Exhibit 10.1
UDR, INC.
1999 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND
RESTATED MAY 13, 2009)
ARTICLE 1
PURPOSE
1.1 GENERAL . The purpose of
the UDR, Inc. 1999 Long-Term Incentive Plan (the
“Plan”) is to promote the success, and enhance the
value, of UDR, Inc. (the “Company”), by linking the
personal interests of its employees, officers, consultants and
directors to those of Company stockholders 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, consultants 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, consultants and directors.
ARTICLE 2
EFFECTIVE
DATE
2.1 EFFECTIVE DATE . For tax
reasons, the Plan was approved by the Board of Directors in interim
stages. 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 cash Performance Unit Awards under Article 9
of the Plan with respect to a performance period beginning on
January 1, 1999.
On January 25, 2000, the Board
approved the Plan for the purpose of (i) making Awards of
Restricted Stock on or prior to May 31, 2000 to non-officer
employees of the Company, (ii) making Awards of Restricted
Stock on or prior to May 31, 2000 to certain officers of the
Company from shares purchased by the Company on the open market,
and (iii) making cash Performance Unit Awards under
Article 9 of the Plan with respect to a performance period
beginning on January 1, 2000 (the “Second Effective
Date”).
On March 20, 2001, the Board
approved the Plan as it relates to all types of Awards under the
Plan (the “Third Effective Date”) and the Plan became
fully effective as of the Third Effective Date. The Plan was
approved by the stockholders of the Company on May 8, 2001. 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).
The Plan was amended and restated by
the Board of Directors on May 4, 2004 to eliminate the express
authority under Section 7.1(c) to pay the exercise price of an
Option with a promissory note, which amendment and restatement of
the Plan is not subject to stockholder approval.
The Plan was amended and restated by
the Board of Directors on July 23, 2004 to modify
Sections 14.8 and 14.9 to provide that unless otherwise
provided in a Participant’s Award Agreement upon a
Participant’s Death, Disability or Retirement, 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,
which amendment and restatement of the Plan is not subject to
stockholder approval.
The Plan was amended and restated by
the Board of Directors on February 10, 2006, to eliminate the
automatic grant of formula awards to non-employee directors and to
update non-material terms of the Plan (par value of common stock
and other nomenclature) to conform to Maryland versus Virginia
corporate law, which amendment and restatement of the Plan is not
subject to stockholder approval.
The Plan was amended and restated by
the Board of Directors on February 7, 2008 generally as
follows: (i) to change the name of the Company from United
Dominion Realty Trust, Inc. to UDR, Inc.; and (ii) to provide
that the grant price of any Stock Appreciation Right may not be
reduced except as provided in Section 15.1 or otherwise with
the consent of the stockholders, which amendment and restatement of
the Plan is not subject to stockholder approval.
The Plan was amended and restated by
the Board of Directors on May 30, 2008 generally as follows:
(i) to limit the term of Options and Stock Appreciation Rights
to 10 years; (ii) to provide that shares of stock that
are (a) not issued or delivered as a result of the net
settlement of a Stock Appreciation Right or Option, (b) used
to pay the exercise price or withholding taxes related to an
outstanding Award or (c) repurchased on the open market with
the proceeds of the Option exercise price shall not again become
available for issuance under the Plan; (iii) to provide that
the exercise price per share of an Option shall in no event be less
than the Fair Market Value of one share of stock on the date of
grant; (iv) to provide that the maximum Fair Market Value of
any Awards, other than Options or Stock Appreciation Rights, that
may be received by a Participant during any one calendar year shall
be $2,000,000; (v) to provide that in no event may a Stock
Appreciation Right be exercisable for more than 10 years from
the date of its grant; (vi) to provide that, except as
provided in Section 15.1, without the consent of stockholders
an Award may not be exchanged or bought out if the effect is to
lower the exercise price of the Option or the grant price of the
Stock Appreciation Right; (vii) to provide that, except as
provided in Section 15.1, without consent of the stockholders,
an Award may not be granted in substitution of another Award if the
effect is to replace an Option or Stock Appreciation Right with an
Award with a lower exercise or grant price and (viii) to
expand the Performance Goals.
Subject to stockholder approval, the
Plan was amended and restated by the Board of Directors on
March 12, 2009 generally as follows: (i) to increase
the number of shares of Stock available for issuance pursuant to
Awards from 4,000,000 to 16,000,000; (ii) to provide that the
maximum Fair Market Value of any Awards, other than Options or
Stock Appreciation Rights, that may be received by a Participant
during any one calendar year shall be $5,000,000, (iii) to
provide that the maximum number of shares of Stock with respect to
one or more Options and/or Stock Appreciation Rights that may be
granted during any one calendar year under the Plan to any one
Participant shall be 5,000,000 shares and (iv) to provide that
Awards (other than Options or Stock Appreciation Rights) granted
from and after the approval of the Plan at the Company’s 2009
Annual Meeting of Stockholders shall count against the Plan reserve
as 2.28 shares of Stock for each share of Stock actually subject to
the Award.
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) a
merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is
to change the state in which the Company is incorporated;
(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 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
UDR, Inc., a Maryland corporation.
(h) “Consultant”
means, and is limited to, a “consultant” or
“advisor” with respect to whom the Company would be
permitted to use Form S-8 to register the issuance of securities,
as described in the General Instructions to Form S-8 under the 1933
Act.
(i) “Covered
Employee” means a covered employee as defined in Code
Section 162(m)(3).
(j) “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.
(k) “Dividend
Equivalent” means a right granted to a Participant under
Article 11.
(l) “Effective
Date” means the First, Second or Third Effective Date, as the
context requires, as such terms are defined in
Section 2.1.
(m) “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.
(n) “Incentive Stock
Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor
provision thereto.
(o) “Non-Employee
Director” means a member of the Board who is not an employee
of the Company or any Parent or Subsidiary.
(p) “Non-Qualified Stock
Option” means an Option that is not an Incentive Stock
Option.
(q) “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.
(r) “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.
(s) “Parent” means
a corporation that 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).
(t) “Participant”
means a person who, as an employee, officer, consultant or director
of the Company or any Parent or Subsidiary, has been granted an
Award under the Plan.
(u) “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.
(v) “Plan” means
the UDR, Inc. 1999 Long-Term Incentive Plan, as amended from time
to time.
(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) “Retirement”
means a Participant’s termination of employment with the
Company, Parent or Subsidiary after attaining any normal or early
retirement age specified in any pension, profit sharing or other
retirement program sponsored by such company, or, in the event of
the inapplicability thereof with respect to the person in question,
as determined by the Committee in its reasonable judgment.
(y) “Stock” means
the $0.01 par value Common Stock of the Company, and such other
securities of the Company as may be substituted for Stock pursuant
to Article 14.
(z) “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.
(aa) “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).
(bb) “1933 Act”
means the Securities Act of 1933, as amended from time to time.
(cc) “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 delegated as
provided below in this Section 4.3:
(a) Designate Participants;
(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,
exercisability 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.
Notwithstanding the above, the Board
or the Committee may expressly delegate to a special committee
consisting of one or more directors who are also officers of the
Company some or all of the Committee’s authority under
subsections (a) through (g) above with respect to those
eligible Participants who, at the time of grant are not, and are
not anticipated to become, either (i) Covered Employees or
(ii) persons subject to the insider trading rules of
Section 16 of the 1934 Act.
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.
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 16,000,000. The maximum
number of shares of Stock that may be issued subject to Incentive
Stock Options shall be 16,000,000 shares. Awards (other than
Options or Stock Appreciation Rights) granted from and after the
approval of the Plan at the Company’s 2009 Annual Meeting of
Stockholders, shall be counted against this number as 2.28 shares
of Stock for each share of Stock actually subject to the Award.
5.2 LAPSED AWARDS . To the
extent that an Award is canceled, terminates, expires, is forfeited
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. Shares of Stock
that are (a) not issued or delivered as a result of the net
settlement of a Stock Appreciation Right or Option, (b) used
to pay the exercise price or withholding taxes related to an
outstanding Award, or (c) repurchased on the open market with
the proceeds of the Option exercise price shall not again become
available for issuance under the Plan. If shares subject to an
Award again become available under the Plan pursuant to this
Section 5.2, the number of shares that become available shall
equal the number of shares that counted against the Plan reserve
pursuant to Section 5.1.
5.3 STOCK DISTRIBUTED . Any
Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury 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 Participant shall be 5,000,000. 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
Participant (less any consideration paid by the Participant for
such Award) during any one calendar year under the Plan shall be
$5,000,000.
ARTICLE 6
ELIGIBILITY
6.1 GENERAL . Awards may be
granted only to individuals who are employees, officers,
consultants or directors of the Company or a Parent or
Subsidiary.
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, but shall in no event be less than the
Fair Market Value of one share of Stoc
