exv10w25



 






Exhibit 10.25




Certain Compensation Arrangements




Named Executive Officers




          As disclosed in the Company’s proxy statement for its 2004 Annual Meeting of Stockholders (the
“2004 Proxy Statement”), the Compensation Committee of the Company’s Board of Directors has for
recent years, including 2004, structured the compensation of the executive officers who were named
in the Summary Compensation Table of the Company’s 2004 Proxy (the “Named Executive Officers,” who
are expected to also be named in the Summary Compensation Table of the Company’s proxy statement
for its 2005 Annual Meeting of Stockholders) as follows:




          Base Salary. The Company establishes base salary for its key executives annually after
reviewing their duties and making an evaluation of recent performance, periodically
reviewing base salary levels and total compensation for key executives of comparable REITs,
and after determining the appropriate level of total compensation in a year when target
performance is achieved. The Compensation Committee approved (for Board ratification, as
described below) revised base salaries for 2005 for the Named Executive Officers. The base
salaries for the Named Executive Officers will be as follows (effective as of March 1, 2005
except as otherwise noted): Bryce Blair — $725,000 (with an interim increase to $682,500 as
of December 6, 2004); Timothy J. Naughton — $435,716; Thomas J. Sargeant — $401,415; Samuel
B. Fuller – $386,096; and Leo Horey — $330,174.




          Cash Bonus. Under the Company’s corporate (cash) bonus plan, the Compensation
Committee may award annual cash bonuses to officers for the achievement of specified
performance goals by the Company, the individual and the individual’s business unit, with
varying weightings applied to each category of goals based on the individual’s position
within the Company. Each year, the Compensation Committee sets for each officer the
threshold, target or maximum cash bonuses that may be awarded to that officer if threshold,
target or maximum goals are achieved. For bonuses awarded in 2005 with respect to 2004, the
Company-wide goals used in determining cash bonuses were (i) the achievement of a targeted
level of Funds from Operations (“FFO”) per share, (ii) the achievement of growth in FFO per
share as compared to a peer group of apartment REITs, (iii) the achievement of a targeted
average fixed charge coverage ratio, (iv) the operating performance of development and
construction activities as compared to the original budgeted performance, and (v)
management’s effectiveness at achieving various corporate initiatives. The same categories
of goals will be used to determine cash bonus awards to be granted in 2006 with respect to
2005. The Compensation Committee approved (for Board ratification, as described below) the
following cash bonus awards in respect of 2004 performance: Bryce Blair — $971,805; Timothy
J. Naughton — $528,439; Thomas J. Sargeant — $507,247; Samuel B. Fuller — $425,715; and Leo
S. Horey — $305,794. Cash bonus awards for 2005 performance will be determined and paid in
early 2006.




          Long-Term Incentive Awards. Under the Company’s long-term incentive (equity) plan,
stock options and restricted stock are granted under the Company’s 1994 Stock Incentive Plan
to provide long-term performance incentives and rewards tied to the price of the Company’s
Common Stock. Each year the Compensation Committee sets for each Named Executive Officer
the threshold, target and maximum number of options and restricted shares that may be
granted to that officer if threshold, target or maximum goals are achieved by the Company
and the individual’s business unit. The Company goals for 2004 were (i) total shareholder
return as measured on both an absolute basis (based on a three-year average) and a relative
basis as measured against a peer group of apartment REITs, (ii) the multiple that the price
of the Common Stock represents to the Company’s FFO per share, as measured against a peer
group of apartment REITs, and (iii) management effectiveness at achieving various corporate
initiatives. For awards



 









 






to be granted in 2006 with respect to 2005, the same categories of goals will be used.
The Compensation Committee approved (for Board ratification, as described below) the
following awards of stock options and restricted shares for the Named Executive Officers in
respect of 2004 performance:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Options	 	Restricted Shares	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Bryce Blair
	 	 	146,005	 	 	 	23,765	 	 	 	 	 
	Timothy J. Naughton
	 	 	72,122	 	 	 	11,706	 	 	 	 	 
	Thomas J. Sargeant
	 	 	63,437	 	 	 	11,196	 	 	 	 	 
	Samuel B. Fuller
	 	 	49,461	 	 	 	8,041	 	 	 	 	 
	Leo S. Horey
	 	 	40,317	 	 	 	6,720	 	 	 	 	 







The Board’s practice is that annual compensation arrangements affecting senior executive
officers be approved by the Compensation Committee but not finalized until ratified by the
full Board (or, in the case of the Chief Executive Officer, until ratified by the
independent directors). Full Board (or independent director) ratification of the
determinations made above were given.




Directors




Compensation arrangements for the Company’s non-employee directors were described in Exhibit
10.1 of the company’s Form 10-Q for the quarter ended June 30, 2003, which exhibit is
incorporated herein by reference. In addition to the arrangements described in that
exhibit, the Board has approved the payment of $2,500 per month to the Lead Independent
Director for serving in that capacity.