11.  Unitholders’ equity (continued):  Upon valid tender for redemption of each unit of Finance Trust, the unitholder is entitled to receive, except as provided  below, a price per unit payable in cash equal to the Canadian dollar equivalent of the outstanding principal amount of the  U.S. Holdco Notes as of the redemption date, divided by the total number of Finance Trust units issued and outstanding  immediately prior to the redemption date. In certain circumstances, including where such payment would cause Finance  Trust's monthly cash redemption obligations to exceed $50 (subject to adjustment in certain circumstances or waiver by  the trustees) the redemption price per Finance Trust unit being redeemed, to which a redeeming unitholder is entitled  shall be the fair market value of the Finance Trust units being redeemed, as determined by the trustees, which shall be  payable by way of delivery of U.S. Holdco Notes.  The following number of Stapled Units are issued and outstanding:  As at December 31, 2008 147,032,851 Issued under the Distribution Reinv estment Plan and Unit Purchase Plan (the "DRIP") 1,261,744 Stapled Units redeemed from a subsidiary (note 10) (5,437,565) Options ex ercised 968,232 As at December 31, 2009 143,825,262 Issued under the DRIP 814,074 2014 Convertible Debentures converted into Stapled Units (note 8(b)) 355,205 Options exercised 1,126,101 As at December 31, 2010 146,120,642 As at December 31, 2010, a maximum of 8,800,000 (2009 - 8,800,000) Stapled Units were authorized to be issued to the  REIT's officers, employees and certain trustees, of which 7,600,000 options (2009 - 7,000,000 options) have been  granted. The exercise price of each option approximated the market price of the Stapled Units on the date of grant and  shall be increased by the amount, if any, by which, (i) the fair market value of one Finance Trust unit at the time of  exercise of such option, exceeds (ii) the fair market value of one Finance Trust unit at the time of grant of such option. The options vest at 33.3% per year from the grant date, will be fully vested after three years, and expire ten years after  the date of the grant.  During the year ended December 31, 2010, 600,000 (2009 - 600,000) options were granted. The fair value of the unit  options used to compute compensation cost is the estimated fair value of each option granted on the grant date. This  was calculated using an option pricing model with the following weighted average assumptions: expected distribution  yield is 5.13%; expected volatility is 25.00%; risk free interest rate is 2.71%; and expected option life is 4.5 years from  the date of grant. The grant-date fair value of the options in total is $1,589. Unit-based compensation expense of  $1,225 for the year ended December 31, 2010 (2009 - $535) was included in the trust expenses amount recorded in net  earnings and charged to unitholders’ equity.  23  (a) Unit option plan:  H&R REAL ESTATE INVESTMENT TRUST  H&R FINANCE TRUST  Notes to Combined Financial Statements   (In thousands of dollars, except unit and per unit amounts)  Years ended December 31, 2010 and 2009 