As filed with the Securities and Exchange Commission on April 8, 1999.
File No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
- -------------------------------------------------------------------------------
UNITED DOMINION REALTY TRUST, INC.
(Exact Name of Issuer as Specified in its Charter)
Virginia 54-0857512
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
10 South 6th Street
Richmond, Virginia 23219
(804)780-2691
(Address, including zip code, and telephone number of Principal Executive
Offices)
United Dominion Realty Trust, Inc. 1999 Long-Term Incentive Plan
(Full Titles of the Plan)
KATHERYN E. SURFACE Copy to:
Senior Vice President and General Counsel JAMES W. FEATHERSTONE
United Dominion Realty Trust, Inc. Hunton & Williams
10 South 6th St. Riverfront Plaza, East Tower
Richmond, Virginia 23219 951 East Byrd Street
(804) 780-2691 Richmond, Virginia 23219-4074
(Name, address, including zip code, and (804) 788-8200
telephone number, including area code, of
agent for service)
-----------------------
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Securities Amount to Maximum Maximum Amount of
to be Registered be Registered Offering Price Aggregate Registration
Per Unit (1) Offering Price Fee
(1)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Common Stock 12,000,000 shares (2) $10.1875 $119,628,000 $33,985.50
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Rights to Purchase 12,000,000 rights N/A N/A N/A
Series C
Junior Participating
Redeemable Preferred
Stock, no par value (3)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Determined in accordance with Rule 457(h), the registration fee calculation
is based on the average of the high and low prices of the Company's Common
Stock reported on the New York Stock Exchange on March 31, 1999.
(2) Amount to be registered includes any additional shares to be issued
pursuant to the anti-dilution provisions of the United Dominion Realty
Trust, Inc. 1999 Long-Term Incentive Plan.
(3) The rights will be attached to and trade with the common stock.
<PAGE>
PART I INFORMATION REQUIRED IN The Section 10(a) Prospectus
(a) The documents constituting Part I of this Registration Statement
will be sent or given to participants in the Plan as specified by Rule 428(b)(1)
under the Securities Act of 1933, as amended.
(b) Upon written or oral request, the Company will provide, without
charge, the documents incorporated by reference in Item 3 of Part II of this
Registration Statement. The documents are incorporated by reference in the
Section 10(a) prospectus. The Company will also provide, without charge, upon
written or oral request, other documents required to be delivered to employees
pursuant to Rule 428(b). Requests for the above-mentioned information should be
directed to Katheryn E. Surface, Corporate Secretary, 10 South 6th Street,
Richmond, Virginia, 23219, telephone (804) 780-2691.
PART II. INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents have been filed by United Dominion Realty Trust,
Inc. (the "Company") (File No. 1-10524) with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and are deemed to be a part hereof from the
date of the filing of such documents:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(2) Current Report on Form 8-K dated January 27, 1998, filed on February
4, 1998; Current Report on Form 8-K dated and filed on February 13, 1998;
Current Report on Form 8-K dated and filed on February 17, 1998; Current Report
dated March 27, 1998, filed on April 13, 1998, as amended by Amendment No. 1 on
Form 8-K/A dated and filed on June 12, 1998; Current Report on Form 8-K dated
June 9, 1998, filed on June 24, 1998, as amended by Amendment No. 1 on Form
8-K/A dated and filed on August 13, 1998; Current Report on Form 8-K dated May
28, 1998, filed on October 19, 1998; Current Report on Form 8-K dated September
11, 1998, filed on October 23, 1998, as amended by Amendment No. 1 on Form 8-K/A
dated and filed on December 21, 1998; Current Report on Form 8-K dated and filed
on October 28, 1998; Current Report on Form 8-K dated November 2, 1998, filed on
November 6, 1998; Current Report on Form 8-K dated November 10, 1998, filed on
November 12, 1998; Current Report on Form 8-K dated December 7, 1998, filed on
December 21, 1998; Current Report on Form 8-K dated and filed on January 20,
1999; Current Report on Form 8-K dated and filed March 29, 1999;
(3) The description of the common stock and preferred stock contained in
the Company's Registration Statements on Form 8-A dated April 9, 1990, May 1,
1995, June 10, 1997 and February 4, 1998, filed under the Exchange Act,
including any amendments or reports filed for the purpose of updating such
descriptions; and
(4) All other documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement that indicates that all
securities offered have been sold or that deregisters all securities that remain
unsold.
Any statement contained in a document incorporated or deemed incorporated
herein by reference shall be deemed to be modified or superseded for the purpose
of this Registration Statement to the extent that a statement contained herein
or in any subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities. Not Applicable.
Item 5. Interests of Named Experts and Counsel. Not Applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers
Directors and officers of United Dominion may be indemnified against
liabilities, fines, penalties, and claims imposed upon or asserted against them
as provided in the Virginia Stock Corporation Act and the Restated Articles of
Incorporation of the Company (the "Articles"). Such indemnification covers all
costs and expenses reasonably incurred by a director or officer. The Board of
Directors, by a majority vote of a quorum of disinterested directors or, under
certain circumstances, independent counsel appointed by the Board of Directors,
must determine that the director or officer seeking indemnification was not
guilty of willful misconduct or a knowing violation of the criminal law. In
addition, the Virginia Stock Corporation Act and the Articles may under certain
circumstances eliminate the liability of directors and officers in a shareholder
or derivative proceeding.
If the person involved is not a director or officer of United Dominion,
the Board of Directors may cause United Dominion to indemnify, to the same
extent allowed for directors and officers of United Dominion, such person who
was or is a party to a proceeding, by reason of the fact that he is or was an
employee or agent of United Dominion, or is or was serving at the request of
United Dominion as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise.
Item 7. Exemption from Registration Claimed. Not Applicable.
<PAGE>
Item 8. Exhibits
Exhibit Number Description
4.1 Restated Articles of Incorporation of United Dominion,
dated January 21, 1999 (filed as Exhibit 4(a) (ii) to
the Company's Form S-3 Registration Statement, filed
with the Commission on February 24, 1999 (File No.
333-72885), and incorporated by reference herein)
4.2 Restated Bylaws of the Company (filed as Exhibit 3(b)
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (File No. 1-10524), and
incorporated by reference herein)
4.3 Specimen United Dominion common stock certificate
(filed as Exhibit 4(i) to United Dominion's Annual
Report on Form 10-K for the year ended December 31,
1993 (File No. 1-10524), and incorporated by reference
herein)
4.4 Rights Agreement dated as of January 27, 1998, between
United Dominion and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (filed as Exhibit 1 to United
Dominion's Form 8-A Registration Statement dated
February 4, 1998 (File No. 1-10524) and incorporated
by reference herein)
4.5 Form of Rights Certificate (included in Exhibit 4.4)
4.6 Loan Agreement dated as of November 7, 1993, between
United Dominion and Aid Association for Lutherans
(filed as Exhibit 6(c)(1) to United Dominion's Form
8-A Registration Statement dated April 19, 1990 (File
No. 10524), and incorporated by reference herein)
4.7 Note Purchase Agreement dated as of January 15, 1993,
between United Dominion and CIGNA Property and
Casualty Insurance Company, Connecticut General Life
Insurance Company, Connecticut General Life Insurance
Company on behalf of one or more separate accounts,
Insurance Company of North America, Principal Mutual
Life Insurance Company, and Aid Association for
Lutherans (filed as Exhibit 6(c)(5) to United
Dominion's Form 8-A Registration Statement dated April
19, 1990 (File No. 1-10524), and incorporated by
reference herein)
5.1 Opinion of Hunton & Williams
23.1 Consent of Hunton & Williams (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
23.3 Consent of L.P. Martin & Company, L.P.
23.4 Consent of Deloitte & Touche LLP
23.5 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on signature page)
99.1 United Dominion Realty Trust, Inc. 1999 Long-Term
Incentive Plan
<PAGE>
Item 9. Undertakings
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities being offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(signatures on following page)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia on the 9th day of
March, 1999.
UNITED DOMINION REALTY TRUST, INC.
By /s/ John P. McCann
------------------------------------
John P. McCann
Chief Executive Officer
Power of Attorney
Know All Men and Women By These Presents that each individual whose
signature appears below constitutes and appoints John P. McCann and Katheryn E.
Surface, and each of them, such individual's true and lawful attorneys-in-fact
and agents with full power of substitution, for such individual and in his or
her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement
and any registration statement related to the offering contemplated by this
registration statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 9, 1999.
Signature Title & Capacity
/s/ John P. McCann Chairman, Chief Executive Officer
- ------------------------------- (Principal Executive Officer) and
John P. McCann Director
/s/ John S. Schneider President and Director
- -------------------------------
John S. Schneider
/s/ Kevin W. Walsh Vice President, Finance (Principal
- ------------------------------- Financial Officer)
Kevin W. Walsh
/s/ Robin R. Flanagan Principal Accounting Officer Director
- -------------------------------
Robin R. Flanagan
/s/ Jeff C. Bane Director
- -------------------------------
Jeff C. Bane
/s/ R. Toms Dalton, Jr. Director
- -------------------------------
R. Toms Dalton, Jr.
/s/ Robert P. Freeman Director
- -------------------------------
Robert P. Freeman
/s/ Jon A. Grove Director
- ------------------------------
Jon A. Grove
/s/ Barry M. Kornblau Director
- -----------------------------
Barry M. Kornblau
/s/ James D. Klingbeil Director
- -----------------------------
James D. Klingbeil
/s/ Lynne B. Sagalyn Director
- ----------------------------
Lynne B. Sagalyn
/s/ Mark J. Sandler Director
- ----------------------------
Mark J. Sandler
Director
- ----------------------------
Robert W. Scharar
/s/ C. Harmon Williams Director
- ---------------------------
C. Harmon Williams, Jr.
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
Exhibit Number Description
-------------- -----------
4.1 Restated Articles of Incorporation of United Dominion,
dated January 21, 1999 (filed as Exhibit 4(a) (ii) to
the Company's Form S-3 Registration Statement, filed
with the Commission on February 24, 1999 (File No.
333-72885), and incorporated by reference herein).
4.2 Restated Bylaws of the Company (filed as Exhibit 3(b)
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (File No. 1-10524), and
incorporated by reference herein)
4.3 Specimen United Dominion common stock certificate
(filed as Exhibit 4(i) to United Dominion's Annual
Report on Form 10-K for the year ended December 31,
1993 (File No. 1-10524), and incorporated by reference
herein)
4.4 Rights Agreement dated as of January 27, 1998, between
United Dominion and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (filed as Exhibit 1 to United
Dominion's Form 8-A Registration Statement dated
February 4, 1998 (File No. 1-10524) and incorporated
by reference herein)
4.5 Form of Rights Certificate (included in Exhibit 4.4)
4.6 Loan Agreement dated as of November 7, 1993, between
United Dominion and Aid Association for Lutherans
(filed as Exhibit 6(c)(1) to United Dominion's Form
8-A Registration Statement dated April 19, 1990 (File
No. 10524), and incorporated by reference herein)
4.7 Note Purchase Agreement dated as of January 15, 1993,
between United Dominion and CIGNA Property and
Casualty Insurance Company, Connecticut General Life
Insurance Company, Connecticut General Life Insurance
Company on behalf of one or more separate accounts,
Insurance Company of North America, Principal Mutual
Life Insurance Company, and Aid Association for
Lutherans (filed as Exhibit 6(c)(5) to United
Dominion's Form 8-A Registration Statement dated April
19, 1990 (File No. 1-10524), and incorporated by
reference herein)
5.1 Opinion of Hunton & Williams
23.1 Consent of Hunton & Williams (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
23.3 Consent of L.P. Martin & Company, L.P.
23.4 Consent of Deloitte & Touche LLP
23.5 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on signature page)
99.1 United Dominion Realty Trust, Inc. 1999 Long-Term
Incentive Plan
April 8, 1999
Board of Directors
United Dominion Realty Trust, Inc.
10 South Sixth Street
Richmond, Virginia 23219
Registration Statement on Form S-8
12,000,000 Shares of Common Stock
Gentlemen:
We are acting as counsel for United Dominion Realty Trust, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 12,000,000 shares of Common Stock, $1 par value, of the Company
(the "Shares") and 12,000,000 Rights to purchase Series C Junior Participating
Redeemable Preferred Stock, no par value (the "Rights"). The Shares and Rights
are described in the Registration Statement on Form S-8 of the Company (the
"Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") on April 8, 1999. In connection with the filing of
the Registration Statement, you have requested our opinion concerning certain
corporate matters.
We are of the opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the Commonwealth of Virginia.
2. When the Shares have been issued pursuant to the Company's 1999
Long-Term Incentive Plan described in the Registration Statement, the Shares
will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement and to the references to us in the Prospectus
included therein.
Very truly yours,
/s/ Hunton & Williams
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-000000) pertaining to the 1999 Long-Term Incentive Plan of United
Dominion Realty Trust, Inc. of our report dated January 27, 1999, with respect
to the consolidated financial statements and schedule of United Dominion Realty
Trust, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
April 2, 1999
Exhibit 23.3
Letterhead of L.P. Martin & Company
CONSENT OF L.P. MARTIN & COMPANY, P.C., INDEPENDENT AUDITORS
We consent to the reference to our firm under "Experts" in the
Registration Statement (Form S-8) of United Dominion Realty Trust, Inc. for the
registration of 12,000,000 shares of its Common Stock and to the incorporation
by reference therein of (a) our report dated May 1,1998, with respect to the
statement of rental operations of Dogwood Creek Apartments for the year ended
December 31, 1997, included in the Current Report of United Dominion Realty
Trust, Inc. on Form 8-K, dated June 9, 1998, filed with the Securities and
Exchange Commission, (b) our report dated May 8, 1998, with respect to the
combined statement of rental operations of Trails at Mount Moriah Apartments,
Trails at Kirby Parkway Apartments, and Cinnamon Trails Apartments for the year
ended December 31, 1997, included in the Current Report of United Dominion
Realty Trust, Inc. on Form 8-K, dated June 9, 1998, filed with the Securities
and Exchange Commission, (c) our report dated June 29,1998, with respect to the
combined statement of rental operations of Audubon Apartments, Carmel
Apartments, Cimarron City Apartments, Grand Cypress Apartments, Kenton
Apartments, Peppermill Apartments, The Crest Apartments, and Village of Thousand
Oaks Apartments for the year ended December 31, 1997,included in the Current
Report of United Dominion Realty Trust, Inc. on Form 8-K, dated June 9, 1998,
filed the Securities and Exchange Commission and (d) our report dated with
respect to the statement of rental operations of Rancho Mirage Apartments for
the year ended December 31, 1997, included in the Current Report of United
Dominion Realty Trust, Inc. on Form 8-K dated May 28, 1998, filed with the
Securities and Exchange Commission.
/s/ L.P. Martin & Company, P.C.
L.P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
April 6, 1999
Exhibit 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
United Dominion Realty Trust, Inc. on Form S-8 of our report dated February 27,
1998 (March 27, 1998 as to Note 12) appearing in the Annual Report on Form 10-K
of ASR Investments Corporation for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 5, 1999
Exhibit 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report on American Apartment
Communities II, Inc., dated February 27, 1998, and our report on American
Apartment Communities II, L.P., dated February 12, 1998, included in the
Company's Current Report on Form 8-K, filed with the SEC on October 23, 1998,
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
San Francisco, California
April 5, 1999
Exhibit 99.1
United Dominion Realty Trust, Inc.
1999 LONG-TERM INCENTIVE PLAN
ARTICLE I
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 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 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 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 is being approved by the
Board of Directors in two parts. 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
Performance Unit Awards under Article 9 of the Plan with respect to a
performance period beginning on January 1, 1999. At a date within 12 months
prior to the 2000 annual meeting of the shareholders of the Company, the Board
will approve the Plan as it relates to all types of Awards under the Plan (the
"Second Effective Date") and the Plan shall be fully effective as of the Second
Effective Date. The Plan shall be submitted to the shareholders of the Company
for approval within 12 months of the Second Effective Date. No Incentive Stock
Options granted under the Plan may be exercised prior to approval of the Plan by
the shareholders and if the shareholders fail to approve the Plan within 12
months of the Second Effective Date, any Incentive Stock Options previously
granted hereunder shall be automatically converted to Non-Qualified Stock
Options without any further act. 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). Any such Awards shall
be contingent upon the shareholders having approved the Plan. If the
shareholders approve the LTIP, no further options will be granted under the
United Dominion Realty Trust, Inc. 1985 Stock Option Plan, as amended, or any
other prior option plan of the Company after the date of such shareholder
approval.
<PAGE>
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) the merger or consolidation of the Company with any other
real estate investment trust, corporation or other business entity
in which the Company is not the survivor (without respect to the
legal structure of the transaction);
(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 members of
the Board or the resignation or addition of fifty percent (50%) or
more independent members of the Board.
(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 Virginia
corporation.
<PAGE>
(h) "Covered Employee" means a covered employee as defined in Code
Section 162(m)(3).
(i) "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.
(j) "Dividend Equivalent" means a right granted to a Participant
under Article 11.
(k) "Effective Date" means the First Effective Date or the Second
Effective Date, as the context requires, as such terms are defined in
Section 2.1.
(l) "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.
(m) "Incentive Stock Option" means an Option that is intended to
meet the requirements of Section 422 of the Code or any successor
provision thereto.
(n) "Non-Employee Director" means a member of the Board who is not
an employee of the Company or any Parent or Subsidiary.
(o) "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
(p) "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.
(q) "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.
(r) "Parent" means a corporation which 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).
<PAGE>
(s) "Participant" means a person who, as an employee, officer or
director of the Company or any Subsidiary, has been granted an Award under
the Plan.
(t) "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.
(u) "Plan" means the United Dominion Realty Trust, Inc. 1999
Long-Term Incentive Plan, as amended from time to time.
(v) "Potential Change of Control" means and includes each of the
following:
(1) the Company enters into an agreement, the consummation
of which would result in the occurrence of a Change of Control;
(2) any person (including the Company) publicly announces an
intention to take or to consider taking actions which, if
consummated, would constitute a Change of Control;
(3) any person who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing
9.5% or more of the combined voting power of the Company's then
outstanding securities increases his beneficial ownership of such
securities by 5% or more over the percentage so owned by such person
on the First Effective Date; or
(4) the Board adopts a resolution to the effect that, for the
purposes of the Plan, a Potential Change of Control has occurred.
(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) "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.
(y) "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.
<PAGE>
(z) "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).
(aa) "1933 Act" means the Securities Act of 1933, as amended from
time to time.
(bb) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
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
limited by the automatic provisions of Article 13 with respect to annual grants
of Options to Non-Employee Directors:
(a) Designate Participants;
<PAGE>
(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;
(e) Accelerate the vesting 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.
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.
<PAGE>
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 the lesser of (i) 8% of the number of shares of Stock issued and
outstanding from time to time, less the number of shares subject to outstanding
Awards at that time, or (ii) 12,000,000 shares.
Not more than 10% of the total authorized shares may be granted as Awards of
Restricted Stock or unrestricted Stock Awards. The maximum number of shares of
Stock that may be issued subject to Incentive Stock Options shall be 10,000,000
shares.
5.2. LAPSED AWARDS. To the extent that an Award is canceled, terminates,
expires 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.
5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued 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
Covered Employee 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 Covered Employee (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 or directors of the Company or a Parent or Subsidiary.
<PAGE>
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, provided that the exercise
price for any Option shall not be less than the Fair Market Value as of
the date of the grant.
(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.
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. The Committee may waive any exercise 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 exerciseable at an earlier
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 surrendered in payment of the exercise
price were themselves acquired otherwise than on the open market, such
shares shall have been held by the Participant for at least six months.
Without limiting the foregoing, if the Award Agreement so provides,
and if the Participant is employed by the Company on the date the Option
is exercised, payment of all or part of the Option price may be made in
installments. In that event, the Company shall lend the Participant an
amount equal to not more than ninety percent (90%) of the Option price of
the shares acquired by the exercise of the Option. This amount shall be
evidenced by the Participant's promissory note and shall be payable in not
more than five equal annual installments, unless the amount of the loan
exceeds the maximum loan value for the shares purchased, which value shall
be established from time to time by regulations of the Board of Governors
of the Federal Reserve System (the "Fed"). In that event, the note shall
be payable in equal quarterly installments over a period of time not to
exceed five years. The Committee, however, may vary such terms and make
such other provisions concerning the unpaid balance of such purchase price
in the case of hardship, subsequent termination of employment, absence on
military or government service, or subsequent death of the Participant as
in its discretion are necessary or advisable in order to protect the
Company, promote the purposes of the Plan and comply with regulations of
the Fed relating to securities credit transactions. The Participant shall
pay interest on the unpaid balance at the minimum rate necessary to avoid
imputed interest or original issue discount under the Code. All shares
acquired with cash borrowed from the Company shall be pledged to the
Company as security for the repayment thereof. In the discretion of the
Committee, shares may be released from such pledge proportionately as
payments on the note (together with interest) are made, provided the
release of such shares complies with the regulations of the Fed relating
to securities credit transactions then applicable. While shares are so
pledged, and so long as there has been no default in the installment
payments, such shares shall remain registered in the name of the
Participant, and he shall have the right to vote such shares and to
receive all dividends thereon.
<PAGE>
(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.
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 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, the Incentive Stock Option shall (to the extent not
previously exercised) lapse immediately.
<PAGE>
(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.
(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 14.6.
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
(determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00.
(e) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted
to any individual who, at the date of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary unless the exercise price
per share of such Option is at least 110% of the Fair Market Value per
share of Stock at the date of grant and the Option expires no later than
five years after the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an Incentive
Stock Option may be made pursuant to the Plan after the day immediately
prior to the tenth anniversary of the Second Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant or, in the case of
the Participant's Disability, by the Participant's guardian or legal
representative.
(h) DIRECTORS. The Committee may not grant an Incentive Stock Option
to a non-employee director. The Committee may grant an Incentive Stock
Option to a director who is also an employee of the Company or Parent or
Subsidiary but only in that individual's position as an employee and not
as a director.
<PAGE>
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1. GRANT OF SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation
Right, the Participant to whom it is granted has the right to receive the
excess, if any, of:
(1) The Fair Market Value of one share of Stock on the date of
exercise; over
(2) The grant price of the Stock Appreciation Right as
determined by the Committee, which shall not be less than the Fair
Market Value of one share of Stock on the date of grant.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall be
evidenced by an Award Agreement. The terms, methods of exercise, methods
of settlement, form of consideration payable in settlement, and any other
terms and conditions of any Stock Appreciation Right shall be determined
by the Committee at the time of the grant of the Award and shall be
reflected in the Award Agreement.
ARTICLE 9
PERFORMANCE UNITS
9.1. GRANT OF PERFORMANCE UNITS. The Committee is authorized to grant
Performance Units to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Units granted to each Participant. All
Awards of Performance Units shall be evidenced by an Award Agreement.
9.2. RIGHT TO PAYMENT. A grant of Performance Units gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Units are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. The Committee
shall set performance goals and other terms or conditions to payment of the
Performance Units in its discretion which, depending on the extent to which they
are met, will determine the number and value of Performance Units that will be
paid to the Participant. If the terms of a Performance Unit so provide, the
Participant may elect to defer payment of the Performance Unit under an
applicable deferred compensation plan maintained by the Company.
<PAGE>
9.3. OTHER TERMS. Performance Units may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1. GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as may be selected by the Committee. All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.
10.3. FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock that
is at that time subject to restrictions shall be forfeited and reacquired by the
Company; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted Stock.
10.4. CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock.
ARTICLE 11
DIVIDEND EQUIVALENTS
11.1 GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of the
number of shares of Stock subject to an Award, as determined by the Committee.
The Committee may provide that Dividend Equivalents be paid or distributed when
accrued or be deemed to have been reinvested in additional shares of Stock, or
otherwise reinvested.
<PAGE>
ARTICLE 12
OTHER STOCK-BASED AWARDS
12.1. GRANT OF OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine
the terms and conditions of such Awards.
ARTICLE 13
AWARDS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
13.1. GRANT OF OPTIONS. Each Non-Employee Director of the Company (other
than a Non-Employee Director who first becomes a member of the Board pursuant to
an agreement relating to the acquisition, by merger or otherwise, of assets by
the Company or any affiliate, or to the sale by the Company of its securities)
shall be granted a Non-Qualified Stock Option to purchase 5,000 shares of Stock,
subject to adjustment as provided in Section 15.1, on the date such person first
becomes a Non-Employee Director (the "Initial Grant"). In addition, as of the
day following each annual meeting of the Company's shareholders (beginning with
the annual meeting in 2000), each Non-Employee Director who is serving in such
capacity as of such date shall be granted an option to purchase 2,000 shares of
Stock, subject to adjustment as provided in Section 15.1 ("Annual Grants"). Each
such day that options are to be granted under the Plan is referred to
hereinafter as a "Grant Date."
If on any Grant Date, shares of Stock are not available under the Plan to
grant to Non-Employee Directors the full amount of a grant contemplated by the
immediately preceding paragraph, then each Non-Employee Director shall receive
an Option (a "Reduced Grant") to purchase shares of Stock in an amount equal to
the number of shares of Stock then available under the Plan divided by the
number of Non-Employee Directors as of the applicable Grant Date.
Fractional shares shall be ignored and not granted.
If a Reduced Grant has been made and, thereafter, during the term of the
Plan, additional shares of Stock become available for grant, then each person
who was a Non-Employee Director both on the Grant Date on which the Reduced
Grant was made and on the date additional shares of Stock become available (a
"Continuing Non-Employee Director") shall receive an additional Option to
purchase shares of Stock. The number of newly available shares shall be divided
equally among the Options granted to the Continuing Non-Employee Directors;
provided, however, that the aggregate number of shares of Stock subject to a
Continuing Non-Employee Director's additional Option plus any prior Reduced
Grant to the Continuing Non-Employee Director on the applicable Grant Date shall
not exceed 2,000 shares with respect to an Annual Grant or 5,000 shares with
respect to an Initial Grant (subject to adjustment pursuant to Section 15.1). If
more than one Reduced Grant has been made, available Options shall be granted
beginning with the earliest such Grant Date.
<PAGE>
13.2. OPTION PRICE. The option price for each Option granted under this
Article 13 shall be the Fair Market Value on the date of grant of the Option.
13.3. TERM. Each Option granted as an Initial Grant under this Article 13
shall, to the extent not previously exercised, terminate and expire on the date
five (5) years after the date of grant of the option, unless earlier terminated
as provided in Section 13.4. Each Option granted as an Annual Grant under this
Article 13 shall, to the extent not previously exercised, terminate and expire
on the date ten (10) years after the date of grant of the option, unless earlier
terminated as provided in Section 13.4.
13.4 LAPSE OF OPTION. An Option granted under this Article 13 shall not
automatically lapse by reason of the Participant ceasing to qualify as a
Non-Employee Director but remaining as a member of the Board. An Option granted
under this Article 13 shall lapse under the earliest of the following
circumstances:
(1) The Option shall lapse ten years after it is granted (or five years in
the case of an Option granted as an Initial Grant).
(2) Except as provided in paragraph (3) below, if the Participant ceases
to serve as a member of the Board for any reason, the Option shall lapse,
unless it is previously exercised, 30 days after the Participant's
termination as a member of the Board.
(3) If a Participant who has completed ten (10) years of service on the
Board (including, as such service, service as a director of a corporation
whose assets are acquired by the Company, by merger or otherwise) ceases
to serve as a member of the Board for any reason, the Option shall lapse,
unless it is previously exercised, two years after the Participant's
termination as a member of the Board.
13.5. EXERCISABILITY. Each Option granted under this Article 13 shall be
immediately exercisable, in whole or in part, from and after the date of grant.
13.6. EXERCISE AND PAYMENT. An Option granted under this Article 13 shall
be exercised by written notice directed to the Secretary of the Company (or his
designee) and accompanied by payment in full of the exercise price in cash.
13.7. NON-EXCLUSIVITY. Nothing in this Article 13 shall prohibit the
Committee from making discretionary Awards to Non-Employee Directors pursuant to
the other provisions of the Plan. Options granted pursuant to this Article 13
shall be governed by the provisions of this Article 13 and by other provisions
of the Plan to the extent not inconsistent with the provisions of Article 13.
<PAGE>
ARTICLE 14
PROVISIONS APPLICABLE TO AWARDS
14.1. STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
14.2. EXCHANGE PROVISIONS. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 15.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is made,
and after taking into account the tax, securities and accounting effects of such
an exchange.
14.3. TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant
(or, if Section 7.2(e) applies, five years from the date of its grant), and the
term of any option granted under Article 13 shall be as prescribed in Sections
13.3 and 13.4.
14.4. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Parent or Subsidiary on the grant or exercise of an Award may be
made in such form as the Committee determines at or after the time of grant,
including without limitation, cash, Stock, other Awards, or other property, or
any combination, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case determined in accordance with
rules adopted by, and at the discretion of, the Committee.
14.5. LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or a Parent or Subsidiary, or
shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Company or a Parent or Subsidiary. No unexercised
or restricted Award shall be assignable or transferable by a Participant other
than by will or the laws of descent and distribution or, except in the case of
an Incentive Stock Option, pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Award
under the Plan; provided, however, that the Committee may (but need not) permit
other transfers where the Committee concludes that such transferability (i) does
not result in accelerated taxation, (ii) does not cause any Option intended to
be an incentive stock option to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any factors
deemed relevant, including without limitation, any state or federal tax or
securities laws or regulations applicable to transferable Awards.
<PAGE>
14.6 BENEFICIARIES. Notwithstanding Section 14.5, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.
14.7. STOCK CERTIFICATES. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
14.8 ACCELERATION UPON DEATH OR DISABILITY. Notwithstanding any other
provision in the Plan or any Participant's Award Agreement to the contrary, upon
the Participant's death or Disability during his employment or service as a
director, 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. Any Option or Stock
Appreciation Rights Awards shall thereafter continue or lapse in accordance with
the other provisions of the Plan and the Award Agreement. To the extent that
this provision causes Incentive Stock Options to exceed the dollar limitation
set forth in Section 7.2(d), the excess Options shall be deemed to be
Non-Qualified Stock Options.
14.9. ACCELERATION UPON A CHANGE OF CONTROL. Except as otherwise provided
in the Award Agreement, upon the occurrence of a Change of Control, 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; provided, however that such
acceleration will not occur if, in the opinion of the Company's accountants,
such acceleration would preclude the use of "pooling of interest" accounting
treatment for a Change of Control transaction that (a) would otherwise qualify
for such accounting treatment, and (b) is contingent upon qualifying for such
accounting treatment. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(d), the excess
Options shall be deemed to be Non-Qualified Stock Options.
<PAGE>
14.10. ACCELERATION UPON A POTENTIAL CHANGE OF CONTROL. In the event of a
Potential Change of Control, the Committee may in its sole discretion declare
all outstanding Options, Stock Appreciation Rights, and other Awards in the
nature of rights that may be exercised to be fully exercisable, and/or all
restrictions on all outstanding Awards to have lapsed, in each case, as of such
date as the Committee may, in its sole discretion, declare, which may be on or
before the consummation of such transaction or event. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options.
14.11. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an event
has occurred as described in Section 14.9 or 14.10 above, the Committee may in
its sole discretion at any time determine that all or a portion of a
Participant's Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully or partially exercisable,
and/or that all or a part of the restrictions on all or a portion of the
outstanding Awards shall lapse, in each case, as of such date as the Committee
may, in its sole discretion, declare. The Committee may discriminate among
Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 14.11.
14.12 EFFECT OF ACCELERATION. If an Award is accelerated under Section
14.9 or 14.10, the Committee may, in its sole discretion, provide (i) that the
Award will expire after a designated period of time after such acceleration to
the extent not then exercised, (ii) that the Award will be settled in cash
rather than Stock, (iii) that the Award will be assumed by another party to the
transaction giving rise to the acceleration or otherwise be equitably converted
in connection with such transaction, or (iv) any combination of the foregoing.
The Committee's determination need not be uniform and may be different for
different Participants whether or not such Participants are similarly situated.
14.13. PERFORMANCE GOALS. The Committee may determine that any Award
granted pursuant to this Plan to a Participant (including, but not limited to,
Participants who are Covered Employees) shall be determined solely on the basis
of (a) the achievement by the Company or a Parent or Subsidiary of a specified
target return, or target growth in return, on equity or assets, (b) the
Company's total shareholder return (stock price appreciation plus reinvested
dividends) relative to a defined comparison group or target over a specific
performance period, (c) the Company's stock price, (d) the achievement by an
individual, the Company, or a business unit of the Company, Parent or Subsidiary
of a specified target, or target growth in, revenues, net income or earnings per
share, (e) the achievement of objectively determinable goals with respect to
service or product delivery, service or product quality, customer satisfaction,
meeting budgets and/or retention of employees or (e) any combination of the
goals set forth in (a) through (e) above. If an Award is made on such basis, the
Committee shall establish goals prior to the beginning of the period for which
such performance goal relates (or such later date as may be permitted under Code
Section 162(m) or the regulations thereunder) and the Committee may for any
reason reduce (but not increase) any Award, notwithstanding the achievement of a
specified goal. Any payment of an Award granted with performance goals shall be
conditioned on the written certification of the Committee in each case that the
performance goals and any other material conditions were satisfied.
<PAGE>
14.14. TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A termination of
employment shall not occur in a circumstance in which a Participant transfers
from the Company to one of its Parents or Subsidiaries, transfers from a Parent
or Subsidiary to the Company, or transfers from one Parent or Subsidiary to
another Parent or Subsidiary.
ARTICLE 15
CHANGES IN CAPITAL STRUCTURE
15.1. GENERAL. In the event a stock dividend is declared upon the Stock,
the authorization limits under Section 5.1 and 5.4 shall be increased
proportionately, and the shares of Stock then subject to each Award shall be
increased proportionately without any change in the aggregate purchase price
therefor. In the event the Stock shall be changed into or exchanged for a
different number or class of shares of stock or securities of the Company or of
another corporation, whether through reorganization, recapitalization,
reclassification, share exchange, stock split-up, combination of shares, merger
or consolidation, the authorization limits under Section 5.1 and 5.4 shall be
adjusted proportionately, and there shall be substituted for each such share of
Stock then subject to each Award the number and class of shares into which each
outstanding share of Stock shall be so exchanged, all without any change in the
aggregate purchase price for the shares then subject to each Award, or, subject
to Section 16.2, there shall be made such other equitable adjustment as the
Committee shall approve.
ARTICLE 16
AMENDMENT, MODIFICATION AND TERMINATION
16.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan without shareholder approval; provided, however, that the Board or
Committee may condition any amendment or modification on the approval of
shareholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities or other applicable laws, policies or
regulations.
16.2 AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however, that, subject to the terms of the
applicable Award Agreement, such amendment, modification or termination shall
not, without the Participant's consent, reduce or diminish the value of such
Award determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination, and provided
further that, except as provided in Section 15.1, the exercise price of any
Option may not be reduced. No termination, amendment, or modification of the
Plan shall adversely affect any Award previously granted under the Plan, without
the written consent of the Participant.
<PAGE>
ARTICLE 17
GENERAL PROVISIONS
17.1. NO RIGHTS TO AWARDS. No Participant or eligible participant shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Committee is obligated to treat Participants or eligible participants
uniformly.
17.2. NO SHAREHOLDER RIGHTS. No Award gives the Participant any of the
rights of a shareholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
17.3. WITHHOLDING. The Company or any Parent or Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of the Plan. With respect
to withholding required upon any taxable event under the Plan, the Committee
may, at the time the Award is granted or thereafter, require that any such
withholding requirement be satisfied, in whole or in part, by withholding shares
of Stock having a Fair Market Value on the date of withholding equal to the
amount required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
17.4. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any Parent or Subsidiary to terminate any Participant's employment or status as
an officer or director at any time, nor confer upon any Participant any right to
continue as an employee, officer or director of the Company or any Parent or
Subsidiary.
l6.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Parent or Subsidiary.
17.6. INDEMNIFICATION. To the extent allowable under applicable law, each
member of the Committee shall be indemnified and held harmless by the Company
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from any
claim, action, suit, or proceeding to which such member may be a party or in
which he may be involved by reason of any action or failure to act under the
Plan and against and from any and all amounts paid by such member in
satisfaction of judgment in such action, suit, or proceeding against him
provided he gives the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on his own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.
<PAGE>
17.7. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Parent or Subsidiary unless provided otherwise in such other plan.
17.8. EXPENSES. The expenses of administering the Plan shall be borne
by the Company and its Parents or Subsidiaries.
17.9. TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
17.10. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.11. FRACTIONAL SHARES. No fractional shares of Stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.
17.12. GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
1933 Act, or any state securities act, any of the shares of Stock paid under the
Plan. The shares paid under the Plan may in certain circumstances be exempt from
registration under the 1933 Act, and the Company may restrict the transfer of
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.
17.13. GOVERNING LAW. To the extent not governed by federal law, the Plan
and all Award Agreements shall be construed in accordance with and governed by
the laws of the Commonwealth of Virginia.
17.14 ADDITIONAL PROVISIONS. Each Award Agreement may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of this Plan.
<PAGE>
The foregoing is hereby acknowledged as being the United Dominion Realty
Trust, Inc. 1999 Long-Term Incentive Plan as adopted by the Board of Directors.
United Dominion Realty Trust, Inc.
By: __________________________
Its: ___________________________
