exv10w33



 





EXHIBIT 10.33




RULES AND PROCEDURES

FOR

NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PROGRAM




     The following rules and procedures have been adopted by the Compensation Committee (the
“Committee”) of the Board of Directors of AvalonBay Communities, Inc. (the “Company”) to govern the
deferral by a Non-Employee Director pursuant to Section 7(b) of the AvalonBay Communities, Inc.
1994 Stock Option and Incentive Plan, as amended and restated on December 8, 2004 and as
subsequently amended (the “Plan”). All capitalized terms used herein shall have the same meaning
as used in the Plan unless otherwise specifically provided herein.



     1. Election to Defer. A Non-Employee Director may elect in advance to receive all or
a portion of the cash compensation or Restricted Stock Award otherwise due him in the form of a
Deferred Stock Award. To make such an election, the Non-Employee Director must execute and deliver
to the Company an election form specifying the percentage of his cash compensation he wishes to
defer and whether or not he wishes to receive his Restricted Stock Award in the form of a Deferred
Stock Award. Except with respect to a newly elected or appointed Non-Employee Director, any
election under this paragraph shall apply only to cash fees that are earned with respect to
services to be performed beginning on or after the start of the next calendar year after such
receipt and to stock awards to be granted after the start of the next calendar year. A newly
elected or appointed Non-Employee Director, may, no later than 30 days after becoming a
Non-Employee Director, file a deferral election which shall apply only to cash fees that are earned
with respect to services to be performed subsequent to the election and to stock awards to be
granted subsequent to the election. An election shall remain in effect from year to year, until a
new election becomes effective with respect to cash fees payable, and a stock award to be granted,
in the next calendar year. A Non-Employee Director may revoke or modify his deferral election with
respect to cash fees that are payable, and a stock award to be granted, in the calendar year
beginning after receipt by the Company of his written revocation (for clarification, this means
that in the absence of a revocation or modification, an election will remain in effect for
subsequent calendar years)..



     2. Deferred Account. As of the last day of each calendar quarter, a Non-Employee
Director’s deferred account (“Account”) shall be credited with a number of whole and fractional
stock units determined by dividing his aggregate deferred cash fees for the calendar quarter by the
Fair Market Value of a share of Stock. If a Non-Employee Director has elected to receive his
Restricted Stock Award in the form of a Deferred Stock Award, at such time as provided in Section
6(b)(i) of the Plan for issuance of Restricted Stock, his Account shall also be credited with a
number of stock units determined pursuant to the provisions of Section 6(b)(i) of the Plan. Except
as otherwise provided in the award agreement, the stock units credited in lieu of a Restricted
Stock Award shall vest twenty percent (20%) on the date of issuance and twenty percent (20%) on
each of the four anniversaries of the date of issuance.



     3. Dividend Equivalent Amounts. Whenever dividends (other than dividends payable only
in shares of Stock) are paid with respect to Stock, each Account shall be credited with a number of
whole and fractional stock units determined by multiplying the dividend value per share by the
stock unit balance of the Account on the record date and dividing the result by the Fair Market
Value of a share of Stock on the dividend payment date.



 









 





     4. Period of Deferral. The period of deferral shall cease when a Non-Employee
Director ceases to serve as a member of the Board of Directors of the Company.



     5. Designation of Beneficiary. A Non-Employee Director may designate one or more
beneficiaries to receive payments from his Account in the event of his death. A designation of
beneficiary shall apply to a specified percentage of a Non-Employee Director’s entire interest in
his Account. Such designation, or any change therein, must be in writing and shall be effective
upon receipt by the Company. If there is no effective designation of beneficiary, or if no
beneficiary survives the Non-Employee Director, the estate of the Non-Employee Director shall be
deemed to be the beneficiary. All payments to a beneficiary or estate shall be made in a lump sum
in shares of Stock, with any fractional share paid in cash.



     6. Payment. All vested stock units credited to a Non-Employee Director’s Account
shall be paid in shares of Stock to the Non-Employee Director, or his designated beneficiary (or
beneficiaries) or estate, in a lump sum within 30 days after the Non-Employee Director ceases to
serve on the Board; provided, however, that fractional shares shall be paid in cash.
Notwithstanding the foregoing, in the event of a Change in Control of the Company (as defined in
Section 16(b) of the Plan), all Accounts under this deferred compensation arrangement shall become
immediately payable in a lump sum.



     7. Adjustments. In the event of a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall make appropriate adjustments in the number
of stock units credited to Non-Employee Directors’ Accounts.



8. Nontransferability of Rights. During a Non-Employee Director’s lifetime, any
payment under this deferred compensation arrangement shall be made only to him. No sum or
other interest under this deferred compensation arrangement shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge,
and any attempt by a Non-Employee Director or any beneficiary under this deferred
compensation arrangement to do so shall be void. No interest under this deferred
compensation arrangement shall in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of a Non-Employee Director or beneficiary
entitled thereto.



     9. Company’s Obligations to Be Unfunded and Unsecured. The Accounts maintained under
this deferred compensation arrangement shall at all times be entirely unfunded, and no provision
shall at any time be made with respect to segregating assets of the Company (including Stock) for
payment of any amounts hereunder. No Non-Employee Director or other person shall have any interest
in any particular assets of the Company (including Stock) by reason of the right to receive payment
under this deferred compensation arrangement, and any Non-Employee Director or other person shall
have only the rights of a general unsecured creditor of the Company with respect to any rights
under this deferred compensation arrangement.




Adopted by the Compensation Committee of the Board of Directors on November 20, 2006.