A summary of the options activity for the years ended December 31, 1999, 1998 and 1997 is as follows:

Gables accounts for stock options issued under the plan in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees,” under which no compensation cost has been recognized since all options have been granted with an exercise price equal to the fair value of Gables’ common shares on the date of grant. Had compensation cost for these plans been determined consistent with Statement of Financial Accounting Standards No. 123 (SFAS 123), “Accounting for Stock-Based Compensation,” Gables’ net income and earnings per share would have been reduced to the following pro forma amounts:

Because the SFAS 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years.

The weighted average fair value of options granted is $2.36, $1.92 and $2.14 for 1999, 1998 and 1997, respectively. The fair value of each option grant as of the date of grant has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions for grants in 1999, 1998 and 1997, respectively: risk free interest rates of 5.69%, 4.84% and 6.45%; expected lives of 6.86, 6.39 and 3.91; dividend yields of 8.88%, 7.55% and 7.99%, and expected volatility of 25%, 18% and 18%.

Gables has made the following grants of restricted shares and unrestricted shares under the plan: