Exhibit 10.23

UDR, INC.
1999 LONG-TERM INCENTIVE PLAN
NOTICE OF CLASS 2 LTIP UNIT AWARD
Grantee's Name and Address:
 
 
 
 
 

In consideration of the agreement by the Grantee named above (the “Grantee”) to
provide services to or for the benefit of United Dominion Realty, L.P. (the
“Partnership”), the Partnership hereby grants to the Grantee an award of Class 2
LTIP Units (the “Award”), subject to the terms and conditions of this Notice of
Class 2 LTIP Unit Award (the “Notice”), the UDR, Inc. 1999 Long-Term Incentive
Plan, as amended from time to time (the “Plan”), the Amended and Restated
Agreement of Limited Partnership of United Dominion Realty, L.P., as amended
from time to time (the “Partnership Agreement”) and the Class 2 LTIP Unit
Agreement (including Appendix A thereto) attached hereto (the “Agreement”).
Unless otherwise provided herein, the capitalized terms in this Notice shall
have the same meaning as those defined in the Plan, the Partnership Agreement
and/or the Agreement, as applicable.
Award Number
 
Date of Award
 
Total Number of Class 2 LTIP Units
Awarded (the “Class 2 LTIP Units”)
 

Vesting Schedule:
Subject to the Grantee’s continuing employment, except as set forth below, and
other limitations set forth in this Notice, the Agreement, the Partnership
Agreement and the Plan, the Class 2 LTIP Units will vest only to the extent the
established metrics set forth in the Agreement are met for the applicable
performance periods set forth in the Agreement. If the Grantee would become
vested in a fraction of a Class 2 LTIP Unit, such Class 2 LTIP Unit shall not
vest until the Grantee becomes vested in the entire Class 2 LTIP Unit.
Except as otherwise set forth in the Plan, except Section 14.9 thereof, the
Agreement or as determined by the Committee, in its sole discretion, vesting
shall cease upon the date the Grantee’s employment is terminated for any reason,
and no Unvested Units shall thereafter become vested. In the event the Grantee’s
employment is terminated for any reason, and the Class 2 LTIP Units do not
otherwise vest, then all Unvested Units held by the Grantee immediately upon
such termination of the Grantee’s employment shall automatically and without any
further action thereupon be cancelled and forfeited without payment of any
consideration therefor, and the Grantee shall have no further right, title or
interest in or to the Unvested Units.

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IN WITNESS WHEREOF, the Company, the Partnership and the Grantee have executed
this Notice and agree that the Award is to be governed by the terms and
conditions of this Notice, the Plan, the Partnership Agreement and the
Agreement.
 
 
UDR, Inc.,
 
 
 
 
 
 
 
a Maryland corporation
 
 
 
 
 
 
 
By:
 
 
 
 
Warren L. Troupe
 
 
 
Senior Executive Vice President
 
 
 
 
 
 
 
Date:
 
 
 
 
 
 
 
 
 
 
 
 
 
United Dominion Realty, L.P.,
 
 
a Delaware limited partnership
 
 
 
 
 
 
 
By:
UDR, Inc., a Maryland corporation
 
 
 
 
 
 
 
By:
 
 
 
 
Warren L. Troupe
 
 
 
Senior Executive Vice President
 
 
 
 
 
 
 
Date:
 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE CLASS 2 LTIP UNITS SHALL VEST, IF
AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S EMPLOYMENT OR AS OTHERWISE
SPECIFICALLY PROVIDED HEREIN (NOT THROUGH THE ACT OF BEING HIRED OR BEING
GRANTED THIS AWARD). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN
THIS NOTICE, THE AGREEMENT, THE PARTNERSHIP AGREEMENT NOR IN THE PLAN SHALL
CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF THE GRANTEE’S
EMPLOYMENT, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S EMPLOYMENT AT ANY TIME, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS
THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY,
THE GRANTEE’S STATUS IS AT WILL.
 
 
GRANTEE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[Name]
 
 
 
 
 

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Award Number: __________________
UDR, INC.
1999 LONG-TERM INCENTIVE PLAN

CLASS 2 LTIP UNIT AGREEMENT
1.Issuance of Class 2 LTIP Units. In consideration of the agreement by the
Grantee to provide services to or for the benefit of the Partnership, the
Partnership hereby (a) issues to the Grantee an award (the “Award”) of the Total
Number of Class 2 LTIP Units set forth in the Notice of Class 2 LTIP Unit Award
(the “Notice”) to which this Class 2 LTIP Unit Agreement (this “Agreement”) is
attached (the “Class 2 LTIP Units”), subject to the terms and provisions of the
Notice, this Agreement, the Partnership Agreement and the Plan, and (b) if not
already a Partner, admits the Grantee as a Partner of the Partnership on the
terms and conditions set forth in the Notice, this Agreement, the Partnership
Agreement and the Plan. The Partnership and the Grantee acknowledge and agree
that the Class 2 LTIP Units are hereby issued to the Grantee for the performance
of services to or for the benefit of the Partnership in his or her capacity as a
Partner or in anticipation of the Grantee becoming a Partner. To the extent not
an existing Partner, the Grantee shall be admitted to the Partnership as an
additional Limited Partner with respect to the Class 2 LTIP Units only upon the
satisfactory completion of the applicable requirements set forth in the
Partnership Agreement, including the requirements set forth in Section 4 of
Exhibit H to the Partnership Agreement. At the request of the Partnership, the
Grantee shall execute the Partnership Agreement or a joinder or counterpart
signature page thereto. The Grantee acknowledges that the Partnership may from
time to time issue or cancel (or otherwise modify) LTIP Units in accordance with
the terms of the Partnership Agreement. The Class 2 LTIP Units shall have the
rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption and conversion set forth
in the Notice, this Agreement, the Plan and the Partnership Agreement.

2.Definitions. For purposes of this Agreement, the following terms shall have
the meanings set forth below. Certain capitalized terms used herein shall have
the meanings set forth on Appendix A attached hereto. All capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Notice, the Plan and/or the Partnership Agreement, as applicable.

(a)“Apartment Peer Group” shall have the meaning set forth on Appendix A
attached hereto.

(b)“Apartment Peer Group Median TSR” means the median TSR of the companies
constituting the Apartment Peer Group for the Relative TSR Performance Period.

(c)“Base Units” means the number of Class 2 LTIP Units designated as Base Units
on Appendix A attached hereto.

(d)“Company FFO as Adjusted” means the Company’s “FFO as Adjusted” as reported
in the Company’s quarterly earnings release(s).

(e)“FFO as Adjusted Base Units” means the number of Base Units designated as FFO
as Adjusted Base Units on Appendix A attached hereto.

(f)“FFO as Adjusted Distribution Equivalent Units” means, with respect to the
FFO as Adjusted Performance Period, a number of Class 2 LTIP Units equal to the
number of additional shares

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of Stock implied by an assumed reinvestment since the Date of Award of all
dividends that would have been payable on that number of shares of Stock equal
to the number of Class 2 LTIP Units that become FFO as Adjusted Vested Base
Units as of the completion of the FFO as Adjusted Performance Period, net of the
amount of any distributions made by the Partnership pursuant to Section 5.02 of
the Partnership Agreement and Section 7(a) of Exhibit H to the Partnership
Agreement to the Grantee during the corresponding period in respect of one-third
(⅓) of the Total Number of Class 2 LTIP Units set forth in the Notice (such net
amount to be calculated on a quarterly basis).

(g)“FFO as Adjusted Performance Period” means the FFO as Adjusted Performance
Period set forth on Appendix A attached hereto.

(h)“FFO as Adjusted Performance Vested Units” means (x) the FFO as Adjusted
Performance Vested Base Units, plus (y) the FFO as Adjusted Distribution
Equivalent Units.

(i)“FFO as Adjusted Performance Vesting Percentage” means the percentage
determined as set forth on Appendix A attached hereto, which is a function of
the Company FFO as Adjusted during the FFO as Adjusted Performance Period.

(j)“FFO as Adjusted Vested Base Units” means the product of (i) the total number
of FFO as Adjusted Base Units, and (ii) the applicable FFO as Adjusted
Performance Vesting Percentage.

(k)“Relative TSR Base Units” means the number of Base Units designated as
Relative TSR Base Units on Appendix A attached hereto.

(l)“Relative TSR Distribution Equivalent Units” means, with respect to the
Relative TSR Performance Period, a number of Class 2 LTIP Units equal to the
number of additional shares of Stock implied by an assumed reinvestment since
the Date of Award of all dividends that would have been payable on that number
of shares of Stock equal to the number of Class 2 LTIP Units that become
Relative TSR Vested Base Units as of the completion of the Relative TSR
Performance Period, net of the amount of any distributions made by the
Partnership pursuant to Section 5.02 of the Partnership Agreement and Section
7(a) of Exhibit H to the Partnership Agreement to the Grantee during the
corresponding period in respect of two-thirds (⅔) of the Total Number of Class 2
LTIP Units set forth in the Notice (such net amount to be calculated on a
quarterly basis).

(m)“Relative TSR Performance Period” means the Relative TSR Performance Period
set forth on Appendix A attached hereto.

(n)“Relative TSR Performance Vested Units” means (x) the Relative TSR Vested
Base Units, plus (y) the Relative TSR Distribution Equivalent Units.

(o)“Relative TSR Performance Vesting Percentage” means the percentage determined
as set forth on Appendix A attached hereto, which is a function of the Company’s
achievement of the TSR Metric during the Relative TSR Performance Period.

(p)“Relative TSR Vested Base Units” means the product of (i) the total number of
Relative TSR Base Units, and (ii) the applicable Relative TSR Performance
Vesting Percentage.

(q)“Restrictions” means the exposure to forfeiture set forth in the Notice and
Sections 4(a) and (b) hereof, and the restrictions on sale or other transfer set
forth in Section 3 hereof.

(r)“TSR” shall have the meaning set forth on Appendix A attached hereto.

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(s)“TSR Metric” means the measurement of the Company’s relative TSR versus the
TSR of the Apartment Peer Group, calculated as set forth on Appendix A attached
hereto.

(t)“Unvested Unit” means any Class 2 LTIP Unit that has not become fully vested
pursuant to Section 4 hereof and remains subject to the Restrictions.

3.Class 2 LTIP Units Subject to Partnership Agreement; Transfer Restrictions.
The Class 2 LTIP Units are subject to the terms of the Plan and the terms of the
Partnership Agreement, including, without limitation, the restrictions on
transfer of Units (including, without limitation, Class 2 LTIP Units) set forth
in Article 9 of the Partnership Agreement. Any permitted transferee of the Class
2 LTIP Units shall take such Class 2 LTIP Units subject to the terms of the
Plan, this Agreement, the Notice and the Partnership Agreement. Any such
permitted transferee must, upon the request of the Partnership, agree to be
bound by the Plan, the Partnership Agreement, the Notice and this Agreement, and
shall execute the same on request, and must agree to such other waivers,
limitations, and restrictions as the Partnership or the Company may reasonably
require. Any sale, transfer, exchange, redemption, assignment, pledge,
hypothecation or other encumbrance (each, a “Transfer”) of the Class 2 LTIP
Units which is not made in compliance with the Plan, the Partnership Agreement,
the Notice and this Agreement shall be null and void and of no effect.
Notwithstanding any other provision of this Agreement, without the consent of
the Committee (which it may give or withhold in its sole discretion), the
Grantee shall not convert the Class 2 LTIP Units into Partnership Common Units,
or Transfer the Class 2 LTIP Units (whether vested or unvested), including by
means of a redemption of such Class 2 LTIP Units by the Partnership, until the
earlier of (i) the occurrence of, and in connection with, a Change of Control
(or such earlier time as is necessary in order for the Grantee to participate in
such Change of Control transaction with respect to the Class 2 LTIP Units and
receive the consideration payable with respect thereto in connection with such
Change of Control) and (ii) the expiration of the two (2) year period following
the Date of Award set forth in the Notice, other than by will or the laws of
descent and distribution.

4.Performance Vesting.

(a)FFO as Adjusted Units. As soon as reasonably practicable (but in no event
more than 60 days) following the completion of the FFO as Adjusted Performance
Period, the Committee shall determine the Company FFO as Adjusted, the FFO as
Adjusted Performance Vesting Percentage, the number of FFO as Adjusted
Distribution Equivalent Units, and the number of Class 2 LTIP Units granted
hereby that have become FFO as Adjusted Vested Base Units and FFO as Adjusted
Performance Vested Units, in each case as of the completion of the FFO as
Adjusted Performance Period. Upon such determination by the Committee (the “FFO
Determination Date”), the Restrictions set forth in the Notice and Section 3
above shall lapse with respect to fifty-percent (50%) of the FFO as Adjusted
Performance Vested Units and such FFO as Adjusted Performance Vested Units shall
become fully vested subject to Grantee’s continued status as a Service Provider
through the Determination Date, except as provided in the Plan, except Section
14.9 thereof, this Agreement or as otherwise determined by the Committee, in its
sole discretion. The Restrictions set forth in the Notice and Section 3 above
shall lapse with respect to the remaining fifty-percent (50%) of the FFO as
Adjusted Performance Vested Units and such FFO as Adjusted Performance Vested
Units shall become fully vested on the first anniversary of the FFO
Determination Date, subject to Grantee’s continued employment through such date,
except as provided in the Plan, except Section 14.9 thereof, this Agreement or
as otherwise determined by the Committee, in its sole discretion. Any FFO as
Adjusted Base Units granted hereby which have not become FFO as Adjusted
Performance Vested Base Units as of the FFO Determination Date will
automatically be cancelled and forfeited without payment of any consideration
therefor, and the Grantee shall have no further right to or interest in such FFO
as Adjusted Base Units.

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(b)Relative TSR Units. As soon as reasonably practicable (but in no event more
than 60 days) following the completion of the Relative TSR Performance Period,
the Committee shall determine the Company’s TSR, the Apartment Peer Group Median
TSR, the extent to which the TSR Metric has been achieved, the Relative TSR
Performance Vesting Percentage, the number of Relative TSR Distribution
Equivalent Units, and the number of Class 2 LTIP Units granted hereby that have
become Relative TSR Vested Base Units and Relative TSR Performance Vested Units,
in each case as of the completion of the Relative TSR Performance Period. Upon
such determination by the Committee (the “TSR Determination Date”), the
Restrictions set forth in the Notice and Section 3 above shall lapse with
respect to the Relative TSR Performance Vested Units and such Relative TSR
Performance Vested Units shall become fully vested, subject to Grantee’s
continued employment through such vesting date, except as provided in the Plan,
except Section 14.9 thereof, this Agreement or as otherwise determined by the
Committee, in its sole discretion. Any Relative TSR Base Units granted hereby
which have not become Relative TSR Performance Vested Units as of the [TSR
Determination Date], and any Class 2 LTIP Units granted hereby which have not
become FFO as Adjusted Performance Vested Units or Relative TSR Performance
Vested Units as of the [TSR Determination Date], will automatically be cancelled
and forfeited without payment of any consideration therefor, and the Grantee
shall have no further right to or interest in such Relative TSR Base Units or
other Class 2 LTIP Units.

5.Delivery of Units. The Class 2 LTIP Units will be registered in the name of
the Grantee and may be held by the Company or the Partnership prior to the
vesting of such Class 2 LTIP Units as provided in the Notice and this Agreement
(the “Restricted Period”). Any certificate for Class 2 LTIP Units issued during
the Restricted Period shall be registered in the name of the Grantee and shall
bear a legend in substantially the following form:

THIS CERTIFICATE AND THE CLASS 2 LTIP UNITS REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN A NOTICE OF CLASS 2 LTIP UNIT AWARD AND CLASS 2 LTIP UNIT
AGREEMENT DATED [DATE] BETWEEN THE REGISTERED OWNER OF THE CLASS 2 LTIP 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 AGREEMENTS, 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 Unvested Units, or to
effectuate the transfer or surrender of such Unvested 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 Unvested Units to the Company or the Partnership upon termination
of the Grantee’s service during the Restricted Period, in accordance with the
provisions of the Notice and this Agreement.
6.Determinations by Committee. Notwithstanding anything contained herein, all
determinations, interpretations and assumptions relating to the vesting of the
Award (including, without limitation, determinations, interpretations and
assumptions with respect to the Company’s TSR, Company FFO as Adjusted and
Apartment Peer Group Median TSR) shall be made by the Committee and shall be
applied consistently and uniformly to all similar Awards granted under the Plan
(including, without limitation, similar awards which provide for payment in the
form of cash or shares of Stock). In making such determinations, the Committee
may employ attorneys, consultants, accountants, appraisers, brokers, or other

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persons, and the Committee, the Board, the Company, the Partnership and their
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith and absent manifest error
shall be final and binding upon the Grantee, the Company and all other
interested persons. In addition, the Committee, in its discretion, may adjust or
modify the methodology for calculations relating to the vesting of the Award
(including, without limitation, the methodology for calculating the Company’s
TSR, Company FFO as Adjusted and Apartment Peer Group Median TSR), other than
the FFO as Adjusted Performance Vesting Percentage and Relative TSR Performance
Vesting Percentage, as necessary or desirable to account for events affecting
the value of the Stock or Company FFO as Adjusted which, in the discretion of
the Committee, are not considered indicative of Company performance, which may
include events such as the issuance of new Stock, stock repurchases, stock
splits, issuances and/or exercises of stock grants or stock options, and similar
events, all in order to properly reflect the Company’s intent with respect to
the performance objectives underlying the Award or to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
with respect to the Award.

7.Covenants, Representations and Warranties. The Grantee hereby represents,
warrants, covenants, acknowledges and agrees on behalf of the Grantee and his or
her spouse, if applicable, that:

(a)Investment. The Grantee is holding the Class 2 LTIP Units for the Grantee’s
own account, and not for the account of any other person or entity. The Grantee
is holding the Class 2 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 an [executive
officer and]1 employee 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 Class 2 LTIP Units have
not been registered under the 1933 Act, and the Class 2 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
Class 2 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 grant of the Class 2
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.

1 NTD: Include if applicable.
 
 
 
 

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(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 and 704 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. Grantee hereby further recognizes that
the U.S. Congress is considering legislation that would change the federal tax
consequences of acquiring, owning and disposing of LTIP Units. 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 Class 2 LTIP Units.
8.Capital Account. The Grantee shall make no contribution of capital to the
Partnership in connection with the issuance of the Class 2 LTIP Units and, as a
result, the Grantee’s Capital Account balance in the Partnership immediately
after his or her receipt of the Class 2 LTIP Units shall be equal to zero,
unless the Grantee was a Partner in the Partnership prior to such issuance, in
which case the Grantee’s Capital Account balance shall not be increased as a
result of his or her receipt of the Class 2 LTIP Units.

9.Restrictions on Public Sale by the Grantee. To the extent not inconsistent
with applicable law, the Grantee agrees not to effect any sale or distribution
of the Class 2 LTIP Units or any similar security of the Company or the
Partnership, or any securities convertible into or exchangeable or exercisable
for such securities, including a sale pursuant to Rule 144 under the 1933 Act,
during the fourteen (14) days prior to, and for a period of up to 180-days
beginning on, the date of the pricing of any public or private debt or equity
securities offering by the Company or the Partnership (except as part of such
offering), if and to the extent requested in writing by the Partnership or the
Company in the case of a non-underwritten public or private offering or if and
to the extent requested in writing by the managing underwriter or underwriters
(or initial purchaser or initial purchasers, as the case may be) and consented
to by the Partnership or the Company, which consent may be given or withheld in
the Partnership’s or the Company’s sole and absolute discretion, in the case of
an underwritten public or private offering (such agreement to be in the form of
a lock-up agreement provided by the Company, the Partnership, managing
underwriter or underwriters, or initial purchaser or purchasers as the case may
be).

10.Conformity to Securities Laws. The Grantee acknowledges that the Plan, the
Notice and this Agreement are intended to conform to the extent necessary with
all provisions of all applicable federal and state laws, rules and regulations
(including, but not limited to, the 1933 Act and the 1934 Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation the applicable exemptive conditions of
Rule 16b-3 of the 1934 Act) and to such approvals by any listing, regulatory or
other governmental authority as may, in the opinion of counsel for the
Partnership or the Company, be necessary or advisable in connection therewith.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the award of Class 2 LTIP Units is made, only in such a manner as to conform
to such laws, rules and regulations. To the extent permitted by applicable law,
the Plan, this Agreement and this award of Class 2 LTIP Units shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.

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11.Taxes.

(a)Tax Liability. The Grantee is ultimately liable and responsible for all taxes
owed by the Grantee in connection with the Award, regardless of any action the
Company or any Related Entity takes with respect to any tax withholding
obligations that arise in connection with the Award. Neither the Company nor any
Related Entity makes any representation or undertaking regarding the treatment
of any tax withholding in connection with any aspect of the Award, including the
grant, vesting, assignment, release or cancellation of the Class 2 LTIP Units,
the subsequent sale of any Class 2 LTIP Units and the receipt of any Partnership
distributions. The Company does not commit and is under no obligation to
structure the Award to reduce or eliminate the Grantee’s tax liability. For
purposes of this Award, “Related Entity” shall mean a Parent or Subsidiary.

(b)Payment of Withholding Taxes. Prior to any event in connection with the Award
that the Company determines may result in any tax withholding obligation,
whether United States federal, state, local or non-U.S., including any social
insurance, employment tax, payment on account or other tax-related obligation
(the “Tax Withholding Obligation”), the Grantee must arrange for the
satisfaction of the minimum amount of such Tax Withholding Obligation in a
manner acceptable to the Company.

(c)Section 83(b) Election. The Grantee covenants that the Grantee shall make a
timely election under Section 83(b) of the Code (and any comparable election in
the state of the Grantee’s residence) with respect to the Class 2 LTIP Units,
and the Partnership hereby consents to the making of such election(s). In
connection with such election, the Grantee and the Grantee’s spouse, if
applicable, shall promptly provide a copy of such election to the Partnership. A
form of election under Section 83(b) of the Code is attached hereto as Appendix
B. The Grantee represents that the Grantee has consulted any tax advisor(s) that
the Grantee deems advisable in connection with the filing of an election under
Section 83(b) of the Code and similar state tax provisions. The Grantee
acknowledges that it is the Grantee’s sole responsibility and not the Company’s
or the Partnership’s to timely file an election under Section 83(b) of the Code
(and any comparable state election), even if the Grantee requests that the
Company, the Partnership or any representative thereof make such filing on the
Grantee’s behalf. The Grantee should consult his or her tax advisor to determine
if there is a comparable election to file in the state of his or her residence.

12.Profits Interests. The Partnership and the Grantee intend that (i) the Class
2 LTIP Units be treated as “profits interests” as defined in Internal Revenue
Service Revenue Procedure 93-27, as clarified by Revenue Procedure 2001-43, (ii)
the issuance of such units not be a taxable event to the Partnership or the
Grantee as provided in such revenue procedures, and (iii) the Partnership
Agreement, the Plan, the Notice and this Agreement be interpreted consistently
with such intent. In furtherance of such intent, effective immediately prior to
the issuance of the Class 2 LTIP Units, the Partnership may revalue all
Partnership assets to their respective gross fair market values, and make the
resulting adjustments to the Capital Accounts of the Partners, in each case, as
set forth in the Partnership Agreement.

13.Ownership Information. The Grantee hereby covenants that so long as the
Grantee holds any Class 2 LTIP Units, at the request of the Partnership, the
Grantee shall disclose to the Partnership in writing such information relating
to the Grantee’s ownership of the Class 2 LTIP Units as the Partnership
reasonably believes to be necessary or desirable to ascertain in order to comply
with the Code or the requirements of any other appropriate taxing authority.

14.Entire Agreement; Governing Law. The Notice, the Plan, the Partnership
Agreement and this Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company, the Partnership and the Grantee with

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respect to the subject matter hereof, and may not be modified adversely to the
Grantee’s interest except by means of a writing signed by the Company, the
Partnership and the Grantee. These agreements are to be construed in accordance
with and governed by the internal laws of the State of Maryland without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of Maryland to the
rights and duties of the parties. Should any provision of the Notice or this
Agreement be determined to be illegal or unenforceable, the other provisions
shall nevertheless remain effective and shall remain enforceable.

15.Construction. The captions used in the Notice and this Agreement are inserted
for convenience and shall not be deemed a part of the Award for construction or
interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

16.Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan, the Partnership
Agreement or this Agreement shall be submitted by the Grantee, the Partnership
or the Company to the Committee. The resolution of such question or dispute by
the Committee shall be final and binding on all persons.

17.Venue and Jurisdiction. The parties agree that any suit, action, or
proceeding arising out of or relating to the Notice, the Plan, the Partnership
Agreement or this Agreement shall be brought exclusively in the United States
District Court for Colorado (or should such court lack jurisdiction to hear such
action, suit or proceeding, in a Colorado state court) and that the parties
shall submit to the jurisdiction of such court. The parties irrevocably waive,
to the fullest extent permitted by law, any objection the party may have to the
laying of venue for any such suit, action or proceeding brought in such court.

18.Plan Controls. The terms contained in the Plan are incorporated into and made
a part of the Notice and this Agreement, and the Notice and this Agreement shall
be governed by and construed in accordance with the Plan. In the event of any
actual or alleged conflict between the provisions of the Plan and the provisions
of the Notice and this Agreement, the provisions of the Plan shall be
controlling and determinative.

19.Successors. The Notice and this Agreement shall be binding upon any successor
of the Company or the Partnership, in accordance with the terms of the Notice,
this Agreement and the Plan.

20.Severability. If any one or more of the provisions contained in the Notice or
this Agreement is invalid, illegal or unenforceable, the other provisions of the
Notice and this Agreement will be construed and enforced as if the invalid,
illegal or unenforceable provision had never been included.

21.Notices. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery, upon deposit for
delivery by an internationally recognized express mail courier service or upon
deposit in the United States mail by certified mail (if the parties are within
the United States), with postage and fees prepaid, addressed to the other party
at its address as shown in these instruments, or to such other address as such
party may designate in writing from time to time to the other party.

22.Amendment. The Committee may amend, modify or terminate this Agreement
without approval of the Grantee; provided, however, that such amendment,
modification or termination shall not, without the Grantee’s consent, reduce or
diminish the value of this award determined as if it had been fully vested on
the date of such amendment or termination.

8

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23.Amendment and Delay to Meet the Requirements of Section 409A. The Grantee
acknowledges that the Company, in the exercise of its sole discretion and
without the consent of the Grantee, may amend or modify this Agreement in any
manner to the minimum extent necessary to meet the requirements of Section 409A
of the Code as amplified by any Treasury regulations or guidance from the
Internal Revenue Service as the Company deems appropriate or advisable. In
addition, the Company makes no representation that the Award will comply with
Section 409A of the Code and makes no undertaking to prevent Section 409A of the
Code from applying to the Award or to mitigate its effects on any deferrals or
payments made in respect of the Units. The Grantee is encouraged to consult a
tax adviser regarding the potential impact of Section 409A of the Code.

END OF AGREEMENT

9

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APPENDIX A
Definitions
Capitalized terms not defined herein shall have the meanings set forth in the
Class 2 LTIP Unit Agreement to which this Appendix is attached.

“Apartment Peer Group” means the following companies:

Aimco
AvalonBay Communities, Inc.
Camden Property Trust
Equity Residential
Essex Property Trust, Inc.
Mid-America Apartment Communities, Inc.
Monogram Residential Trust
Post Properties, Inc.

To the extent a member of the Apartment Peer Group ceases to be a separate
publicly traded company during the Relative TSR Performance Period, such member
shall not be used in calculating the Apartment Peer Group Median TSR. To the
extent during the Relative TSR Performance Period a member of the Apartment Peer
Group is the subject of an acquisition proposal or publicly reported speculation
regarding acquisition, a going private transaction, subject of an activist
campaign or other similar event or events and such event(s) has an impact
(positive or negative) on the member’s TSR, such member shall similarly not be
used in calculating the Apartment Peer Group Median TSR.
“Base Units” means [_______] Class 2 LTIP Units. 2 

“FFO as Adjusted Base Units” means [_______] Base Units.3

“FFO as Adjusted Performance Period” means the period commencing on January 1,
2016 and ending on December 31, 2016.

“FFO as Adjusted Performance Vesting Percentage” means the percentage determined
as set forth below based on the Company FFO as Adjusted during the FFO as
Adjusted Performance Period:

 
Performance of FFO as Adjusted
 
Company FFO as Adjusted
 
FFO as Adjusted Performance Vesting
Percentage
 
 
Below Threshold
 
Less than $1.74
 
0%
 
 
Threshold
 
$1.74
 
25%
 
 
100% (target)
 
$1.78
 
50%
 
 
 
 
 
 
 
 
 
2 Total number of Base Units will represent total base units (Relative TSR Base
Units + FFO as Adjusted Base Units) at maximum performance, and will exclude the
estimated number of units attributable to dividend value.
3 FFO as Adjusted Base Units will represent 1/3 of the total Base Units.
 
High (maximum)
 
$1.82 or greater
 
100%
 

*If achievement is greater than the Threshold and falls between any two points
on the chart above, the FFO as Adjusted Performance Vesting Percentage will be
determined by linear interpolation.

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“Relative TSR Base Units” means [_______] Base Units.4 Relative TSR Base Units
will represent 2/3 of the total Base Units.

“Relative TSR Performance Period” means the period commencing on January 1, 2016
and ending on December 31, 2018.

“Relative TSR Performance Vesting Percentage” means the percentage determined as
set forth below based upon the Company’s TSR performance during the Relative TSR
Performance Period against the Apartment Peer Group Median TSR:
 
TSR Performance
 
 Company TSR Relative to Apartment Peer Group Median TSR/bps
 
Relative TSR Performance Vesting
Percentage
 
 
Below Threshold
 
Lower than -250 bps
 
0%
 
 
Threshold
 
-250 bps
 
25%
 
 
Target
 
Median
 
50%
 
 
High
 
+400 bps
 
100%
 

*If achievement is greater than the Threshold and falls between any two points
on the chart above, the Relative TSR Performance Vesting Percentage will be
determined by linear interpolation.

TSR Calculation
For purposes of the 2016 LTI, the TSR Metric shall be calculated by using the
twenty (20)-day trailing average TSR, as calculated by management and by using
the daily YTD TSR as calculated by Thomson Reuters for the measurement of TSR.
The relative index shall be calculated as in the same manner as described above
and the difference between the absolute total shareholder return and the
relative comparison, expressed in terms of the amount of basis points, shall be
applied to the matrix set forth above under Performance Criteria.
To the extent a member of the Apartment Peer Group ceases to be a separate
publicly traded company during the performance period, such member shall not be
used in calculating the Apartment Peer Group Average. To the extent during the
performance period a member of the Apartment Peer Group is the subject of an
acquisition proposal or publicly reported speculation regarding acquisition, a
going private transaction or other event and such event has an impact (positive
or negative) on the member’s TSR, such member shall similarly not be used in
calculating the Apartment Peer Group Average.
Each 3-year award will vest on the date the Committee determines performance
(the "Determination Date") in January or February 2019. The Committee retains
the discretion to adjust awards upwards or downwards based on external factors.
Employment though the applicable vesting date is generally required except as
otherwise provided in the Plan, except for Section 14.9 thereof, the applicable
award agreement or as determined by the Committee, in its sole discretion.
 
 
 
 
 
4 Relative TSR Base Units will represent 2/3 of the total Base Units
 

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APPENDIX B
FORM OF SECTION 83(b) ELECTION

[Attached]

B-1

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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 NAME: __________________________________________________
TAXPAYER’S SOCIAL SECURITY NUMBER: _____________________________    
ADDRESS: ___________________________________________________________        
TAXABLE YEAR: _____________________________________________________    
The name, taxpayer identification number and address of the undersigned’s spouse
are (complete if applicable):
SPOUSE’S NAME: _____________________________________________________
SPOUSE’S SOCIAL SECURITY NUMBER: ________________________________    
ADDRESS: ___________________________________________________________    
2.    The property which is the subject of this election is <LTIPS_GRANTED>
Class 2 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 and/or to the extent that certain
performance conditions are not satisfied. 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.

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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.
Additionally, the undersigned will include a copy of the election with his or
her income tax return for the taxable year in which the property is transferred.
The undersigned is the person performing the services in connection with which
the property was transferred.
Dated: _________________
____________________________________
 
<GRANTEE NAME>
 
 
Dated: _________________
____________________________________
 
<SPOUSE NAME>

B-3