exv10w5






Exhibit 10.5




FORM OF AMENDMENT

TO

ENDORSEMENT SPLIT DOLLAR LIFE INSURANCE AGREEMENT



The Endorsement Split Dollar Life Insurance Agreement (the “Agreement”) entered into as of
_______________ by and between AvalonBay Communities, Inc., a Maryland corporation (the “Company”),
and ____________ (the “Insured”), as previously amended, is hereby further amended as follows:




1. The Agreement is amended and restated as follows:




INTRODUCTION




     The Insured is a valuable employee of the Company. The Company wishes to continue this
employment relationship and, as inducement thereto, is willing to participate with the Insured in
the payment of premiums on certain life insurance policies as an additional form of compensation
for the Insured’s services as an employee of the Company. This Agreement is intended to qualify as
a life insurance employee benefit plan as described in Revenue Ruling 64-328.



     NOW, THEREFORE, the parties agree as follows:



ARTICLE 1. GENERAL DEFINITIONS




     The following terms shall have the meanings specified:



     1.1 “Company" means AvalonBay Communities, Inc., or any successor thereto.



     1.2 “Insured" means the Employee.



     1.3 “Insurer(s)” means the insurance company or companies listed on Attachment I
hereto.



     1.4 “Policy” or “Policies” means the insurance policy or policies listed on
Attachment I, issued on the life of the Insured by the Insurer(s), together with any supplementary
contracts to such policies issued by the Insurer(s).



     1.5 “Employment Agreement” means the Employment Agreement made as of
_________ between the Company and the Insured, as amended from time to time.



 









 





ARTICLE 2. PREMIUMS




     2.1 Premium Payments. During the term of this Agreement, each annual premium on each
Policy shall be paid as follows:



     2.1.1. Insured’s Portion. During the term of this Agreement the
Insured shall be obligated to pay a portion of each premium equal to the current
term rate for the Insured’s age multiplied by the Insured’s then current interest in
the death benefit of such Policy. The “current term rate” shall mean the lesser of
the Insurer’s term insurance rate or the PS 58 rate, as specified in Revenue Rulings
64-328 and 66-110, or any subsequently issued applicable authority. The Insured
shall pay the Insured’s portion of the premium through payroll deduction. After the
Insured ceases to be employed by the Company, if this Agreement remains in effect,
the Insured shall pay the Insured’s portion of the premium by personal check or
cash.



     2.1.2. Company’s Portion. During the term of this Agreement the
Company shall pay any additional premium amounts not paid by the Insured that are
required to meet the Company’s premium obligations to the Insured under the Plan.
Notwithstanding the foregoing, if the Insured is terminated by the Company for
Cause (as defined in the Employment Agreement) or the Insured resigns voluntarily
and such resignation is not considered a Constructive Termination Without Cause (as
defined in the Employment Agreement), the Company shall cease to pay any additional
premiums on behalf of the Insured and shall withdraw from the cash surrender value
of the Policy an amount equal to the lesser of the aggregate premiums paid by the
Company under the Policy or the cash surrender value. The Insured may choose to pay
future premiums on his own or arrange for the Policy to be reduced to a fully
paid-up Policy. No transfer of the Policy shall be made to the Insured until such
time as provided in Article 4.



     2.2 Timing. The Insured’s portion of the premium and the Company’s portion of the
premium shall be remitted to the Insurer before expiration of the grace period.



ARTICLE 3. POLICY OWNERSHIP AND INSURED’S BENEFITS




     3.1 Company’s Interest. The Company shall be the sole and exclusive owner of each
Policy and the direct beneficiary of an amount of the death proceeds of each Policy equal to the
aggregate premiums paid by the Company under the Policy.



     3.2 Insured’s Interest. The Insured shall have the right, during the term of this
Agreement, to designate and change direct and contingent beneficiaries (and to elect and change a
payment plan for such beneficiaries) with respect to the amount of the death proceeds of each



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Policy in excess of that payable to the Company pursuant to Section 3.1. Apart from this
right, the Insured shall have no current access to the Policy while this Agreement is in force.



ARTICLE 4. TERMINATION OF AGREEMENT




     This Agreement shall terminate 30 days after the earliest to occur of the following: (i)
Insured’s termination of employment by the Company for Cause (as defined in the Employment
Agreement), (ii) the Insured’s voluntary termination of employment which is not due to a
Constructive Termination Without Cause (as defined in the Employment Agreement), or (iii) the
payment of the full premiums due under the Policy for the Policy’s 15th year (i.e., the
payment due in 2017).



     This Agreement shall terminate in 2017, after the premium due date in such year.



     Upon termination of the Policy, except as otherwise provided in Section 2.1.2, the
Company shall first withdraw from the cash surrender value in the Policy an amount equal to the
lesser of the aggregate premiums paid by the Company under the Policy or the cash surrender value
in the Policy., and The Company shall then transfer the ownership of the Policy to the Insured
(subject to the payment of any required withholding taxes.); provided, however, that in the
event of termination under clause (i) or (ii), transfer of the Policy to the Insured may not occur
earlier than six months after the Insured’s termination of employment with the Company. Upon the
transfer of the policy to the Insured, the Company’s rights hereunder shall terminate. In the
event the Agreement is terminated under any other circumstances, the Insured’s rights hereunder
shall terminate.



ARTICLE 5. INSURER(S)




     Each Insurer shall be bound only by the provisions of and endorsements on its Policy, and any
payments made or actions taken by it in accordance therewith shall fully discharge it from all
claims, suits and demands of all persons. The Insurer shall in no way be bound by or be deemed to
have notice of the provisions of this Agreement.



ARTICLE 6. MISCELLANEOUS




     6.1 Termination/Amendment. The Company and the Insured may amend or terminate this
Agreement by mutual consent. Any amendment shall be in writing and shall be filed with the
Agreement.



     6.2 Transferability. The Insured shall have the right to assign any part or all of
the Insured’s interests in each Policy and this Agreement to any person, entity or trust by
execution of a written assignment delivered to the Company and the Insurer. The Insured may
not assign any part of his interest in each Policy and this Agreement to anyone. The Company
may also assign its rights in each Policy and in this Agreement.



     6.3 Binding Effect. This Agreement shall bind the Insured, his heirs, executors,
administrators and transferees, and the Company and its successors and any Policy beneficiary.



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     2. Attachment I and Attachment II to the Agreement are unchanged and remain in full force and
effect.



     IN WITNESS WHEREOF, this Amendment is entered into this ______ day of
____________, 2008.



	 	 	 	 	 
	 	AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 
	 	Insured
 
	 




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