain any defined benefit pension plans or defined benefit SERPs for its named executive officers.

 

Base Salary

 

The base salaries of named executive officers are reviewed on an annual basis, as well as at the time of a promotion or other change in responsibilities. Annual merit increases are generally effective January 1st of the applicable year.

 

Historically, the Committee relies primarily on peer group analyses in determining annual salary increases while also considering the Trust’s overall performance. Mr. Gershenson may also consider the individual’s experience, current performance and potential for advancement in determining his recommendations. Mr. Gershenson’s recommendation as to Mr. Smith’s base salary is guided by the peer group analyses to a greater extent than for the other named executives officers due to the existence of more reliable peer data regarding chief financial officers.

 

In 2008, the Committee approved a base salary increase of 4% for Mr. Gershenson. Market data suggested that Mr. Gershenson was under market, but he declined a significant increase. In addition, principally based on Mr. Gershenson’s recommendation (which the Committee determined was reasonable), the Committee approved an increase of 3% to 5% for the other named executive officers.

The following table sets forth the base salaries approved for the named executive officers in 2007 and 2008:

 

 

 

 

Annual Bonus

 

Historically, the annual bonus has been paid in cash. In 2007, the Committee determined to issue restricted stock, with vesting in equal installments over two years, in lieu of all or a portion of the cash bonuses otherwise payable to named executive officers. The Committee has expressed its intention to continue this practice through at least the bonus relating to the 2009 executive compensation program. Messrs. Gershenson and Smith have received (and will receive) the following portion of their bonuses paid in restricted stock during such periods: 100% for 2007 bonus; 662/3% for 2008 bonus; and 25% for 2009 bonus. The other named executive officers have received (and will receive) 25% of their bonuses in the form of restricted stock during such periods. As described further below, the Committee also approved a discretionary grant of restricted stock as part of the 2008 bonus program.

 

The shares of restricted stock granted in respect of 2008 bonuses were calculated based upon the allocable cash value divided by $5.48, the closing price of the Shares on March 4, 2009. The shares were granted on March 4, 2009 and therefore will be reflected in 2009 in the “Summary Compensation Table” and “Grants of Plan-Based Awards in 2009” table in next year’s proxy statement. The portion of the bonuses paid in cash is reflected in the Non-Equity Incentive Plan Compensation column of the “Summary Compensation Table.”

 

Set forth below are the annual bonuses of the named executive officers in 2007 and 2008 (based on the aggregate cash value approved by the Committee).

 

 

 

 

Set forth below are the various payouts of the bonus program and discretionary restricted stock grant relating to the annual bonus in 2008.

 

 

Mr. Gershenson and Mr. Smith.  The annual bonuses for Mr. Gershenson and Mr. Smith are primarily determined using the peer group analyses and a review of the Trust’s overall performance, although Mr. Gershenson is guaranteed an annual bonus of at least $350,000 in accordance with his employment agreement. Mr. Gershenson’s bonus decreased 22.6% primarily due to market conditions and Trust performance, although it was 7.3% above the minimum bonus set forth in his employment agreement due to his overall cash compensation being significantly below market. Mr. Smith’s bonus decreased by 22.6% due to market conditions and Trust performance.

Other Named Executive Officers.  The annual cash bonus program for other named executive officers and certain other employees of the Trust was established with the assistance of Mercer in 2004 and is based upon the achievement of corporate, department and individual goals. In the fourth quarter preceding the applicable year, in connection with the Trust’s budget forecasting process and primarily based upon the recommendations of Mr. Gershenson, the Committee and the Board review and approve corporate financial goals for the applicable year. Other corporate goals, including strategic and other measures, are generally determined in the discretion of Mr. Gershenson, in consultation with the Trust’s senior management. Based upon such corporate performance goals, the other named executive officers establish department and individual goals for themselves that are tailored to achieving the corporate goals; these goals are reviewed by Mr. Gershenson to ensure that they are reasonable.

 

Preliminary amounts payable under the program are determined in accordance with a pre-established formula: the corporate, department and individual goals represent 30%, 50% and 20% of the estimated bonus, while the satisfaction of the threshold, target and maximum performance measures for such goals equate to payouts of 20%, 40% and 60% of base salary, respectively. For example, if an eligible employee satisfies the threshold amount of the corporate goal, such person would receive a preliminary bonus of 6% of base salary for such component (corporate weighting (30%) multiplied by threshold payout (20%)); the preliminary bonus is the aggregate amount of the three underlying components. In calculating the preliminary bonus amounts, the Committee does not prorate the amounts between the threshold, target and maximum. However, the Committee retains discretion to amend the preliminary amounts based upon unusual events.

 

Upon the completion of the applicable year, Mr. Gershenson recommends bonuses to the Committee based upon the foregoing. In March 2009, the Committee approved the 2008 bonuses for the other named executive officers principally based on Mr. Gershenson’s recommendations as to the satisfaction of the applicable corporate, department and individual goals for each person, less 50% due to market conditions, which the Committee determined were reasonable.

 

Special Grant of Restricted Stock.  In March 2009, the Committee also approved a special grant of restricted stock to the named executive officers and certain other employees as part of the 2008 bonus program. The Committee determined to make such grant for the following reasons: (1) in light of its determination to suspend the long-term incentive program for the 2009 compensation program, it was important to provide additional equity ownership and incentives for management; (2) for retention and incentive purposes, given the steep decline of the Trust’s stock price in recent months, which was significantly impacted by global macroeconomic events, and the resulting impact on the value of outstanding equity awards held by the named executive officers. The dollar value of the special grants made to each named executive officer was generally equal to 54.8% of the amount paid to such person under the 2008 annual bonus program. However, Mr. Zantello received a grant equal to 127.9% of his 2008 annual bonus, which was higher than average because it was determined as part of a rebalancing of his 2009 compensation components based on benchmarking data.

 

Long-Term Incentive Compensation

 

In 2003, Mercer assisted the Committee in designing the LTI Program to supplement its historical practice of granting stock options. In the first quarter of the applicable year, the Committee approves a long-term incentive dollar target for each named executive officer based upon a percentage of base salary, with such target principally based on market data (approximately the median of the peer group(s)) and the recommendation from Mr. Gershenson. In 2008, the Committee approved long-term incentive targets of 75% to 120% of base salary for the named executive officers, which generally is consistent with the historical LTI Program.

 

Set forth below is the long-term incentive dollar target of the named executive officers in 2007 and 2008 (based on the aggregate cash value approved by the Committee).

 

2008 Awards.  From 2004 to 2007, the LTI Program consisted of a long-term incentive dollar target that was divided into three components: stock option grants, cash target awards and performance-based restricted stock target awards. In March 2008, the Committee determined to substantially revise the LTI Program primarily to reduce its complexity and thereby improve its effectiveness. Beginning in 2008, the LTI Program consists of service-based restricted stock and performance-based restricted stock. In 2008, the Committee determined that service-based restricted stock grants and performance-based restricted stock grants each would correspond to 50% of the long-term incentive dollar target.

 

The service-based restricted stock grant equals 50% of the long-term incentive dollar target divided by the closing price of the Shares on the business day immediately prior to the award date, and such grant vests in five equal installments beginning on the first anniversary of the grant date.

 

The performance-based restricted stock target award equals 50% of the long-term incentive dollar target divided by the closing price of the Shares on the business day immediately prior to the award date. The performance-based restricted stock grant operates in similar fashion to the restricted stock awards under the prior LTI Program. Specifically, the performance-based restricted stock is earned based on the achievement of specific performance measures over a period of three calendar years (with such measures established by the Committee at the beginning of the three-year period). For 2008 awards, the sole performance measure is growth in diluted funds from operations (“FFO”) per share. The Committee has discretion to adjust the performance measures during the performance period for unusual or nonrecurring events affecting the Trust or its financial statements or changes in applicable laws, regulations or accounting principles. Upon completion of the performance period, the Committee will compare actual performance against the target performance levels. The satisfaction of the threshold, target and maximum performance measures results in grants of restricted stock of 50%, 100% and 150% (with pro-ration), respectively, of the target award. Generally, the Committee approves minimum, target and maximum performance levels such that the relative difficulty of achieving such measures is consistent from year to year. No performance-based long-term incentive awards were earned for awards covering the 2005 to 2007 and 2006 to 2008 performance periods. Upon the Committee’s confirmation of the satisfaction of the applicable performance measures, generally at the first Committee meeting following the end of the performance period, 50% of the award will be paid in Shares (with one Share issued for each share of performance-based restricted stock), and 50% of the award will be paid in restricted stock (with one share of restricted stock for each share of performance-based restricted stock, and vesting on the first anniversary of the grant date).

 

2006 Awards.  Under the prior long-term incentive program, with respect to the awards granted for the 2006 to 2008 performance period, none of the performance measures were satisfied as of December 31, 2008 and therefore no cash payouts or restricted stock grants were made with respect to the 2006 awards.

 

Stock Ownership Guidelines.  Effective September 2008, the Committee approved stock ownership guidelines for the executive officers. The guidelines require such persons to hold a number of Shares equal to a multiple of their then current base salary; Mr. Gershenson’s multiple is five and all other executive officers’ multiple is three. Covered employees have a five-year period to comply with the guidelines, with the initial compliance deadline being September 2013. The Committee will review the minimum equity holding level and other market trends and practices on a periodic basis. The Committee has confirmed that all employees currently satisfy the guidelines or are making significant progress toward the guidelines.

 

Perquisites and Other Personal Benefits

 

The Trust historically provides named executive officers with perquisites and other personal benefits that the Committee believes are reasonable and consistent with its overall compensation program to enable the Trust to attract and retain employees for key positions. Mr. Gershenson periodically reviews existing perquisites and other personal benefits provided to named executive officers and recommends material changes, if any, to the Committee for approval. See the “Summary Compensation Table” for a description of certain perquisites provided to named executive officers in 2008.

Deferred Stock

 

Messrs. Gershenson, Smith and Zantello are party to deferral agreements with the Trust whereby they irrevocably committed to defer the gain on the exercise of specified stock options. In December 2008, Mr. Zantello and Mr. Smith extended the deferral period of certain deferred gains from 2009 to 2011 and 2012, respectively, as permitted by the original deferral agreements. See “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control — Trust Share-Based Plans — Deferred Stock” for additional information.

 

Contingent Compensation

 

The Trust has an employment agreement with Mr. Gershenson which provides for specified severance benefits, including a termination upon a change of control. Mr. Gershenson’s agreement includes a full tax gross-up regarding change of control payments.

 

In addition, effective July 10, 2007, the Trust established a Change of Control policy for the benefit of the executive officers of the Trust. The policy provides for payments of specified amounts if such person’s employment with the Trust or any subsidiary is terminated in specified circumstances following a change of control, but does not include a tax gross-up. The Trust believes this policy would be instrumental in the success of the Trust in the event of any future hostile takeover bid and will ensure the continued dedication of employees, notwithstanding the possibility, threat or occurrence of a change of control. Further, it is imperative to diminish the inevitable distraction of such employees by virtue of the personal uncertainties and risks created by a pending or threatened change of control, and to provide such employees with compensation and benefits upon a change of control that ensure that such employees’ compensation and benefits expectations are satisfied. Finally, many competitors have change of control arrangements with named executive officers and such policy ensures the Trust will be competitive in its compensation program. See “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control” for further information.

 

Customary Benefits

 

The Trust also provides customary benefits such as medical, dental and life insurance and disability coverage, as well as vacation and paid holidays, to each named executive officer, which is generally provided to all other eligible employees.

 

Changes for 2009 Compensation Program for Named Executive Officers

 

Annual Bonus.  Effective for the remaining term of Mr. Gershenson’s employment agreement, Mr. Gershenson has agreed to waive his guaranteed annual bonus of at least $350,000 per year.

 

Long-Term Incentive Compensation Program.  In light of the global economic and financial crisis, and the resulting impact on the operations and liquidity of the Trust and difficulty in forecasting operating performance for 2009 and thereafter, the Committee has determined to suspend the long-term incentive compensation program for 2009. Therefore, no long-term performance target awards were made in March 2009.

 

Ramco-Gershenson Properties Trust Deferred Compensation Plan.  Under the Ramco-Gershenson Properties Trust Deferred Compensation Plan for Officers (the “Officer Deferred Compensation Plan”), an officer may elect to defer restricted shares which may be granted during a subsequent calendar year (“Deferral Year”) by completing and filing a proper deferred compensation agreement with the Secretary of the Trust no later than December 31 of the year prior to the Deferral Year. Restricted shares deferred will be credited to a stock account. Shares in the stock account will receive distributions, which at the officer’s election will either be paid in cash or will be reinvested in shares. An officer may modify or revoke his or her existing deferral election only on a prospective basis, and only for restricted shares to be granted in a subsequent calendar year, and only if the officer executes a new deferred compensation agreement or revokes his or her existing deferred compensation agreement in writing by December 31 of the year preceding the calendar year for which such modification or revocation is to be effective. The officer must elect the end of the deferral period at the time of such election and, except for a few circumstances, no officer shall have any right to make any early withdrawals from the officer’s deferred compensation accounts. No executive officers elected to defer their restricted shares granted in 2009.

Timing and Pricing of Share-Based Grants

 

The Trust does not coordinate the timing of share-based grants with the release of material non-public information. Annual stock option or restricted stock grants for executive officers and other employees are generally made at the first Committee meeting each year with a grant date as of such approval or shortly thereafter. Further, restricted stock awards that are subject to performance measures are generally granted at the first Committee meeting of the year following satisfaction of such performance measures. The Committee generally establishes dates for regularly scheduled meetings at least a year in advance.

 

In accordance with the Trust’s compensation plans, the exercise price of each stock option is the closing price of the Shares (as reported by the NYSE) on the grant date (which date is not earlier than the date the Committee approved such grant). The Committee is prohibited from repricing options, both directly (by lowering the exercise price) and indirectly (by canceling an outstanding option and granting a replacement stock option with a lower exercise price), without shareholder approval.

 

Policy Regarding Retroactive Adjustment

 

The Committee does not have a formal policy regarding whether it will make retroactive adjustments to, or attempt to recover, cash or share-based incentive compensation granted or paid to executive officers in which the payment was predicated upon the achievement of certain financial results that are subsequently the subject of a restatement. The Committee may seek to recover any amount determined to have been inappropriately received by the executive officers to the extent permitted by applicable law.

 

Tax and Accounting Implications

 

Deductibility of Executive Compensation.  The Committee has reviewed the Trust’s compensation policies in light of Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”), which generally limits deductions by a publicly-held corporation for compensation paid to certain executive officers to $1,000,000 per annum, subject to specified exceptions (the most significant of which is performance-based compensation), and has determined that the compensation levels of the Trust’s executive officers were not at a level that would be affected by such provisions. The Committee intends to continue to review the application of Section 162(m) with respect to any future compensation arrangements considered by the Trust.

 

Nonqualified Deferred Compensation.  Section 409A of the IRC provides that amounts deferred under nonqualified deferred compensation arrangements will be included in an employee’s income when vested unless certain conditions are met. If the certain conditions are not satisfied, amounts subject to such arrangements will be immediately taxable and employees will be subject to additional income tax, penalties and a further additional income tax calculated as interest on income taxes deferred under the arrangement. In December 2008, the Trust revised certain of its compensation agreements to ensure that the Trust’s employment, severance and deferred compensation arrangements satisfy the requirements of Section 409A to allow for deferral without accelerated taxation, penalties or interest.

 

Change of Control Payments.  Section 280G of the IRC disallows a company’s tax deduction for “excess parachute payments,” generally defined as payments to specified persons that are contingent upon a change of control in an amount equal to or greater than three times the person’s base amount (the five-year average of Form W-2 compensation). Additionally, IRC Section 4999 imposes a 20% excise tax on any person who receives such excess parachute payments.

 

The Trust’s share-based plans entitle participants to payments in connection with a change of control that may result in excess parachute payments. Further, Messrs. Gershenson’s employment agreement, along with the Change of Control policy for the benefit of executive officers, entitle such persons to payments upon termination of their employment following a change of control that may qualify as excess parachute payments. As noted earlier, Mr. Gershenson’s employment agreement provides for a full tax-gross up on benefits that exceed limits set forth in Section 280G of the IRC.

 

The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis (CD&A) in this proxy statement with management, including the Chief Executive Officer. Based on such review and discussion, the Compensation Committee recommended to the Board of Trustees that the CD&A be included in the Trust’s annual report on Form 10-K for the year ended December 31, 2008 and the proxy statement for the 2009 annual meeting of shareholders.

 

The Compensation Committee

 

Arthur H. Goldberg (Chairman)
Stephen R. Blank
Robert A. Meister
Michael A. Ward

 

During 2008, none of the Trust’s executive officers served on the board of directors or compensation committee (or committee performing equivalent functions) of any other company that had one or more executive officers serving on the Trust’s Board or Compensation Committee.

 

Mr. Ward previously was an officer of the Trust; none of the other members of the Compensation Committee is or has been an officer or an employee of the Trust.

 

The table below summarizes the total compensation paid or earned by each of the named executive officers in 2008, 2007 and 2006.

 

 

 

 

 

		Performance		Grant Date						2008
Name		Period		(Service-Based)		Purpose				Expense ($)
Dennis E. Gershenson		2004-2006		March 2007			LTI Program			$	17,143
		2005-2007		None earned			LTI Program				7,838
		2006-2008		None earned			LTI Program				—
		2007-2009		—			LTI Program				(15,041	)
		—		March 2007			Bonus Stock				47,639
		2008-2010		—			LTI Program				187,816
		—		March 2008			Bonus Stock				177,184
		—		April 2008			Bonus Stock				22,454
Total											445,033
Richard J. Smith		2004-2006		March 2007			LTI Program				10,322
		2005-2007		None earned			LTI Program				4,310
		2006-2008		None earned			LTI Program				—
		2007-2009		—			LTI Program				(8,105	)
		2008-2010		—			LTI Program				97,859
		—		March 2008			Bonus Stock				75,002
Total											179,388
Thomas W. Litzler		2006-2008		None earned			LTI Program				—
		—		June 2006			Signing Bonus Grant				11,113
		2007-2009		—			LTI Program				(7,794	)
		2008-2010		—			LTI Program				96,064
		—		March 2008			Bonus Stock				11,980
Total											111,363
Frederick A. Zantello		2004-2006		March 2007			LTI Program				8,605
		2005-2007		None earned			LTI Program				4,189
		2006-2008		None earned			LTI Program				—
		2007-2009		—			LTI Program				(7,694	)
		2008-2010		—			LTI Program				77,532
		—		March 2008			Bonus Stock				9,379
Total											92,011
Catherine J. Clark		2004-2006		March 2007			LTI Program				3,692
		2005-2007		None earned			LTI Program				1,798
		2006-2008		None earned			LTI Program				—
		2007-2009		—			LTI Program				3,710
		2008-2010		—			LTI Program				60,973
		—		March 2008			Bonus Stock				8,129
Total											78,302

 

 

 

		Grant Date		2008
Name		(Month)		Expense ($)
Dennis E. Gershenson		February 2006		$	5,102
		March 2007			27,516
Total					32,618
Richard J. Smith		February 2006			2,796
		March 2007			14,647
Total					17,443
Thomas W. Litzler		February 2006			2,815
		March 2007			9,290
Total					12,105
Frederick A. Zantello		February 2006			2,766
		March 2007			10,925
Total					13,691
Catherine J. Clark		February 2006			1,423
		March 2007			6,540
Total					7,963

 

 

Narrative Discussion of Summary Compensation Table.  See “Compensation Discussion and Analysis” for a further discussion of the 2008 compensation program and certain prior-year compensation determinations.

 

Although the Summary Compensation Table reflects a significant increase in compensation for Messrs. Gershenson and Smith, the Committee approved only a 4% increase in their respective base salary and target long-term incentive award, and the actual discretionary bonus earned was 22.6% less than in 2007. However, the Summary Compensation Table reflects FAS 123(R) expense, and reported 2008 compensation was significantly affected by the form of bonus payment in 2008 and 2007. See the Bonus/Non-Equity Incentive Plan Compensation discussion below for further information. As noted previously, Mercer indicated that Mr. Gershenson’s base salary and annual and long-term incentives were below the market median. In addition, Mr. Smith’s base salary was competitive, while annual incentives were below market and long-term incentives were above market.

 

Employment Agreement — Mr. Gershenson.  See “Potential Payments Upon Termination or Change-in-Control” for a description of the material terms of Mr. Gershenson’s employment agreement.

 

Bonus/Non-Equity Incentive Plan Compensation.  Mr. Litzler, Mr. Zantello and Ms. Clark earned the following bonuses in 2008 pursuant to the annual bonus program, approved by the Compensation Committee on March 4, 2009: Litzler, $54,000; Zantello, $45,000; and Clark $39,000. 75% of such bonus was paid in cash, with such amounts reflected in the “Non-Equity Incentive Plan Compensation” column for 2008. The remaining 25% of such bonus was paid in restricted stock at the election of the Trust, and the related expense will be reflected in the “Stock Awards” column beginning in 2009. These named executive officers received cash and restricted stock in the same proportion in 2007 with respect to the annual bonus program. In 2006, all of their annual bonus was paid in

cash, with such amounts reflected in the “Non-Equity Incentive Plan Compensation” column. Mr. Litzler also received a discretionary signing bonus of $100,000 in 2006.

 

Messrs. Gershenson and Smith received a discretionary bonus of $242,501 and $90,000, respectively, as part of the annual bonus program. One-third of such bonuses were paid in cash, with such amounts reflected in the “Bonus” column for 2008. The remaining two-thirds of such bonus was paid in restricted stock at the election of the Trust, and the related expense will be reflected in the “Stock Awards” column beginning in 2009. In 2007, 100% of the annual discretionary bonus was paid in restricted stock. Therefore no amounts were reported in the “Bonus” column for 2007 and the “Stock Awards” column in 2008 reflects a significant increase in expense; this explains the significant increase in reported compensation for Messrs. Gershenson and Smith from 2007 to 2008. In 2006, these named executive officers received all of their discretionary bonus paid in cash, with such amounts reflected in the “Bonus” column.

 

2008 Special Grant of Restricted Stock.  In addition to the amounts noted above, each named executive officer received a discretionary grant of restricted stock on March 4, 2009 as part of their 2008 bonus, having a cash value of: Gershenson, $132,890; Smith, $49,320; Litzler, $29,592; Zantello, $57,540; and Clark, $21,372. The related expense will be reflected in the “Stock Awards” column beginning in 2009.

 

LTI Program.  In 2006 and 2007, the long-term incentive dollar target was divided into three components: stock option grants (25%), cash target awards (25%) and performance-based restricted stock target awards (50%). The stock options vest in three equal installments beginning on the first anniversary of the grant date. With respect to the performance-based restricted stock awards, the satisfaction of the threshold, target and maximum performance measures results in actual restricted share grants of 50%, 100% and 150% (with pro-ration), respectively, of the restricted share target award. With respect to the cash target awards, the satisfaction of the threshold, target and maximum performance measures would result in actual cash payouts of 50%, 100% and 150% (with pro-ration), respectively, of such dollar target. The purpose of the cash award was to allow participants to cover the expected tax liability each year when the restricted stock grants vest.

 

All (Messrs. Smith and Gershenson) or a portion (Mr. Zantello and Ms. Clark) of the amounts in the “Non-Equity Incentive Plan” column for 2006 relate to long-term incentive cash awards made in 2004; the applicable performance measures for such awards were satisfied on December 31, 2006. Mr. Zantello and Ms. Clark earned $21,570 and $9,256, respectively, in cash. No awards were earned for the 2005 to 2007 performance period or the 2006 to 2008 performance period.

 

In 2008, the LTI Program was revised to provide 50% of the long-term incentive dollar target in each of service-based restricted stock and performance-based restricted stock, respectively.

 

The following table provides information about equity and non-equity awards made to the named executive officers in 2008.

 

 

 

Narrative Discussion of Grants of Plan-Based Awards in 2008 Table.

 

Annual Bonus Program.  Under the 2007 and 2008 annual bonus program, Messrs. Litzler and Zantello and Ms. Clark received target awards in dollars to be paid out, at the election of the Trust, partially in cash (75%) and restricted stock (25%). For the 2007 annual bonus, the restricted stock earned is set forth in “All Other Stock Awards:” For the 2008 annual bonus program, the cash portion is set forth in “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” above and the restricted stock portion is set forth in “Estimated Future Payouts Under Equity Incentive Plan Awards” above.

 

For the 2008 annual bonus program, the earned portion paid in cash is reported in the “Non-Equity Incentive Plan Compensation” column for 2008 in the “Summary Compensation Table” and the earned portion paid in restricted stock will be reflected in the “Stock Awards” column in the “Summary Compensation Table” beginning in 2009 as well as the “Grants of Plan-Based Awards in 2009” table. Amounts earned for the 2008 annual bonus program were approved by the Compensation Committee on March 4, 2009, and shortly thereafter the cash amounts were paid out and the restricted stock was granted.

 

Discretionary Bonuses.  Messrs. Gershenson and Smith receive discretionary bonuses. Messrs. Gershenson and Smith received (and will receive) the following portion of their bonuses paid in restricted stock during such

periods: 100% for 2007 bonus; 662/3% for 2008 bonus; and 25% for 2009 bonus. The earned bonus for the 2007 compensation program is included in “All Other Stock Awards” above and the applicable expense is included in the “Stock Awards” column in 2008 in the “Summary Compensation Table.” The earned cash portion of the bonus for the 2008 compensation program is included in the “Bonus” column for 2008 of the Summary Compensation Table. The earned restricted stock portion of the bonus for the 2008 compensation program will be included in the “Stock Awards” column in the “Summary Compensation Table” beginning in 2009 as well as the “Grants of Plan-Based Awards in 2009” table.

 

2008 LTI Program.  Beginning in 2008, the LTI Program consists of service-based restricted stock and performance-based restricted stock. In 2008, the Committee determined that service-based restricted stock grants and performance-based restricted stock grants each would correspond to 50% of the long-term incentive dollar target.

 

The service-based restricted stock grant equals 50% of the long-term incentive dollar target divided by the closing price of the Shares on the business day immediately prior to the award date, and such grant vests in five equal installments beginning on the first anniversary of the grant date. The holder of the service-based restricted stock has all the rights of a holder of Shares (other than free transfer rights), including voting rights and cash dividend rights.

 

The performance-based restricted stock target award equals 50% of the long-term incentive dollar target divided by the closing price of the Shares on the business day immediately prior to the award date. For 2008 awards, the sole performance measure is growth in diluted FFO per share. The Committee has discretion to adjust the performance measures during the performance period for unusual or nonrecurring events affecting the Trust or its financial statements or changes in applicable laws, regulations or accounting principles. Upon completion of the performance period, the Committee will compare actual performance against the target performance levels. The satisfaction of the threshold, target and maximum performance measures results in grants of restricted stock of 50%, 100% and 150% (with pro-ration), respectively, of the target award. Upon the Committee’s confirmation of the satisfaction of the applicable performance measures, generally at the first Committee meeting following the end of the performance period, 50% of the award will be paid in Shares (with one Share issued for each share of performance-based restricted stock), and 50% of the award will be paid in restricted stock (with one share of restricted stock for each share of performance-based restricted stock, and vesting on the first anniversary of the grant date). The holder of the performance-based restricted stock has no rights of a holder of Shares until the Shares or restricted stock are actually granted.

 

The following table provides information on the current holdings of stock option and stock awards by the named executive officers as of December 31, 2008.