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                                                                 EXHIBIT 10.9

                            GABLES RESIDENTIAL TRUST

        SECOND AMENDED AND RESTATED 1994 SHARE OPTION AND INCENTIVE PLAN*


SECTION 1.        GENERAL PURPOSE OF THE PLAN; DEFINITIONS

     The name of the plan is the Gables Residential Trust 1994 Share Option and
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees and Trustees of Gables Residential Trust (the "Company")
and its Subsidiaries upon whose judgment, initiative and efforts the Company
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.

     The following terms shall be defined as set forth below:

     "Act" means the Securities Exchange Act of 1934, as amended.

     "Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Share Options, Non-Qualified Share
Options, Restricted Share Awards and Unrestricted Share Awards.

     "Board" means the Board of Trustees of the Company.

     "Cause" means and shall be limited to a vote of the Board of Trustees
resolving that the participant should be dismissed as a result of (i) any
material breach by the participant of any agreement to which the participant and
the Company are parties, (ii) any act (other than retirement) or omission to act
by the participant which may have a material and adverse effect on the business
of the Company or any Subsidiary or on the participant's ability to perform
services for the Company or any Subsidiary, including, without limitation, the
commission of any crime (other than ordinary traffic violations), or (iii) any
material misconduct or neglect of duties by the participant in connection with
the business or affairs of the Company or any Subsidiary.

     "Change of Control" is defined in Section 12.

     "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

     "Committee" means the Board or any Committee of the Board referred to in
Section 2.

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     * The 1994 Share Option and Incentive Plan was approved by the Board of
Trustees and the shareholders on January 19, 1994; the first amendment thereto
was approved by the Board of Trustees at a Meeting of the Board of Trustees on
February 20, 1995 and by the shareholders at the 1995 Annual Meeting of
Shareholders on May 16, 1995; the second amendment thereto was approved by the
Board of Trustees at a Meeting of the Board of Trustees on February 6, 1996 and
by the shareholders at the 1996 Annual Meeting of Shareholders on May 14, 1996.
At a Meeting of the Board of Trustees on December 11, 1996, the Board of
Trustees adopted Amendment No. 1 to the Second Amended and Restated 1994 Share
Option and Incentive Plan (see attached).


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     "Disability" means disability as set forth in Section 22(e)(3) of the Code.

     "Disinterested Person" means an Independent Trustee who qualifies as such
under Rule 16b-3(c)(2)(i) promulgated under the Act, or any successor
definition under the Act.

     "Effective Date" means the date on which the Plan is approved by
shareholders as set forth in Section 14.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.

     "Fair Market Value" on any given date means the last reported sale price at
which the Shares are traded on such date or, if no Shares are traded on such
date, the most recent date on which the Shares were traded, as reflected on the
New York Stock Exchange or, if applicable, any other national stock exchange on
which the Shares are traded. Notwithstanding the foregoing, the Fair Market
Value on the first day of the Company's initial public offering shall mean the
initial public price.

     "Incentive Share Option" means any Share Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.

     "Independent Trustee" means a member of the Board who is not also an
employee of the Company or any Subsidiary.

     "Non-Qualified Share Option" means any Share Option that is not an
Incentive Share Option.

     "Option" or "Share Option" means any option to purchase Shares granted
pursuant to Section 5.

     "Restricted Share Award" means Awards granted pursuant to Section 6.

     "Share" or "Shares" means one or more, respectively, of the Common Shares
of beneficial interest, par value $.01 per share, of the Company, subject to
adjustments pursuant to Section 3.

     "Subsidiary" means Gables Realty Limited Partnership, Central Apartment
Management, Inc., East Apartment Management, Inc., Gables Central Construction,
Inc., and Gables East Construction, Inc., and any corporation or other entity
(other than the Company) in any unbroken chain of corporations or other
entities, beginning with the Company if each of the corporations or entities
(other than the last corporation or entity in the unbroken chain) owns stock or
other interests possessing 50% or more of the economic interest or the total
combined voting power of all classes of stock or other interests in one of the
other corporations or entities in the chain.

     "Unit" or "Units" means a unit or units of limited partnership interest in
Gables Realty Limited Partnership, a Delaware limited partnership and the entity
through which the Company principally conducts its business.

     "Unrestricted Share Award" means Awards granted pursuant to Section 7.

SECTION 2.   ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
             AND DETERMINE AWARDS

     (a)  Committee. Prior to the closing of the Company's initial public
          offering and the appointment

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of the Independent Trustees, the Plan shall be administered by the Board. After
the closing of the Company's initial public offering and the appointment of the
Independent Trustees, the Plan shall be administered by all of the Independent
Trustee members of the Compensation Committee of the Board, or any other
committee of not less than two Independent Trustees performing similar
functions, as appointed by the Board from time to time. Each member of the
Committee shall be a Disinterested Person after the date of the closing of the
Company's initial public offering.

     (b) Powers of Committee. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:

               (i) to select the officers and other employees of the Company and
          its Subsidiaries to whom Awards may from time to time be granted;

               (ii) to determine the time or times of grant, and the extent, if
          any, of Incentive Share Options, Non-Qualified Share Options,
          Restricted Share Awards and Unrestricted Share Awards, or any
          combination of the foregoing, granted to any one or more participants;

               (iii) to determine the number of Shares to be covered by any
          Award;

               (iv) to determine and modify the terms and conditions, including
          restrictions, not inconsistent with the terms of the Plan, of any
          Award, which terms and conditions may differ among individual Awards
          and participants, and to approve the form of written instruments
          evidencing the Awards;

               (v) to accelerate the exercisability or vesting of all or any
          portion of any Award;

               (vi) subject to the provisions of Section 5(a)(iii), to extend
          the period in which Share Options may be exercised;

               (vii) to determine whether, to what extent, and under what
          circumstances Shares and other amounts payable with respect to an
          Award shall be deferred either automatically or at the election of the
          participant and whether and to what extent the Company shall pay or
          credit amounts constituting interest (at rates determined by the
          Committee) or dividends or deemed dividends on such deferrals; and

               (viii) to adopt, alter and repeal such rules, guidelines and
          practices for administration of the Plan and for its own acts and
          proceedings as it shall deem advisable; to interpret the terms and
          provisions of the Plan and any Award (including related written
          instruments); to make all determinations it deems advisable for the
          administration of the Plan; to decide all disputes arising in
          connection with the Plan; and to otherwise supervise the
          administration of the Plan.

     All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.

SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION


     (a) Shares Issuable. At any time, the maximum number of Shares available
for issuance under the Plan shall be 8% of the sum of (i) the total number of
Shares outstanding at such time (which limit shall be determined without
considering as outstanding any Shares that are the subject of any unexercised
options under the Plan or any other option plan of the Company or any Shares
owned by the Company or any of its

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subsidiaries) and (ii) the total number of Shares issuable upon the exchange of
Units that are outstanding at such time (other than Units owned by the Company
or any of its subsidiaries); provided, however, that the maximum number of
Shares for which Incentive Share Options may be granted under the Plan shall not
exceed 1,101,960 Shares (which number is subject to adjustment as provided in
paragraph (b) below); provided, further, that at any time the total number of
Shares issued or available for issuance under the Plan in respect of Restricted
Share Awards or Unrestricted Share Awards shall not exceed 50% of the total
number of Shares available for issuance under the Plan at such time. For
purposes of this limitation, the Shares underlying any Awards which are
forfeited, cancelled, reacquired by the Company, satisfied without the issuance
of Shares or otherwise terminated (other than by exercise) shall be added back
to the Shares available for issuance under the Plan. Shares issued under the
Plan may be authorized but unissued Shares or Shares reacquired by the Company.

     (b) Share Dividends, Mergers, etc. In the event of a share dividend, share
split or similar change in capitalization affecting the Shares, the Committee
shall make appropriate adjustments in (i) the number and kind of shares or
securities on which Awards may thereafter be granted, (ii) the number and kind
of shares remaining subject to outstanding Awards, and (iii) the option or
purchase price in respect of such shares. In the event of any merger,
consolidation, dissolution or liquidation of the Company or Gables Realty
Limited Partnership, the Committee in its sole discretion may, as to any
outstanding Awards, make such substitution or adjustment in the aggregate number
of shares reserved for issuance under the Plan and the number and purchase price
(if any) of shares subject to such Awards as it may determine and as may be
permitted by the terms of such transaction, or amend or terminate such Awards
upon such terms and conditions as it shall provide (which, in the case of the
termination of the vested portion of any Award, shall require payment or other
consideration which the Committee deems equitable in the circumstances).

     (c) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

SECTION 4.        ELIGIBILITY

     Participants in the Plan will be such full or part-time officers and other
employees of the Company and its Subsidiaries who are responsible for or
contribute to the management, growth or profitability of the Company and its
Subsidiaries and who are selected from time to time by the Committee, in its
sole discretion. Independent Trustees are also eligible to participate in the
Plan but only to the extent provided in Section 5(c) and Section 7 below.

SECTION 5.        SHARE OPTIONS

     Any Share Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

     Share Options granted under the Plan may be either Incentive Share Options
or Non-Qualified Share Options. To the extent that any Option does not qualify
as an Incentive Share Option, it shall constitute a NonQualified Share Option.

     No Incentive Share Option shall be granted under the Plan after January 18,
2004.

     (a) Share Options Granted to Employees. The Committee in its discretion may
grant Share

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Options to employees of the Company or any Subsidiary. Share Options granted to
employees pursuant to this Section 5(a) shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

          (i) Exercise Price. The exercise price per share for the Shares
     covered by a Share Option granted pursuant to this Section 5(a) shall be
     determined by the Committee at the time of grant but shall not be less than
     100% of Fair Market Value on the date of grant. Notwithstanding the
     foregoing, with respect to Non-Qualified Share Options which are granted in
     lieu of cash bonus, the exercise price per share shall not be less than 50%
     of the Fair Market Value on the date of grant. If an employee owns or is
     deemed to own (by reason of the attribution rules applicable under Section
     424(d) of the Code) more than 10% of the combined voting power of all
     classes of stock of the Company or any Subsidiary or parent corporation and
     an Incentive Share Option is granted to such employee, the option price of
     such Incentive Share Option shall be not less than 110% of Fair Market
     Value on the grant date.

          (ii) Grant of Discount Options in Lieu of Cash Bonus. Upon the request
     of an employee and with the consent of the Committee, such employee may
     elect each calendar year to receive a NonQualified Share Option in lieu of
     cash bonus to which he may become entitled during the following calendar
     year pursuant to any other plan of the Company, but only if such employee
     makes an irrevocable election to waive receipt of all or a portion of such
     cash bonus. Such election shall be made on or before the date set by the
     Committee which date shall be no later than 15 days preceding January 1 of
     the calendar year in which the cash bonus would otherwise be paid. A
     Non-Qualified Share Option shall be granted to each employee who made such
     an irrevocable election on the date the waived cash bonus would otherwise
     be paid; provided, however, that with respect to an employee who is subject
     to Section 16 of the Act, if such grant date is not at least six months and
     one day from the date of the election, the grant shall be delayed until the
     date which is six months and one day from the date of the election (or the
     next following business day, if such date is not a business day). The
     exercise price per Share Option shall be determined by the Committee but
     shall not be less than 50% of the Fair Market Value of a single Share on
     the date the Share Option is granted. The number of Shares subject to the
     Share Option shall be determined by dividing the amount of the waived cash
     bonus by the difference between the Fair Market Value of a single Share on
     the date the Share Option is granted and the exercise price per Share
     Option. The Share Option shall be granted for whole number of Shares so
     determined; the value of any fractional share shall be paid in cash. An
     employee may revoke his election under this Section 5(a)(ii) on a
     prospective basis at any time; provided, however, that with respect to an
     employee who is subject to Section 16 of the Act, such revocation shall
     only be effective six months and one day following the date of such
     revocation.

          (iii) Option Term. The term of each Share Option shall be fixed by the
     Committee, but no Incentive Share Option shall be exercisable more than ten
     years after the date the option is granted. If an employee owns or is
     deemed to own (by reason of the attribution rules of Section 424(d) of the
     Code) more than 10% of the combined voting power of all classes of stock of
     the Company or any Subsidiary or parent corporation and an Incentive Share
     Option is granted to such employee, the term of such option shall be no
     more than five years from the date of grant.

          (iv) Exercisability; Rights of a Shareholder. Share Options shall
     become vested and exercisable at such time or times, whether or not in
     installments, as shall be determined by the Committee at or after the grant
     date; provided, however, that Share Options granted in lieu of cash bonus
     shall be exercisable immediately. The Committee may at any time accelerate
     the exercisability of all or any portion of any Share Option. An optionee
     shall have the rights of a shareholder only as to shares acquired upon the
     exercise of a Share Option and not as to unexercised Share Options.


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          (v) Method of Exercise. Share Options may be exercised in whole or in
     part, by giving written notice of exercise to the Company, specifying the
     number of shares to be purchased. Payment of the purchase price may be made
     by one or more of the following methods:

               (A) In cash, by certified or bank check or other instrument
          acceptable to the Committee;

               (B) In the form of Shares that are not then subject to
          restrictions under any Company plan and that have been held by the
          optionee for at least six months, if permitted by the Committee in its
          discretion. Such surrendered Shares shall be valued at Fair Market
          Value on the exercise date; or

               (C) By the optionee delivering to the Company a properly executed
          exercise notice together with irrevocable instructions to a broker to
          promptly deliver to the Company cash or a check payable and acceptable
          to the Company to pay the purchase price; provided that in the event
          the optionee chooses to pay the purchase price as so provided, the
          optionee and the broker shall comply with such procedures and enter
          into such agreements of indemnity and other agreements as the
          Committee shall prescribe as a condition of such payment procedure.
          Payment instruments will be received subject to collection.

The delivery of certificates representing the Shares to be purchased pursuant to
the exercise of a Share Option will be contingent upon receipt from the optionee
(or a purchaser acting in his stead in accordance with the provisions of the
Share Option) by the Company of the full purchase price for such Shares and the
fulfillment of any other requirements contained in the Share Option or
applicable provisions of laws.

          (vi) Non-transferability of Options. No Share Option shall be
     transferable by the optionee otherwise than by will or by the laws of
     descent and distribution and all Share Options shall be exercisable, during
     the optionee's lifetime, only by the optionee.

          (vii) Termination by Reason of Death. If any optionee's employment by
     the Company and its Subsidiaries terminates by reason of death, the Share
     Option may thereafter be exercised, to the extent exercisable at the date
     of death, by the legal representative or legatee of the optionee, for a
     period of six months (or such longer period as the Committee shall specify
     at any time) from the date of death, or until the expiration of the stated
     term of the Option, if earlier.

          (viii) Termination by Reason of Disability.

                 (A) Any Share Option held by an optionee whose employment by 
          the Company and its Subsidiaries has terminated by reason of
          Disability may thereafter be exercised, to the extent it was
          exercisable at the time of such termination, for a period of twelve
          months (or such longer period as the Committee shall specify at any
          time) from the date of such termination of employment, or until the
          expiration of the stated term of the Option, if earlier.

               (B) The Committee shall have sole authority and discretion to
          determine whether a participant's employment has been terminated by
          reason of Disability.

               (C) Except as otherwise provided by the Committee at the time of
          grant, the death of an optionee during a period provided in this
          Section 5(a)(viii) for the exercise of a NonQualified Share Option,
          shall extend such period for six months from the date of death,
          subject to termination on the expiration of the stated term of the
          Option, if earlier.

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          (ix) Termination for Cause. If any optionee's employment by the
     Company and its Subsidiaries has been terminated for Cause, any Share
     Option held by such optionee shall immediately terminate and be of no
     further force and effect; provided, however, that the Committee may, in its
     sole discretion, provide that such Share Option can be exercised for a
     period of up to 30 days from the date of termination of employment or until
     the expiration of the stated term of the Option, if earlier.

          (x) Other Termination. Unless otherwise determined by the Committee,
     if an optionee's employment by the Company and its Subsidiaries terminates
     for any reason other than death, Disability, or for Cause, any Share Option
     held by such optionee may thereafter be exercised, to the extent it was
     exercisable on the date of termination of employment, for three months (or
     such longer period as the Committee shall specify at any time) from the
     date of termination of employment or until the expiration of the stated
     term of the Option, if earlier.

          (xi) Annual Limit on Incentive Share Options. To the extent required
     for "incentive stock option" treatment under Section 422 of the Code, the
     aggregate Fair Market Value (determined as of the time of grant) of the
     Shares with respect to which Incentive Share Options granted under this
     Plan and any other plan of the Company or its Subsidiaries become
     exercisable for the first time by an optionee during any calendar year
     shall not exceed $100,000.

          (xii) Form of Settlement. Shares issued upon exercise of a Share
     Option shall be free of all restrictions under the Plan, except as
     otherwise provided in this Plan.

     (b) Reload Options. At the discretion of the Committee, Options granted
under Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of Shares in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Share on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of Shares equal to the number
delivered to exercise the original Option.

     (c) Share Options Granted to Independent Trustees.

          (i) Automatic Grant of Options. Promptly after the closing of the
     Company's initial public offering and the appointment of the Independent
     Trustees, each Independent Trustee shall automatically be granted a
     Non-Qualified Share Option to purchase 3,000 Shares. Each Independent
     Trustee who is serving as Trustee of the Company on the fifth business day
     after each annual meeting of shareholders, beginning with the 1995 annual
     meeting, shall automatically be granted on such day a Non-Qualified Share
     Option to acquire 5,000 Shares. The exercise price per Share for the Shares
     covered by a Share Option granted pursuant to the first sentence hereof
     shall be equal to the greater of the initial public offering price or the
     Fair Market Value of a single Share on the date the Share Option is
     granted. The exercise price per Share for the Shares covered by a Share
     Option granted pursuant to the second sentence hereof shall be equal to the
     Fair Market Value of a single Share on the date the Share Option is
     granted.

          (ii) Exercise; Termination; Non-transferability.

               (A) Except as provided in Section 12, no Option granted under
          Section 5(c)(i) may be exercised before the first anniversary of the
          date upon which it was granted; provided, however, that any Option so
          granted shall become exercisable upon the termination of service of
          the Independent Trustee because of Disability or death. No Option
          issued under this Section

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                    5(c) shall be exercisable after the expiration of ten years
                    from the date upon which such Option is granted.

                         (B) The rights of an Independent Trustee in an Option
                    granted under Section 5(c) shall terminate six months after
                    such Trustee ceases to be a Trustee of the Company or the
                    specified expiration date, if earlier; provided, however,
                    that if the Independent Trustee ceases to be a Trustee for
                    Cause, the rights shall terminate immediately on the date on
                    which he ceases to be a Trustee.

                         (C) No Share Option granted under this Section 5(c)
                    shall be transferable by the optionee otherwise than by will
                    or by the laws of descent and distribution, and such Options
                    shall be exercisable, during the optionee's lifetime only by
                    the optionee. Any Option granted to an Independent Trustee
                    and outstanding on the date of his death may be exercised by
                    the legal representative or legatee of the optionee for a
                    period of six months from the date of death or until the
                    expiration of the stated term of the option, if earlier.

                         (D) Options granted under this Section 5(c) may be
                    exercised only by written notice to the Company specifying
                    the number of Shares to be purchased. Payment of the full
                    purchase price of the Shares to be purchased may be made by
                    one or more of the methods specified in Section 5(a)(v). An
                    optionee shall have the rights of a shareholder only as to
                    shares acquired upon the exercise of a Share Option and not
                    as to unexercised Share Options.

                    (iii) Limited to Independent Trustees. The provisions of
               this Section 5(c) shall apply only to Options granted or to be
               granted to Independent Trustees, and shall not be deemed to
               modify, limit or otherwise apply to any other provision of this
               Plan or to any Option issued under this Plan to a participant who
               is not an Independent Trustee of the Company. To the extent
               inconsistent with the provisions of any other Section of this
               Plan, the provisions of this Section 5(c) shall govern the rights
               and obligations of the Company and Independent Trustees
               respecting Options granted or to be granted to Independent
               Trustees. The provisions of this Section 5(c) which affect the
               price, date of exercisability, option period or amount of Shares
               under an Option shall not be amended more than once in any
               six-month period, other than to comport with changes in the Code
               or ERISA.

SECTION 6.        RESTRICTED SHARE AWARDS

     (a) Nature of Restricted Share Award. The Committee may grant Restricted
Share Awards to any employee of the Company or any Subsidiary. A Restricted
Share Award is an Award entitling the recipient to acquire, at no cost or for a
purchase price determined by the Committee, Shares subject to such restrictions
and conditions as the Committee may determine at the time of grant ("Restricted
Shares"). Conditions may be based on continuing employment and/or achievement of
pre-established performance goals and objectives.

     (b) Acceptance of Award. A participant who is granted a Restricted Share
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within 60 days (or such shorter date as the
Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the Shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Shares in such form as the Committee shall
determine.

     (c) Rights as a Shareholder. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Shares including voting and dividend rights, subject

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to non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Share Award. Unless the
Committee shall otherwise determine, certificates evidencing the Restricted
Shares shall remain in the possession of the Company until such Shares are
vested as provided in Section 6(e) below.

     (d) Restrictions. Restricted Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein. In the event of termination of employment by the Company and its
Subsidiaries for any reason (including death, retirement, Disability, and for
Cause), the Company shall have the right, at the discretion of the Committee, to
repurchase Restricted Shares with respect to which conditions have not lapsed at
their purchase price, or to require forfeiture of such Shares to the Company if
acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or forfeiture
not later than the 90th day following such termination of employment (unless
otherwise specified in the written instrument evidencing the Restricted Share
Award).

     (e) Vesting of Restricted Shares. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Shares and the Company's right of repurchase or forfeiture shall
lapse. Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the Shares
on which all restrictions have lapsed shall no longer be Restricted Shares and
shall be deemed "vested."

     (f) Waiver, Deferral and Reinvestment of Dividends. The written instrument
evidencing the Restricted Share Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Shares.

SECTION 7.        UNRESTRICTED SHARE AWARDS

     (a) Grant or Sale of Unrestricted Shares. The Committee may, in its sole
discretion, grant (or sell at a purchase price determined by the Committee) an
Unrestricted Share Award to any employee of the Company or any Subsidiary which
will entitle such employee to receive Shares free of any restrictions under the
Plan ("Unrestricted Shares"). Unrestricted Shares may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration, or in lieu of any cash compensation to such employee.

     (b) Elections to Receive Unrestricted Shares In Lieu of Compensation. Upon
the request of an employee and with the consent of the Committee, each employee
may, pursuant to an irrevocable written election delivered to the Company no
later than the date or dates specified by the Committee, receive a portion of
the cash compensation otherwise due to him in Unrestricted Shares (valued at
Fair Market Value on the date or dates the cash compensation would otherwise be
paid, or on the effective date of the election, if later). With respect to any
employee who is subject to Section 16 of the Act, such irrevocable election
shall become effective no earlier than six months and one day following the date
of such election and the revocation of such election shall be effective six
months and one day following the date of the revocation.

     (c) Elections to Receive Unrestricted Shares in Lieu of Trustees' Fees.
Each Independent Trustee may, pursuant to an irrevocable written election
delivered to the Company, receive all or a portion of his cash trustee's fees in
Unrestricted Shares (valued at Fair Market Value on the date or dates the
trustee's fees would otherwise be paid, or on the effective date of the
election, if later). Such election shall be effective no earlier than six months
and one day following the date of such election. Any revocation of such election
shall be effective six months and one day following the date of the revocation.


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SECTION 8.        TAX WITHHOLDING

     (a) Payment by Participant. Each participant shall, no later than the date
as of which the value of an Award or of any Shares or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.

     (b) Payment in Shares. A participant may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from of Shares to be issued pursuant to any Award a number of shares
with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the withholding amount due, or (ii) transferring to the
Company Shares owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due. With respect to any participant who is subject to Section 16 of the
Act, the following additional restrictions shall apply:

          (A) the election to satisfy tax withholding obligations relating to an
     Award in the manner permitted by this Section 8(b) shall be made either (1)
     during the period beginning on the third business day following the date of
     release of quarterly or annual summary statements of revenues of the
     Company and ending on the twelfth business day following such date, or (2)
     at least six months prior to the date as of which the receipt of such an
     Award first becomes a taxable event for Federal income tax purposes;

          (B) such election shall be irrevocable;

          (C) such election shall be subject to the consent or disapproval of
     the Committee; and

          (D) the Shares withheld to satisfy tax withholding must pertain to an
     Award which has been outstanding for at least six months.

Notwithstanding the foregoing, the first sentence of Section 8(b)(A) shall not
be applicable until the Company has been subject to the reporting requirements
of Section 13(a) of the Act for at least a year prior to the election and has
filed all reports and statements required to be filed pursuant to that Section
for that year.

SECTION 9.        TRANSFER, LEAVE OF ABSENCE, ETC

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

     (a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or

     (b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

SECTION 10.       AMENDMENTS AND TERMINATION

     The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase

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price or with no exercise or purchase price, but such price, if any, must
satisfy the requirements which would apply to the substitute or amended Award
if it were then initially granted under this Plan) for the purpose of
satisfying changes in law or for any other lawful purpose, but no such  
action shall adversely affect rights under any outstanding Award without        
the holder's consent.  To the extent required by the Code to ensure that 
Options granted hereunder qualify as Incentive Share Options and to the 
extent required by the Act to ensure that Awards and Options granted under
the Plan are exempt under Rule 16b-3 promulgated under the Act, Plan 
amendments shall be subject to approval by the Company's shareholders.

SECTION 11.       STATUS OF PLAN

     With respect to the portion of any Award which has not been exercised and
any payments in cash, Shares or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Shares or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.

SECTION 12.       CHANGE OF CONTROL PROVISIONS

     Upon the occurrence of a Change of Control as defined in this Section 12:

     (a) Each outstanding Share Option shall automatically become fully
exercisable notwithstanding any provision to the contrary herein.

     (b) Restrictions and conditions on Restricted Share Awards shall
automatically be deemed waived, and the recipients of such Awards shall become
entitled to receipt of the Shares subject to such Awards unless the Committee
shall otherwise expressly provide at the time of grant.

     (c) "Change of Control" shall mean the occurrence of any one of the
following events:

          (i) any "person," as such term is used in Sections 13(d) and 14(d) of
     the Act (other than the Company, any of its Subsidiaries, any trustee,
     fiduciary or other person or entity holding securities under any employee
     benefit plan of the Company or any of its Subsidiaries), together with all
     "affiliates" and "associates" (as such terms are defined in Rule 12b-2
     under the Act) of such person, shall become the "beneficial owner" (as such
     term is defined in Rule 13d-3 under the Act), directly or indirectly, of
     securities of the Company representing 40% or more of either (A) the
     combined voting power of the Company's then outstanding securities having
     the right to vote in an election of the Company's Board of Trustees
     ("Voting Securities") or (B) the then outstanding Shares of the Company (in
     either such case other than as a result of acquisition of securities
     directly from the Company); or

          (ii) persons who, as of the date of the closing of the Company's
     initial public offering, constitute the Company's Board of Trustees (the
     "Incumbent Trustees") cease for any reason, including, without limitation,
     as a result of a tender offer, proxy contest, merger or similar
     transaction, to constitute at least a majority of the Board, provided that
     any person becoming a director of the Company subsequent to the closing of
     the Company's initial public offering whose election or nomination for
     election was approved by a vote of at least a majority of the Incumbent
     Trustees shall, for purposes of this Plan, be considered an Incumbent
     Trustee; or

          (iii) the shareholders of the Company shall approve (A)any
     consolidation or merger of

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     the Company or any Subsidiary where the shareholders of the Company,
     immediately prior to the consolidation or merger, would not, immediately
     after the consolidation or merger, beneficially own (as such term is
     defined in Rule 13d-3 under the Act), directly or indirectly, shares
     representing in the aggregate 50% of the voting shares of the corporation
     issuing cash or securities in the consolidation or merger (or of its
     ultimate parent corporation, if any), (B) any sale, lease, exchange or
     other transfer (in one transaction or a series of transactions contemplated
     or arranged by any party as a single plan) of all or substantially all of
     the assets of the Company or (C) any plan or proposal for the liquidation
     or dissolution of the Company;

     Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
Shares or other Voting Securities outstanding, increases (x) the proportionate
number of Shares beneficially owned by any person to 40% or more of the Shares
then outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any person to 40% or more of the combined
voting power of all then outstanding Voting Securities; provided, however, that
if any person referred to in clause (x) or (y) of this sentence shall thereafter
become the beneficial owner of any additional Shares or other Voting Securities
(other than pursuant to a share split, stock dividend, or similar transaction),
then a "Change of Control" shall be deemed to have occurred for purposes of the
foregoing clause(i).

SECTION 13.       GENERAL PROVISIONS

     (a) No Distribution; Compliance with Legal Requirements. The Committee may
require each person acquiring Shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the Shares
without a view to distribution thereof.

     No Shares shall be issued pursuant to an Award until all applicable
securities law and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Shares and Awards as it deems
appropriate.

     (b) Delivery of Share Certificates. Delivery of share certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a share transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.

     (c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to shareholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.

SECTION 14.       EFFECTIVE DATE OF PLAN

     The Plan shall become effective upon approval by the holders of a majority
of the Shares of the Company present or represented and entitled to vote at a
meeting of shareholders. Subject to such approval by the shareholders, and to
the requirement that no Shares may be issued hereunder prior to such approval,
Share Options and other Awards may be granted hereunder on and after adoption of
the Plan by the Board.


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SECTION 15.        GOVERNING LAW

     This Plan shall be governed by Maryland law except to the extent such law
is preempted by federal law.






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       AMENDMENT NO. 1 TO THE GABLES RESIDENTIAL TRUST SECOND AMENDED AND
                  RESTATED 1994 SHARE OPTION AND INCENTIVE PLAN

     On December 11, 1996, pursuant to Section 10 of the Plan, the Board of
Trustees of the Company adopted the following amendment to the Plan:


     Add the following after Section 5(a)(v)(C):

          (D)  By the optionee delivering to the Company a full recourse
               promissory note, provided that the Board or the Compensation
               Committee has (i) authorized the loan of funds to the optionee
               for the purpose of enabling or assisting the optionee to effect
               the exercise of the optionee's Share Options and (ii) established
               the terms of such note. Such promissory note shall, at the
               Company's discretion, be accompanied by a pledge agreement of the
               Common Shares issued pursuant to the exercise of such Share
               Options.



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