form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
__________________
FORM
8-K
__________________
Current
Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of
1934
Date of
Report (Date of Earliest Event Reported): December 30, 2009
ESSEX
PROPERTY TRUST, INC.
(Exact
Name of Registrant as Specified in its Charter)
001-13106
(Commission
File Number)
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Maryland
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77-0369576
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(State
or Other Jurisdiction of Incorporation)
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(I.R.S.
Employer Identification No.)
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925
East Meadow Drive, Palo Alto, California 94303
(Address
of Principal Executive Offices) (Zip Code)
(650)
494-3700
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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£
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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£
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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£
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d2(b))
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£
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
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Item
1.01 Entry Into a Material Definitive Agreement
On
December 23, 2009, the Board of Directors (the “Board”) of Essex Property Trust,
Inc. (the “Company”) approved an amendment (the “First Amendment”) to the Second
Amended and Restated Agreement of Limited Partnership, as amended, (the
“Partnership Agreement”) of Essex Portfolio, L.P. (the “Partnership”), as to
which the Company is the general partner.
The First
Amendment relates to Series Z Incentive Units and Series Z-1 Incentive Units
(collectively referred to herein as “Z Units”) of the Partnership, which units
have been issued to executive officers and other employees of the Company as
part of the Company’s compensation program. Such units automatically
convert into common units of the Partnership upon the occurrence of certain
triggering events as set forth in the Partnership Agreement. Common
units of the Partnership are exchangeable on a one-for-one basis into shares of
the Company’s common stock (“Essex shares”). The First Amendment provides that
the Compensation Committee of the Board may set a different date, than is now
provided in the Partnership Agreement, for the conversion of Series Z Units into
common units of the Partnership and, when such a different date is set, the
Compensation Committee may also change the conversion ratio of incentive units
and impose restrictions on the exchange and sale of common units and shares of
common stock ultimately issued in connection with these incentive units,
provided that the holder of such incentive units consents to such changes and
restrictions.
The First
Amendment also makes certain clarifying changes to the definition of “Series Z-1
Trigger Event”, which definition defines the events that trigger the conversion
of Series Z-1 Incentive Units into common units of the
Partnership. The First Amendment allows for the transfer of Series Z
Units to certain trusts. The First Amendment also makes a
change relating to LTIP Units, which are another form of incentive units issued
from time to time to executive officers and other employees of the
Company. The First Amendment provides that common units of the
Partnership, which are issued upon the conversion of LTIP Units, may be subject
to restrictions as to when such common units may be exchanged or converted into
Essex shares.
The
foregoing description of certain terms of the First Amendment does not purport
to be complete, and is qualified in its entirety by reference to the full text
of the First Amendment, which is being filed as Exhibit 10.1 to this Current
Report on Form 8-K.
Pursuant
to the First Amendment, the Compensation Committee has determined to allow
holders of Z Units to voluntarily elect for early conversion of their units into
common units of the Partnership and in turn into Essex shares. The early
conversion is limited to up to the current conversion ratio (the “Conversion
Ratchet Percentage” and “Series Z-1 Conversion Ratchet Percentage” as defined in
the Partnership Agreement) that existed on January 1, 2009, for the Z Units.
This ratio sets the number of common units into which a Z Unit is convertible.
Upon issuance, the conversion ratio of Z Units is typically zero and such ratio
increases generally by up to 10% each year if performance objectives are met.
The Compensation Committee has provided that holders may elect to have early
conversion and receive up to that number of common units into which their total
holdings of Z Units would be convertible, as based on the current conversion
ratio. This will be implemented as follows. Based on the number of common units
a holder elects to receive, the conversion ratio of the equivalent number of Z
Units will then be increased to 100% and those units will then be converted into
common units on a one-for-one basis. The conversion ratio for the remaining
units will be adjusted accordingly so that there is no overall change in the
number of common units issued or issuable upon conversion of all the Z Units
held by a holder, as based on the current conversion ratio.
As to
those units for which a holder elects to have early conversion, the Compensation
Committee set the date for the conversion of such units into common units
to be December 31, 2009.
With
respect to the Z Units that are converted into common units on December 31,
2009, those common units in turn can only be exchanged into Essex shares. The
Essex shares issued upon such exchange will be subject to limitations as to when
they can be sold or otherwise transferred. All holders that elect to have a
portion of their Z Units converted into Essex shares are eligible for future
increases in the conversion ratio of their remaining Z Units subject to meeting
the performance conditions specified by the Compensation Committee.
In the
future, holders of Z Units will be allowed to elect an early conversion once a
year and the conversion will be based on the conversion ratio as of January 1 of
the year of the election.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
The disclosure set forth above under
item 1.01, which disclosure describes certain compensatory arrangements of
executive officers and other employees of the Company, is incorporated by
reference under this item.
Item
9.01 Financial Statements and Exhibits
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First
Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Essex Portfolio, L.P., as amended, dated December 23,
2009.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Essex
Property Trust, Inc.
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/s/ Michael T. Dance
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Name:
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Michael
T. Dance
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Title:
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Exec.
Vice President and Chief Financial
Officer
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Date: December
30, 2009