Form 4: Paramount Group Exec's Equity Changes Post-Merger
Insider Trading Report
Paramount Group's EVP, Head of Real Estate, Peter Brindley, reports significant changes in his derivative securities holdings following the company's merger with Rithm Capital Corp.
Summary
- Peter R.C. Brindley, EVP, Head of Real Estate for Paramount Group, Inc., reported changes in his beneficial ownership of derivative securities.
- The transactions occurred on December 19, 2025, coinciding with the Partnership Merger Effective Time as per the Agreement and Plan of Merger with Rithm Capital Corp.
- A total of 125,230 LTIP Units, whose 'Book-Up Target' was not zero, were cancelled and converted into the right to receive cash equal to the Company Merger Consideration of $6.60 per unit.
- Various LTIP Units (totaling 713,936 units) and AOLTIP Units (totaling 1,300,335 units) that had vested or became fully vested, and whose 'Book-Up Target' was zero (for LTIPs), automatically converted into an equivalent number of Common OP Units.
- Performance-based AOLTIP Units (1,081,315 units) vested with all performance goals deemed satisfied at the maximum level at the Partnership Merger Effective Time.
- A total of 1,625,783 Common OP Units, including those converted from LTIP and AOLTIP units, were cancelled and exchanged for the Partnership Merger Consideration of $6.60 per unit.
Sentiment
Score: 7
Explanation: The sentiment is neutral to slightly positive. While it marks the end of an independent entity for Paramount Group, the executive's equity compensation was liquidated at a fixed merger price, with performance units vesting at maximum, indicating a favorable outcome for the executive's holdings in the context of the merger.
Positives
- The reporting person received cash for cancelled units at the Company Merger Consideration price of $6.60 per unit.
- Performance-based AOLTIP Units vested at the maximum level, maximizing the payout for those awards.
- Time-vesting conditions for various LTIP and AOLTIP units were accelerated, leading to full vesting upon the merger's effective time.
Negatives
- The reporting person's equity holdings in Paramount Group, Inc. derivatives were liquidated, indicating a cessation of direct equity participation in the company's future as an independent entity.
Future Outlook
The filing does not provide forward-looking statements regarding the company's future operations, as it primarily reports the outcome of a past merger event on an executive's equity holdings. The merger itself implies Paramount Group, Inc. will no longer operate as an independent public entity.
Industry Context
This filing reflects the final stages of an acquisition in the real estate investment trust (REIT) sector, where Paramount Group, Inc. is being acquired by Rithm Capital Corp. Such mergers are common in the REIT industry as companies seek scale, diversification, or strategic alignment, often leading to the delisting of the acquired entity and the consolidation of assets under the acquirer.
Comparison to Industry Standards
- This Form 4 reports a standard executive compensation liquidation event following a merger, consistent with typical corporate acquisition processes.
- The $6.60 per unit merger consideration would be assessed against the company's pre-merger trading price and analyst valuations to determine its fairness, but this filing does not provide that context.
- The vesting of performance-based units at maximum levels is a common feature in change-of-control clauses within executive compensation plans, designed to incentivize management through the transaction.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Application of Agreements | The transactions are governed by the 'Second Amended and Restated Agreement of Limited Partnership' and the 'Agreement and Plan of Merger,' which dictate the conversion and cancellation terms of derivative securities during the merger. | 2025-12-19 | These agreements define the corporate governance framework for the merger and the treatment of equity interests, ensuring a structured process for the change of control. |
Related Party Transactions
- The transactions involve Peter R.C. Brindley, an executive of Paramount Group, Inc., and the company's Operating Partnership, which are related parties.
- The entire merger transaction between Paramount Group, Inc. and Rithm Capital Corp. involves the company and its subsidiary Operating Partnership, which are related entities.
Stakeholder Impact
- Shareholders: Existing shareholders of Paramount Group, Inc. would have received the $6.60 per share merger consideration.
- Employees (including executives): Executives like Peter Brindley had their equity compensation liquidated, often a positive financial event for them due to accelerated vesting and payout.
- Rithm Capital Corp.: The acquirer gains control of Paramount Group's assets and operations.
Next Steps
- The completion of the merger means Paramount Group, Inc. will likely cease to be an independent publicly traded entity.
- The reporting person has liquidated their equity interests in the former company.
Key Dates
| Date | Description |
|---|---|
| 2014-11-24 | Grant date for 45,714 LTIP Units (part of previously converted OP Units) |
| 2016-03-18 | Grant date for 22,642 LTIP Units (part of previously converted OP Units) |
| 2017-01-30 | Grant date for 21,416 LTIP Units and 7,828 LTIP Units (part of previously converted OP Units) |
| 2018-02-05 | Grant date for 31,008 LTIP Units (part of previously converted OP Units) |
| 2019-01-14 | Grant date for 19,418 LTIP Units and 44,046 LTIP Units (part of previously converted OP Units) |
| 2020-01-17 | Grant date for 53,476 LTIP Units (part of previously converted OP Units) and earning date for 12,713 LTIP Units |
| 2020-01-20 | Grant date for 21,803 LTIP Units (part of previously converted OP Units) |
| 2020-10-26 | Date of Second Amended and Restated Agreement of Limited Partnership of Paramount Group Operating Partnership LP |
| 2021-01-11 | Grant date for 43,970 LTIP Units (part of previously converted OP Units) |
| 2021-02-04 | Grant date for LTIP Units that converted to OP Units at merger effective time |
| 2022-01-13 | Grant date for 31,566 LTIP Units and 46,621 LTIP Units that were cancelled for cash |
| 2023-01-25 | Earning date for 47,043 LTIP Units that were cancelled for cash; Grant date for LTIP Units and AOLTIP Units that converted to OP Units at merger effective time |
| 2023-09-08 | Grant date for LTIP Units and Performance-Based AOLTIP Units that converted to OP Units at merger effective time |
| 2024-01-30 | Earning date for 44,058 LTIP Units (part of previously converted OP Units) |
| 2024-02-29 | Grant date for LTIP Units that converted to OP Units at merger effective time |
| 2025-02-07 | Earning date for 27,017 LTIP Units that converted to OP Units at merger effective time |
| 2025-09-17 | Date of Agreement and Plan of Merger between Issuer, Operating Partnership, and Rithm Capital Corp. |
| 2025-10-08 | Amendment date for Agreement and Plan of Merger |
| 2025-12-19 | Date of earliest transaction (Partnership Merger Effective Time) |
| 2025-12-22 | Signature date of reporting person's attorney-in-fact |
| 2030-01-25 | Expiration date for AOLTIP Units granted on January 25, 2023 |
Keywords
Paramount Group, PGRE, Rithm Capital Corp, Merger, SEC Form 4, Beneficial Ownership, LTIP Units, AOLTIP Units, OP Units, Equity Compensation, Executive Compensation
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