8-KLeadership ChangesExhibits & Filings

WELLTOWER INC. 8-K Report, Executive Changes (Jan 5, 2009)

Filed January 5, 2009For Securities:WELL

Summary

This 8-K filing by Health Care REIT, Inc. (now Welltower Inc.) on January 5, 2009, details significant amendments to its executive compensation and benefit plans. The primary driver for these changes is to ensure compliance with Section 409A of the Internal Revenue Code, which governs non-qualified deferred compensation plans. Key adjustments were made to employment and consulting agreements for top executives, stock option agreements with dividend equivalent rights, deferred stock unit grants for non-employee directors, and the Supplemental Executive Retirement Plan (SERP). These amendments aim to standardize payment timing, deferral periods, and lump-sum payment options, particularly in cases of separation from service or changes in control, while maintaining the company's ability to offer competitive executive compensation.

Key Highlights

  • 1Company amends executive employment and consulting agreements to comply with Section 409A of the Internal Revenue Code.
  • 2Severance payments for specified executives will be deferred for six months following separation from service to meet 409A requirements.
  • 3Changes made to stock option agreements with dividend equivalent rights (DERs) to align with 409A, including setting a fixed period for DER payments.
  • 4Deferred stock unit grant agreements for non-employee directors have been amended to establish specific deadlines for share delivery and quarterly DER payments.
  • 5The Supplemental Executive Retirement Plan (SERP) was updated to comply with 409A, including revised payment event definitions and a mandatory six-month delay for specified employees.
  • 6Amended agreements include provisions for lump-sum severance payments upon involuntary termination or termination following a change in control, where permissible under 409A.
  • 7The filing includes numerous exhibits detailing the specific amendments to these various compensation and benefit plans.

Frequently Asked Questions

The company amended its executive compensation and benefit plans primarily to ensure compliance with Section 409A of the Internal Revenue Code, which imposes strict rules on non-qualified deferred compensation plans to prevent improper tax deferrals.

The employment agreements for key executives were modified to specify that severance payments subject to Section 409A will be deferred for six months after separation from the company. Payment dates for bonuses were also adjusted for 409A compliance, and severance payments upon involuntary termination or change in control will now be made in a lump sum.

Amendments to stock option agreements with dividend equivalent rights (DERs) now set a fixed period for DER payments from the grant date, rather than being solely tied to option exercise. Recipients will continue to receive DERs during this period if they remain employed and a change in control has not occurred.

The Supplemental Executive Retirement Plan (SERP) has been amended to align with 409A. This includes changes to permissible payment events, extending election periods for distributions, making lump-sum payments the default, and implementing a mandatory six-month payment delay for specified employees.