EXHIBIT 99.5
UNITED DOMINION REALTY
TRUST, INC.
1999 LONG-TERM INCENTIVE PLAN
(as amended and restated July 22, 2004)
ARTICLE 1
PURPOSE
1.1 GENERAL . The purpose of
the United Dominion Realty Trust, Inc. 1999 Long-Term Incentive
Plan (the “Plan”) is to promote the success, and
enhance the value, of United Dominion Realty Trust, Inc. (the
“Company”), by linking the personal interests of its
employees, officers, consultants and directors to those of Company
shareholders and by providing such persons with an incentive for
outstanding performance. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and
retain the services of employees, officers, consultants and
directors upon whose judgment, interest, and special effort the
successful conduct of the Company’s operation is largely
dependent. Accordingly, the Plan permits the grant of incentive
awards from time to time to selected employees, officers,
consultants and directors. In addition, the Plan provides for
automatic annual grants of options to Non-Employee Directors of the
Company as provided in Article 13.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE . For tax
reasons, the Plan was approved by the Board of Directors in interim
stages. First, the Board approved the Plan on March 9, 1999 as
it relates to Awards of Restricted Stock and Performance Units only
(the “First Effective Date”), and the Plan became
effective as of the First Effective Date for the limited purpose of
(i) making Awards of Restricted Stock on or prior to
May 31, 1999 to non-officer employees of the Company and
(ii) making cash Performance Unit Awards under Article 9
of the Plan with respect to a performance period beginning on
January 1, 1999.
On January 25, 2000, the Board
approved the Plan for the purpose of (i) making Awards of
Restricted Stock on or prior to May 31, 2000 to non-officer
employees of the Company, (ii) making Awards of Restricted
Stock on or prior to May 31, 2000 to certain officers of the
Company from shares purchased by the Company on the open market,
and (iii) making cash Performance Unit Awards under
Article 9 of the Plan with respect to a performance period
beginning on January 1, 2000 (the “Second Effective
Date”).
On March 20, 2001, the Board
approved the Plan as it relates to all types of Awards under the
Plan (the “Third Effective Date”) and the Plan became
fully effective as of the Third Effective Date. The Plan was
approved by the shareholders of the Company on May 8, 2001. In
the discretion of the Committee, Awards may be made to Covered
Employees which are intended to constitute qualified
performance-based compensation under Code Section 162(m).
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The Plan was amended and restated by
the Board of Directors on May 4, 2004 to eliminate the express
authority under Section 7.1(c) to pay the exercise price of an
Option with a promissory note, which amendment and restatement of
the Plan is not subject to shareholder approval.
The Plan was amended and restated by
the Board of Directors on July 22, 2004 to modify
Sections 14.8 and 14.9 to provide that unless otherwise
provided in a Participant’s Award Agreement upon a
Participant’s Death, Disability or Retirement, all
outstanding Options, Stock Appreciation Rights and other Awards in
the nature of rights that may be exercised shall become fully
exercisable and all restrictions on outstanding Awards shall lapse,
which amendment and restatement of the Plan is not subject to
shareholder approval.
ARTICLE 3
DEFINITIONS
3.1 DEFINITIONS . When a word
or phrase appears in this Plan with the initial letter capitalized,
and the word or phrase does not commence a sentence, the word or
phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning
is required by the context. The following words and phrases shall
have the following meanings:
(a) “Award” means any
Option, Stock Appreciation Right, Restricted Stock Award,
Performance Unit Award, Dividend Equivalent Award, or Other
Stock-Based Award, or any other right or interest relating to Stock
or cash, granted to a Participant under the Plan.
(b) “Award Agreement”
means any written agreement, contract, or other instrument or
document evidencing an Award.
(c) “Board” means the
Board of Directors of the Company.
(d) “Change of Control”
means and includes each of the following:
(1) a merger or consolidation in
which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state
in which the Company is incorporated;
(2) the transfer or sale of all or
substantially all of the assets of the Company other than to an
affiliate or Subsidiary of the Company;
(3) the liquidation of the Company;
or
(4) the acquisition by any person, or
by a group of persons acting in concert, of more than fifty percent
(50%) of the outstanding voting securities of the Company, which
results in the resignation or addition of fifty percent (50%) or
more independent members of the Board.
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(e) “Code” means the
Internal Revenue Code of 1986, as amended from time to time.
(f) “Committee” means the
committee of the Board described in Article 4.
(g) “Company” means
United Dominion Realty Trust, Inc., a Maryland corporation.
(h) “Consultant” means,
and is limited to, a “consultant” or
“advisor” with respect to whom the Company would be
permitted to use Form S-8 to register the issuance of securities,
as described in the General Instructions to Form S-8 under the 1933
Act.
(i) “Covered Employee”
means a covered employee as defined in Code
Section 162(m)(3).
(j) “Disability” shall
mean any illness or other physical or mental condition of a
Participant that renders the Participant incapable of performing
his customary and usual duties for the Company, or any medically
determinable illness or other physical or mental condition
resulting from a bodily injury, disease or mental disorder which,
in the judgment of the Committee, is permanent and continuous in
nature. The Committee may require such medical or other evidence as
it deems necessary to judge the nature and permanency of the
Participant’s condition. Notwithstanding the above, with
respect to an Incentive Stock Option, Disability shall mean
Permanent and Total Disability as defined in Section 22(e)(3)
of the Code.
(k) “Dividend Equivalent”
means a right granted to a Participant under Article 11.
(l) “Effective Date”
means the First, Second or Third Effective Date, as the context
requires, as such terms are defined in Section 2.1.
(m) “Fair Market Value”,
on any date, means the closing sales price on the New York Stock
Exchange on such date or, in the absence of reported sales on such
date, the closing sales price on the immediately preceding date on
which sales were reported.
(n) “Incentive Stock
Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor
provision thereto.
(o) “Non-Employee
Director” means a member of the Board who is not an employee
of the Company or any Parent or Subsidiary.
(p) “Non-Qualified Stock
Option” means an Option that is not an Incentive Stock
Option.
(q) “Option” means a
right granted to a Participant under Article 7 of the Plan to
purchase Stock at a specified price during specified time periods.
An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.
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(r) “Other Stock-Based
Award” means a right, granted to a Participant under
Article 12 that relates to or is valued by reference to Stock
or other Awards relating to Stock.
(s) “Parent” means a
corporation that owns or beneficially owns a majority of the
outstanding voting stock or voting power of the Company. For
Incentive Stock Options, the term shall have the same meaning as
set forth in Code Section 424(e).
(t) “Participant” means a
person who, as an employee, officer, consultant or director of the
Company or any Parent or Subsidiary, has been granted an Award
under the Plan.
(u) “Performance Unit”
means a right granted to a Participant under Article 9, to
receive cash, Stock, or other Awards, the payment of which is
contingent upon achieving certain performance goals established by
the Committee.
(v) “Plan” means the
United Dominion Realty Trust, Inc. 1999 Long-Term Incentive Plan,
as amended from time to time.
(w) “Restricted Stock
Award” means Stock granted to a Participant under
Article 10 that is subject to certain restrictions and to risk
of forfeiture.
(x) “Retirement” means a
Participant’s termination of employment with the Company,
Parent or Subsidiary after attaining any normal or early retirement
age specified in any pension, profit sharing or other retirement
program sponsored by such company, or, in the event of the
inapplicability thereof with respect to the person in question, as
determined by the Committee in its reasonable judgment.
(y) “Stock” means the
$1.00 par value Common Stock of the Company, and such other
securities of the Company as may be substituted for Stock pursuant
to Article 14.
(z) “Stock Appreciation
Right” or “SAR” means a right granted to a
Participant under Article 8 to receive a payment equal to the
difference between the Fair Market Value of a share of Stock as of
the date of exercise of the SAR over the grant price of the SAR,
all as determined pursuant to Article 8.
(aa) “Subsidiary” means
any corporation, limited liability company, partnership or other
entity that is directly, or indirectly through one or more
intermediaries, controlled by or under common control with the
Company. Notwithstanding the foregoing, for purposes of Incentive
Stock Options granted under the Plan, the term
“Subsidiary” shall have the meaning set forth in Code
Section 424(f).
(bb) “1933 Act” means the
Securities Act of 1933, as amended from time to time.
(cc) “1934 Act” means the
Securities Exchange Act of 1934, as amended from time to time.
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ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE . The Plan shall
be administered by the Compensation Committee of the Board or, at
the discretion of the Board from time to time, by the Board. The
Committee shall consist of two or more members of the Board. It is
intended that the directors appointed to serve on the Committee
shall be “non-employee directors” (within the meaning
of Rule 16b-3 promulgated under the 1934 Act) and
“outside directors” (within the meaning of Code Section
162(m) and the regulations thereunder) to the extent that
Rule 16b-3 and, if necessary for relief from the limitation
under Code Section 162(m) and such relief is sought by the Company,
Code Section 162(m), respectively, are applicable. However,
the mere fact that a Committee member shall fail to qualify under
either of the foregoing requirements shall not invalidate any Award
made by the Committee, which Award is otherwise validly made under
the Plan. The members of the Committee shall be appointed by, and
may be changed at any time and from time to time in the discretion
of, the Board. During any time that the Board is acting as
administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee
(other than in this Section 4.1) shall include the Board.
4.2 ACTION BY THE COMMITTEE .
For purposes of administering the Plan, the following rules of
procedure shall govern the Committee. A majority of the Committee
shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present, and acts
approved unanimously in writing by the members of the Committee in
lieu of a meeting shall be deemed the acts of the Committee. Each
member of the Committee is entitled to, in good faith, rely or act
upon any report or other information furnished to that member by
any officer or other employee of the Company or any Parent or
Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the
administration of the Plan.
4.3 AUTHORITY OF COMMITTEE .
The Committee has the exclusive power, authority and discretion to
do the following; except as such discretion shall be delegated as
provided below in this Section 4.3 or shall be limited by the
automatic provisions of Article 13 with respect to annual
grants of Options to Non-Employee Directors:
(a) Designate Participants;
(b) Determine the type or types of
Awards to be granted to each Participant;
(c) Determine the number of Awards to
be granted and the number of shares of Stock to which an Award will
relate;
(d) Determine the terms and
conditions of any Award granted under the Plan, including but not
limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, based in each case on
such considerations as the Committee in its sole discretion
determines;
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(e) Accelerate the vesting,
exercisability or lapse of restrictions of any outstanding Award,
based in each case on such considerations as the Committee in its
sole discretion determines;
(f) Determine whether, to what
extent, and under what circumstances an Award may be settled in, or
the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
(g) Prescribe the form of each Award
Agreement, which need not be identical for each Participant;
(h) Decide all other matters that
must be determined in connection with an Award;
(i) Establish, adopt or revise any
rules and regulations as it may deem necessary or advisable to
administer the Plan;
(j) Make all other decisions and
determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the Plan;
and
(k) Amend the Plan or any Award
Agreement as provided herein.
Notwithstanding the above, the Board
or the Committee may expressly delegate to a special committee
consisting of one or more directors who are also officers of the
Company some or all of the Committee’s authority under
subsections (a) through (g) above with respect to those
eligible Participants who, at the time of grant are not, and are
not anticipated to be become, either (i) Covered Employees or
(ii) persons subject to the insider trading rules of
Section 16 of the 1934 Act.
4.4 DECISIONS BINDING . The
Committee’s interpretation of the Plan, any Awards granted
under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final,
binding, and conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE
PLAN
5.1 NUMBER OF SHARES . Subject
to adjustment as provided in Section 15.1, the aggregate
number of shares of Stock reserved and available for Awards or
which may be used to provide a basis of measurement for or to
determine the value of an Award (such as with a Stock Appreciation
Right or Performance Unit Award) shall be 4,000,000. The maximum
number of shares of Stock that may be issued subject to Incentive
Stock Options shall be 4,000,000 shares.
5.2 LAPSED AWARDS . To the
extent that an Award is canceled, terminates, expires, is forfeited
or lapses for any reason, any shares of Stock subject to the Award
will again be available for the grant of an Award under the Plan
and shares subject to SARs or other Awards settled in cash will be
available for the grant of an Award under the Plan.
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5.3 STOCK DISTRIBUTED . Any
Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock
purchased on the open market.
5.4 LIMITATION ON AWARDS .
Notwithstanding any provision in the Plan to the contrary (but
subject to adjustment as provided in Section 15.1), the
maximum number of shares of Stock with respect to one or more
Options and/or SARs that may be granted during any one calendar
year under the Plan to any one Participant shall be 500,000. The
maximum fair market value (measured as of the date of grant) of any
Awards other than Options and SARs that may be received by a
Participant (less any consideration paid by the Participant for
such Award) during any one calendar year under the Plan shall be
$1,000,000.
ARTICLE 6
ELIGIBILITY
6.1 GENERAL . Awards may be
granted only to individuals who are employees, officers,
consultants or directors of the Company or a Parent or
Subsidiary.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL . The Committee is
authorized to grant Options to Participants on the following terms
and conditions:
(a) EXERCISE PRICE . The
exercise price per share of Stock under an Option shall be
determined by the Committee.
(b) TIME AND CONDITIONS OF
EXERCISE . The Committee shall determine the time or times at
which an Option may be exercised in whole or in part, subject to
Section 7.1(e). The Committee also shall determine the
performance or other conditions, if any, that must be satisfied
before all or part of an Option may be exercised or vested. The
Committee may waive any exercise or vesting provisions at any time
in whole or in part based upon factors as the Committee may
determine in its sole discretion so that the Option becomes
exercisable or vested at an earlier date. The Committee may permit
an arrangement whereby receipt of Stock upon exercise of an Option
is delayed until a specified future date.
(c) PAYMENT . The Committee
shall determine the methods by which the exercise price of an
Option may be paid, the form of payment, including, without
limitation, cash, shares of Stock, or other property (including
“cashless exercise” arrangements), and the methods by
which shares of Stock shall be delivered or deemed to be delivered
to Participants; provided that if shares of Stock are used to pay
the exercise price of an Option, such shares must have been held by
the Participant for at least six months. When shares of Stock are
delivered, such delivery may be by attestation of ownership or
actual delivery.
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(d) EVIDENCE OF GRANT . All
Options shall be evidenced by a written Award Agreement between the
Company and the Participant. The Award Agreement shall include such
provisions, not inconsistent with the Plan, as may be specified by
the Committee.
(e) EXERCISE TERM . In no
event may any Option be exercisable for more than ten years from
the date of its grant.
(f) NO RE-LOAD OPTIONS . The
Committee shall not provide in an Award Agreement, or in an
amendment thereto, for the automatic grant of a new Option to any
Participant who delivers shares of Stock as full or partial payment
of the exercise price of the original Option.
7.2 INCENTIVE STOCK OPTIONS .
The terms of any Incentive Stock Options granted under the Plan
must comply with the following additional rules:
(a) EXERCISE PRICE . The
exercise price per share of Stock shall be set by the Committee,
provided that the exercise price for any Incentive Stock Option
shall not be less than the Fair Market Value as of the date of the
grant.
(b) EXERCISE . In no event may
any Incentive Stock Option be exercisable for more than ten years
from the date of its grant.
(c) LAPSE OF OPTION . An
Incentive Stock Option shall lapse under the earliest of the
following circumstances; provided, however, that the Committee may,
prior to the lapse of the Incentive Stock Option under the
circumstances described in paragraphs (3), (4) and (5) below,
provide in writing that the Option will extend until a later date,
but if an Option is exercised after the dates specified in
paragraphs (3), (4) and (5) below, it will automatically
become a Non-Qualified Stock Option:
(1) The Incentive Stock Option shall
lapse as of the option expiration date set forth in the Award
Agreement.
(2) The Incentive Stock Option shall
lapse ten years after it is granted, unless an earlier time is set
in the Award Agreement.
(3) If the Participant terminates
employment for any reason other than as provided in paragraph
(4) or (5) below, the Incentive Stock Option shall lapse,
unless it is previously exercised, three months after the
Participant’s termination of employment; provided, however,
that if the Participant’s employment is terminated by the
Company for cause or by the Participant without the consent of the
Company (in either case, as determined by the Company and
communicated in writing to the Participant), the Incentive Stock
Option shall (to the extent not previously exercised) lapse
immediately.
(4) If the Participant terminates
employment by reason of his Disability, the Incentive Stock Option
shall lapse, unless it is previously exercised, one year after the
Participant’s termination of employment.
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(5) If the Participant dies while
employed, or during the three-month period described in paragraph
(3) or during the one-year period described in paragraph
(4) and before the Option otherwise lapses, the Option shall
lapse one year after the Participant’s death. Upon the
Participant’s death, any exercisable Incentive Stock Options
may be exercised by the Participant’s beneficiary, determined
in accordance with Section 14.5.
Unless the exercisability of the
Incentive Stock Option is accelerated as provided in
Article 13, if a Participant exercises an Option after
termination of employment, the Option may be exercised only with
respect to the shares that were otherwise vested on the
Participant’s termination of employment.
(d) INDIVIDUAL DOLLAR
LIMITATION . The aggregate Fair Market Value (determ
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