Exhibit 10.1

 

GABLES RESIDENTIAL TRUST

 

SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN

 

The provisions of the Gables Residential Trust Senior Management Incentive
Compensation Plan (the “Plan”) apply to executive officers of Gables Residential
Trust (the “Company”) selected to participate in the Plan by the Compensation
Committee of the Board of Trustees of the Company (the “Committee”).  The Plan
is effective as of January 1, 2005.

 

The Plan is administered by the Committee and consists of two segments:
 (1) annual incentive compensation payable in the form of cash bonuses, and
(2) annual incentive compensation payable in the form of restricted stock awards
or units of partnership interests in Gables Realty Limited Partnership (“Units”)
based on the Company’s growth in total return to shareholders over a three-year
period relative to the National Association of Real Estate Investment
Trusts, Inc. Equity Residential Apartment REIT Total Return Index (“NAREIT
Apartment Index”).  All determinations as to bonuses and awards are made by the
Committee.

 

1.                                       ANNUAL CASH BONUS.  AN ANNUAL CASH
BONUS IS DETERMINED BY THE COMMITTEE TO REWARD ACHIEVEMENTS IN MEETING
MANAGEMENT BUSINESS OBJECTIVE TARGETS, PERSONAL DEVELOPMENT AND DIVISIONAL
PERFORMANCE.  THE ANNUAL BONUS FOR EACH EXECUTIVE OFFICER SHALL BE BASED ON AN
EVALUATION BY THE COMMITTEE OF EACH EXECUTIVE OFFICER’S INDIVIDUAL PERFORMANCE
AS JUDGED AGAINST SPECIFIC GOALS BASED ON HIS OR HER BUSINESS FUNCTION, AS WELL
AS HIS OR HER ROLE IN DISCHARGING COMPANY-WIDE RESPONSIBILITIES AND ACHIEVING
COMPANY-WIDE GOALS.  IN DETERMINING EACH EXECUTIVE OFFICER’S CASH BONUS, THE
COMMITTEE WILL ALSO GIVE CONSIDERATION TO THE PERFORMANCE OF COMPANIES IN THE
INDUSTRY SECTOR IN WHICH THE COMPANY COMPETES, SPECIFICALLY WITH RESPECT TO SUCH
EXECUTIVE OFFICER’S EQUIVALENT BUSINESS FUNCTIONS.

 

Executive officers who remain employed through year-end may earn maximum bonuses
(based on a percentage of their base salary for the year for which the award is
made) as set forth in Appendix A.

 

Bonuses are paid in cash and shall be paid out in full no later than 75 days
after the end of the Company’s fiscal year.

 

2.                                       EQUITY-BASED AWARDS.  EQUITY-BASED
AWARDS TO EXECUTIVE OFFICERS ARE GRANTED TO REWARD SENIOR MANAGEMENT FOR
PERFORMANCE BY THE COMPANY MEASURED OVER THREE-YEAR PERIODS.  THE GRANT OF
AWARDS, IF ANY, WOULD BE TIED TO THE YEAR-OVER-YEAR GROWTH IN TOTAL SHAREHOLDER
RETURN OF THE COMPANY’S COMMON SHARES OF BENEFICIAL INTEREST (ASSUMING
CONTEMPORANEOUS REINVESTMENT, IN SHARES, OF ALL DIVIDENDS AND OTHER
DISTRIBUTIONS IN RESPECT OF SHARES) FOR THE THREE-YEAR PERIOD ENDING ON
DECEMBER 31 OF THE CURRENT FISCAL YEAR RELATIVE TO THE NAREIT APARTMENT INDEX
FOR THE SAME PERIOD.  THE TEN-DAY YEAR-END AVERAGE TOTAL RETURN OF THE COMPANY
FOR EACH YEAR IN THE PERFORMANCE PERIOD SHALL BE COMPARED TO THE TEN-DAY
YEAR-END AVERAGE TOTAL RETURN OF THE COMPANIES COMPRISING THE INDEX.  FOR THE
FIRST AND SECOND THREE-YEAR PERFORMANCE PERIODS ENDING ON DECEMBER 31, 2005 AND
DECEMBER 31, 2006, RESPECTIVELY, THE COMPANY’S TOTAL SHAREHOLDER RETURN FOR EACH
OF 2003 AND 2004 IS DEEMED TO BE AT THE MEDIAN LEVEL OF THE NAREIT APARTMENT
INDEX.

 

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Each executive officer shall receive his or her maximum potential award if the
Company outperforms 75 percent of the companies in the NAREIT Apartment Index
and shall receive no award at all if 75 percent of the companies in the NAREIT
Apartment Index out-perform the Company.  Performance levels are linear, ranging
from zero to maximum.

 

Awards, if any, shall be granted by the Committee at the beginning of each
fiscal year, based on results for the preceding three-year performance period. 
Grants shall be made either in the form of restricted shares or Units at the
election of each executive officer.  Each grant has vesting requirements that
cover a three-year period whereby 25 percent of the award vests immediately, and
the remaining portion (75 percent) vests ratably over a three-year period on
each of the first three January 1 following the date of grant as long as the
executive officer remains employed by the Company as of each such vesting date.

 

Executive officers who remain employed throughout the fiscal year may earn the
awards set forth in Appendix B, subject to vesting as described above.

 

3.                                       CHANGE OF CONTROL.  IN THE EVENT OF A
CHANGE OF CONTROL OF THE COMPANY (AS DEFINED IN THE COMPANY’S 2004 EQUITY
INCENTIVE PLAN), EACH EXECUTIVE OFFICER SHALL RECEIVE A CASH BONUS EQUAL TO
(A) THE AVERAGE OF CASH BONUSES EARNED AS A PERCENTAGE OF THE EXECUTIVE
OFFICER’S MAXIMUM CASH BONUS POTENTIAL FOR THE THREE MOST RECENTLY COMPLETED
FISCAL YEARS, EXCLUSIVE OF INVESTMENT PERFORMANCE BONUS, IF ANY, MULTIPLIED BY
(B) THE EXECUTIVE OFFICER’S MAXIMUM CASH BONUS POTENTIAL (EXCLUSIVE OF
INVESTMENT PERFORMANCE BONUS, IF ANY) EXPRESSED AS A PERCENTAGE OF HIS OR HER
ANNUAL BASE SALARY, MULTIPLIED BY (C) HIS OR HER ANNUAL BASE SALARY AND FURTHER
MULTIPLIED BY (D) A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF ELAPSED
DAYS IN THE CALENDAR YEAR IN WHICH THE CHANGE OF CONTROL OCCURS AND THE
DENOMINATOR OF WHICH IS 365.  WITH REGARD TO THE EQUITY-BASED AWARD, THE NUMBER
OF SHARES TO BE GRANTED TO EACH EXECUTIVE OFFICER THEN EMPLOYED SHALL BE
INITIALLY DETERMINED PURSUANT TO THE PROVISIONS OF SECTION 2 ABOVE, BUT USING
THE AVERAGE TOTAL RETURN OF THE COMPANY FOR THE TEN BUSINESS DAYS IMMEDIATELY
PRECEDING THE ANNOUNCEMENT OF THE CHANGE OF CONTROL FOR THE LAST YEAR IN THE
THREE-YEAR PERIOD AND COMPARING IT AGAINST THE NAREIT APARTMENT INDEX FOR THE
SAME PERIOD.  SUCH INITIAL NUMBER OF SHARES SHALL BE MULTIPLIED BY A FRACTION,
THE NUMERATOR OF WHICH IS THE NUMBER OF ELAPSED DAYS IN THE CALENDAR YEAR IN
WHICH THE CHANGE OF CONTROL OCCURS AND THE DENOMINATOR OF WHICH IS 365.  ALL
SUCH SHARES AWARDED SHALL BE FULLY VESTED AND NONFORFEITABLE ON DATE OF GRANT.

 

4.                                       AMENDMENT AND TERMINATION.  THE
COMMITTEE RESERVES THE RIGHT TO AMEND AND TERMINATE THE PLAN AT ANY TIME;
PROVIDED, HOWEVER, THAT NO SUCH AMENDMENT OR TERMINATION SHALL ADVERSELY AFFECT
AN EXECUTIVE OFFICER’S RIGHTS WITH RESPECT TO EXISTING AWARDS WITHOUT THE
EXECUTIVE OFFICER’S CONSENT.

 

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