8-KLeadership ChangesExhibits & Filings

AVALONBAY COMMUNITIES INC 8-K Report, Executive Changes (Feb 22, 2018)

Filed February 22, 2018For Securities:AVB

Summary

AvalonBay Communities Inc. (AVB) filed an 8-K on February 22, 2018, primarily detailing updates to its equity award agreements and a directors' deferred compensation program. The Compensation Committee approved updated forms for Restricted Stock Agreements, Stock Option Agreements, and Performance-Based Restricted Stock Unit Agreements. These revisions are largely to align with the company's Second Amended and Restated 2009 Equity Incentive Plan, previously approved by shareholders. A key update for the performance-based awards is that earned units will now be settled in unrestricted shares of common stock, and participants will receive cash equivalent to dividends accrued during the performance period. The company also updated its Directors' Deferred Compensation Program and related agreements to allow independent directors to elect to receive awards of Restricted Units (deferred stock) instead of cash and restricted stock compensation, with conversion to common stock occurring after their departure from the Board. These program and agreement updates are also designed to be consistent with the updated equity incentive plan.

Key Highlights

  • 1Approval of updated forms for Restricted Stock Agreements, Stock Option Agreements, and Performance-Based Restricted Stock Unit Agreements for associates.
  • 2Performance-Based Restricted Stock Units will now settle in unrestricted common stock upon vesting.
  • 3Participants in performance-based equity awards will receive cash equivalent to dividends on earned units.
  • 4Updates are primarily to conform with the Second Amended and Restated 2009 Equity Incentive Plan.
  • 5Approval of an Amended and Restated Directors’ Deferred Compensation Program.
  • 6Independent directors can elect to receive Restricted Units (deferred stock) in lieu of other compensation, converting to common stock post-Board departure.
  • 7New forms for Director Restricted Stock and Director Restricted Unit Agreements were also approved.

Frequently Asked Questions

The primary purpose is to make conforming changes to align the various equity award agreements (for associates and directors) with the company's Second Amended and Restated 2009 Equity Incentive Plan, which was approved by shareholders in May 2017.

Earned performance-based restricted stock units will now be settled in unrestricted shares of AvalonBay common stock, rather than shares subject to further vesting. Additionally, participants will receive cash payments equivalent to the dividends that would have been paid on those earned shares during the performance period.

The program was amended and restated, along with updated forms for related agreements, to allow independent directors to elect to receive awards of Restricted Units (deferred stock) in place of cash and restricted stock compensation. These Restricted Units convert to AvalonBay common stock after the director leaves the Board.

As of the filing date, no awards of restricted stock, nor any awards of restricted units under the Directors’ Deferred Compensation Program, had been made to independent directors under the revised forms. Awards have been approved for granting using the updated forms for officers and associates.