8-KLeadership ChangesShareholder MattersCorporate Changes+1

ESSEX PROPERTY TRUST, INC. 8-K Report, Executive Changes (May 17, 2013)

Filed May 17, 2013For Securities:ESS

Summary

This Form 8-K filing by ESSEX PROPERTY TRUST, INC. (ESS) reports on key corporate actions approved by its stockholders at the Annual Meeting held on May 14, 2013. The most significant item for investors is the approval of the 2013 Stock Award and Incentive Compensation Plan. This new plan replaces the previous 2004 plan and governs the issuance of equity-based compensation to employees, consultants, and directors, including stock options, restricted stock, and units. The plan has a term of 10 years, with 1,000,000 shares available for awards, and includes specific limits to comply with Section 162(m) of the Internal Revenue Code to ensure deductibility of performance-based compensation. Additionally, stockholders approved an amendment to the company's charter to eliminate the classified board structure, moving towards annual election of all directors. This change, along with conforming bylaw amendments, simplifies corporate governance. The filing also details the election of directors and the ratification of KPMG LLP as the independent auditor. Investors should note the approval of the 2013 Employee Stock Purchase Plan, which provides another avenue for employee ownership.

Key Highlights

  • 1Approval of the 2013 Stock Award and Incentive Compensation Plan, effective June 1, 2013, replacing the 2004 plan.
  • 2The new plan makes 1,000,000 shares of common stock available for awards, with a sub-limit of 500,000 shares for 'full value' awards.
  • 3The 2013 Plan includes various award types such as stock options, restricted stock, restricted stock units, and performance bonus awards, with a maximum term of 10 years.
  • 4Stockholder approval to eliminate the classified board of directors, moving to an annual election of all directors.
  • 5Election of three directors: Keith R. Guericke, Issie N. Rabinovitch, and Thomas E. Randlett, to serve until the 2014 annual meeting.
  • 6Ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2013.
  • 7Approval of the 2013 Employee Stock Purchase Plan.

Frequently Asked Questions

The 2013 Stock Award and Incentive Compensation Plan is designed to provide equity-based incentives to employees, consultants, and directors of Essex Property Trust, Inc. The goal is to align their interests with those of the stockholders and to attract and retain key talent by offering awards such as stock options, restricted stock, and performance bonuses.

The plan makes available a total of 1,000,000 shares of the Company's common stock for awards. Additionally, any shares not issued under the previous 2004 plan or subject to outstanding awards that are not delivered to a participant will also become available. There's a sub-limit of 500,000 shares that can be issued as 'full value' awards (like restricted stock or RSUs).

The company's charter was amended to eliminate the classified board of directors structure. This means that all directors will now be elected annually by the stockholders, rather than serving staggered, multi-year terms. This change aims to simplify corporate governance and allow for more direct accountability of directors to shareholders.

Yes, the 2013 Plan includes limits to comply with Section 162(m) of the Internal Revenue Code, ensuring certain performance-based compensation remains tax-deductible. For example, in any calendar year, an individual is limited to 200,000 shares subject to options or stock appreciation rights, and 150,000 shares for performance-based restricted stock awards. Cash awards are limited to $1,500,000.