Exhibit 10.1
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June 30, 2008
Michael A. Ernst
5914 Norway Road
Dallas, TX 75230
Re: Separation of Employment from UDR, Inc.
Dear Mike:
As we have discussed, your employment with UDR, Inc. (the “Company”) will end
effective July 31, 2008 (the “Separation Date”). This letter (this “Letter
Agreement”) reflects our agreement with respect to the separation of your
employment with the Company.
1. Last Day of Employment. Your last day of employment with the Company will be
July 31, 2008.
2. Vacation Pay. You will be paid an amount equal to all accrued but unused
vacation up to July 31, 2008. You are entitled to payment of all accrued but
unused vacation whether or not you sign this Letter Agreement. You will not be
entitled to use sick leave, salary continuation or disability benefits after the
Separation Date.
3. Consideration. In consideration for signing this Letter Agreement the Company
agrees that:
(a) You may continue to participate in the Company’s group health insurance
plans at the same coverage levels as immediately prior to the Separation Date.
Coverage will continue until the first to occur of (i) July 31, 2009; (ii) your
employment by a third party, and eligibility for coverage by such employer, (a
third party shall not be deemed to include an entity of which all of the
outstanding capital stock or ownership interests are owned by you) or (iii) you
default in the payment of or no longer continue to pay your portion of the
premiums (the “Severance Period”). During the Severance Period, the Company
shall continue to pay its portion of the premiums and you will pay your portion
of the premiums. At the end of the Severance Period, if you do not have health
insurance from another employer, you may continue coverage as required by the
Consolidated Omnibus Budget Reconciliation Act of 1985 at your own expense.

 

1745 Shea Center Dr., Suite 200
Highlands Ranch, CO 80129
Tel: 720.283.6120
Fax: 720.283.2453
www.udr.com

 

 

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You hereby agree to inform Thomas W. Toomey, Chief Executive Officer and
President, UDR, Inc., 1745 Shea Center Drive, Suite 200, Highlands Ranch, CO
80129, immediately upon your acceptance of employment by a third party.
(b) The Company shall cause United Dominion Realty, L.P. and/or UDR
Out-Performance IV, LLC to repurchase 83,000 Membership Units in UDR
Out-Performance IV, LLC, which constitutes 100% of the Membership Units in UDR
Out-Performance IV, LLC owned by you, for Eighty-Three Thousand Dollars and No
Cents ($83,000.00), such amount to be paid to you within thirty (30) days of the
Separation Date.
(c) The Company shall cause United Dominion Realty, L.P. and/or UDR
Out-Performance V, LLC to repurchase 115,000 Membership Units in UDR
Out-Performance V, LLC, which constitutes 100% of the Membership Units in UDR
Out-Performance V, LLC owned by you, for One Hundred Fifteen Thousand Dollars
and No Cents ($115,000.00), such amount to be paid to you within thirty (30)
days of the Separation Date.
(d) You will be treated as though you were an employee of the Company through
July 31, 2008 and the shares of Common Stock that would have vested under the
following Notices of Performance Contingent Restricted Stock Awards (“PARS”) as
of such date shall vest pursuant to the terms of such agreements:
(i) You will be fully vested in a total of 3,764 shares of Common Stock pursuant
to your 2006 PARS granted on January 1, 2006; and
(ii) You will be fully vested in 3,922 shares of Common Stock pursuant to your
2007 PARS granted on January 1, 2007.
(e) All restrictions on the following Restricted Stock Awards held by you that
remain subject to restrictions on July 31, 2008 shall lapse:
(i) 3,332 shares of restricted Common Stock granted to you on February 8, 2007;
and
(ii) 7,153 shares of restricted Common Stock granted to you on February 7, 2008.

 

 

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(f) Effective as of the date of this Letter Agreement, you will forfeit any
right to receive additional shares of Common Stock under your 2006, 2007 and
2008 Performance Contingent Restricted Stock Award grants.
4. Other Benefits. Except as provided explicitly in this Letter Agreement, you
shall not be entitled to any other or further benefits from Company, including,
without limitation, participation in health and dental insurance plans,
disability and life insurance plans, stock plans, 401(k) plans, and profit
sharing plans.
5. Expenses. Your expense report for expenses incurred through the Separation
Date must be received within three business days after the Separation Date. You
will be reimbursed for expenses incurred through the Separation Date in
accordance with ordinary Company reimbursement practices and policies. If a
final accounting of these new expenditures indicates that you owe the Company
any amount (e.g., for charges to Company accounts) after your expense reports
have been processed, you must pay such amount within three days after the later
of the Effective Date or the Separation Date.
6. Company Property. You acknowledge that you have returned to the Company all
Company documents (including copies) and property which you may possess,
including, but not limited to, the following proprietary information of the
Company: files, memoranda, notes, computer-recorded information, personnel
records (except copies of any agreements you may have signed with the Company),
equipment, materials, keys, entry cards, identification, credit cards, and any
other materials of any kind that embodies any confidential or proprietary
information of the Company (and all reproductions thereof).
7. Revocation. You understand that you have twenty-one (21) days to consider the
preclusive effect of this Letter Agreement prior to executing this Letter
Agreement. You further understand that you may revoke this Letter Agreement for
a period of seven (7) days following your execution of this Letter Agreement.
Any revocation within this period must be submitted, in writing, to: the
Company, c/o Thomas W. Toomey, Chief Executive Officer and President, and state,
“I hereby revoke my acceptance of the Letter Agreement.” The revocation must be
mailed to the Company, c/o Thomas W. Toomey, Chief Executive Officer and
President, or his designee, and postmarked within seven (7) days of execution of
this Letter Agreement. This Letter Agreement shall not become effective or
enforceable until the revocation period has expired. If the last day of the
revocation period is a Saturday, Sunday, or legal holiday in Colorado, then the
revocation period shall not expire until the next following day which is not a
Saturday, Sunday, or legal holiday in Colorado.

 

 

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8. General Release of Claim and Covenant Not to Sue.
(a) In consideration of the benefits provided to you under this Letter
Agreement, and except for the obligations created by this Letter Agreement, you
knowingly and voluntarily release and forever discharge the Company and its
affiliates, as well as their respective officers, directors, employees,
stockholders, agents, attorneys, insurers, representatives, assigns and
successors, past and present, and each of them (hereinafter together and
collectively referred to as the “Released Parties”) of, with respect to and from
any and all actions, and claims of any kind, known and unknown, suspected or
unsuspected, against the Released Parties, which you, your heirs, executors,
administrators, successors, and assigns (together and collectively “Executive”)
have or may have as of the date of execution of this Letter Agreement,
including, but not limited to, any alleged violation of:
The National Labor Relations Act, as amended;
Title VII of the Civil Rights Act of 1964, as amended;
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
The Employee Retirement Income Security Act of 1974, as amended;
The Immigration Reform Control Act, as amended;
The Americans with Disability Act of 1990, as amended;
The Age Discrimination in Employment Act of 1967, as amended;
The Fair Labor Standards Act, as amended;
The Occupational Safety and Health Act, as amended;
The Equal Pay Act;
The Family and Medical Leave Act of 1993;
all Colorado laws concerning the workplace;
any other federal, state or local civil or human rights law or any other local,
state or federal law, regulation or ordinance; based upon any covenant of good
faith and fair dealing, implied or express contract, wrongful discharge,
promissory estoppel, equitable estoppel, employee benefit, violation of public
policy, negligent or intentional infliction of emotional distress, defamation,
false light, compelled self-publication, fraud, misrepresentation, invasion of
privacy, assault, battery, tortious interference with a contract, tortious
interference with a business relationship or economic interest, negligent
retention, negligent hiring, negligent supervision, negligence, negligent
misrepresentation, gross negligence, loss of consortium, equity or any
intentional or other tort; and/or

 

 

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(i) Arising out of the Released Parties’ personnel practices, policies, or
procedures; and
(ii) Arising out of or relating to Executive’s employment or the initiation,
existence or cessation of Executive’s employment with the Released Parties,
including any claims for salary, wages, severance pay, vacation pay, sick pay,
bonuses, and any other compensation or benefit of any nature; and
(iii) Arising out of any statements or representations to or about Executive;
and
(iv) Arising out of any other wrong, injury or loss allegedly suffered by
Executive; and
any allegation for costs, fees, or other expenses including attorneys’ fees
incurred in these matters (collectively the “Released Claims”).
You shall not sue or initiate against the Released Parties any action or
proceeding, or participate in the same, individually or as a member of a class,
under any contract (express or implied), or any federal, state or local law,
statute or regulation pertaining in any manner to the Released Claims.
Notwithstanding any of the foregoing, the release provisions in this Letter
Agreement shall not be interpreted as waiving or releasing any right to
indemnification or insurance coverage, if any, that you currently have under any
of the Company’s existing insurance policies, the Company’s Amended and Restated
Bylaws or the Company’s Charter or indemnification agreements with respect to
actions taken by you in the course and scope of your employment with the
Company.
(b) Except for the obligations created by this Letter Agreement, the Released
Parties hereby covenant not to sue and release and forever discharge you from
any and all claims, known and unknown, which the Release Parties have or may
have against you, including all claims arising from your position as Executive
Vice President and Chief Financial Officer or as an employee of the Company or
its subsidiaries or affiliates and the termination of that relationship (and
specifically including any and all claims related to prior promises or contracts
of employment), as of the date of this Letter Agreement; provided, however, the
Released Parties do not release you with respect to claims arising out of or
relating to fraud, gross negligence or willful misconduct.

 

 

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9. No Claims Exist. You confirm that no claim, charge, complaint, or action
exists pertaining in any manner to the Released Claims in any forum or form. In
the event that any such claim, charge, complaint or action is filed, you shall
not be entitled to recover any relief or recovery therefrom, including costs and
attorney’s fees.
10. Non-Disparagement. Thomas W. Toomey, W. Mark Wallis, Warren L. Troupe and
David L. Messenger, so long as they are employees of the Company, agree not to
make any negative, disparaging, disruptive or damaging statements, comments or
remarks to any third party concerning you. You agree not to make any negative,
disparaging, disruptive or damaging statements, comments or remarks to any third
party concerning the Company, its officers and directors or the Company’s
business. In response to inquiries about you from individuals outside of the
Company, the Company’s official response shall be to provide our standard
reference information of dates of employment and title.
11. Assistance. In partial consideration for the benefits provided to you by the
Company under this Letter Agreement, to which you are not otherwise entitled,
you agree to provide reasonable assistance related to transition matters to the
Company and/or its employees.
12. Confidentiality. You acknowledge that you have been exposed to and have
learned a substantial amount of information, which is proprietary and
confidential to the Company, whether or not you developed or created such
information. You acknowledge that such proprietary and confidential information
may include, but is not limited to, trade secrets; acquisition or merger
information; advertising and promotional programs; resource or developmental
projects; plans or strategies for future business development; financial or
statistical data; customer information, including, but not limited to, customer
lists, sales records, account records, sales and marketing programs, pricing
matters, and strategies and reports; and any Company manuals, forms, techniques,
and other business procedures or methods, devices, computer software or matters
of any kind relating to or with respect to any confidential program or projects
of the Company, or any other information of a similar nature made available to
you and not known in the trade in which the Company is engaged, which, if
misused or disclosed, could adversely affect the business or standing of the
Company (collectively, the “Confidential Information”). Confidential Information
shall not include information that is generally known or generally available to
the public through no fault of your own. You agree that except as required by
court order, you will not at any time divulge to any person, agency,
institution, the Company or other entity any information which you know or has
reason to believe is proprietary or confidential to the Company, including but
not limited to the types of information described above, or use such information
to the competitive disadvantage of the Company. You agree that your duties and
obligations under this Section 12 will continue until the later of twelve
(12) months from the Separation Date, or as long as the Confidential Information
remains proprietary or confidential to the Company.

 

 

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13. Non-Solicitation. As further consideration for the benefits provided in this
Letter Agreement for a period terminating twelve (12) months from the Separation
Date, you agree not to directly or indirectly solicit for employment any person
employed by the Company or its affiliates.
14. Joint Preparation of Agreement. This Letter Agreement is deemed to have been
drafted jointly by the parties. In any interpretation of this Letter Agreement,
the provisions of this Letter Agreement shall not be interpreted or construed
against any party on the basis that the party was the drafter.
15. Severability. If any provision of this Letter Agreement is determined to be
invalid or unenforceable, in whole or in part, such determination will not
affect any other provision of this Letter Agreement. For example, if the release
of a particular claim is held by a court to be invalid or unenforceable, such
ruling will not affect the releases of any other claims.
16. Entire Agreement. This Letter Agreement (including the exhibits hereto)
contains the entire agreement between you and the Company and is the complete,
final and exclusive embodiment of our agreement with regard to the subject
matter. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it may not be modified except
in writing signed by you and an officer of the Company.
17. Governing Law. This Letter Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Colorado, as applied to
contracts made and performed entirely within the State of Colorado.

 

 

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Please sign and return this Letter Agreement to me, keeping a copy for yourself.
Our sincerest wishes in your future endeavors.
Sincerely,
UDR, Inc.
/s/ Thomas W. Toomey          
Thomas W. Toomey
Chief Executive Officer and President
Accepted and Agreed:

                 
 
  Date:   June 30,2008   By:   /s/ Michael A. Ernst
 
               
 
              Michael A. Ernst