This excerpt taken from the EQR 8-K filed Dec 15, 2008.
The net real estate basis of the Companys active condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Companys halted conversions as they are now held for use), which were included in investment in real estate, net in the consolidated balance sheets, was $47.5 million and $95.4 million at December 31, 2007 and 2006, respectively.
On May 15, 2002, the shareholders of EQR approved the Companys 2002 Share Incentive Plan. The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5% of the Companys outstanding Common Shares calculated on a fully diluted basis and determined annually on the first day of each calendar year. As of January 1, 2008, this amount equaled 21,631,555, of which 10,392,101 shares were available for future issuance. No awards may be granted under the 2002 Share Incentive Plan after February 20, 2012.
Pursuant to the 2002 Share Incentive Plan and the Fifth Amended and Restated 1993 Share Option and Share Award Plan (collectively the Share Incentive Plans), officers, trustees and key employees of the Company may be granted share options to acquire Common Shares (Options) including non-qualified share options (NQSOs), incentive share options (ISOs) and share appreciation rights (SARs), or may be granted restricted or non-restricted shares, subject to conditions and restrictions as described in the Share Incentive Plans. Finally, certain executive officers of the Company participate in the Companys performance based restricted share plan. Options, SARs, restricted shares and performance shares are sometimes collectively referred to herein as Awards.
The Options are generally granted at the fair market value of the Companys Common Shares at the date of grant, vest in three equal installments over a three year period, are exercisable upon vesting and expire ten years from the date of grant. The exercise price for all Options under the Share Incentive Plans is equal to the fair market value of the underlying Common Shares at the time the Option is granted. The Fifth Amended and Restated 1993 Share Option and Share Award Plan will terminate at such time as all outstanding Awards have expired or have been exercised/vested. The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted. Any Options which had vested prior to such a termination would remain exercisable by the holder.
As to the restricted shares that have been awarded through December 31, 2007, these shares generally vest three years from the award date. During the three-year period of restriction, the Companys unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. In addition, the Companys unvested restricted shareholders have the same voting rights as any other Common Share holder. As a result, dividends paid on unvested restricted shares are included as a component of retained earnings (deficit) and have not been considered in reducing net income available to Common Shares in a manner similar to the Companys preferred share dividends for the earnings per share calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.
In addition, each year prior to 2007, selected executive officers of the Company received performance-based awards. Effective January 1, 2007, the Company has elected to discontinue the award of new performance-based award grants. The executive officers have the opportunity to earn in Common Shares an amount as little as 0% to as much as 225% of the target number of performance-based awards. The owners of performance-based awards have no right to vote, receive dividends or transfer the awards until Common Shares are issued in exchange for the awards. The number of Common Shares the executive officer actually receives on the third anniversary of the grant date will depend on the excess, if any, by which the Companys Average Annual Return (i.e., the average of the Common Share dividends declared during each year as a