¨
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Preliminary Proxy Statement
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¨
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Confidential, For Use of the Commission Only (as permitted by Rule 14a—6(e)(2))
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x
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Definitive Proxy Statement
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¨
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Definitive additional materials
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¨
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Soliciting material under Rule 14a-12
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x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
|
Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transactions applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
|
Proposed maximum aggregate value of transaction:
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(5)
|
Total fee paid:
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¨
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Fee paid previously with preliminary materials:
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
|
(1)
|
Amount previously paid:
|
(2)
|
Form, Schedule or Registration Statement No.:
|
(3)
|
Filing Party:
|
(4)
|
Date Filed:
|
Sincerely,
|
|
Michael J. Schall
|
Chief Executive Officer and President
|
By Order of the Board of Directors,
|
|
Michael J. Schall
|
Chief Executive Officer and President
|
Palo Alto, California
|
April 5, 2013
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Policy on Hedging and Pledging Essex Equity Securities | 20 | |
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Other Transactions | 45 | |
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Name
|
Amount and
Nature of
Beneficial
Ownership
(1)
|
Percentage
of Common
Stock
Outstanding
(2)
|
Percentage
of Shares of
Common
Stock
Outstanding
and
Operating
Partnership
Interests
(3)
|
|||||||||
Incumbent Directors and Executive Officers
|
||||||||||||
George M. Marcus (4)
|
1,592,279 | 4.1 | % | 4.0 | % | |||||||
Keith R. Guericke (5)
|
194,221 | * | * | |||||||||
Michael J. Schall (6)
|
135,466 | * | * | |||||||||
Michael T. Dance (7)
|
27,263 | * | * | |||||||||
John D. Eudy (8)
|
45,353 | * | * | |||||||||
Craig K. Zimmerman (9)
|
59,297 | * | * | |||||||||
John F. Burkart (10)
|
19,038 | * | * | |||||||||
David W. Brady (11)
|
12,546 | * | * | |||||||||
Gary P. Martin (12)
|
19,914 | * | * | |||||||||
Issie N. Rabinovitch (13)
|
33,276 | * | * | |||||||||
Thomas E. Randlett (14)
|
20,224 | * | * | |||||||||
Byron A. Scordelis (15)
|
4,333 | * | * | |||||||||
Janice L. Sears (16)
|
1,718 | * | * | |||||||||
Claude J. Zinngrabe, Jr. (17)
|
3,833 | * | * | |||||||||
All incumbent directors and executive officers as a group (15 persons) (18)
|
2,196,527 | 5.5 | % | 5.4 | % | |||||||
5% or greater Stockholders
|
Name
|
Amount and
Nature of
Beneficial
Ownership
(1)
|
Percentage
of Common
Stock
Outstanding
(2)
|
Percentage
of Shares of
Common
Stock
Outstanding
and
Operating
Partnership
Interests
(3)
|
|||||||||
The Vanguard Group, Inc. (19)
100 Vanguard Boulevard
Malvern, PA 19355
|
4,169,658 | 11.0 | % | 10.4 | % | |||||||
Invesco Ltd. (20)
1555 Peachtree Street NE
Atlanta, GA 30309
|
3,551,395 | 9.3 | % | 8.8 | % | |||||||
BlackRock, Inc. (21)
40 East 52nd Street
New York, NY 10022
|
3,107,739 | 8.2 | % | 7.7 | % | |||||||
Cohen & Steers, Inc. (22)
280 Park Avenue, 10th Floor
New York, NY 10017
|
2,199,967 | 5.8 | % | 5.5 | % |
*
|
Less than 1%
|
(1)
|
Mr. Marcus, certain officers and directors of the Company and certain other entities and investors own limited partnership interests in Essex Portfolio, L.P., a California limited partnership (the “operating partnership”), which presently aggregate to approximately a 5.5% limited partnership interest. The Company presently has approximately 94.5% general partnership interest in the operating partnership. The limited partners of the operating partnership share with the Company, as general partner, in the net income or loss and any distributions of the operating partnership. Pursuant to the partnership agreement of the operating partnership, limited partnership interests can be exchanged into shares of the Company’s Common Stock.
|
(2)
|
With respect to shares of Common Stock, assumes the exchange of the limited partnership interests in the operating partnership and in other partnerships held by such person, if any, into shares of the Company’s Common Stock. The total number of shares outstanding used in calculating this percentage assumes that none of the limited partnership interests or vested options held by other persons are exchanged or converted into shares of the Company’s Common Stock and is based on 37,990,836 shares of the Company’s Common Stock outstanding as of the Record Date.
|
(3)
|
Assumes exchange of all outstanding limited partnership interests (including non-forfeitable Series Z-1 incentive units) in the operating partnership for shares of the Company’s Common Stock, which would result in an additional 2,152,261 outstanding shares of Common Stock. Assumes that none of the interests in partnerships (such as DownREITs), other than the operating partnership, held by other persons are exchanged into shares of Common Stock, and that none of the vested stock options held by other persons are converted into shares of Common Stock.
|
(4)
|
Includes 960,154 shares of Common Stock that may be issued upon the exchange of all of Mr. Marcus’ limited partnership interests in the operating partnership and in certain other partnerships and 301,494 shares and 15,941 shares of Common Stock that may be issued upon the exchange of all the limited partnership interests in the operating partnership held by The Marcus & Millichap Company (“TMMC”) and Essex Portfolio Management Company (“EPMC”), respectively. Also includes 155,000 shares of Common Stock held by TMMC, 26,676 shares of Common Stock held in The Marcus & Millichap Company 401(k) Plan (the “TMMC 401(k) Plan”) and 4,000 shares of Common Stock held by Mr. Marcus’ children. Mr. Marcus is a principal stockholder of each of TMMC and EPMC and may be deemed to own beneficially, and to share the voting and dispositive power of 472,435 shares of Common Stock (including shares issuable upon exchange of limited partnership interests). Mr. Marcus disclaims beneficial ownership of (i) all shares, and limited partnership interests held by TMMC, and (ii) 6,376 shares of Common Stock that may be issued upon conversion of limited partnership interests held by EPMC. As of the Record Date, Mr. Marcus had pledged to a commercial bank 875,722 units of limited partnership interests in the operating partnership.
|
(5)
|
Includes 112,583 shares of Common Stock that may be issued upon the exchange of all of Mr. Guericke’s limited partnership interests in the operating partnership. Also includes 7,684 shares of Common Stock held in the Essex Property Trust, Inc. 401(k) Plan (the “Essex 401(k) Plan”), and 8,888 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 1,568 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units. Includes 4,000 shares of Common Stock subject to options that are exercisable within 60 days of Record Date.
|
(6)
|
Includes 70,667 shares of Common Stock that may be issued upon the exchange of all of Mr. Schall’s limited partnership interests in the operating partnership. Also includes 3,560 shares of Common Stock held in the Essex 401(k) Plan, 11,500 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date, and 14,388 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Further includes 860 shares of Common Stock held by Mr. Schall’s three children. Excludes 12,524 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units. The aforementioned shares and limited partnership interests in the operating partnership, except for the shares held by Mr. Schall’s adult children and for his benefit in the Essex 401(k) plan, are held in a revocable trust in which Mr. Schall and Ann Schall act as co-trustees. Mr. Schall disclaims beneficial ownership for 35,333 shares that may be issued upon the exchange of limited partnership interests in the operating partnership; 7,194 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units; and 17,246 shares of Common Stock.
|
(7)
|
Includes 2,250 shares of Common Stock that may be issued upon the exchange of all of Mr. Dance’s limited partnership interests in the operating partnership. Also includes 5,450 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date and 5,045 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 7,955 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units.
|
(8)
|
Includes 23,792 shares of Common Stock that may be issued upon the exchange of all of Mr. Eudy’s limited partnership interests in the operating partnership. Also includes 1,585 shares of Common Stock held in the Essex 401(k) Plan, 5,450 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date, and 12,156 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 9,210 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units.
|
(9)
|
Includes 38,911 shares of Common Stock that may be issued upon the exchange of all of Mr. Zimmerman’s limited partnership interests in the operating partnership and certain other partnerships. Also includes 2,780 shares of Common Stock held in the Essex 401(k) Plan, 5,450 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date, and 12,156 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 9,210 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units.
|
(10)
|
Includes 4,569 shares of Common Stock that may be issued upon the exchange of all of Mr. Burkart’s limited partnership interests in the operating partnership. Also includes 3,000 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date and 11,459 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 10,884 shares of Common Stock issuable upon satisfying certain requirements of the Series Z-1 incentive units.
|
(11)
|
Includes 9,676 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(12)
|
Includes 14,914 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(13)
|
Includes 14,914 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(14)
|
Includes 10,664 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date, and excludes 341 shares of Common Stock owned by Mr. Randlett’s wife as to which Mr. Randlett disclaims beneficial ownership.
|
(15)
|
Includes 3,833 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(16)
|
Includes 1,333 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(17)
|
Includes 3,833 shares of Common Stock subject to options that are exercisable within 60 days of the Record Date.
|
(18)
|
Includes 1,687,958 shares of common stock that may be issued upon the exchange of all of the executive officers’ and directors’ limited partnership interests in the operating partnership and certain other partnerships and 97,017 shares of common stock subject to options that are exercisable within 60 days of the Record Date. Also, includes 71,337 shares that may be issued in exchange for non-forfeitable Series Z-1 incentive units. Excludes 59,289 shares of common stock issuable upon satisfying the requirements of the Series Z-1 incentive units.
|
(19)
|
As reported on a Schedule 13G/A filed February 13, 2013, The Vanguard Group, Inc. stated that it has sole voting power over 82,175 shares, shared voting power over 28,200 shares, sole dispositive power over 4,108,270 shares and shared dispositive power over 61,388 shares. Vanguard also informed us that these shares include the shares separately reported on a Schedule 13G/A filed February 15, 2013, by Vanguard Specialized Fund – Vanguard REIT Index Fund, stating that it has sole voting power over 2,410,531 shares.
|
(20)
|
As reported on a Schedule 13G/A filed February 1, 2013, Invesco Ltd. stated that it has sole voting power over 2,126,445 shares, shared voting power over 25,994 shares, sole dispositive power over 3,532,613 shares, and shared dispositive power over 18,782 shares.
|
(21)
|
As reported on a Schedule 13G/A filed February 1, 2013, BlackRock, Inc. stated that it has sole voting and dispositive power over 3,107,739 shares.
|
(22)
|
As reported on a Schedule 13G/A filed March 4, 2013, Cohen & Steers, Inc. reported sole voting power over 1,442,040 shares and sole dispositive power over 2,199,967 shares; Cohen & Steers Capital Management, Inc. reported sole voting power over 1,442,040 shares and sole dispositive power over 2,190,060 shares; and Cohen & Steers Europe S.A. reported sole dispositive power over 9,907 shares.
|
Name and Position
|
Age
|
First
Elected
|
Term
Expires
|
George M. Marcus
Chairman of the Board
|
71
|
1994
|
2015
|
Keith R. Guericke
Vice Chairman of the Board
|
64
|
1994
|
2013
|
Michael J. Schall
Director, Chief Executive Officer and President
|
55
|
1994
|
2015
|
Michael T. Dance
Executive Vice President and Chief Financial Officer
|
56
|
—
|
—
|
John D. Eudy
Executive Vice President-Development
|
58
|
—
|
—
|
Craig K. Zimmerman
Executive Vice President-Acquisitions
|
62
|
—
|
—
|
John F. Burkart
Executive Vice President-Asset Management
|
49
|
—
|
—
|
Erik J. Alexander
Senior Vice President-Property Operations
|
45
|
—
|
—
|
David W. Brady
Director
|
72
|
1994
|
2014
|
Gary P. Martin
Director
|
65
|
1994
|
2015
|
Issie N. Rabinovitch
Director
|
67
|
1994
|
2013
|
Thomas E. Randlett
Director
|
70
|
1994
|
2013
|
Byron A. Scordelis
Director
|
63
|
2011
|
2014
|
Janice L. Sears
Director
|
52
|
2011
|
2014
|
Claude J. Zinngrabe, Jr.
Director
|
67
|
2011
|
2014
|
Director
|
Executive
|
Audit
|
Compensation
|
Nominating/
Corporate
Governance
|
Pricing
|
David W. Brady
|
X
|
X
|
|||
Keith R. Guericke
|
X
|
Chair
|
|||
George M. Marcus
|
Chair
|
||||
Gary P. Martin
|
Chair
|
||||
Issie N. Rabinovitch
|
Chair
|
||||
Thomas E. Randlett
|
X
|
Chair
|
Director
|
Executive
|
Audit
|
Compensation
|
Nominating/
Corporate
Governance
|
Pricing
|
Byron A. Scordelis
|
X
|
X
|
|||
Janice L. Sears
|
X
|
X
|
|||
Claude J. Zinngrabe, Jr.
|
X
|
||||
Michael J. Schall
|
X
|
X
|
|
·
|
A director is not independent if the director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company.
|
|
·
|
A director is not independent if the director has received, or has an immediate family member that is an executive officer of the Company and who has received, during any twelve-month period with the last three years, more than $120,000 in direct compensation from the Company (other than director and committee fees and compensation or other forms of deferred compensation for prior service, which compensation is not contingent upon continued service). Consistent with the commentary of the applicable NYSE listing standards, compensation received by a director for former service as an interim Chairman or CEO or other executive officer need not be considered in determining independence under this test, and compensation received by an immediate family member for service as an employee of the listed company (other than an executive officer) need not be considered in determining independence under this test.
|
|
·
|
A director is not independent if (i) the director or an immediate family member is a current partner of a firm that is the Company’s internal or external auditor; (ii) the director is a current employee of such a firm, (iii) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (iv) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time.
|
|
·
|
A director is not independent if the director or an immediate family member is, or has been within the last three years, employed as an executive officer of any other company where any of the Company’s present executive officers concurrently serves or served on that company’s compensation committee.
|
|
·
|
A director is not independent if the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.
|
|
·
|
A director is not independent if the director serves an executive officer of any tax exempt organization to which the Company has made, within the last three years, contributions in any single fiscal year that exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues.
|
|
·
|
An annual grant of options for that number of shares as determined by having the grant have a value of $50,000 as based on using the Black-Scholes option pricing methodology. With respect to annual grants of options, directors can elect, in lieu of an option grant, to receive a restricted stock award for that number of shares as determined by having the restricted stock grant equal to a value of $50,000. Directors must make this election at the time of the Company’s annual meeting, at which time such grant of options or restricted stock will be made. Annual grants of options or restricted stock will completely vest one year after the date of grant.
|
|
·
|
An annual cash retainer, paid quarterly, in the amount of $22,000 per year.
|
|
·
|
A board attendance fee of $1,000 per meeting attended.
|
|
·
|
A committee attendance fee of $500 per meeting, except as to regularly scheduled Audit Committee meetings, for which a $2,000 attendance fee is paid. With the exception of meetings of the Audit Committee, no meeting attendance fees shall apply when both Board of Directors and committee meetings occur on the same day.
|
|
·
|
The Chairman of the Audit Committee, Mr. Randlett, receives $10,000 per year, payable quarterly, in addition to the other compensation indicated above.
|
Name
|
Fees Earned
or Paid in
Cash
($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(1)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||
D. Brady
|
41,000 | 50,000 | - | - | 91,000 | |||||||||||||||
K. Guericke
|
- | - | - | 275,000 | 275,000 | |||||||||||||||
G. Marcus
|
28,500 | 50,000 | - | - | 78,500 | |||||||||||||||
G. Martin
|
30,000 | - | 50,000 | - | 80,000 | |||||||||||||||
I. Rabinovitch
|
30,500 | - | 50,000 | - | 80,500 | |||||||||||||||
T. Randlett
|
51,000 | - | 50,000 | - | 101,000 | |||||||||||||||
B. Scordelis
|
32,500 | - | 50,000 | - | 82,500 | |||||||||||||||
J. Sears
|
40,000 | - | 50,000 | - | 90,000 | |||||||||||||||
C. Zinngrabe, Jr.
|
30,500 | - | 50,000 | - | 80,500 |
(1)
|
The assumptions used to calculate the value of the restricted stock and options awards are set forth in Note 13 of the Notes to Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2012. As of December 31, 2012, each director had the following number of stock options (vested and unvested) then outstanding: David W. Brady: 9,676 options; Keith R. Guericke: 10,000 options; George M. Marcus: 0 options; Gary P. Martin: 17,914 options; Issie N. Rabinovitch: 17,914 options; Thomas E. Randlett: 13,664 options; Byron A. Scordelis: 9,500 options, Janice L. Sears: 7,000 options; and Claude J. Zinngrabe, Jr.: 9,500 options, respectively. Also, as of December 31, 2012, David W. Brady and George M. Marcus each had 331 shares of unvested restricted stock outstanding, and no other directors had unvested restricted stock outstanding.
|
|
·
|
Reported FFO per share, excluding non-core items, of $6.82, representing a 21% increase compared to 2011. We exceeded our original guidance for NOI growth and per share FFO growth.
|
|
·
|
Maintained strong liquidity and conservative debt structure through access to both debt and equity capital sources. Reflecting the commitment to a well-structured balance sheet, Fitch improved our unsecured debt rating to BBB+/stable and we successfully completed our debut public debt offering totaling $300 million of unsecured bonds due in 2022 at a coupon of 3.625%.
|
|
·
|
Acquired 15 apartment communities (on balance sheet and in joint ventures) totaling $802 million.
|
|
·
|
Expanded our development pipeline to almost $1 billion with the commencement of five apartment projects with an estimated cost of $516 million.
|
|
·
|
Completed the construction of Expo, a 275-unit community located in Seattle, Washington. Expo was a ground up development that was completed ahead of schedule and below our budgeted cost. Leasing activities are progressing as planned and the forecasted stabilized yield of approximately 7% exceeds our investment expectations.
|
|
·
|
Improved the customer experience through numerous technology iniatives and adding amenities to the existing apartment portfolio through redevelopment.
|
($ in millions)
|
||||||||
Company
|
Revenues ($)(*)
|
Market Value($)(*)
|
||||||
AvalonBay Communities, Inc. (AVB)
|
1,044 | 13,093 | ||||||
Apartment Investment and Management Company (AIV)
|
1,060 | 3,849 | ||||||
Alexandria Real Estate Equities, Inc. (ARE)
|
590 | 4,384 | ||||||
American Campus Communities, Inc. (ACC)
|
445 | 3,386 | ||||||
BioMed Realty Trust, Inc. (BMR)
|
470 | 2,948 | ||||||
BRE Properties, Inc. (BRE)
|
397 | 3,715 | ||||||
Camden Property Trust (CPT)
|
719 | 5,616 | ||||||
Douglas Emmett, Inc. (DEI)
|
575 | 3,277 | ||||||
Equity Lifestyle Properties, Inc. (ELS)
|
699 | 2,783 | ||||||
Home Properties, Inc. (HME)
|
621 | 3,028 | ||||||
Mid-America Apartment Communities, Inc. (MAA)
|
474 | 2,660 | ||||||
Post Properties, Inc. (PPS)
|
335 | 2,641 | ||||||
Colonial Properties (CLP)
|
430 | 1,906 | ||||||
Realty Income Corporation (O)
|
464 | 5,241 | ||||||
United Dominion Realty Trust, Inc. (UDR)
|
728 | 6,071 | ||||||
Essex Property Trust, Inc. (ESS)
|
527 | 5,261 |
*
|
Revenues are for the twelve months ended September 30, 2012, and the equity market capitalization (“Market Value”) is as of October 31, 2012.
|
|
·
|
Attract, retain, and motivate executive officers through the overall design and mix of cash, equity, and short and long-term compensation elements;
|
|
·
|
Reward individual performance by tying significant portions of short-term compensation in the form of salary and annual bonus opportunity to achievement of individual performance; and
|
|
·
|
Align the interests of executive officers with the interests of our stockholders by tying significant portions of short and long- term compensation, in the form of annual bonus and long-term equity based awards, to increasing distributable cash flow to shareholders, and increasing the value of our common stock based on the acquisition, development, redevelopment and onsite property management of apartment communities.
|
Compensation
element:
|
Why this element is
included:
|
How the amount of
this element is
determined:
|
How this elements fits
in the overall
program:
|
Base salary
|
Customary element necessary to hire and retain executives.
|
Base salary and any changes in salary are based on views of individual retention or performance factors and market data at peer companies (but without specific benchmarking).
|
Short-term cash compensation that is fixed and paid during the year.
|
Annual bonus
|
Customary element appropriate to motivate executives and tie a significant compensation opportunity to a mix of individual and corporate performance.
|
Annual bonus is based on both discretionary and non-discretionary performance criteria.
|
Short-term cash compensation that is contingent on Compensation Committee discretion and review of non-discretionary criteria.
|
Equity incentive – stock options grants and Essex Operating Partnership Units
|
Equity compensation for long-term retention of management and alignment of shareholder interest that complements cash compensation and provides performance incentives.
|
Stock option awards and Z-1 Unit awards are determined primarily based on how the award’s grant date value relates to the officer’s total compensation and how the vesting and other aspects of the awards might incentivize performance.
|
Long-term compensation is primarily contingent on performance goals which are expected to be consistent with an increase in the long-term value of our common stock into which the units are ultimately exchangeable. The sale of Z-1 incentive units is contractually prohibited.
|
Executive
|
Salary 2011 ($)
|
Salary 2012 ($)
|
Percentage Change
|
|||||||||
Michael Schall, CEO
|
350,000 | 450,000 | 28.6% | |||||||||
Michael Dance, CFO
|
300,000 | 325,000 | 8.3% | |||||||||
Craig Zimmerman, EVP
|
300,000 | 325,000 | 8.3% | |||||||||
John Eudy, EVP
|
300,000 | 325,000 | 8.3% | |||||||||
John Burkart, EVP
|
250,000 | 275,000 | 10.0% |
|
·
|
individual performance;
|
|
·
|
corporate and business unit performance; and
|
|
·
|
the functions performed by the executive officer.
|
1)
|
Same-property NOI growth of 8.0%, adjusted for dispositions;
|
2)
|
FFO per diluted share of $6.62, and Core FFO per diluted share of $6.65;
|
|
3)
|
Increase FFO with external growth investments consistent with the FFO guidance provided to common stock investors; and
|
4)
|
Actual results exceeding underwritten yields from 2010 and 2011 acquisitions and developments.
|
Executive
|
Targeted
Discretionary Bonus
($)
|
Targeted Non-
Discretionary
Incentive Bonus
($)
|
Maximum Bonus
($)
|
|||||||||
Michael Schall, CEO
|
250,000 | 250,000 | 750,000 | |||||||||
Michael Dance, CFO
|
150,000 | 150,000 | 450,000 | |||||||||
Craig Zimmerman, EVP
|
150,000 | 150,000 | 450,000 | |||||||||
John Eudy, EVP
|
150,000 | 150,000 | 450,000 | |||||||||
John Burkart, EVP
|
150,000 | 150,000 | 450,000 |
1)
|
Same Property NOI growth of 7%, adjusted for dispositions;
|
2)
|
FFO per diluted share of $7.70; and Core FFO per diluted share of $7.55; and
|
|
3)
|
Increase FFO with external growth investments consistent with the FFO guidance provided to common stock investors; and
|
|
4)
|
Actual results exceeding underwritten yields from 2011 and 2012 acquisitions and developments.
|
|
·
|
Mr. Schall’s goals include achieving the Company’s financial and operating objectives, including ranking in the top quartile of multifamily REITs with respect to Core FFO results, establishing a career planning process for high impact employees, restructuring the Company’s economic research activities to improve the long term portfolio performance and other strategic initiatives.
|
|
·
|
Mr. Dance’s goals include achieving the Company’s financial and operating objectives, including ranking in the top quartile of multifamily REITs with respect to Core FFO results, overseeing the implementation of a human resource information system and improving the Company’s equity compensation programs consistent with best corporate governance practices.
|
|
·
|
Mr. Eudy’s goals include the initiation of two new development starts with projected capitalization rates of an appropriate premium over acquisition capitalization rates and completing eight active development projects on time and on budget.
|
|
·
|
Mr. Zimmerman’s goals include allocating capital via acquisitions to the supply constrained markets with the best return potential resulting in over $400 million in acquisitions and other investments at returns that exceed the cost of capital.
|
|
·
|
Mr. Burkart’s goals include identifying assets for renovations to improve their long term performance including unit upgrades to achieve targeted returns, the disposition of assets that are not expected to achieve the desired long term returns on investment, including the remaining seven assets in the Fund II portfolio, and to earn a minimum of a $3 million promote from the liquidation of Fund II.
|
|
·
|
severance payments of two times current annual base salary and two times the individual’s average annual bonus for the three calendar years preceding the change in control;
|
|
·
|
continuation of health, dental and life insurance for up to 24 months to be paid by the Company;
|
|
·
|
accelerated vesting of all outstanding, unvested equity-based compensation awards and Series Z-1 incentive units that are not assumed or substituted in connection with a change in control (the vesting will accelerate at the time of a change in control if such awards or units are not assumed or substituted in connection with a change in control of the Company) ; and
|
|
·
|
outplacement services provided at the cost of the Company.
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
(
$)(1)
|
Option
Awards
($)(1)
|
All Other
Compensation
($)(2)
|
Total
($)
|
|||||||||||||||||||
Michael J.
Schall
Director,
President and
Chief Executive
Officer
|
2012
|
450,000 | 580,000 | - | 646,800 | 13,647 | 1,690,447 | |||||||||||||||||||
2011
|
350,000 | 475,000 | 418,200 | 269,800 | 11,260 | 1,524,260 | ||||||||||||||||||||
2010
|
295,000 | 400,000 | 751,000 | - | 11,207 | 1,457,207 | ||||||||||||||||||||
Michael T.
Dance
Executive Vice
President
and Chief
Financial
Officer
|
2012
|
325,000 | 435,000 | - | 199,920 | 14,168 | 974,088 | |||||||||||||||||||
2011
|
300,000 | 375,000 | 167,280 | 168,625 | 13,556 | 1,024,461 | ||||||||||||||||||||
2010
|
225,000 | 300,000 | 660,880 | - | 11,383 | 1,197,263 | ||||||||||||||||||||
John D. Eudy
Executive Vice
President,
Development
|
2012
|
325,000 | 442,500 | - | 199,920 | 13,527 | 980,947 | |||||||||||||||||||
2011
|
300,000 | 375,000 | 167,280 | 168,625 | 14,083 | 1,024,988 | ||||||||||||||||||||
2010
|
300,000 | 300,000 | 660,880 | - | 14,130 | 1,270,010 | ||||||||||||||||||||
Craig K.
Zimmerman
Executive Vice
President,
Acquisitions
|
2012
|
325,000 | 442,500 | - | 199,920 | 13,423 | 980,843 | |||||||||||||||||||
2011
|
300,000 | 375,000 | 167,280 | 168,625 | 13,600 | 1,024,505 | ||||||||||||||||||||
2010
|
300,000 | 400,000 | 660,880 | - | 13,547 | 1,374,427 | ||||||||||||||||||||
John F. Burkart
Executive Vice
President, Asset
Management
|
2012
|
275,000 | 383,500 | - | 176,400 | 13,427 | 848,327 | |||||||||||||||||||
2011
|
250,000 | 350,000 | 585,480 | 67,450 | 14,165 | 1,267,095 | ||||||||||||||||||||
2010
|
224,000 | 275,000 | 450,600 | - | 14,097 | 964,697 |
(1)
|
These dollar amounts reflect the aggregate grant date fair value calculated in accordance with FASB ASC Topic 718 for the awards granted for the year indicated. The 2011 stock awards are subject to performance conditions, and the grant date fair value of these awards is based on the probable outcome of the performance conditions calculated in accordance with ASC Topic 718. These dollar amounts do not represent payments actually received by the officers.
|
|
·
|
These awards consist of (i) for 2012, stock option awards (described in the next table below) (ii) for 2011, Series Z-1 incentive unit awards (described under “Series Z-1 Incentive Units” below) and stock option awards and (iii) for 2010, Series Z-1 incentive unit awards.
|
|
·
|
The grant date fair value of the performance-based stock awards granted in 2011 based on the maximum level of performance is as follows: $697,500 for Mr. Schall, $279,020 for Mr. Dance, $279,020, for Mr. Eudy, $279,020 for Mr. Zimmerman, and $976,570 for Mr. Burkart.
|
|
·
|
The assumptions used to calculate the values of the 2012 awards are set forth in Note 13 of the Notes to Consolidated Financial Statements in our Form 10-K for 2012, 2011 and 2010.
|
(2)
|
For 2012, these amounts include the named executive officers’ respective perquisites limited to Company provided leased automobiles or automobile allowances, and payments of life insurance premiums of $368, for Mr. Schall, Mr. Dance, Mr. Eudy, Mr. Zimmerman, and Mr. Burkart, respectively.
|
Name
|
Grant Date
|
Estimated
Future
Payouts
Under Equity
Incentive Plan
Awards
Maximum (#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)(1)
|
Exercise or
Base Price of
Option
Awards ($/Sh)
|
Grant Date
Fair Value of
Stock and
Options
Awards ($)
|
||||||||||||||
Schall
|
12/11/2012
|
- | 55,000 | 143.03 | 646,800 | ||||||||||||||
Dance
|
12/11/2012
|
- | 17,000 | 143.03 | 199,920 | ||||||||||||||
Eudy
|
12/11/2012
|
- | 17,000 | 143.03 | 199,920 | ||||||||||||||
Zimmerman
|
12/11/2012
|
- | 17,000 | 143.03 | 199,920 | ||||||||||||||
Burkart
|
12/11/2012
|
- | 15,000 | 143.03 | 176,400 |
(1)
|
10% of these options vested on December 11, 2012, the date of grant, and will vest 20% each year through 2016 with the remaining 10% vesting in 2017.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)
(1)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($)(2)
|
|||||||||||||||||||
Schall
|
5,500 | 49,500 | 143.03 |
12/11/2019
|
12,524 | 1,824,121 | ||||||||||||||||||
6,000 | 14,000 | 132.03 |
12/6/2021
|
-
|
- | |||||||||||||||||||
Dance
|
1,700 | 15,300 | 143.03 |
12/11/2019
|
7,955 | 1,158,646 | ||||||||||||||||||
3,750 | 8,750 | 132.03 |
12/6/2021
|
- | - | |||||||||||||||||||
Eudy
|
1,700 | 15,300 | 143.03 |
12/11/2019
|
9,210 | 1,341,437 | ||||||||||||||||||
3,750 | 8,750 | 132.03 |
12/6/2021
|
- | - | |||||||||||||||||||
Zimmerman
|
1,700 | 15,300 | 143.03 |
12/11/2019
|
9,210 | 1,341,437 | ||||||||||||||||||
3,750 | 8,750 | 132.03 |
12/6/2021
|
- | - | |||||||||||||||||||
Burkart
|
1,500 | 13,500 | 143.03 |
12/11/2019
|
10,884 | 1,585,255 | ||||||||||||||||||
1,500 | 3,500 | 132.03 |
12/6/2021
|
- | - |
(1)
|
Unvested units issued pursuant to the Z-1 Unit programs described above.
|
(2)
|
The value is based on the closing price of Essex common stock on the NYSE on December 31, 2012, of $146.65, multiplied by the number of units indicated in the adjacent column, less the $1.00 capital contribution required for each unit.
|
Option Awards
|
Stock Awards
|
||||||||||||||||
Name
|
Number of
Shares Acquired
on Exercise (#)
|
Value Realized
on Exercise ($)
|
Number of
Shares Acquired
on Vesting (#)(1)
|
Value Realized
on Vesting ($)(2)
|
|||||||||||||
Schall
|
- | - | 3,921 | 571,094 | |||||||||||||
Dance
|
- | - | 4,070 | 592,796 | |||||||||||||
Eudy
|
- | - | 3,065 | 446,417 | |||||||||||||
Zimmerman
|
- | - | 3,065 | 446,417 | |||||||||||||
Burkart
|
- | - | 3,042 | 443,067 |
(1)
|
Stock awards consist of Z-1 Units, the amount reflect the increase in conversion ratio as of January 1, 2013.
|
(2)
|
The value is based on the closing price of Essex common stock on the NYSE on December 31, 2012 of $146.65 multiplied by the number of units acquired on vesting, less the $1.00 per unit capital contribution.
|
Name
|
Executive
Contributions
in 2012 ($)
|
Registrant
Contributions
in 2012 ($)
|
Aggregate
Earnings/(Losses)
in 2012 ($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance as of
December 31,
2012 ($)
|
||||||||||||||||
Schall
|
- | - | 205,303 | - | 2,481,189 | ||||||||||||||||
Dance
|
- | - | - | - | - | ||||||||||||||||
Eudy
|
- | - | 27,358 | - | 319,591 | ||||||||||||||||
Zimmerman
|
- | - | - | - | - | ||||||||||||||||
Burkart
|
- | - | - | - | - |
Name
|
Payment for
2X Annual
Salary/Bonus
($)
|
24 months of
benefits ($)
|
Assumed Realized
Value of
Accelerated Equity
Awards and Z-1
Incentive Units ($)
|
Total (1) ($)
|
|||||||||||||
Schall
|
1,630,000 | 22,000 | 2,220,515 | 3,872,515 | |||||||||||||
Dance
|
1,216,667 | 22,000 | 1,349,912 | 2,588,579 | |||||||||||||
Eudy
|
1,266,667 | 22,000 | 1,533,958 | 2,822,625 | |||||||||||||
Zimmerman
|
1,266,667 | 22,000 | 1,533,958 | 2,822,625 | |||||||||||||
Burkart
|
1,049,333 | 22,000 | 1,696,179 | 2,767,512 |
(1)
|
The total does not include: (i) available balances under the nonqualified deferred compensation plan table preceding this table, (ii) any amounts due for accrued but unpaid wages under applicable law or under generally available benefit plans such as our 401(k) plan, at the time of any employment termination, or (iii) the proceeds of insurance policies paid by insurance companies in the event of death or disability.
|
Plan Category
|
Number of Securities
To Be Issued Upon
Exercise Of
Outstanding Options,
Warrants and Rights
(#)
|
Weighted Average
Exercise Price For
Outstanding Options,
Warrants and Rights
($)
|
Securities Remaining
Available for Future
Issuance Under Plans
(#)
|
||||||||||
Equity compensation
plans approved by
security holders:
|
|
||||||||||||
Stock Incentive Plans
|
623,434 | 125.96 | (1) | 194,321 | |||||||||
Equity compensation
plans not approved by
security holders:
|
|||||||||||||
Series Z-1 incentive
units (2)
|
330,747 | N/A | 32,548 | ||||||||||
Total
|
954,181 | - | 226,869 |
(1)
|
This weighted average price amount applies only to options granted under the Company’s 1994 and 2004 plans.
|
(2)
|
Includes convertible Series Z-1 incentive units, as described above.
|
|
·
|
the Audit Committee of the Essex Board of Directors (the "Board") will review single related person transactions up to $75 million and determine whether or not to approve the transaction, prior to the Company committing to the transaction.
|
|
·
|
the Audit Committee and the Board's Nominating and Corporate Governance Committee will jointly review a single related person transaction in excess of $75 million or related person transactions that in the aggregate exceed $100 million in any calendar year, and such transaction shall be approved by each Committee, prior to the Company committing to the transaction.
|
|
·
|
Routine Transactions up to $1,000,000 that might involve a related person: generally transactions with a related person for ordinary course goods or services with established pricing practices, such as broker commissions for listing or buying properties, do not require prior committee approval but are to be reported to the Audit Committee for ratification.
|
|
·
|
Property Transactions: the acquisition or disposition of properties that may involve a related person are governed by the general approval procedure set forth above for transactions at the $75 million and $100 million thresholds (with associated Audit Committee, or Audit Committee and Nominating and Corporate Governance Committee approval, or ratification), except that the guidelines list specified information relating to acquisitions or dispositions to be provided to the reviewing committee(s), including a description of the related person's direct or indirect interest in the transaction, the underwriting process, risk and mitigation information, the property marketing process, and analysis of comparable transactions, valuation or other relevant metrics. For two years after an acquisition involving a related person, the Audit Committee will receive reports concerning actual versus underwritten performance.
|
|
·
|
Preferred Equity/Subordinate Debt Transactions: these types of transactions with a related person, regardless of the amount involved, must be approved or ratified by both the Audit Committee and Nominating and Corporate Governance Committee. The committees must be provided information concerning the proposed transaction that is comparable to that set forth above for property transactions, and reports must be made to the Audit Committee quarterly as to the status of the transaction and promptly as to any default or similar event. Unless otherwise approved by the Board of Directors, the amount outstanding under, or invested pursuant to, all preferred equity/subordinate debt transactions involving the same related person may not exceed $50 million.
|
|
·
|
We will file articles of amendment and restatement with the State Department of Assessments and Taxation of Maryland as soon as practicable after the 2013 annual meeting.
|
|
·
|
Each director who was elected at the 2012 annual meeting to serve until the 2015 annual meeting and each nominee for director who is elected at this annual meeting will resign effective at the 2014 annual meeting.
|
|
·
|
Beginning with the 2014 annual meeting, each of our directors will stand for election to serve for a one-year term and until each director's successor is duly elected and qualified.
|
|
·
|
our Board of Directors will remain classified,
|
|
·
|
the three Class I directors will stand for election as Class I nominees for three-year terms expiring at the 2016 annual meeting of stockholders, and all Class II and Class III Directors will continue to serve for the remainder of their three-year terms, and in each case, until the director’s respective successor is duly elected and qualified or until such director’s earlier resignation or removal.
|
·
|
the eligibility requirements for participation in the 2013 Plan;
|
|
·
|
the performance criteria upon which awards certain awards of restricted stock, restricted stock units and performance bonus awards may be based;
|
|
·
|
the maximum numbers of Shares subject to options, stock appreciation rights, restricted stock and restricted stock units that may be granted to a participant in any calendar year; and
|
|
·
|
the maximum dollar amount that a participant may receive upon settlement of a performance bonus award.
|
Plan Term:
|
From June 1, 2013 until the earlier of
|
|
(i) |
May 31, 2023, or
|
|
(ii) |
its termination by the Board.
|
|
Eligible Participants:
|
Employees of the Company are eligible to receive each type of award offered under the 2013 Plan, including incentive stock options.
|
|
Consultants and directors are eligible to receive awards other than incentive stock options under the
2013 Plan
.
|
||
Shares Available for Awards:
|
1,000,000 Shares
,
plus
any unissued or undelivered Shares (i) authorized for grants under the 2004 Plan and (ii) subject to outstanding awards granted under the 2004 Plan that are not issued or delivered to a participant for any reason, subject to adjustments in the event of certain changes in capital adjustments of the Company.
|
|
No more than 500,000 Shares may be issued pursuant to “full value” awards, which are generally awards in which a participant receives the entire value of the Shares without having to pay an exercise or purchase price, as restricted stock or restricted stock units.
|
||
Award Types
|
(1) |
Stock options (“incentive stock options,” within the meaning of Section 422 of the Code, and non-qualified stock options)
|
(2) |
Restricted stock
|
|
(3) |
Restricted stock units
|
(4) |
Stock appreciation rights
|
|
(5) |
Dividend equivalent rights
|
|
(6) |
Performance bonus awards
|
|
(7) |
Operating partnership units, which are exchangeable or convertible for Shares
|
|
(8) |
Profits interests in the operating partnership
|
|
(9) |
Other stock-based awards
|
|
Award Terms:
|
Awards granted under the 2013 Plan generally have a term of no longer than 10 years from the date of grant, and incentive stock options granted to ten percent owners will have a term of no longer than 5 years.
|
|
ISO Limits:
|
No more than 1,000,000 Shares may be issued upon the exercise of incentive stock options granted under the 2013 Plan.
|
|
162(m) Share Limits:
|
Section 162(m) of the Code requires among other things that the maximum number of Shares awarded to an individual must be approved by a company’s stockholders in order for the awards granted under a
plan
to be eligible for treatment as performance-based compensation that will not be subject to the $1 million limitation on tax deductibility for compensation paid to certain specified executive officers. Accordingly, the
2013 Plan
limits awards granted to an individual participant in any calendar year to:
|
|
(1) |
No more than 200,000 Shares subject to options or stock appreciation rights, provided that an additional one-time grant of up to 100,000 Shares may be made to new hires; and
|
|
(2) |
No more than 150,000 Shares subject to awards of performance-based restricted stock awards, performance-based restricted stock unit awards, or other similar performance-based awards, provided that an additional one-time grant of up to 50,000 Shares may be made to new hires.
|
|
(3) |
No more than $1,500,000 may be granted in the form of awards payable in cash, including performance bonus awards.
|
|
Vesting:
|
Determined by the Administrator within limits set forth in the 2013 Plan.
|
|
Not Permitted:
|
(1) |
Repricing or reducing the exercise price of an option or stock appreciation right without the approval of the stockholders of the Company.
|
(2) |
Canceling or exchanging, without approval of the stockholders of the Company, any outstanding option or stock appreciation right in consideration for the grant of a cash payment, a new option or stock appreciation right with a lower exercise price, or a new award when the exercise price of the option or stock appreciation right exceeds the fair market value of the underlying Shares.
|
|
·
|
Options and stock appreciation rights: no more than 200,000 Shares, provided that an additional one-time grant of up to 100,000 Shares may be made to new hires.
|
|
·
|
Performance-based restricted stock and restricted stock units: no more than 150,000 Shares, provided that an additional one-time grant of up to 50,000 Shares may be made to new hires.
|
|
·
|
Performance cash-based awards, including performance bonus awards: no more than $1,500,000 in cash or other property having an equivalent value.
|
|
(i)
|
increase in the share price of the Company’s common stock,
|
|
(ii)
|
earnings per share,
|
|
(iii)
|
total stockholder return,
|
|
(iv)
|
operating margin,
|
|
(v)
|
gross margin,
|
|
(vi)
|
return on equity,
|
|
(vii)
|
return on assets,
|
|
(viii)
|
return on investment,
|
|
(ix)
|
operating income,
|
|
(x)
|
net operating income,
|
|
(xi)
|
pre-tax profit,
|
|
(xii)
|
cash flow,
|
|
(xiii)
|
revenue,
|
|
(xiv)
|
expenses,
|
|
(xv)
|
earning before interest, taxes and depreciation,
|
|
(xvi)
|
economic value added,
|
|
(xvii)
|
personal management objectives,
|
|
(xviii)
|
funds from operations,
|
|
(xix)
|
same property results, and
|
|
(xx)
|
external growth investments.
|
|
·
|
a merger or consolidation in which the Company is not the surviving entity;
|
|
·
|
the sale, transfer or other disposition of all or substantially all of the assets of the Company;
|
|
·
|
a complete liquidation or dissolution of the Company,
|
|
·
|
an acquisition by a person or related group of persons of beneficial ownership of securities possessing more than 50% of the total combine voting power of the Company’s outstanding securities;
|
|
·
|
any reverse merger in which the Company is the surviving entity but (A) the Shares outstanding prior to the merger are converted or exchanged into securities or other property or (B) the securities possessing more than 40% of the voting power of the Company’s outstanding securities are transferred to persons different from those who held such securities immediately prior to such merger or series of transactions; or
|
|
·
|
a change in the composition of the Board over a period of 36 months or less such that a majority of the Board members ceases, by reason of contested elections, to be continuing directors.
|
·
|
immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of the Company’s capital stock; or
|
·
|
holds rights to purchase stock under all of the Company’s employee stock purchase plans that would accrue at a rate that exceeds $25,000 worth of the Company’s stock for each calendar year
|
2012
|
2011
|
|||||||
Audit Fees (1)
|
$ | 1,227,450 | $ | 1,228,000 | ||||
Audit-Related Fees (2)
|
221,500 | 193,000 | ||||||
Tax Fees (3)
|
- | - | ||||||
All Other Fees (4)
|
- | - | ||||||
Total
|
$ | 1,448,950 | $ | 1,421,000 |
(1)
|
Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements, the audit of internal control over financial reporting as of the end of the year, reviews of the interim consolidated financial statements included in quarterly reports, and services that are normally provided by KPMG LLP in connection with statutory and regulatory filings or engagements.
|
(2)
|
Audit-Related Fees consist of audit fees paid by unconsolidated joint ventures of the Company. No fees were paid in 2012 and 2011 for Audit-Related Fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements but were not reported under “Audit Fees.”
|
(3)
|
Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning for both federal and state income taxes. There were no fees in this category incurred in 2012 or 2011.
|
(4)
|
All Other Fees consist of fees for products and services other than the services reported above. There were no fees in this category incurred in 2012 or 2011.
|
Page | ||
1.
|
PURPOSES OF THE PLAN
|
1
|
2.
|
DEFINITIONS
|
1
|
3.
|
STOCK SUBJECT TO THE PLAN
|
7
|
4.
|
ADMINISTRATION OF THE PLAN
|
8
|
5.
|
ELIGIBILITY
|
10
|
6.
|
TERMS AND CONDITIONS OF AWARDS
|
11
|
7.
|
AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION AND TAXES
|
13
|
8.
|
EXERCISE OF AWARD
|
16
|
9.
|
PERFORMANCE-BASED AWARDS FOR COVERED EMPLOYEES
|
17
|
10.
|
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
|
18
|
11.
|
CHANGE IN CONTROL
|
18
|
12.
|
EFFECTIVE DATE AND TERM OF PLAN
|
20
|
13.
|
AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
|
20
|
14.
|
RESERVATION OF SHARES
|
21
|
15.
|
NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP
|
21
|
16.
|
NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS
|
21
|
17.
|
UNFUNDED OBLIGATION
|
21
|
18.
|
CONSTRUCTION
|
22
|
19.
|
NO RIGHTS TO AWARDS
|
22
|
20.
|
NO STOCKHOLDERS RIGHTS
|
22
|
21.
|
FRACTIONAL SHARES
|
22
|
22.
|
LIMITATIONS APPLICABLE TO SECTION 16 PERSONS
|
22
|
23.
|
GOVERNMENT AND OTHER REGULATIONS
|
22
|
24.
|
GOVERNING LAW
|
23
|
25.
|
SECTION 409A
|
23
|
Page | ||
1.
|
PURPOSE
|
1
|
2.
|
DEFINITIONS
|
1
|
3.
|
ELIGIBILITY
|
5
|
4.
|
OFFERING PERIODS
|
6
|
5.
|
PARTICIPATION
|
6
|
6.
|
CONTRIBUTIONS
|
6
|
7.
|
GRANT OF OPTION
|
8
|
8.
|
EXERCISE OF OPTION
|
8
|
9.
|
DELIVERY
|
9
|
10.
|
WITHDRAWAL
|
9
|
11.
|
TERMINATION OF EMPLOYMENT
|
10
|
12.
|
INTEREST
|
10
|
13.
|
STOCK
|
10
|
14.
|
ADMINISTRATION
|
10
|
15.
|
DESIGNATION OF BENEFICIARY
|
11
|
16.
|
TRANSFERABILITY
|
11
|
17.
|
USE OF FUNDS
|
11
|
18.
|
REPORTS
|
12
|
19.
|
ADJUSTMENTS, DISSOLUTION, LIQUIDATION, MERGER OR CHANGE IN CONTROL
|
12
|
20.
|
AMENDMENT OR TERMINATION
|
13
|
21.
|
NOTICES
|
13
|
22.
|
CONDITIONS UPON ISSUANCE OF SHARES
|
13
|
23.
|
NON-COMPENSATORY ACCOUNTING TREATMENT
|
14
|
24.
|
CODE SECTION 409A
|
14
|
25.
|
TERM OF PLAN
|
14
|
26.
|
STOCKHOLDER APPROVAL
|
14
|
27.
|
GOVERNING LAW
|
15
|
28.
|
SEVERABILITY
|
15
|
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
|
|
COMPUTERSHARE
655 MONTGOMERY STREET
SUITE 830
SAN FRANCISCO, CA 94111
|
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
|
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
|
|
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
M57977-P33031
|
KEEP THIS PORTION FOR YOUR RECORDS | |
DETACH AND RETURN THIS PORTION ONLY |
ESSEX PROPERTY TRUST, INC.
|
For
|
Withhold
|
For All
|
To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the
number(s) of the nominee(s) on the line below.
|
||||
The Board of Directors recommends you vote FOR the following: | All | All | Except | |||||
1.
|
Election of three directors to serve until the 2016 Annual Meeting of Stockholders, or the 2014 Annual Meeting of Stockholders if Proposal No. 2 is approved:
|
o
|
o
|
o
|
||||
Nominees:
|
||||||||
01) Keith R. Guericke
|
||||||||
02) Issie N. Rabinovitch
|
||||||||
03) Thomas E. Randlett
|
||||||||
The Board of Directors recommends you vote FOR proposals 2, 3, 4, 5 and 6: |
For
|
Against
|
Abstain
|
||
2.
|
Amendment of our charter to eliminate classification of the board of directors and elect directors annually.
|
o
|
o
|
o
|
|
3.
|
Approval of the 2013 Stock Award and Incentive Compensation Plan.
|
o
|
o
|
o
|
|
4.
|
Approval of the 2013 Employee Stock Purchase Plan.
|
o
|
o
|
o
|
|
5.
|
Ratification of the appointment of KPMG LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2013.
|
o
|
o
|
o
|
|
6.
|
Advisory approval of the Company's executive compensation.
|
o
|
o
|
o
|
|
7.
|
To transact such other business as may properly come before the meeting or any adjournment thereof.
|
||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
|
||
|
||||||||
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
Signature (Joint Owners)
|
Date
|
|||||
M57978-P33031
|
ESSEX PROPERTY TRUST, INC.
925 EAST MEADOW DRIVE, PALO ALTO, CALIFORNIA 94303
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
ON MAY 14, 2013
|
Keith R. Guericke and Michael J. Schall (the "Proxyholders"), or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Essex Property Trust, Inc. to be held on Tuesday, May 14, 2013 at 1:00 p.m., Pacific Time at The Stanford Park Hotel, 100 El Camino Real, Menlo Park, California 94025, and any adjournments or postponements thereof.
|
Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxyholders will have authority to vote FOR the election of all director nominees and FOR proposals 2, 3, 4, 5 and 6. In their discretion, the Proxyholders are authorized to vote upon such other business as may properly come before the Annual Meeting.
|
SEE REVERSE SIDE: If you wish to vote in accordance with the Board of Directors' recommendations, just sign and date the reverse side. You need not mark any boxes.
|
Continued and to be signed on reverse side
|