Class 1 Performance LTIP Unit Award Agreement
1999 LONG TERM INCENTIVE PLAN
CLASS 1 PERFORMANCE LTIP UNIT AWARD AGREEMENT
Class 1 Performance LTIP Units:
Date of Award:
Vesting Commencement Date:
The restrictions imposed under this Section 5 shall apply to all securities issued with respect to Restricted Units hereunder in connection with any merger, reorganization, consolidation, re-capitalization, stock dividend, unit distribution or other change in corporate structure affecting the common stock of the Company or the Partnership Units of the Partnership
For purposes of this Agreement, the term “Cause” means, unless an agreement between the Grantee and the Company states otherwise, (i) failure by the Grantee to perform the duties of the Grantee to the Company or any Parent or Subsidiary (or any successor thereof) (other than due to his or her Disability), provided that such conduct shall not constitute Cause unless and until such failure by Grantee to perform his or her duties has not been cured to the satisfaction of the Company, in its reasonable discretion, within 15 days after written notice of such failure has been given by the Company to Grantee; (ii) an act of fraud, embezzlement, theft, breach of fiduciary duty, dishonesty, or any other misconduct or any violation of law (other than a traffic violation) committed by the Grantee; (iii) any action by the Grantee intentionally causing damage to or misappropriation of the Company’s or any Parent’s or Subsidiary’s (or any of their successor’s) assets; (iv) the Grantee’s wrongful disclosure of confidential information of the Company or any Parent or Subsidiary (or any successor thereof); (v) the Grantee’s breach of (x) any non-competition, non-solicitation, non-disparagement or other restrictive covenants related to the Company or any Parent or Subsidiary (or any successor thereof) to which he or she is subject, and/or (y) the Grantee’s duty of loyalty; or (vi) performance by the Grantee of his or her duties in a manner deemed by the Committee, in its reasonable discretion, to be grossly negligent.
THIS CERTIFICATE AND THE UNITS REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN A CLASS 1 PERFORMANCE LTIP UNIT AWARD AGREEMENT DATED [DATE] BETWEEN THE REGISTERED OWNER OF THE UNITS REPRESENTED HEREBY, UDR, INC. AND UNITED DOMINION REALTY, L.P. RELEASE FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SUCH AGREEMENT, COPIES OF WHICH ARE ON FILE IN THE OFFICE OF UDR, INC.
At the Company’s or the Partnership’s request, the Grantee hereby agrees to promptly execute, deliver and return to the Partnership any and all documents or certificates that the Company or the Partnership deems necessary or desirable to effectuate the cancellation and forfeiture of the Restricted Units, or to effectuate the transfer or surrender of such Restricted Units to the Partnership. In addition, if requested, the Grantee shall deposit with the Company or the Partnership, a stock/unit power, or powers, executed in blank and sufficient to re-convey the Restricted Units to the Company or the Partnership upon termination of the Grantee’s service during the Restricted Period, in accordance with the provisions of this Agreement.
(a)Investment. The Grantee is holding the LTIP Units for the Grantee’s own account, and not for the account of any other person or entity. The Grantee is holding the LTIP Units for investment and not with a view to distribution or resale thereof except in compliance with applicable laws regulating securities.
(b)Relation to the Partnership. The Grantee is presently a director of the Company, which is the sole general partner of the Partnership, or is otherwise providing services to or for the benefit of the Partnership, and in such capacity has become personally familiar with the business of the Partnership.
(c)Access to Information. The Grantee has had the opportunity to ask questions of, and to receive answers from, the Partnership with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial conditions, and results of operations of the Partnership.
(d)Registration. The Grantee understands that the LTIP Units have not been registered under the 1933 Act, and the LTIP Units cannot be transferred by the Grantee unless such transfer is registered under the 1933 Act or an exemption from such registration is available. The Partnership has made no agreements, covenants or undertakings whatsoever to register the transfer of the LTIP Units under the 1933 Act. The Partnership has made no representations, warranties, or covenants whatsoever as to whether any exemption from the 1933 Act, including, without limitation, any exemption for limited sales in routine brokers’ transactions pursuant to Rule 144 of the 1933 Act, will be available. If an exemption under Rule 144 is available at all, it will not be available until at least six (6) months after the issuance of the LTIP Units and then not unless the terms and conditions of Rule 144 have been satisfied.
(e)Public Trading. None of the Partnership’s securities are presently publicly traded, and the Partnership has made no representations, covenants or agreements as to whether there will be a public market for any of its securities.
(f)Tax Advice. The Partnership has made no warranties or representations to the Grantee with respect to the income tax consequences of the transactions contemplated by this Agreement (including, without limitation, with respect to the decision of whether to make an election under Section 83(b) of the Code), and the Grantee is in no manner relying on the Partnership or its representatives for an assessment of such tax consequences. Grantee hereby recognizes that the Internal Revenue Service has proposed regulations under Sections 83, 704, and 707 of the Code that may affect the proper treatment of the LTIP Units for federal income tax purposes. In the event that those proposed regulations or similar regulations become final or temporary regulations, the Grantee hereby agrees to cooperate with the Partnership in amending this Agreement and the Partnership Agreement, and to take such other action as may be required, to conform to such regulations. Further, Congress recently enacted, and proposed Treasury Regulations were recently issued under, Section 1061 of the Code, which materially alters the taxation of “profits interests” issued in connection with the provision of services. The Grantee is advised to consult with his or her own tax advisor with respect to such tax consequences and his or her ownership of the LTIP Units.
1745 Shea Center Dr., Suite 200
Highlands Ranch, Colorado 80129
Attn: Corporate Secretary
or any other address designated by the Company or the Partnership in a written notice to the Grantee. Notices to the Grantee will be directed to the address of the Grantee then currently on file with the Company, or at any other address given by the Grantee in a written notice to the Company.
IN WITNESS WHEREOF, the Company, the Partnership and the Grantee have executed this Agreement and agree that the LTIP Units are to be governed by the terms and conditions of this Agreement, the Partnership Agreement and the Plan.
UNITED DOMINION REALTY, L.P.,
a Delaware limited partnership
a Maryland corporation, its General Partner
The Grantee acknowledges receipt of a copy of the Plan, the Partnership Agreement and this Agreement and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the LTIP Units subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Agreement, the Partnership Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement, the Partnership Agreement and the Plan. The Grantee hereby agrees that all disputes arising out of or relating to this Agreement and the Plan shall be resolved in accordance with Section 26 of this Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Agreement.
FORM OF SECTION 83(b) ELECTION
ELECTION PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE
The undersigned hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in the undersigned’s gross income for the taxable year in which the property was transferred the excess (if any) of the fair market value of the property described below, over the amount the undersigned paid for such property, if any, and supplies herewith the following information in accordance with the Treasury regulations promulgated under Section 83(b):
1.The name, taxpayer identification number and address of the undersigned, and the taxable year for which this election is being made, are:
TAXPAYER’S SOCIAL SECURITY NUMBER:
The name, taxpayer identification number and address of the undersigned’s spouse are (complete if applicable):
SPOUSE’S SOCIAL SECURITY NUMBER:
2.The property which is the subject of this election is <LTIPS_GRANTED> Class 1 Performance LTIP Units (the “Units”) of United Dominion Realty, L.P. (the “Company”), representing an interest in the future profits, losses and distributions of the Company.
3.The date on which the above property was transferred to the undersigned was <GRANT DATE>.
4.The above property is subject to the following restrictions: The Units are subject to forfeiture to the extent unvested upon a termination of service with the Company under certain circumstances. These restrictions lapse upon the satisfaction of certain conditions as set forth in an agreement between the taxpayer and the Company. In addition, the Units are subject to certain transfer restrictions pursuant to such agreement and the Amended and Restated Agreement of Limited Partnership of United Dominion Realty, L.P., as amended (or amended and restated) from time to time, should the taxpayer wish to transfer the Units.
5.The fair market value of the above property at the time of transfer (determined without regard to any restriction other than a nonlapse restriction as defined in § 1.83-3(h) of the Income Tax Regulations) was $0.
6.The amount paid for the above property by the undersigned was $0.
7.The amount to include in gross income is $0.
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of this election will be furnished to the person for whom the services were performed. The undersigned is the person performing the services in connection with which the property was transferred.
PARTNERSHIP CALL RIGHT NOTICE
United Dominion Realty, L.P. (the “Partnership”) hereby irrevocably elects, in accordance with the terms of Section 7 of that certain Class 1 Performance Unit Award Agreement dated as of [DATE] by and between the Partnership and [GRANTEE] (the “Award Agreement”), to exercise the Partnership Call Right with respect to certain Post-Conversion Period Performance LTIP Units that were issued under such agreement (the “Post-Conversion Period Class 1 Performance LTIP Units”). The Call Date applicable to such exercise and the subject Post-Conversion Period Class 1 Performance LTIP Units are set forth below. In accordance with the terms of the Award Agreement, you will be paid the fair market value of such Class 1 Performance LTIP Units as of the Call Date, as determined in good faith by the General Partner of the Partnership, which price the General Partner subsequently will provide on the Call Date if not stated below. Such amount may be paid in cash or in stock of UDR, Inc., a Maryland corporation, or in any combination thereof, as determined by the General Partner in its sole discretion.
Name of Post-Conversion Period Class 1 Performance LTIP Unit Holder:
Name as Registered with Partnership
Number of Post-Conversion Period Class 1 Performance LTIP Units to be Purchased:
Date of Award of Post-Conversion Period Class 1 Performance LTIP Units to be Purchased:
Aggregate Purchase Price: