8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

February 10, 2011

HOME PROPERTIES, INC.

(Exact name of Registrant as specified in its Charter)

MARYLAND	1-13136	16-1455126
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification Number)

850 Clinton Square, Rochester, New York 14604

 (Address of principal executive offices and internet site)

(585) 546-4900

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[    ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[    ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[    ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[    ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

HOME PROPERTIES, INC.

CURRENT REPORT

ON FORM 8-K

Item 1.01                 Entry into a Material Definitive Agreement.

On February 10, 2011, Home Properties, L.P. (the “Operating Partnership”) entered into an amendment (the “Amendment”) to its $175,000,000 Credit Agreement, dated September 1, 2009 (the “Credit Agreement”).  The lenders under the Credit Agreement, as amended, are Manufacturers and Traders Trust Company, U.S. Bank National Association, RBS Citizens, N.A., d/b/a/ Charter One, Chevy Chase Bank, a division of Capital One Bank, N.A., PNC Bank National Association, First Niagara Bank, JPMorgan Chase Bank, N.A. and Tristate Capital Bank.  Manufacturers and Traders Trust Company will continue to act as Administrative Agent. The line of credit was extended by one year to mature on August 31, 2012.  Upon the satisfaction of certain conditions, the Operating Partnership has the righ t to extend the line of credit for one additional year.  The Amendment eliminates a LIBOR floor of 1.5%, modifies the pricing grid to reduce the spread over LIBOR, and lowers the unused facility fee and the cap rate used for asset valuation purposes.  Repayment of advances on the line of credit continues to be guaranteed by Home Properties, Inc. (the “Company”) and certain of the Operating Partnership’s subsidiaries.  The Credit Agreement, as amended, contains various affirmative and negative covenants with respect to the Company, the Operating Partnership and their subsidiaries, including the requirement that the Company maintain certain financial ratios and measurements.  Advances under the credit facility are available for refinancing existing indebtedness, working capital and general corporate purposes.  The foregoing description of the Credit Agreement, guarantees and Amendment does not purport to be complete and is qualified in its ent irety by reference to the full text of the Credit Agreement and the Guaranty, which were filed previously and to the Amendment, which is filed as Exhibit 10.1 hereto, all of which are incorporated herein by reference.

Item 2.03                 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet arrangement of a Registrant.

The information in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.

Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Josh E. Fidler has notified the Company that he will not stand for re-election to the Board of Directors (the “Board”) at the Company’s 2011 Shareholders Meeting (the “2011 Shareholders Meeting”) because of other responsibilities.  In addition, Nelson B. Leenhouts, Norman Leenhouts and Paul L. Smith will not stand for re-election to the Board at the 2011 Shareholders Meeting because they have reached the Company’s mandatory Board retirement age.  Each of Josh Fidler, Nelson Leenhouts, Norman Leenhouts and Paul Smith will complete his current term as a director of the Company, which continues until the 2011 Shareholders Meeting.

The Company’s Board approved the adoption of an Amended and Restated Executive Retention Plan (the “Revised Plan”).  The predecessor Executive Retention Plan (the “Original Plan”) was adopted in 1999.  Both the Original Plan and the Revised Plan provide for severance benefits to the Company’s officers, including its executive officers, and certain employees upon termination of employment following a change in control.  The Revised Plan eliminates the excise tax gross-up payment to certain executives and the rights of those executives to terminate employment for any reason during a 30-day window following the one-year anniversary of the change in control.  The Revised Plan is effective immediately.

Item 8.01                 Other Events.

The Company’s Board approved the adoption of Executive Stock Ownership Guidelines (the “Guidelines”).  The Guidelines require the Company’s executive officers to acquire and retain certain levels of equity ownership in the Company.  The executive officers have three years from the adoption of the Guidelines to achieve compliance.

Item 9.01                 Financial Statements and Exhibits.

Exhibit 10.1                      First Amendment to Credit Agreement

Exhibit 10.2                      Amended and Restated Executive Retention Plan

Exhibit 99.1                      Executive Stock Ownership Guidelines

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HOME PROPERTIES, INC.

(Registrant)

Date:        February 16, 2011

By:           /s/ David P. Gardner                                                                           

David P. Gardner

Executive Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of February 10, 2011 by and among HOME PROPERTIES, L.P. (the “Borrower”), HOME PROPERTIES, INC. (the “Company”), MANUFACTURERS AND TRADERS TRUST COMPANY, as administrative agent (the “Administrative Agent”), and the LENDERS (as defined below) party hereto.

WHEREAS, the Borrower, the Company, the Lenders from time to time party thereto (the “Lenders”), the Administrative Agent and the other parties thereto have entered into that certain Credit Agreement dated as of September 1, 2009 (amended and in effect immediately prior to the date hereof, the “Credit Agreement”); and

WHEREAS, the Borrower, the Company, the Lenders and the Administrative Agent agree to amend certain provisions of the Credit Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1.                      Definitions.  Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Credit Agreement.

Section 2.                      Specific Amendments to Credit Agreement.  The parties hereto agree that the Credit Agreement is hereby amended as follows:

(a)           The definitions of “ADJUSTED LIBO RATE”, “ALTERNATE BASE RATE”, “APPLICABLE MARGIN”, “CAPITALIZATION RATE”, “MATURITY DATE” and “UNUSED FACILITY FEE RATE” contained in Section 1.1 are hereby restated in their entirety as follows:

“ADJUSTED LIBO RATE” means, for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (i) the LIBO Rate for such Interest Period multiplied by (ii) the Statutory Reserve Rate.

“ALTERNATE BASE RATE” means, for any day, a fluctuating rate of interest that is equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the one-month Adjusted LIBO Rate determined on a daily basis, plus (i) prior to the First Amendment Date, 1.750% and (ii) on or after the First Amendment Date, 1.00%. Any change in the Alternate Base Rate shall be effective on the opening of business on the day of such change.

“APPLICABLE MARGIN” means, (i) as of any date of determination prior to the First Amendment Date, the percentage rate set forth below corresponding to the ratio of Total Outstanding Indebtedness to Total Value as determined in accordance with Section 6.01(a)(i):

Level	Ratio of Total Outstanding Indebtedness to Gross Asset Value	Applicable Margin for Eurodollar Loans	Applicable Margin for ABR Loans
1	Greater than .60 to 1.00	3.250%	1.500%
2	Greater than .55 to 1.00 but less than or equal to .60 to 1.00	3.000%	1.250%
3	Greater than .50 to 1.00 but less than or equal to .55 to 1.00	2.750%	1.000%
4	Greater than .45 to 1.00 but less than or equal to .50 to 1.00	2.625%	0.875%
5	Less than or equal to .45 to 1.00	2.500%	0.750%

; and (ii) as of any date of determination on or after the First Amendment Date, the percentage rate set forth below corresponding to the ratio of Total Outstanding Indebtedness to Total Value as determined in accordance with Section 6.01(a)(i):

Level	Ratio of Total Outstanding Indebtedness to Gross Asset Value	Applicable Margin for Eurodollar Loans	Applicable Margin for ABR Loans
1	Greater than .55 to 1.00	2.625%	1.625%
2	Greater than .50 to 1.00 but less than or equal to .55 to 1.00	2.300%	1.300%
3	Greater than .45 to 1.00 but less than or equal to .50 to 1.00	2.100%	1.100%
4	Less than or equal to .45 to 1.00	1.900%	0.900%

The Applicable Margin for Loans shall be determined by the Administrative Agent from time to time, based on the ratio of Total Outstanding Indebtedness to Total Value as set forth in the Quarterly Compliance Certificate or Annual Compliance Certificate most recently delivered by the Borrower pursuant to Section 5.01(a)(ii) or Section 5.01(b)(ii), as the case may be.  Any adjustment to the Applicable Margin shall be effective as of the fifth Business Day following the Administrative Agent’s receipt of the applicable Annual Compliance Certificate or Quarterly Compliance Certificate, as the case may be.  If the Borrower fails to deliver an Annual Compliance Certificate or a Quarterly Compliance Certificate pursuant to Section 5.01, the Applicable Margin shall equal the percentages corresponding to Level 1 from the date such compliance certificate was to be delivered in accordance with the terms of this Agreement until the fifth Business Day following the Administrative Agent’s receipt of the applicable Annual Compliance Certificate or Quarterly Compliance Certificate, as the case may be.  Notwithstanding the foregoing, (a) for the period from the Effective Date through but excluding the date which is the fifth Business Day following the Administrative Agent’s receipt of the Annual Compliance Certificate for the fiscal year ended December 31, 2009, the Applicable Margin shall be determined based on Level 1 in the first table set forth above, and as of the fifth Business Day following the Administrative Agent’s receipt of the Annual Compliance Certificate for the fiscal year ended December 31, 2009, the Applicable Margin shall be adjusted to the Level corresponding to the ratio of Total Outstanding Indebtedness to Total Value as set forth in the Annual Compliance Certificate delivere d with respect to the fiscal year ended December 31, 2009, and (b) on the First Amendment Date the Applicable Margin will be adjusted to reflect the percentage rate referenced in the table set forth in clause (ii) above corresponding to the ratio of Total Outstanding Indebtedness to Total Value which shall be calculated for the fiscal quarter ending September 30, 2010 giving pro forma effect to the Capitalization Rate as in effect on the First Amendment Date, and thereafter, such Applicable Margin shall be adjusted from time to time as set forth in this definition.  The provisions of this definition shall be subject to Section 2.19.

“CAPITALIZATION RATE” means, (i) with respect to any calculation made prior to the First Amendment Date, 7.75% and (ii) with respect any calculation made on and after the First Amendment Date, 7.00%; provided, however, that if the occupancy level of any Unencumbered Eligible Project falls below 75%, the Capitalization Rate used with respect to such Unencumbered Eligible Project for purposes of determining the Total Unencumbered Property Value with respect to such Unencumbered Eligible Project shall be 10.00%; provided further, however, that the Capitalization Rate shall be reviewed from time to time at the request of any Lender by the Administrative Agent and the Lenders and shall be subject to adjustment from time to time by the Required Lenders, acting in their sole discretion, based upon market conditions for comparab le property types.

“MATURITY DATE” means August 31, 2012 (the “Initial Maturity Date”); provided however that if (i) the Borrower advises the Administrative Agent on or before May 31, 2012 (but in any event not prior to February 28, 2012) in writing of its desire to extend the Maturity Date, (ii) pays the Administrative Agent for the account of each Lender an extension fee (the “Extension Fee”) equal to 0.375% of each Lender’s Commitment, (iii) on the date such notice is delivered and on the Initial Maturity Date no Default or Event of Default has occurred and is continuing and (iv) on the date such notice is delivered and on the Initial Maturity Date all representations and warranties under the Loan Documents are true and correct in all material respects except to the extent such representation or warranty ex pressly relates to an earlier date (in which case such representation and warranty shall be true and correct as of such date), then the “Maturity Date” shall mean August 31, 2013. Upon payment, the Extension Fee shall be fully earned and nonrefundable.

“UNUSED FACILITY FEE RATE” means the per annum percentage set forth in the table below corresponding to the Level at which the “Applicable Margin” is determined in accordance with the definition thereof:

Level	Unused Facility Fee Rate Prior to the First Amendment Date	Unused Facility Fee Rate On or After the First Amendment Date
1	0.500%	0.375%
2	0.500%	0.375%
3	0.500%	0.300%
4	0.375%	0.300%
5	0.375%	N/A

Notwithstanding the foregoing, (a) for the period from the Effective Date through but excluding the date which is the fifth Business Day following the Administrative Agent’s receipt of the Annual Compliance Certificate for the fiscal year ending December 31, 2009, the Unused Facility Fee Rate shall be determined based on Level 1 for the period prior to the First Amendment Date, and (b) for the avoidance of doubt, on the First Amendment Date the Unused Facility Fee Rate will be adjusted to reflect the Level referenced in the table set forth above for the period on or after the First Amendment Date corresponding to the Level to which the “Applicable Margin” is adjusted on the First Amendment Date in accordance with the definition thereof, and thereafter, such Unused Facility Fee Rate shall be adjusted from time to ti me as set forth in the definition of “Applicable Margin”.

(b)           The following definition of “FIRST AMENDMENT DATE” is hereby added in the correct alphabetical sequence to Section 1.1. of the Credit Agreement:

“FIRST AMENDMENT DATE” shall mean February 10, 2011.

(c)           Section 6.01(a) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

(a)           Indebtedness and Other Financial Covenants. The Borrower shall not, and shall not permit its Subsidiaries to, directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except that the Borrower and/or its Subsidiaries may create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness to the extent that (i) Total Outstanding Indebtedness would not exceed 60% of Total Value, (ii) Secured Indebtedness of the Consolidated Businesses would not exceed 57.5% of Total Value, (iii) Recourse Secured Indebtedness would not exceed 35% of Total Value, or (iv) Adjusted Recourse Secured Indebtedness would not exceed 12.5% of Total Value. Notwith standing anything to the contrary herein contained, in no event shall (x) the aggregate amount of completion guarantees with respect to Projects at any time exceed 15% of Total Value and (y) the aggregate amount of Low Income Housing Credit Program Guarantees at any time exceed $11 million.

(d)           Section 6.01(e) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

(e)           Total Unencumbered Value. At no time shall (i) the Unsecured Indebtedness of the Consolidated Businesses be greater than 50% of the Total Unencumbered Value, (ii) the Total Unencumbered Value be less than $300,000,000 or (iii) the Unencumbered Eligible Projects consist of less than fifteen (15) Eligible Projects.  At no time shall the sum of items (i) and (ii) set forth in the definition of Total Unencumbered Value be less than $270,000,000.

Section 3.                      Conditions Precedent.  The effectiveness of the amendments to the Credit Agreement set forth in Section 2 hereof are subject to the truth and accuracy of the representations set forth in Sections 4 and 5 below and the satisfaction of the following conditions:

(a)           Receipt by the Administrative Agent of counterparts of this Amendment duly executed by the Borrower, the Company, the Administrative Agent and each of the Lenders;

(b)           Receipt by the Administrative Agent of a reaffirmation of obligations duly executed by each of the Guarantors;

(c)           Payment by Borrower of all fees, costs and expenses of the Lender in accordance with Section 7 and 8 hereof; and

(d)           Such other documents, instruments and agreements as the Administrative Agent may reasonably request.

Section 4.  Representations.  The Borrower and the Company each represents and warrants to the Administrative Agent and each Lender that:

(a)           Authorization.  The Borrower and the Company have the right and power, and have taken all necessary action to authorize the execution and delivery of this Amendment and to perform their obligations hereunder and under the Credit Agreement, as amended by this Amendment, in accordance with their respective terms.  This Amendment has been duly executed and delivered by a duly authorized officer of each of the Borrower and the Company. This Amendment, the Credit Agreement, as amended by this Amendment and each of the Loan Documents are legal, valid and binding obligations of the Borrower and the Company, enforceable against them in accordan ce with their respective terms except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally.

(b)           Compliance with Laws, etc.  The execution, delivery and performance of this Amendment and any other Loan Documents to which the Borrower or the Company are a party do not and will not, by the passage of time, the giving of notice, or both: (i) require any approval by any Governmental Authority or violate any applicable law relating to the Borrower or the Company; (ii) conflict with, result in a breach of or constitute a default under the organizational documents of the Borrower or the Company, or any indenture, agreement or other instrument to which the Borrower or the Company are a party or by which they or any of their properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or the Company.

(c)           No Default.  No Default or Event of Default has occurred and is continuing as of the date hereof nor will exist immediately after giving effect to this Amendment.

Section 5.  Reaffirmation of Representations.  The Borrower and the Company hereby represent, repeat and reaffirm all representations and warranties made by such Person in the Credit Agreement and the other Loan Documents on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that any such representation or warranty expressly relates to an earlier date, in which case, the Borrower and the Company hereby represents, repeats and reaffirms such representation and warranty as of such date).

Section 6.  Certain References.  Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

Section 7.  Expenses.  The Borrower shall pay or reimburse the Administrative Agent upon demand for all reasonable fees, costs and expenses (including reasonable attorneys' fees) incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and any other agreements and documents executed and delivered in connection herewith including any fees agreed to be paid pursuant any agreement among the Company and/or the Borrower and the Administrative Agent.

Section 8.  Amendment Fee.  In consideration of the Lenders amending the Credit Agreement as provided herein, the Borrower agrees to pay to the Administrative Agent for the account of each Lender an amendment fee in an amount equal to (a) .20% times (b) such Lender’s Commitment.

Section 9.  Benefits.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10.  GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 11.  Effect; Ratification.  Except for the amendments expressly set forth and referred to above, the provisions of the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect, and the amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.  The Company and the Borrower hereby (a) ratify and reaffirm each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents effective as of the date hereof and (b) acknowledges and reaffirms its Obligations and its continuing obligations owing to the Administrative Agent and the Lenders under the Loan Documents.

Section 12.  RELEASE.  IN CONSIDERATION OF THE AMENDMENTS CONTAINED HEREIN THE SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE COMPANY AND THE BORROWER HEREBY IRREVOCABLY RELEASE AND FOREVER DISCHARGE ADMINISTRATIVE AGENT AND LENDERS AND EACH OF THEIR RESPECTIVE AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES AND ATTORNEYS (EACH, A “RELEASED PERSON”) OF AND FROM ALL DAMAGES, LOSSES, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, ACTIONS AND CAUSES OF ACTION WHATSOEVER WHICH THE BORROWER OR THE COMPANY MAY NOW HAVE OR CLAIM TO HAVE ON AND AS OF THE DATE HEREOF AGAINST ANY RELEASED PERSON, WHETHER PRESENTLY KNOWN OR UNKNOWN, L IQUIDATED OR UNLIQUIDATED, SUSPECTED OR UNSUSPECTED, CONTINGENT OR NON-CONTINGENT, AND OF EVERY NATURE AND EXTENT WHATSOEVER (COLLECTIVELY, “CLAIMS”) OTHER THAN ANY CLAIM ARISING SOLELY OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH RELEASED PERSON.  EACH OF THE BORROWER AND THE COMPANY REPRESENTS AND WARRANTS TO ADMINISTRATIVE AGENT AND LENDERS THAT IT HAS NOT GRANTED OR PURPORTED TO GRANT TO ANY OTHER PERSON ANY INTEREST WHATSOEVER IN ANY CLAIM, AS SECURITY OR OTHERWISE.  EACH OF THE COMPANY AND THE BORROWER JOINTLY AND SEVERALLY SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS EACH RELEASED PERSON FROM AND AGAINST ANY AND ALL CLAIMS AND ANY LOSS, COST, LIABILITY, DAMAGE OR EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) INCURRED BY ANY RELEASED PERSON IN INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, PROVIDING EVIDENCE OR PRODUCING DOCUMENTS IN CONNECTION WITH OR TAKING OTHER ACTION IN RESPECT OF ANY COMMENCED OR THREATENED CLAIM.

Section 13.                      Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.  Any signatures delivered by a party hereto by facsimile transmission or by electronic transmission shall be deemed an original signature hereto.

[Signatures on Next Page]

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Credit Agreement to be executed as of the date first above written.

BORROWER:

HOME PROPERTIES, L.P.

By:  Home Properties, Inc.

By:  /s/ David P. Gardner

    Name: David P. Gardner

    Title: Executive Vice President and

Chief Financial Officer

COMPANY:

HOME PROPERTIES, INC.

By:  /s/ David P. Gardner

    Name: David P. Gardner

    Title: Executive Vice President and

Chief Financial Officer

[Signature page to First Amendment to Credit Agreement: Home Properties, L.P.]

MANUFACTURERS AND TRADERS TRUST COMPANY,as a Lender and as Administrative Agent

By:  /s/ Lisa A. Plescia

     Name: Lisa A. Plescia

     Title:  Vice President

PNC BANK NATIONAL ASSOCIATION, as a Lender

By:  /s/ Gregory J. Fedorko

     Name:  Gregory J. Fedorko

     Title:  Vice President

U.S. BANK NATIONAL ASSOCIATION, as a Lender

By:  /s/ Bruce A. Ostrom

     Name: Bruce A. Ostrom

     Title:  Vice President

TRISTATE CAPITAL BANK, as a Lender

By:  /s/ Timothy A. Merriman

     Name:  Timothy A. Merriman

     Title:  Senior Vice President

JPMORGAN CHASE BANK N.A., as a Lender

By:  /s/ Vito Caraccio

     Name:  Vito Caraccio

     Title:  Senior Vice President

[Signature page to First Amendment to Credit Agreement: Home Properties, L.P.]

FIRST NIAGARA BANK, as a Lender

By: /s/ Jeffrey H. Parker

     Name:  Jeffrey H. Parker

     Title:  Vice President

RBS CITIZENS, N.A. d/b/a Charter One, as a Lender

By:  /s/ Don Woods

     Name:  Don Woods

     Title:  Senior Vice President

CAPITAL ONE, N.A., successor by Merger to Chevy Chase Bank, F.S.B., as a Lender

By:  /s/ Frederick H. Denecke

     Name:  Frederick H. Denecke

     Title:  Vice President

EX-10.2

Exhibit 10.2

HOME PROPERTIES, INC.

HOME PROPERTIES, L.P.

AMENDED AND RESTATED EXECUTIVE RETENTION PLAN

This Amended and Restated Executive Retention Plan (the “Plan”) is adopted by Home Properties, Inc. (the “Company”), a Maryland corporation organized and operated as a real estate investment trust (“REIT”), and Home Properties, L.P. (the “Operating Partnership”), a New York limited partnership, as of the 12th day of February, 2011.  The Company, the Operating Partnership and any subsidiary entities controlled by the Company or the Operating Partnership are collectively referred to herein as the “Company.”  This Plan supersedes the Executive Retention Plan adopted by the Company and the Operating Partnership as of February 2, 1999 a s such Plan was amended.

1.           PURPOSES OF THE PLAN.  The Board of Directors (the “Board”) of the Company, has determined that it continues to be in the best interests of the Company and its shareholders and the Operating Partnership and its partners to assure that certain of the Company’s officers and employees (the “Participants”) will be able to carry out their functions in the best interests of the shareholders of the Company and the partners of the Operating Partnership not distracted by the ongoing consolidation in the REIT industry and notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board continues to believe that it is in the best interests to diminish the inevitable distraction of the Participants because of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage Participants’ full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Participants with compensation and benefits arrangements upon a Change of Control which ensure that (a) such attention and dedication are likely through protecting the compensation and benefits expectations of the Participants, and (b) such arrangements are competitive with those of other entities in the REIT industry.

2.           CERTAIN DEFINITIONS.

“Base Salary” means the Participant’s wage or salary base for federal income tax purposes on the Termination Date without regard to annual or special bonuses or compensation income resulting from employee benefit plans of the Company (e.g., stock grants, options, excess life insurance).

“Bonus” means an annual bonus in cash under the Bonus Plan, or any comparable bonus under any predecessor or successor plan or program.

“Bonus Plan” means the Company’s incentive compensation or bonus plan or program and any successor or replacement plan or program providing for periodic cash bonuses based on various categories or pay grades and related individual and Company performance criteria.

“Cause” means: (i) the willful and continued failure of a Participant to perform substantially the Participant’s duties with the Company (other than any such failure resulting from the incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to a Participant by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Participant has not substantially performed the Participant’s duties, or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, or (iii) in lieu of clauses (i) and (ii) such other definition of “cause” or comparable concept set forth in any separate agreement of employment between the Participant and the Company.  For purposes of this provision, no act or failure to act, on the part of Participant, shall be considered “willful” unless it is done, or omitted to be done, by Participant in bad faith or without reasonable belief that Participant’s action or omission was in the best interests of the Company.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company.

 “Change of Control” means:

(i) The acquisition by any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either:  (y) the then-outstanding shares of common stock of the Company or interests in the Operating Partnership (either such stock or interests the “Outstanding Company Equity”), or (z) the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Corporation or the Operating Partnership, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Person controlled by the Company, or (D) the acquisition by any Person pursuant to a transaction which complies with clauses (y) and (z) below; or

(ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date this Plan is adopted whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, provided, however, any individual whose initial assumption of office occurs as a result of an acquisition of any equity interest in the Company or an actual or threatened electio n contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board shall not be deemed a member of the Incumbent Board; or

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(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless: (y) following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Equity and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock or other equity and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limi tation, a entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Equity and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of, respectively, the then-outstanding shares of common stock or other equity of the entity or similar voting control of the entity resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination, or (z) prior to such Business Combination, the Incumbent Board determines in good faith and in the reasonable exercise of its discretion, by the affirmative vote of at least two-thirds of its members, that the Business Combination is not a transaction which was intended to be a “Change of Control” for purposes of this Plan; or

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company or by the partners of the Operating Partnership, provided that such liquidation or dissolution is not abandoned by the Board.

“Corporate Staff” means the officers of the Company and other regular full-time Central or Regional employees as defined in the Company’s Employee Handbook, who qualify for a bonus under the Bonus Plan at or above a threshold specified from time to time by the Committee.

“Effective Date” means the first date on which a Change of Control occurs, provided, however, if a Change of Control occurs and if a Participant’s employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Participant that such termination of employment:  (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control, or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Plan, the “Effective Date” as to such Participant means the date immediately prior to the date of such termination of employment.

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“Employee Benefit Plans” any employee benefit plan in which the Participants participate other than Welfare Benefit Plans.

“Equity Award Agreement” means any award agreement or certificate issued to a Participant in connection with any equity-based award.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and, where applicable, the rules and regulations promulgated thereunder and judicial interpretations thereof.

“Excise Tax” means the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or any successor or similar provision.

“Good Reason” means:  (i) a material reduction, without the Participant’s written consent, of the Participant’s duties, responsibilities, and authority from the Participant’s duties, responsibilities, and authority as in effect immediately prior to the Change in Control; (ii) the Company’s requiring Participant to be based at any office or location more than 30 miles from the location at which the Participant was principally employed prior to the Change in Control; (iii) a material reduction by the Company of the Participant’s base compensation or incentive compensation opportunity; or (iv) any failure by the Company to require any successor to the Company to expressly assume and agree to perform this Plan as provided in Sectio n 8(c) of this Plan.  In no event will a Participant have a Good Reason to resign if the Participant resigns more than one year following the initial existence of the Good Reason condition.

“Notice of Termination” means a written notice which: (i) indicates the specific basis on which the Participant’s employment is being terminated, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Participant’s employment under the provision so indicated, and (iii)  specifies the Termination Date.

“Other Senior Staff” means all regular full-time Central and Regional employees as defined by the Company’s Employee Handbook, other than the Corporate Staff.

“Participant” means any of the Corporate Staff or Other Senior Staff.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other authoritative guidance issued thereunder.

“Termination Date” means (i) if a Participant’s employment is terminated by the Company for Cause, or by a Participant for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, and (ii) if a Participant’s employment is terminated by the Company other than for Cause, the Termination Date shall be the date on which the Company notifies Participant of such termination.

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“Welfare Benefit Plan” means welfare benefit plans, practices, policies and programs provided by the Company (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs).

3.           TERMINATION OF EMPLOYMENT; OBLIGATIONS OF THE COMPANY UPON TERMINATION.

(a)           Members of Corporate Staff.  In the event the employment of a member of Corporate Staff is terminated on or after the Effective Date and during the two-year period following such Effective Date by the Company without Cause or by the Corporate Staff member for Good Reason, the Company shall pay to the Corporate Staff member in a lump sum in cash within 30 days after the Termination Date the aggregate of the following amounts: (i) the Corporate Staff member’s Base Salary through the Termination Date to the extent not theretofore paid, (ii) all other amounts earned, accrued or deferred under the Bonus Plan, (iii) two times the Corporate Staff member’s Base Salary; and (iv) an amount equal to two times the greater of (y) the Corporate Staff member’s target Bonus for services rendered in the year in which the Termination Date occurs; or (z) the average Bonus paid to the Corporate Staff member for services rendered in each of the three years prior to the year in which the Termination Date occurs.  In the event that the vesting of equity-based awards as described in Section 4 below, together with all other payments and the value of any benefit received or to be received by the Corporate Staff member would result in all or a portion of such payment being subject to Excise Tax, then the Corporate Staff member’s payment shall be either:  (a) the full payment; or (b) such lesser amount that would result in no portion of the payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state, and local employment taxes, incomes taxes, and the Excise Tax, resul ts in the receipt by the Corporate Staff member, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code.  All determinations required to be made under this Section shall be made by a nationally recognized accounting firm or such other consultant expert in such calculations as the Company may select immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”).  The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and the Corporate Staff member.  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

(b)           Other Senior Staff.  In the event the employment of an Other Senior Staff member is terminated on or after the Effective Date and during the two-year period following such Effective Date by the Company without Cause or by the Other Senior Staff member for Good Reason, the Company shall pay to the  Other Senior Staff member in a lump sum in cash within 30 days after the Termination Date the aggregate of the following amounts: (i) the Other Senior Staff member’s Base Salary through the Termination Date to the extent not theretofore paid, (ii) all other amounts earned, accrued or deferred under the Bonus Plan, and (iii) an amount equ al to one month’s Base Salary for each year such member of Other Senior Staff was employed by the Company (or a predecessor entity for which such Other Senior Staff member is given service credit for purposes of one or more of the Employee Benefit Plans), with a minimum of two month’s Base Salary and a maximum of twenty-four month’s Base Salary.

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4.           EFFECT OF TERMINATION ON EQUITY GRANTS.  In the event of a termination of a Participant’s employment as described in Section 3 above, the Company shall take whatever action is necessary (i) to cause the Participant to become fully vested as of the date immediately before the Termination Date in all time-based stock options, restricted stock grants, and all other equity-based awards; and (ii) to be entitled (A) to exercise and continue to exercise all stock options and all other equity-based awards having an exercise schedule and (B) to retain such grants and awards, but in each case under clauses (A) and (B) such right to exercise and retain shall last only for so long as, and shall apply only to the same extent as, if such options, grants and awards ha d vested prior to termination of employment and their treatment following such termination were determined in accordance with the terms of the applicable Equity Award Agreement and the incentive plan governing such agreement.

An Equity Award Agreement issued to a Participant may contain language regarding the effect of a termination of the Participant’s employment under certain circumstances.  Notwithstanding such language in the Equity Award Agreement, for so long as this Plan is in effect, the Company will be obligated, if the terms of this Plan are more favorable in this regard than the terms of the Equity Award Agreement, to take the actions required above in this Section 4 hereof upon the happening of the termination of a Participant’s employment as described in Section 3 above.

Notwithstanding the foregoing provisions of this Section 4, if an option is intended to be an Incentive Stock Option, in no event may the time for exercise be later than three (3) months after the Participant’s Termination Date.  Any performance-based equity awards that have not been earned but may be earned based on the achievement of certain performance criteria shall vest at the greater of:  (i) the target amount of the awards (if applicable); or (ii) a pro-rata amount based on the performance from the commencement of the performance period through the Termination Date and shall be deemed earned, issued and vested as of the Termination Date.

5.           NON-EXCLUSIVITY OF RIGHTS. Nothing in this Plan shall prevent or limit a Participant’s continuing or future participation in any plan, program, policy or practice provided by the Company and for which such Participant may qualify, nor shall anything herein limit or otherwise affect such rights as Participant may have under any contract or plan with the Company.  Amounts which are vested benefits or which the Participant is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company at or subsequent to the Termination Date shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Plan.

6.           NO EMPLOYMENT RIGHTS.  Each Participant and the Company acknowledge that, except as may otherwise be provided under any other written agreement between such Participant and the Company, the employment of each Participant by the Company is “at will” and each Participant’s employment may be terminated by either the Participant or the Company at any time, subject in each case to any rights which the Participant may have to compensation after the Effective Date.

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7.           NO MITIGATION.  The Company’s obligation to make the payments under this Plan shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Participant or others.  In no event shall any Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Participant under any of the provisions of this Plan and such amounts shall not be reduced whether or not the Participant obtains other employment.

8.           SUCCESSORS AND ASSIGNS.

(a)  This Plan is personal to each Participant covered by the Plan and without the prior written consent of the Company shall not be assignable by any Participant, directly or indirectly or by operation of law, otherwise than by will or the laws of descent and distribution. The interests of each Participant under this Plan are not subject to the claims of any creditors of such Participant and may not be involuntarily assigned, alienated or encumbered.  Any purported assignment in violation of this Plan shall be null and void.  This Plan shall inure to the benefit of and be enforceable by Participant’s legal representatives.

(b)  This Plan shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

9.           MISCELLANEOUS.

(a)           This Plan shall be governed by and construed in accordance with the laws of the State of Maryland, without reference to principles of conflict of laws. The captions of this Plan are not part of the provisions hereof and shall have no force or effect.

(b)           The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which any Participant may reasonably incur as a result of any contest by the Company, the Participants or others of the validity or enforceability of, or liability under, any provision of this Plan, plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code whether or not the Participant is successful in asserting such Participant’s rights in such contest; provided, however, that the Company shall not be obligated to make any such reimbursement, and shall be entitled to repayment of any of Participant’s legal fees or expenses previously advanced (i) if the Participant is unsucc essful, and (ii) if independent counsel mutually acceptable to the Company and the Participant determines that the assertion by such Participant of such contested rights under the Plan was in bad faith or frivolous.  Payments for legal fees and expenses shall be made by the Company within ten business days after delivery of the Participant’s written request for such payment accompanied by detailed evidence of such fees and expenses, provided that the Participant shall have submitted such written request for reimbursement at least 30 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.

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(c)           The provisions of this Plan shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Plan, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision, and (ii) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability.

(d)           The Company may withhold from any amounts payable under this Plan such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)           Any Participant’s or the Company’s failure to insist upon strict compliance with any provision of this Plan or the failure to assert any right of such Participant or the Company may have hereunder, including, without limitation, the right of Participants to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Plan.

(f)           This Plan shall be deemed to constitute a contract between the Company and each Participant who serves as such at any time while this Plan is in effect.  No repeal or amendment of this Plan, insofar as it reduces the extent of the benefits due any Participant, shall, without such Participant’s express prior written consent be effective as to such Participant with respect to any Effective Date occurring or allegedly occurring prior to such repeal or amendment.

(g)           Section 409A.  The timing of all payments and benefits under this Plan shall be made consistently with the requirements of Section 409A.  Therefore, notwithstanding any provision in the Plan to the contrary, in the event that a Participant is a “specified employee” (as defined in Section 409A), any benefit or amount described in the Plan shall be delayed until the date which is the first day of the seventh month after the date of such Participant’s termination of employment (or, if earlier, the date of such Participant’s death), if paying such amount or benefit prior to that date would violate Section 409A.  To the extent that payments under this Plan are subject to Section 409A, this Plan shall be governed by and subject to the requirements of Section 409A and shall be interpreted and administered in accordance with that intent.  If any provisions of this Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict.

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EX-99.1

Exhibit 99.1

HOME PROPERTIES, INC.

EXECUTIVE STOCK OWNERSHIP GUIDELINES

Adopted February 12, 2011

I.           PURPOSE

The Executive Stock Ownership Guidelines (“Guidelines”) of Home Properties, Inc. (the “Corporation”) align the interests of the Corporation’s executive officers with the interests of the Corporation’s stockholders and promote the Corporation’s commitment to sound corporate governance.

II.           PARTICIPATION

The Guidelines apply to the following officers:

Chief Executive Officer;

All Executive Vice Presidents; and

All Senior Vice Presidents

III.           DETERMINATION OF GUIDELINES

Individual guidelines are established for each participant as follows:

Officer Position	Ownership Guidelines
Chief Executive Officer	5x base salary
Executive Vice Presidents	3x base salary
Senior Vice Presidents	2x base salary

The Corporate Governance/Nominating Committee of the Board of Directors (“Governance Committee”) may, from time to time, re-evaluate and revise the participants’ guidelines to give effect to changes in the Corporation’s common stock price or capitalization or as they might otherwise deem appropriate.

IV.           COUNTING SHARES OWNED

Stock that counts towards satisfaction of the Guidelines includes:

Common and convertible (but not perpetual) preferred stock;

Restricted stock;

Units under the Corporation’s Deferred Bonus Plan; and

Operating partnership units in Home Properties, L.P.

V.           COMPLIANCE WITH THE GUIDELINES

Participants are required to achieve compliance with the Guidelines within three years from the date of adoption by the Board of Directors, or three years from their date of hire whichever is later.  If a participant’s guideline threshold increases as a result of a base salary increase or a promotion, e.g., from Senior Vice President to Executive Vice President, the participant will have three years to satisfy the new threshold, commencing January 1 of the year following the salary increase or promotion.  Once achieved, ownership of the guideline amount must be maintained for so long as the individual is subject to the Guidelines.

Notwithstanding the foregoing, once a participant comes into compliance with the Guidelines, that participant will not be deemed to be out of compliance with the Guidelines if the sole reason that the participant’s share ownership has dropped below the required threshold is a decrease in the market price of the Corporation’s common stock.  In that event, the Participant will have an additional period of three years from the date of non-compliance to reach compliance provided that the participant is prohibited from selling any common shares until the required threshold is again achieved.

The Governance Committee has the authority to review each participant’s compliance (or progress towards compliance) with the Guidelines from time to time and, in its sole discretion, to impose such conditions, restrictions or limitations on any non-complying participant as the Governance Committee determines to be necessary or appropriate in order to achieve the purposes of the Guidelines.  For example, the Governance Committee may mandate that a non-complying participant retain (and not transfer) all or a portion of any shares delivered to the participant through the Corporation’s compensation plans or otherwise restrict the participant’s transfer of previously owned shares.

There may be instances in which the Guidelines would place a severe hardship on a participant or prevent a participant from complying with a court order, such as a divorce settlement.  In these instances, the participant must submit a request in writing to the Chair of the Governance Committee (via the Chief Financial Officer) that summarizes the circumstances and describes the extent to which an exemption is being requested.  The Chair of the Governance Committee (after reviewing the request with the Chief Executive Officer and the Chief Financial Officer) will make the final decision as to whether an exemption will be granted.  If such a request is granted in whole or in part, the Chief Financial Officer will work with the participant to develop an alternative stock ownership plan that reflects both the intention of the Guidelines and the participant’s individual circumstances.

VI.           ADMINISTRATION

The Guidelines are administered and interpreted by the Governance Committee and, as to matters relating to the calculation of individual guidelines, the Chief Financial Officer of the Corporation.

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