Eligible employees of Gables may participate in a profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code. Under the plan, employees may defer a portion of their salary on a pre-tax basis. Gables also has the discretion to make matching contributions, currently equal to 50% of an employee’s first 4% salary deferral contribution. Expenses under this plan for the years ended December 31, 1999, 1998 and 1997 were not material.

During January 1996, Gables added the Gables Residential Trust Stock Fund as an investment option for the plan. The fund is comprised of Gables’ common shares. In connection with the addition of this fund to the plan, 100 common shares were registered for issuance under the plan. The plan trustee will purchase Gables common shares for the fund at the direction of the plan investment committee, either on the open market or directly from Gables.

Gables has declared and paid dividends to common shareowners for the years ended December 31, 1999, 1998 and 1997 as follows:

In January 1995, Gables adopted a dividend reinvestment and share purchase program pursuant to which shareowners could elect to reinvest dividends in additional common shares at a 2% discount to the then current market price of common shares and purchase additional common shares for cash (up to $20 per quarter) at 100% of the then current market price (the “Share Builder Plan”).

As of December 31, 1999, Gables had issued all of the 500 shares registered for issuance under the Share Builder Plan. Given Gables’ current capital market strategy to repurchase shares under its common equity repur-chase program, Gables has resolved not to establish a new Share Builder Plan at this time. Accordingly, effective with the first quarter dividend payable on March 31, 2000, shareowners will no longer have a dividend reinvestment option available.

Gables adopted the 1994 Share Option and Incentive Plan to provide incentives to officers, employees and non-employee trustees. The plan provides for the grant of options to purchase a specified number of common shares or the grant of restricted or unrestricted common shares . The total number of shares reserved for issuance under the plan, as amended, is the greater of 2,953 shares or 9% of the total number of outstanding common shares and Units. At December 31, 1999, the number of shares reserved for issuance was 2,953. The number of common shares which may be issued as restricted or unrestricted shares is equal to 50% of the number of shares available for issuance under the plan at such time.

To date, options have been granted in two or more series during each of 1994 through 1999 with an exercise price equal to the fair value of Gables’ common shares on the dates the options were granted. The options granted are generally exercisable in installments over three years, beginning one year after the date of grant. At December 31, 1999, 2,051 common shares are subject to outstanding options granted to Gables’ officers, employees and trustees. These outstanding options have exercise prices ranging from $19.125 to $27.625 and a weighted average remaining contractual life of 7.8 years at December 31, 1999.