8-KMaterial AgreementsCorporate ChangesExhibits & Filings

ESSEX PROPERTY TRUST, INC. 8-K Report, Material Agreement (Dec 10, 2007)

Filed December 10, 2007For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) announced the approval of its 2007 Outperformance Plan, a long-term incentive program designed to align management and board compensation with shareholder value creation. The plan rewards participants if the company's total shareholder return exceeds a cumulative 30% over a three-year period ending December 3, 2010. The "performance pool" will be 10% of the outperformance amount, capped at $25 million, and will be distributed as LTIP Units exchangeable for company stock. Additionally, the company amended its bylaws to allow for the issuance and transfer of uncertificated shares. This change is a proactive measure to comply with New York Stock Exchange (NYSE) requirements for participation in a direct registration system by January 1, 2008, enabling shareholders to hold and trade shares electronically without physical certificates. These actions signal a focus on performance-driven incentives and operational modernization.

Key Highlights

  • 1Essex Property Trust, Inc. approved the 2007 Outperformance Plan, a new long-term incentive program.
  • 2The plan's primary goal is to reward management and non-employee directors for exceeding industry expectations and creating stockholder value.
  • 3Awards are contingent on the company achieving a cumulative total shareholder return of over 30% from December 4, 2007, to December 3, 2010.
  • 4The "performance pool" will be 10% of the outperformance, with a maximum payout of $25 million.
  • 5Awards will be issued as LTIP Units, which are exchangeable for common stock.
  • 6Bylaws were amended to permit uncertificated shares, preparing for NYSE's direct registration system by January 1, 2008.
  • 7The bylaw amendment facilitates electronic (book-entry) ownership and transfer of shares.

Frequently Asked Questions

The 2007 Outperformance Plan is a long-term incentive compensation program designed to align the interests of the company's senior officers and non-employee board members with those of stockholders. It aims to incentivize outperformance and create stockholder value in excess of industry expectations through a 'pay for performance' structure.

Participants will share in a 'performance pool' if Essex Property Trust's total shareholder return from December 4, 2007, to December 3, 2010, exceeds a cumulative 30%. The size of this pool is 10% of the outperformance amount, capped at $25 million. Individual awards will be made in the form of LTIP Units, which are exchangeable for the company's common stock after meeting performance and time-based vesting requirements.

The amendment to the company's bylaws permits the Board of Directors to issue and transfer uncertificated shares. This change is in response to a New York Stock Exchange (NYSE) requirement that companies be eligible to participate in a direct registration system by January 1, 2008. This system allows shareholders to hold and transact shares electronically (book-entry form) without the need for physical stock certificates.

For senior officers, if the performance benchmark is achieved, LTIP Units will vest in three equal installments on December 4, 2010, and the two subsequent anniversaries, provided they remain employed. For non-employee directors, awards will vest in full on December 4, 2010, if the benchmark is met and they continue to serve on the board.