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 .
