Business Context and Reporting Period
Company: Extra Space Storage Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 25, 2010
Event Reported: Adoption of the Executive Change in Control Plan (Executive CIC Plan) by the Compensation Committee of the Board of Directors.
Financial Metrics
This filing does not contain financial performance data. There are no reported values for revenue, profit, cash flow, margins, debt, or liquidity in this document.
Material Changes
The material change reported is the implementation of a new executive compensation arrangement effective August 25, 2010. The Executive CIC Plan establishes severance benefits for executive officers of the Company, Extra Space Storage L.P., and Extra Space Management, Inc., in the event of termination without cause or termination for "good reason."
Guidance, Outlook, and Plan Details
Severance Benefits
- Cash Payment: Lump sum equal to two times the executive's base salary and bonus (greater of prior year's bonus or average of prior three years).
- Outplacement: Services for six months per company policy.
- Health Benefits: Lump sum covering COBRA costs plus taxes for two years.
- Equity: Full vesting of all equity compensation grants, pension, and deferred compensation plans.
- Pro Rata Bonus: Eligible for a pro rata bonus for the year of termination.
Note: All severance is subject to the execution of a general release of claims and is offset by any other severance payable under other plans to prevent duplicate benefits.
Definitions
- Cause: Includes felony, crime of moral turpitude, dishonesty, willful misconduct, fraud, repeated failure to follow board directions, or breach of covenants.
- Good Reason: Includes material reduction in authority/duties, material reduction in salary, or required relocation more than 100 miles from Salt Lake City, Utah.
Restrictive Covenants
Participation requires executives to agree to:
- No solicitation of employees during employment or for one year post-termination.
- No competition with the Company during employment.
- Perpetual non-disclosure and non-use of confidential information.
Key Facts for Investor Verification
- Verify the specific terms of the Executive CIC Plan in Exhibit 10.1 attached to the filing.
- Confirm the list of executive officers eligible for the plan across the Company and its related entities.
- Review the offset provisions to understand how this plan interacts with existing employment agreements or other severance plans.
- Note that this filing contains no financial results; refer to the most recent 10-Q or 10-K for financial performance data.