Exhibit
10.40


EDUCATION
REALTY TRUST, INC.


2010
LONG-TERM INCENTIVE PLAN





SECTION
1.  –  PURPOSE AND AWARD ALLOCATION





The 2010 Long-Term Incentive Plan
(“LTIP”) has
been established by Education Realty Trust, Inc. (the “Company”)
to provide long-term incentives to key employees of the Company.  Its
purposes are to attract, retain and motivate key employees of the Company and to
promote the long-term growth and profitability of the Company.  Awards
under the LTIP are made pursuant to the Company’s 2004 Incentive Plan (the
“Plan”) and
consist of a mixture of time vested restricted stock (1/2) and performance
vested restricted stock units (1/2)(“Award”).  The
Compensation Committee (“Committee”)
of the Board of Directors (the “Board”)
believes that performance vested restricted stock units provide increased
incentive to achieve identified performance goals and that time vested
restricted stock supports its goal of executives having an ownership position in
the Company while encouraging their long-term retention.





The Committee will make Awards pursuant
to the LTIP as set forth on Schedule A hereto, on
such terms as the Committee may prescribe based on the criteria set forth on
Schedule A
hereto and such other factors as it may deem appropriate.





SECTION 2. –
PARTICIPATION





The Committee shall have the sole and
absolute discretion to determine those officers of the Company who shall be
eligible to receive an Award pursuant to the LTIP (each, a “Participant”).





SECTION 3. –
ADMINISTRATION





Subject to applicable law, all
designations, determinations, interpretations, and other decisions under or with
respect to the LTIP or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all persons. Designations, determinations, interpretations, and other
decisions made by the Committee with respect to the LTIP or any Award hereunder
need not be uniform and may be made selectively among Participants, whether or
not such Participants are similarly situated.





SECTION 4. – TIME VESTED
RESTRICTED STOCK





One-half (1/2) of the Participant’s
Award will consist of a grant for restricted shares of the Company’s common
stock (“Restricted
Stock”), which will be subject to the terms and conditions of a
Restricted Stock Award Agreement, the form of which is attached hereto as Exhibit
1.





The shares of Restricted Stock will
vest in three (3) equal annual installments, as long as the Participant is an
employee of the Company on the vesting date. Shares of Restricted Stock shall be
entitled to voting and dividend rights from the effective date of the grant, but
shall be non-transferable by the Participant until such shares have vested in
accordance with the Restricted Stock Award Agreement.





SECTION 5. – PERFORMANCE
VESTED RESTRICTED STOCK UNITS





One-half (1/2) of the Participant’s
Award will be granted as restricted stock units (“RSUs”),
with each unit representing the right to receive in the future one share of the
Company’s common stock (“Common
Shares”). The vesting of RSUs is based upon the Company’s achievement of
total stockholder returns (“TSR”) at
specified levels as set forth on Schedule A hereto,
over the period beginning January 1, 2010 to January 1, 2013 (the “Performance
Period”).





RSUs granted to each Participant will
be subject to the terms and conditions of the Restricted Stock Unit Award
Agreement, the form of which is attached as Exhibit 2
hereto.





Exhibit
10.40


The Committee will grant RSUs to each
Participant equal to the number of Common Shares that such Participant would
earn if “maximum performance” (as set forth on Schedule A) were
achieved.  The Committee shall determine whether and to what extent
the performance goal has been met at the end of the Performance Period (the
“Determination
Date”). RSUs will be converted to fully vested Common Shares based upon
the Company’s achievement of the “threshold,” “target” or “maximum” TSR
performance goals set forth on Schedule Aon the Determination
Date.  Only the number of RSUs that equate to actual performance, as
determined by the Committee pursuant to Schedule A, shall be eligible to vest(such
RSUs that satisfy the performance goals on the Determination Date are referred
to as “Eligible
Shares”)and convert to
Common Shares as further set forth in the applicableRestricted Stock
Unit Award Agreement.After the
Determination Date, any RSUs that are not Eligible Shares will be
forfeited.





Prior to the Determination Date, no
dividend payments will accrue or be paid with respect to any RSUs. If the
performance goals are met, then the Participant will earn dividends on the
Eligible Shares and will have voting rights with respect to the Eligible
Shares.





SECTION 6.  –
FORFEITURE/REDUCTION IN AWARD





Time-Vested Restricted Stock
Awards.  In the event of a Change of Control of the Company, a
termination of the Participant’s employment by the Company without Cause, or a
termination of employment by the Participant for Good Reason, all unvested
shares of Restricted Stock shall accelerate and be fully vested and delivered to
the Participant.  Unvested shares of Restricted Stock will also vest
in the event of termination of the Participant’s employment due to death or
Disability.





Performance-Vested
Restricted Stock Units.  Except as set forth below, in the
applicable Restricted Stock Unit Award Agreement or as the Committee may
otherwise determine in its sole and absolute discretion, termination of a
Participant’s employment prior to the end of the Performance Period will result
in the forfeiture of the RSUs by the Participant, and no payments shall be made
with respect thereto.  Notwithstanding the foregoing, if Participant’s
employment is terminated prior to the end of the Performance Period as a result
of Participant’s death or Disability, the Committee shall determine the number
of RSUs that will convert to Eligible Shares by (i) applying the performance
criteria set forth in the LTIP using the effective date of the Disability (to be
determined by the Committee) or the date of death, as applicable, and (ii)
multiplying the number of Eligible Shares so determined by .3333 if the death or
Disability occurs in 2010, .6667 if the if the death or Disability occurs in
2011, and 1 if the if the death or Disability occurs in 2012 (rounding the
resulting number of Eligible Shares to the nearest whole number).





If a Change of Control occurs prior to
the end of the Performance Period, the Committee shall determine the number of
RSUs that will convert to Eligible Shares by (i) applying the performance
criteria set forth in the LTIP using the effective date of the Change of Control
as the end of the Performance Period, and by appropriately and proportionately
adjusting the performance criteria for such shortened Performance Period, and
(ii) multiplying the number of Eligible Shares so determined by .3333 if the
Change of Control occurs in 2010, .6667 if the Change of Control occurs in 2011,
and 1 if the Change of Control occurs in 2012 (rounding the resulting number of
Eligible Shares to the nearest whole number).


2




Exhibit
10.40


SECTION
7.  –  ADJUSTMENTS FOR UNUSUAL OR NONRECURRING
EVENTS





In addition to any adjustments
enumerated in the description of the performance goals set forth on Schedule A hereto,
the Committee is hereby authorized to make adjustments in the terms and
conditions of, and the criteria included in, awards in recognition of unusual or
nonrecurring events affecting any Participant, the Company, or any subsidiary or
affiliate, or the financial statements of the Company or of any subsidiary or
affiliate; in the event of changes in applicable laws, regulations or accounting
principles; or in the event the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the LTIP.  The
Committee is also authorized to adjust Awards to avoid unwarranted penalties or
windfalls.  Notwithstanding the foregoing, the Committee shall not
have the discretion to increase any Award payable to any Covered Officer (as
defined in Section
10 below) in excess of that provided by the application of the terms and
conditions of Schedule
A attached hereto.





SECTION
8.  –  NO RIGHTS TO AWARDS; NO TRUST OR FUND
CREATED





No person shall have any claim to be
granted any Award and there is no obligation for uniformity of treatment among
Participants.  The terms and conditions of Awards, if any, need not be
the same with respect to each Participant.  The Company reserves the
right to terminate the LTIP at any time in the Company’s sole
discretion.  Neither the LTIP nor any Award hereunder shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any subsidiary or affiliate and a
Participant or any other person. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any subsidiary.


3


Exhibit
10.40




SECTION
9.  –   ASSIGNMENT AND ALIENATION OF
BENEFITS





To the maximum extent permitted by law,
a Participant’s right or benefits under the LTIP shall not be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge
the same shall be void; provided, however, that in the event of a Participant’s
death, any such benefit not forfeited upon death shall pass to such
Participant’s beneficiaries or estate in accordance with the laws of descent and
distribution. Except as prohibited by law, payments or benefits payable to or
with respect to a Participant pursuant to the LTIP may be reduced by amounts the
Participant may owe to the Company, including, without limitation, any amounts
owed on account of loans, travel or standing advances, and personal charges on
credit cards issued through the Company.





SECTION 10.
–   ADDITIONAL DEFINITIONS





The terms that follow, when used in
this LTIP and in any Restricted Stock Award Agreement or any Restricted Stock
Unit Award Agreement issued pursuant to this LTIP, shall have the meanings
indicated below:




“Affiliate” has the meaning
set forth in Rule 12b-2 of the regulations promulgated under the Exchange
Act.




“Cause” means the
Participant has (a) continually failed to substantially perform, or been grossly
negligent in the discharge of, his or her duties to the Company (in any case,
other than by reason of a Disability, physical or mental illness or analogous
condition); (b) been convicted of or plednolo
contendereto a felony
or a misdemeanor with respect to which fraud or dishonesty is a material
element; or (c) materially breached any material Company policy or agreement
with the Company.




“Change
of Control” shall mean the
first of the following events to occur after the Effective
Date:





(a)           any
Person or group of Persons together with its Affiliates, but excluding (i) the
Company or any of its subsidiaries, (ii) any employee benefit plans of the
Company or (iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes, directly or indirectly, the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding securities (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company);





(b)           the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the Board
or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the Effective Date or whose appointment,
election or nomination for election was previously so approved or
recommended;


4


Exhibit
10.40


(c)           the
consummation of a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation or entity
regardless of which entity is the survivor, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power of the voting
securities of the Company, such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation;





(d)           the
stockholders of the Company approve a plan of complete liquidation or winding-up
of the Company or there is consummated an agreement for the sale or disposition
by the Company of all or substantially all of the Company’s assets;
or





(e)           the
occurrence of any transaction or series of transactions deemed by the Board to
constitute a change in control of the Company.





Notwithstanding
the foregoing, (i) a Change of Control shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the holders of the common stock of the
Company immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Company immediately following such
transaction or series of transactions, and (ii) a Change of Control shall not
occur for purposes of this LTIP as a result of any primary or secondary offering
of Company common stock to the general public through a registration statement
filed with the Securities and Exchange Commission.





“Code”
means the Internal Revenue Code of 1986, as amended.





“Covered
Officer” shall mean at any date (i) any individual who, with respect to
the previous taxable year of the Company, was a “covered employee” of the
Company within the meaning of Section 162(m) of the Code; provided, however,
that the term “Covered Officer” shall not include any such individual who is
designated by the Committee, in its discretion, at the time of any Award under
the LTIP or at any subsequent time, as reasonably expected not to be such a
“covered employee” with respect to the current taxable year of the Company or
the taxable year of the Company in which the applicable Award will be paid or
vested, and (ii) any individual who is designated by the Committee, in its
discretion, at the time of any Award or at any subsequent time, as reasonably
expected to be such a “covered employee” with respect to the current taxable
year of the Company or with respect to the taxable year of the Company in which
any applicable Award will be paid or vested.




“Disability”
means a physical or mental condition entitling the Participant to benefits under
the applicable long-term disability plan of the Company or any of its
subsidiaries, or if no such plan exists, a “permanent and total disability”
(within the meaning of Section 22(e)(3) of the Code) or as determined by the
Company in accordance with applicable
laws.





“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.


5


Exhibit
10.40


“Good
Reason”
means (a) an adverse diminution in Participant’s title, duties or
responsibilities (provided, however, that a requirement to utilize skills in
addition to those utilized in Participant’s current position, and/or a change in
title and/or direct reports to reflect the organizational structure of the
successor entity following a Change of Control, shall not in and of itself be
considered an “adverse diminution” as contemplated by this subsection (a)); (b)
a reduction of ten percent (10%) or more in Participant’s annual base salary;
(c) a reduction of ten percent (10%) or more in Participant’s annual target
bonus opportunity (including the failure to pay any bonus earned for any year in
which a Change of Control occurs pursuant to the terms of any applicable plan or
arrangement in effect prior to such Change of Control); or (d) the relocation of
Participant’s principal place of employment to a location more than fifty (50)
miles from Participant’s principal place of employment, except for required
travel on the Company’s business to an extent substantially consistent with
Participant’s historical business travel obligations.  Participant’s
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason hereunder,
provided that Participant provides the Company with a written notice of
resignation within ninety (90) days following the occurrence of the event
constituting Good Reason and the Company shall have failed to remedy such act or
omission within thirty (30) days following its receipt of such
notice.




“Person”
shall mean a “person” as defined in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (a) the Company (or any subsidiary thereof), (b) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, (c) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (d) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the
Company.





SECTION
11.  –   INTERPRETATION AND GOVERNING
LAW





This LTIP shall be governed by and
interpreted and construed in accordance with the internal laws of the State of
Maryland, without
reference to principles of conflicts or choices of laws.


6




Exhibit
10.40


SECTION
12.  –   WITHHOLDING OF TAXES





Pursuant to Section 13.3 of the
Plan, the Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company as a condition precedent for the
fulfillment of any Award, an amount sufficient to satisfy Federal, state and
local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this LTIP and/or any
action taken by a Participant with respect to an Award. Upon the lapse of all
restricted periods and the issuance of shares of common stock with respect to
any portion of an Award, the Company shall satisfy any applicable withholding
obligations or withholding taxes (“Withholding
Taxes”) as set forth by Internal Revenue Service guidelines for the
employer’s minimum statutory withholding with respect to the Participant and
issue shares of common stock to the Participant without
restriction.  As a condition to receiving settlement of any fully
vested shares of common stock hereunder, the Company may require Participant to
pay to the Company, and the Company shall have the right and is hereby
authorized to withhold from any payments hereunder or from any compensation or
other amount owing to Participant, an amount of cash necessary for the Company
to satisfy any Withholding Taxes in respect of this Award.  In its
sole and absolute discretion, the Company may satisfy the required Withholding
Taxes by withholding from the shares of common stock otherwise issuable pursuant
to settlement of the Award that number of whole shares necessary to satisfy
Withholding Taxes with respect to such shares based on the Fair Market Value (as
defined in the Plan) of the shares as of the date the applicable restricted
period ends.





SECTION
13.  –   EFFECTIVE DATE





This LTIP shall be effective as of
January 1, 2010 (the “Effective
Date”).





SECTION
14.  –   MISCELLANEOUS





This LTIP is not a “qualified” plan for
federal income tax purposes.





No provision of the LTIP shall require
the Company, for the purpose of satisfying any obligations under the LTIP, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for such
purposes. Participants shall have no rights under the LTIP other than as
unsecured general creditors of the Company, except that insofar as they may have
become entitled to payment of additional compensation by performance of
services, they shall have the same rights as other employees under general
law.





In no event shall any member of the
Committee be personally liable by reason of any contract or other instrument
executed by a member of the Committee or on his or her behalf in his or her
capacity as a member of the Committee nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless such member of the
Committee against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the LTIP unless arising out of such person’s
own fraud or bad faith. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such person may be
entitled under the Company’s operating agreement, as a matter of law, or
otherwise, or any power that the Company may have to indemnify him or hold him
harmless.





The Committee shall be fully justified
in relying, acting or failing to act, and shall not be liable for having so
relied, acted or failed to act in good faith, upon any information furnished in
connection with the LTIP by any person or persons other than such
member.


7


Exhibit
10.40


SCHEDULE
A


2010
LTIP Participant Opportunities:





Allocation of 2010 LTIP
Award





Participant
            
            Restricted Stock
              (Time-Vested)
              50% of LTIP Award
            
            Performance Shares
              (RSUs)
              50% of LTIP Award
            
            Total Dollar Value
              of LTIP Award
              (based on “target” performance)Randall
      ChurcheyThomas
      TrubianaRandall
      BrownChristine
      RichardsDrew
      Koester





Restricted Stock Awards
(Time-Vested)





Participant
                  
                  Number of Shares of Time Vested Restricted Stock to be
                    AwardedRandall
      ChurcheyThomas
      TrubianaRandall
      BrownChristine
      RichardsDrew
      Koester





Performance Shares
(RSUs)





Metric
                          
                          Threshold
                            Performance
                          
                          Target
                            Performance
                          
                          Maximum
                            PerformanceEDR’s
      TSR Compared to average TSR of Peer Group
                          
                          EDR’s
      TSR is equal to or exceeds (up to 4.9%) average TSR of Peer
      Group
                          
                          EDR’s
      TSR exceeds (5%-9.9%) average TSR of Peer Group
                          
                          EDR’s
      TSR exceeds average TSR of Peer Group by 10% or
  more





8


Exhibit
10.40


“TSR” or
“Total
Stockholder Return” means the appreciation in the Fair Market Value of
the Company’s common stock (or in the case of the Peer Group (defined below),
the common stock of such companies) plus any dividends paid in respect of such
stock during the Performance Period. For purposes of calculating performance,
the Committee will compare the Company’s TSR to the average TSR of the Peer
Group at the end of the Performance Period.





“Peer
Group” means the group of companies comprised of:


·
            American
      Campus Communities, Inc. (ACC)-student housing
  properties


·
            Associated
      Estates Realty Corporation (AEC)-multifamily apartment
      properties


·
            BRE
      Properties, Inc. (BRE)-multifamily apartment
  properties


·
            Camden
      Property Trust (CPT)-multifamily apartment
  properties


·
            Cousins
      Properties Inc. (CUZ)-diverse real estate
  portfolio


·
            Home
      Properties, Inc. (HME)-multifamily apartment
  properties


·
            Mid-America
      Apartments (MAA)-multifamily apartment
  properties


·
            Post
      Properties, Inc. (PPS)-multifamily apartment
  properties


·
            UDR,
      Inc. (UDR)-multifamily apartment
properties


9





Exhibit
10.40





Calculation of Performance
Shares (RSUs)





The table
below shows the number of Shares that each Participant is eligible to receive
based on the Threshold, Target and Maximum performance levels. The number of
shares to be granted is based on the closing price of the Company’s common stock
on December 31, 2009 of $      .




Number of Shares based
  on:Participant
                                        
                                        Threshold
                                          Performance(1)
                                        
                                        Target
                                          Performance (2)
                                        
                                        Maximum
                                          Performance (3)Randall
      ChurcheyThomas
      TrubianaRandall
      BrownChristine
      RichardsDrew
      Koester




(1) 50%
of Participant’s long-term incentive target value x .5.




(2) 50%
of Participant’s long-term incentive target value.




(3) 50%
of Participant’s long-term incentive target value x 1.5.




At the
end of the Performance Period, the Committee will determine the level and to
what extent (i.e., Threshold, Target or Maximum) the performance goal was
met.  RSUs that satisfy the performance goal will be converted to
fully vested Common Shares.


10


Exhibit
10.40





EXHIBIT
1


Form
of Restricted Stock Award Agreement


11


Exhibit
10.40





EXHIBIT
2


Form
of Restricted Stock Unit Award Agreement


12