<PAGE>
                                                                    Exhibit 10.1

                           AVALONBAY COMMUNITIES, INC.

             SUMMARY OF PRINCIPAL TERMS OF OFFICER SEVERANCE PROGRAM


         The Company's Officer Severance Program is designed to provide
severance protection to officers whose employment is terminated in connection
with a change in control of the Company and who do not have severance protection
under an employment agreement with the Company. The principal features of the
program are described below. This is just a summary and is qualified in its
entirety by reference to the complete text of the Officer Severance Program,
which is available to all officers.

<TABLE>
<CAPTION>
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   FEATURE                                                      SUMMARY OF PROVISION
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<S>                                      <C>
1.   Officers covered by program         All Vice Presidents.  Officers with more senior positions who are
                                         not covered by severance arrangements under an agreement with the
                                         Company that provides greater severance benefits are also covered
                                         by the program.
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2.   Circumstances under which           This is a "double trigger" program -- i.e., there must be a change
     severance protection provided       in control AND the officer's employment must be terminated or
                                         constructively terminated without cause by the Company.  Officers
                                         will NOT receive severance benefits in connection with the
                                         following terminations:  a voluntary resignation by the officer
                                         under circumstances which do not constitute a "constructive
                                         termination" by the Company; a termination by the Company for
                                         cause; a termination of the officer's employment on account of
                                         death or disability.
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3.   Definition of "change in control"   "Change in Control" is defined in the same way as in the
                                          Company's stock option plan.
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4.   Period of time in which severance   Severance benefits are provided if the officer is terminated or
     benefit protection is provided.     constructively terminated during the two years following a change
                                         in control or during the six months prior to a change in control.
---------------------------------------- --------------------------------------------------------------------
5.   Amount of cash severance            An amount of cash equal to one times the sum of (i) base salary plus
                                         (ii) the average cash bonus paid during the prior two years. (The
                                         multiplier is reduced to one-half in the case of a constructive
                                         termination due to a requirement that the officer relocate to a
                                         different metropolitan area). The officer will also receive all
                                         accrued base salary and incentive cash compensation through the date
                                         of termination.
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6.   Treatment of equity-based awards    Accelerated vesting of all unvested options and restricted stock
                                         grants. Options will thereafter be exercisable for the period of time
                                         provided in the applicable option agreement.
---------------------------------------- --------------------------------------------------------------------
7.   Welfare benefits (health, dental,   Continuation of all benefits for 18 months with COBRA eligibility
     life, etc.)                         thereafter. The Company will not be obligated to continue
                                         contributing the whole life portion of the premiums on split dollar
                                         life insurance policies.
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8.   Gross-up for excise tax             In the event that the officer is subject to the "golden
     ("golden parachute tax").           parachute tax" rules, the severance benefits will be capped at the
                                         Internal Revenue Code Section 280(G) maximum if the officer is, on a
                                         net after tax basis, better off by so capping the severance benefits.
---------------------------------------- --------------------------------------------------------------------
9.   Effect of subsequent employment     Cash severance will not be reduced as result of compensation
     on severance                        that the officer receives from a subsequent employer. However, the
---------------------------------------- --------------------------------------------------------------------



                                                      1
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---------------------------------------- --------------------------------------------------------------------
     benefits.                           welfare (i.e., insurance) benefits will be reduced to
                                         the extent that the officer obtains comparable benefits from a
                                         subsequent employer.
---------------------------------------- --------------------------------------------------------------------
10.  Enforcement of agreement            The Company will reimburse the officer for all reasonable legal
                                         fees and expenses incurred in enforcing the agreement.  There is a
                                         compulsory arbitration clause.
---------------------------------------- --------------------------------------------------------------------
11.  Constructive termination            The following constitute a "constructive termination" by the Company
                                         such that the officer can resign during the 24 months following a
                                         change in control (or during the 6 months prior to a change in
                                         control) and receive the severance benefits under the program:

                                         -    a material adverse change in functions, duties or
                                              responsibilities

                                         -    involuntary relocation of the officer's offices to a location
                                              outside of the metropolitan area where the employee is
                                              principally employed prior to the change in control or
                                              anticipated change in control (note: a termination on account of
                                              a relocation receives a one-half cash lump sum rather than a 1x
                                              cash lump sum)

                                         -    Reduction or elimination of any material compensation program
                                              unless comparable or substitute benefits are provided

                                         -    Acquiring company fails to honor any compensation arrangement
---------------------------------------- --------------------------------------------------------------------
12.  Release                             As a condition to receiving the severance benefits, an officer
                                         will be required to sign a release of all claims and a one-year
                                         non-solicitation agreement.
---------------------------------------- --------------------------------------------------------------------
13.  Other terms                         The text of the formal program contains a number of important
                                         defined terms and other provisions.
---------------------------------------- --------------------------------------------------------------------
</TABLE>


                                                      2
<PAGE>





                           AVALONBAY COMMUNITIES, INC.

                             OFFICER SEVERANCE PLAN


         1. PURPOSE. AvalonBay Communities, Inc. (the "COMPANY") considers it
essential to the best interests of its stockholders to foster the continuous
employment of key management personnel. The Board of Directors of the Company
(the "BOARD") recognizes, however, that, as is the case with many publicly held
corporations, the possibility of a Change in Control (as defined in Section 2
hereof) exists and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders.
Therefore, the Board has determined that the AvalonBay Communities, Inc. Officer
Severance Plan (the "PLAN") should be adopted to reinforce and encourage the
continued attention and dedication of the Covered Employees (as defined below)
to their assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a Change in Control.
The term "Covered Employee" means any officer of the Company holding the
position of Vice President or higher (it being noted that any officer receiving
severance payments under any other agreement or arrangement with the Company
shall be subject to the limitation on benefits hereunder set forth in the last
sentence of Section 4 hereof) (each, a "COVERED EMPLOYEE"). Nothing in this Plan
shall be construed as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Covered Employee and the
Company or any of its subsidiaries or affiliates (together with the Company, the
"EMPLOYERS"), the Covered Employee shall not have any right to be retained in
the employ of the Employers.

         2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any one of the following events:

                  (a) Any individual, entity or group (a "PERSON") within the
         meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
         1934 (the "ACT") (other than the Company, any corporation, partnership,
         trust or other entity controlled by the Company (a "SUBSIDIARY"), or
         any trustee, fiduciary or other person or entity holding securities
         under any employee benefit plan or trust of the Company or any of its
         Subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such Person, shall
         become the "beneficial owner" (as such term is defined in Rule 13d-3
         under the Act) of securities of the Company representing 30% or more of
         the combined voting power of the Company's then outstanding securities
         having the right to vote generally in an election of the Company's
         Board of Directors ("VOTING SECURITIES"), other than as a result of (i)
         an acquisition of securities directly from the Company or any
         Subsidiary or (ii) an acquisition by any corporation pursuant to a
         reorganization, consolidation or merger if, following such
         reorganization, consolidation or merger the conditions described in
         clauses (i), (ii) and (iii) of subparagraph (c) of this Section 2 are
         satisfied; or

                  (b) Individuals who, as of the Effective Date, constitute the
         Company's Board of Directors (the "INCUMBENT DIRECTORS") cease for any
         reason to constitute at least a majority of the Board, provided,
         however, that any individual becoming a director of the Company
         subsequent to the date hereof (excluding, for this purpose, (i) any
         such individual whose initial assumption of office is in connection
         with an actual or threatened election contest relating to the election
         of members of the Board of Directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Board of Directors, including by reason of agreement intended
         to avoid or settle any such actual or threatened contest or
         solicitation, and (ii) any individual whose initial assumption of
         office is in connection with a reorganization, merger or consolidation,
         involving an unrelated entity and occurring after the date hereof),
         whose election or nomination for election by the Company's shareholders
         was approved by a vote of at least a majority of the persons then
         comprising Incumbent Directors shall for purposes of this Plan be
         considered an Incumbent Director; or


                                       1
<PAGE>


                  (c) Consummation of a reorganization, merger or consolidation
         of the Company, unless, following such reorganization, merger or
         consolidation, (i) more than 50% of, respectively, the then outstanding
         shares of common stock of the corporation resulting from such
         reorganization, merger or consolidation and the combined voting power
         of the then outstanding voting securities of such corporation entitled
         to vote generally in the election of directors is then beneficially
         owned, directly or indirectly, by all or substantially all of the
         individuals and entities who were the beneficial owners, respectively,
         of the outstanding Voting Securities immediately prior to such
         reorganization, merger or consolidation, (ii) no Person (excluding the
         Company, any employee benefit plan (or related trust) of the Company, a
         Subsidiary or the corporation resulting from such reorganization,
         merger or consolidation or any subsidiary thereof, and any Person
         beneficially owning, immediately prior to such reorganization, merger
         or consolidation, directly or indirectly, 30% or more of the
         outstanding Voting Securities), beneficially owns, directly or
         indirectly, 30% or more of, respectively, the then outstanding shares
         of common stock of the corporation resulting from such reorganization,
         merger or consolidation or the combined voting power of the then
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors, and (iii) at least a majority
         of the members of the board of directors of the corporation resulting
         from such reorganization, merger or consolidation were members of the
         Incumbent Board at the time of the execution of the initial agreement
         providing for such reorganization, merger or consolidation;

                  (d) Approval by the shareholders of the Company of a
         complete liquidation or dissolution of the Company; or

                  (e) The sale, lease, exchange or other disposition of all or
         substantially all of the assets of the Company, other than to a
         corporation, with respect to which following such sale, lease, exchange
         or other disposition (i) more than 50% of, respectively, the then
         outstanding shares of common stock of such corporation and the combined
         voting power of the then outstanding voting securities of such
         corporation entitled to vote generally in the election of directors is
         then beneficially owned, directly or indirectly, by all or
         substantially all of the individuals and entities who were the
         beneficial owners of the outstanding Voting Securities immediately
         prior to such sale, lease, exchange or other disposition, (ii) no
         Person (excluding the Company and any employee benefit plan (or related
         trust) of the Company or a Subsidiary or such corporation or a
         subsidiary thereof and any Person beneficially owning, immediately
         prior to such sale, lease, exchange or other disposition, directly or
         indirectly, 30% or more of the outstanding Voting Securities),
         beneficially owns, directly or indirectly, 30% or more of,
         respectively, the then outstanding shares of common stock of such
         corporation and the combined voting power of the then outstanding
         voting securities of such corporation entitled to vote generally in the
         election of directors and (iii) at least a majority of the members of
         the board of directors of such corporation were members of the
         Incumbent Board at the time of the execution of the initial agreement
         or action of the Board of Directors providing for such sale, lease,
         exchange or other disposition of assets of the Company.

         Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred for purposes of this Plan solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Voting Securities outstanding, increases the proportionate voting power
represented by the Voting Securities beneficially owned by any Person to 30% or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any Person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Stock or
other Voting Securities (other than pursuant to a stock split, stock dividend,
or similar transaction), then a "Change in Control" shall be deemed to have
occurred for purposes of this Plan.

         3. TERMINATING EVENT. A "Terminating Event" shall mean the termination
of employment of a Covered Employee in connection with any of the events
provided in this Section 3 occurring within twenty-four (24) months following a
Change in Control. In addition, notwithstanding the foregoing, in the event of
the termination of employment of a Covered Employee in connection with any of
the events provided in this Section 3 within six (6) months prior to the
occurrence of a Change in Control (based on an event, such as a Notice of
Termination, that occurred within such six (6) month period prior to a Change in
Control), such termination shall,


                                       2
<PAGE>


upon the occurrence of a Change in Control, be deemed a Terminating Event under
this Plan. To give effect to the prior sentence, references in Sections
3(b)(ii), (iii) and (iv) to circumstances existing "immediately prior to a
Change in Control" will be interpreted to mean, in a case where the six month
look-back of the prior sentence is being applied, to circumstances existing
immediately prior to the change in circumstances.

                  (a) termination by the Employers of the employment of the
         Covered Employee with the Employers for any reason other than (i) for
         Cause or (ii) as a result of the death or disability (as determined
         under the Employers' then existing long-term disability coverage) of
         such Covered Employee. "Cause" shall mean, and shall be limited to, the
         occurrence of any one or more of the following events:

                           (i) the Covered Employee is convicted of or enters a
                  plea of nolo contendere to an act which is defined as a felony
                  under any federal, state or local law, not based upon a
                  traffic violation, which conviction or plea has or can be
                  expected to have, in the good faith opinion of the Board of
                  Directors or the CEO, a material adverse impact on the
                  business or reputation of the Company; or

                           (ii) any one or more acts of theft, larceny,
                  embezzlement, fraud or material intentional misappropriation
                  from or with respect to the Company; or

                           (iii) a breach by the Covered Employee of his
                  fiduciary duties under Maryland law as an officer, or a
                  material breach by the Covered Employee of any rule,
                  regulation, policy or procedure of the Company that is
                  generally announced or distributed to, and applies to, all
                  employees of the Company or a subset of employees that
                  includes the Covered Employee (including, without limitation,
                  in all events the Company's ethics, sexual harassment and
                  insider trading policies); or

                           (iv) the Covered Employee's commission of any one or
                  more acts of gross negligence or willful misconduct which in
                  the good faith opinion of the Board of Directors or the CEO
                  has resulted in material harm to the business or reputation of
                  the Company; or

                           (v) the deliberate or willful failure by the Covered
                  Employee (other than by reason of the Covered Employee's
                  physical or mental illness, incapacity or disability) to
                  substantially perform the Covered Employee's duties with the
                  Employers and the continuation of such failure for a period of
                  fifteen (15) days after written notice thereof.

                  A Terminating Event shall not be deemed to have occurred
         pursuant to this Section 3(a) solely as a result of the Covered
         Employee being an employee of any direct or indirect successor to the
         business or assets of any of the Employers, rather than continuing as
         an employee of the Employers following a Change in Control. For
         purposes of clauses (iv) and (v) of this Section 3(a), no act, or
         failure to act, on the Covered Employee's part shall be deemed
         "willful" unless done, or omitted to be done, by the Covered Employee
         without reasonable belief that the Covered Employee's act, or failure
         to act, was in the best interest of the Employers; or

                  (b) termination by the Covered Employee of the Covered
         Employee's employment with the Employers for Good Reason. "Good Reason"
         shall mean the occurrence of any of the following events:

                           (i) a material adverse change in the functions,
                  duties or responsibilities of the Covered Employee's position
                  (other than a termination of employment for Cause) which would
                  reduce the level, importance or scope of such position (a
                  change in the person and/or department to whom the Covered
                  Employee is required to report, or a change in the personnel
                  that report to the Covered Employee, shall not by itself
                  constitute a material adverse change in the Covered Employee's
                  position); or


                                       3
<PAGE>


                           (ii) the relocation of the office at which the
                  Covered Employee is principally located immediately prior to
                  the Change in Control (the "Original Office") to a new
                  location outside of the metropolitan area of the Original
                  Office or the failure to locate the Covered Employee's own
                  office at the Original Office (or at the office to which such
                  office is relocated which is within the metropolitan area of
                  the Original Office); or

                           (iii) either (X) the failure by the Company to
                  continue in effect any compensation plan or program in which
                  the Covered Employee participates immediately prior to a
                  Change in Control which is material to the Covered Employee's
                  total compensation, unless comparable alternative arrangements
                  (embodied in ongoing substitute or alternative plans or
                  programs) have been implemented with respect to such plans or
                  programs, or (Y) the failure by the Company to continue the
                  Covered Employee's participation therein following a Change in
                  Control (or in such substitute or alternative plans or
                  programs) on a basis not materially less favorable, in terms
                  of the amount of benefits provided and the level of the
                  Covered Employee's participation relative to other
                  participants, as existed during the last completed fiscal year
                  of the Company prior to the Change in Control (the occurrence
                  of either failure in clause (X) or (Y), a "CIC COMPENSATION
                  FAILURE"); PROVIDED, HOWEVER, that in no event shall a CIC
                  Compensation Failure have occurred if:

                                                (A) the value of the Covered
                                   Employee's total annual compensation
                                   following a Change in Control, including, but
                                   not limited to, cash compensation (including
                                   salary and bonus), stock grants (valued using
                                   stock price less consideration paid), stock
                                   options (valued using the Black-Scholes
                                   method or a variation thereof, as determined
                                   by the Board of Directors or a compensation
                                   consultant engaged by the Board of Directors)
                                   and benefits (valued using an actuarial or
                                   similar valuation method), is at least 90% of
                                   the Covered Employee's total annual
                                   compensation in the last fiscal year prior to
                                   the Change in Control; or

                                                (B) (I) the Covered Employee's
                                        total annual cash compensation
                                        (including salary and bonus) following a
                                        Change in Control is at least 90% of
                                        what it was in the year prior to the
                                        Change in Control, with such reasonable
                                        adjustments thereto as are necessary to
                                        give effect to performance based bonuses
                                        (with respect to which the performance
                                        criteria may reasonably be modified) and
                                        the level of performance achieved with
                                        respect thereto;

                                                (II) the total value of the
                                        Covered Employee's annual stock grants
                                        (valued using stock price less
                                        consideration paid) following a Change
                                        in Control are at least 90% of what they
                                        were in the year prior to the Change in
                                        Control, with such reasonable
                                        adjustments thereto as are necessary to
                                        give effect to (x) performance based
                                        bonuses (with respect to which the
                                        performance criteria may reasonably be
                                        modified) and the level of performance
                                        achieved with respect thereto, and (y)
                                        to changes in the price of the Company's
                                        or the successor's stock due to market
                                        fluctuations;

                                                (III) the Covered Employee's
                                        total annual stock option grants
                                        (measured either by (a) total value, as
                                        determined as described in the preceding
                                        paragraph (A), or (b) total "leverage
                                        potential" (i.e., the number of options
                                        granted multiplied by the exercise
                                        price, after giving effect to changes in
                                        the price of the Company's or the
                                        successor's stock due to market
                                        fluctuations)) are at least 90% of what
                                        they were in the year prior to the
                                        Change in Control, with such reasonable
                                        adjustments thereto as are necessary to
                                        give effect to performance based bonuses
                                        (with respect to


                                       4
<PAGE>


                                        which the performance criteria may
                                        reasonably be modified) and the level
                                        of performance achieved with respect
                                        thereto; and

                                                (IV) there is not a material
                                        reduction in the Covered Employee's
                                        benefits as compared to the last fiscal
                                        year prior to the Change in Control; or

                           (iv) the failure by the Employers to obtain an
                  effective agreement from any successor to assume and agree to
                  perform this Plan.

         4. SPECIAL TERMINATION BENEFITS.  In the event a Terminating
Event occurs with respect to a Covered Employee,

                  (a) the Employers shall pay to the Covered Employee an amount
         equal to all accrued but unpaid annual base salary and all earned but
         unpaid cash incentive compensation earned through such Covered
         Employee's Date of Termination. Said amount shall be paid in one lump
         sum payment no later than thirty-one (31) days following the Date of
         Termination (as such term is defined in Section 8(b)); and

                  (b) if and only if such Terminating Event is not described in
         Section 3(b)(ii), the Employers shall pay to the Covered Employee an
         amount equal to the sum of the following:

                           (i) one times the amount of the current annual base
                  salary of the Covered Employee, determined prior to any
                  reductions for pre-tax contributions to a cash or deferred
                  arrangement or a cafeteria plan; and

                           (ii) one times the amount of the average annual cash
                  bonus earned by the Covered Employee with respect to the two
                  (2) calendar years immediately prior to the Change in Control
                  determined prior to any reductions for pre-tax contributions
                  to a cash or deferred arrangement or a cafeteria plan
                  (provided, however, that if the Covered Employee's tenure with
                  the Company is such that prior to the Terminating Event the
                  Covered Employee has earned an annual bonus only with respect
                  to the calendar year immediately prior to the Change in
                  Control, then such annual bonus shall be deemed to have been
                  earned with respect to the two (2) calendar years immediately
                  prior to the Change in Control; and, provided further,
                  however, that if the Covered Employee's tenure with the
                  Company is such that prior to the Terminating Event the
                  Covered Employee has not earned an annual bonus, then the
                  Covered Employee's target annual bonus immediately prior to
                  the Change in Control shall be deemed to have been earned with
                  respect to the two (2) calendar years immediately prior to the
                  Change in Control).

         Said amount shall be paid in one lump sum payment no later than
         thirty-one (31) days following the Date of Termination; and

                  (c) if and only if such Terminating Event is described in
         Section 3(b)(ii), the Employers shall pay to the Covered Employee an
         amount equal to the sum of the following:

                           (i) one-half times (0.5) the amount of the current
                  annual base salary of the Covered Employee, determined prior
                  to any reductions for pre-tax contributions to a cash or
                  deferred arrangement or a cafeteria plan; and

                           (ii) one-half times (0.5) times the amount of the
                  average annual cash bonus earned by the Covered Employee with
                  respect to the two (2) calendar years immediately prior to the
                  Change in Control determined prior to any reductions for
                  pre-tax contributions to a cash or deferred arrangement or a
                  cafeteria plan, with procedures similar to those described in
                  Section 4(b)(ii) to determine such average.


                                       5
<PAGE>


         Said amount shall be paid in one lump sum payment no later than
         thirty-one (31) days following the Date of Termination (as such term is
         defined in Section 8(b)); and

                  (d) the Employers shall continue to provide health, dental and
         life insurance (or contribute a portion of the cost thereof) to the
         Covered Employee, on the same terms and conditions as though the
         Covered Employee had remained an active employee, for eighteen (18)
         months after the Terminating Event or until such earlier date as the
         Covered Employee obtains comparable benefits through other employment
         or payment to the Covered Employee of a present value equivalent of the
         costs of such benefits to the Company (provided, however, that this
         clause (d) shall in no event obligate the Company to continue to fund
         the premiums on any split dollar life insurance policy pursuant to
         arrangements that were in effect while the Covered Employee was
         employed); and

                  (e) the Employers shall take whatever action is necessary (i)
         to cause the Covered Employee to become vested as of the Date of
         Termination in all 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 had
         vested prior to termination of employment and their treatment following
         such termination were determined in accordance with the terms of the
         applicable stock option agreement, grant agreement or other equity
         award agreement and the incentive plans governing such agreements.
         Reference in this regard is made to the clarification set forth in
         Section 5; and

                  (f) the Employers shall provide COBRA benefits to the Covered
         Employee following the end of the period referred to in Section 4(d)
         above, such benefits to be determined as though the Covered Employee's
         employment had terminated at the end of such period; and

                  (g) notwithstanding the foregoing, if the Terminating Event
         occurs before the Change in Control, the special termination benefits
         required by this Section 4 shall be paid, or commence, as the case may
         be, no later than thirty-one (31) days after the consummation of the
         Change in Control.

         Notwithstanding the foregoing, the special termination benefits
required by Sections 4(b) or 4(c) shall be reduced by any amount paid or payable
to the Covered Employee by the Employers under the terms of any employment
agreement or other plan or arrangement providing for compensation upon such
Covered Employee's termination of employment (other than payment of accrued
vacation benefits and payments under any deferred compensation plan). Other
benefits under this Plan shall also be reduced or eliminated to the extent
provided to the Covered Employee under other agreements or arrangements.
Therefore, a Covered Employee with an employment agreement or arrangement that
provides greater severance benefits than those provided in this Officer
Severance Program will receive no payments or benefits under this Officer
Severance Program.

         5. CLARIFICATION REGARDING TREATMENT OF OPTIONS AND RESTRICTED STOCK.
The stock option and restricted stock agreements (the "EQUITY AWARD AGREEMENTS")
that the Covered Employee has or may receive may contain language regarding the
effect of a termination of the Covered Employee's employment under certain
circumstances. Notwithstanding such language in the Equity Award Agreements, 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 Agreements, to take the actions required under Section 4(e) hereof upon
the happening of a Terminating Event. That section provides that the Company
will cause the Covered Employee to become vested as of the Date of Termination
in all equity-based awards, and that such equity-based awards will thereafter be
subject to the provisions of the applicable Equity Award Agreement as it applies
to vested awards upon a termination. For purposes of clarification, although an
option grant may vest under termination circumstances described above, such
option will thereafter be exercisable only for so long as the related option
agreement provides, except that the Compensation Committee of the Board of
Directors may, in its sole discretion, elect to extend the expiration date of
such option. For example, in general the Covered Employees' option agreements
provide that (in the absence of an extension by the Compensation Committee) upon
a termination of employment for any reason other than death,



                                       6
<PAGE>


disability, retirement or cause, any vested options will only be exercisable for
three months from the date of termination or, if earlier, the expiration date of
the option.

         6. ADDITIONAL BENEFITS.

                  (a) Anything in this Plan to the contrary notwithstanding, in
         the event that any compensation, payment or distribution by the
         Employers to or for the benefit of a Covered Employee, whether paid or
         payable or distributed or distributable pursuant to the terms of this
         Plan or otherwise, (the "SEVERANCE PAYMENTS"), would be subject to the
         excise tax imposed by Section 4999 of the Internal Revenue Code of
         1986, as amended (the "CODE"), the following provisions shall apply to
         such Covered Employee:

                           (i) If the Severance Payments, reduced by the sum of
                  (1) the Excise Tax and (2) the total of the Federal, state,
                  and local income and employment taxes payable by the Covered
                  Employee on the amount of the Severance Payments which are in
                  excess of the Threshold Amount, are greater than or equal to
                  the Threshold Amount, the Covered Employee shall be entitled
                  to the full benefits payable under this Plan.

                           (ii) If the Threshold Amount is less than (x) the
                  Severance Payments, but greater than (y) the Severance
                  Payments reduced by the sum of (1) the Excise Tax and (2) the
                  total of the Federal, state, and local income and employment
                  taxes on the amount of the Severance Payments which are in
                  excess of the Threshold Amount, then the benefits payable
                  under this Plan shall be reduced (but not below zero) to the
                  extent necessary so that the maximum Severance Payments shall
                  not exceed the Threshold Amount. To the extent that there is
                  more than one method of reducing the payments to bring them
                  within the Threshold Amount, the Covered Employee shall
                  determine which method shall be followed; provided that if the
                  Covered Employee fails to make such determination within 45
                  days after the Employers have sent the Covered Employee
                  written notice of the need for such reduction, the Employers
                  may determine the amount of such reduction in its sole
                  discretion.

         For the purposes of this Section 6, "Threshold Amount" shall mean three
         times the Covered Employee's "base amount" within the meaning of
         Section 280G(b)(3) of the Code and the regulations promulgated
         thereunder less one dollar ($1.00); and "Excise Tax" shall mean the
         excise tax imposed by Section 4999 of the Code, or any interest or
         penalties incurred by the Covered Employee with respect to such excise
         tax.

                  (b) The determination as to which of the alternative
         provisions of Section 6(a) shall apply to the Covered Employee shall be
         made by such nationally recognized accounting firm as may at that time
         be the Company's independent public accountants immediately prior to
         the Change in Control (the "ACCOUNTING FIRM"), which shall provide
         detailed supporting calculations both to the Employers and the Covered
         Employee within 15 business days of the Date of Termination, if
         applicable, or at such earlier time as is reasonably requested by the
         Employers or the Covered Employee. For purposes of determining which of
         the alternative provisions of Section 6(a) shall apply, the Covered
         Employee shall be deemed to pay federal income taxes at the highest
         marginal rate of federal income taxation applicable to individuals for
         the calendar year in which the determination is to be made, and state
         and local income taxes at the highest marginal rates of individual
         taxation in the state and locality of the Covered Employee's residence
         on the Date of Termination, net of the maximum reduction in federal
         income taxes which could be obtained from deduction of such state and
         local taxes. Any determination by the Accounting Firm shall be binding
         upon the Employers and the Covered Employee.

         7. WITHHOLDING. All payments made by the Employers under this Plan
shall be net of any tax or other amounts required to be withheld by the
Employers under applicable law.


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<PAGE>


         8. NOTICE AND DATE OF TERMINATION; ETC.

                  (a) NOTICE OF TERMINATION. Any purported termination by the
         Employer of a Covered Employee's employment (other than by reason of
         death) within 24 months following a Change in Control shall be
         communicated by written Notice of Termination from the Employers to the
         Covered Employee in accordance with this Section 8. For purposes of
         this Plan, a "Notice of Termination" shall mean a notice which shall
         indicate the specific termination provision in this Plan relied upon
         and the Date of Termination. Further, a Notice of Termination for Cause
         is required to include a written explanation as to the basis for such
         termination.

                  (b) DATE OF TERMINATION. "Date of Termination," with respect
         to any purported termination of a Covered Employee's employment by the
         Employers within twenty-four (24) months after a Change in Control,
         shall mean the date specified in the Notice of Termination which, in
         the case of a termination by the Employers other than a termination for
         Cause (which may be effective immediately), shall not be less than 30
         days after the Notice of Termination is given. Notwithstanding Section
         3(a) of this Plan, in the event that a Covered Employee gives a Notice
         of Termination to the Employers, the Employers may unilaterally
         accelerate the date of termination of such Covered Employee and such
         acceleration shall not constitute an independent Terminating Event for
         purposes of Section 3(a) of this Plan or a violation of the preceding
         sentence (I.E., the Covered Employee will be entitled to severance
         payments and benefits hereunder only if such Covered Employee's Notice
         of Termination was with respect to a termination for Good Reason).

                  (c) NO MITIGATION. The Covered Employee is not required to
         seek other employment or to attempt in any way to reduce any amounts
         payable to the Covered Employee by the Employers under this Plan.
         Further, the amount of any payment provided for in this Plan shall not
         be reduced by any compensation earned by the Covered Employee as the
         result of employment by another employer, by retirement benefits, by
         offset against any amount claimed to be owed by the Covered Employee to
         the Employers, or otherwise.



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<PAGE>

         9.  OF DISPUTES; PROCEDURES AND SCOPE OF ARBITRATION.

         (a) All controversies and claims arising under or in connection with
this Plan or relating to the interpretation, breach or enforcement thereof
and all other disputes between a Covered Employee and the Company, shall be
resolved by expedited, binding arbitration, to be held in California or
Virginia, as selected by the Covered Employee, in accordance with the
applicable rules of the American Arbitration Association governing employment
disputes. In any proceeding relating to the amount owed to a Covered Employee
in connection with his termination of employment, it is the contemplation
under this Plan that the only remedy that the arbitrator may award in such a
proceeding is an amount equal to the termination payments and benefits
required to be provided under the applicable provisions of Section 4 and, if
applicable, Section 6 hereof, to the extent not previously paid, plus the
costs of arbitration and the Covered Employee's reasonable attorneys fees and
expenses as provided below. Any award made by such arbitrator shall be final,
binding and conclusive on the Company and the Covered Employee for all
purposes, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.

         (b) Except as otherwise provided in this paragraph, each party shall
pay the cost of his or its own legal fees and expenses incurred in connection
with an arbitration proceeding. Provided an award is made in favor of the
Covered Employee in such proceeding, all of his reasonable attorneys fees and
expenses incurred in pursuing or defending such proceeding shall be promptly
reimbursed to the Covered Employee by the Company within five days of the entry
of the award. Any award of reasonable attorneys' fees shall take into account
any offer of the Company, such that an award of attorneys' fees to the Covered
Employee may be limited or eliminated to the extent that the final decision in
favor of the Covered Employee does not represent a material increase in value
over the offer that was made by the Company during the course of such
proceeding. However, any elimination or limitation on attorneys' fees shall only
apply to those attorneys' fees incurred after the offer by the Company.

         (c) In any case where the Company or any other person seeks to stay or
enjoin the commencement or continuation of an arbitration proceeding, whether
before or after an award has been made, or where a Covered Employee seeks
recovery of amounts due after an award has been made, or where the Company
brings any proceeding challenging or contesting the award, all of a Covered
Employee's reasonable attorneys fees and expenses incurred in connection
therewith shall be promptly reimbursed by the Company to the Covered Employee,
within five days of presentation of an itemized request for reimbursement,
regardless of whether the Covered Employee prevails and regardless of the forum
in which such proceeding is brought.


         10. BENEFITS AND BURDENS. This Plan shall inure to the benefit of and
be binding upon the Employers and the Covered Employees, their respective
successors, executors, administrators, heirs and permitted assigns. In the event
of a Covered Employee's death after a Terminating Event but prior to the
completion by the Employers of all payments due him under this Plan, the
Employers shall continue such payments to the Covered Employee's beneficiary
designated in writing to the Employers prior to his death (or to his estate, if
the Covered Employee fails to make such designation).

         11. ENFORCEABILITY. If any portion or provision of this Plan shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Plan, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Plan shall be valid and enforceable to the fullest
extent permitted by law.

         12. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Plan, or the waiver by
any party of any breach of this Plan, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

         13. NOTICES. Any notices, requests, demands, and other communications
provided for by this Plan shall be sufficient if in writing and delivered in
person or sent by registered or certified mail, postage prepaid, to a


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Covered Employee at the last address the Covered Employee has filed in writing
with the Employers, or to the Employers at their main office, attention of the
Board of Directors.

         14. EFFECT ON OTHER PLANS. Nothing in this Plan shall be construed to
limit the rights of the Covered Employees under the Employers' benefit plans,
programs or policies.

         15. NATURE OF PAYMENTS; REQUIREMENT FOR RELEASE, CONFIDENTIALITY AND
NON-SOLICITATION AGREEMENT. The amounts due pursuant to this Plan, except for
payment of accrued base salary through the Date of Termination, are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty. The Company may require, as a condition to
making the payments and providing the benefits required hereby, that a Covered
Employee execute and deliver to the Company a Release and a Non-Solicitation
Agreement (as such terms are defined below), and may also require that the
Covered Employee acknowledge in writing that he or she is resigning as an
officer from the Company and as a director and officer of any subsidiary of the
Company for which the Covered Employee serves in such capacity, before any
amounts or benefits under this Plan are paid or provided. A "RELEASE" shall mean
a written release of all employment-related claims by Covered Employee of the
Company in a form and manner reasonably satisfactory to the Company. Such
Release shall in all events preserve Covered Employee's continuing rights under
this Plan except with respect to any amount paid prior to or simultaneously with
the execution of such Release, in which event Covered Employee shall acknowledge
receipt of such amount and (if such is the case) that such amount was properly
calculated and is in full satisfaction of the Company's obligation to pay such
amount. "NON-SOLICITATION AGREEMENT" means an agreement of Covered Employee with
the Company that Covered Employee shall not, without the prior written consent
of the Company for a period of one year following the Covered Employee's date of
termination, solicit or attempt to solicit for employment with or on behalf of
any corporation, partnership, venture or other business entity, any employee of
the Company or any of its affiliates or any person who was formerly employed by
the Company or any of its affiliates within the preceding six months, unless
such person's employment was terminated by the Company or any of such
affiliates.

         16. AMENDMENT OR TERMINATION OF PLAN. The Company may, upon one year's
advance written notice to the Covered Employees, amend or terminate this Plan at
any time or from time to time; PROVIDED, HOWEVER, that, with respect to any such
notice given on or prior to March 29, 2002, the amendment or termination set
forth in such notice shall not, without the written consent of a Covered
Employee, in any material adverse way affect the rights of such Covered
Employee; and PROVIDED, FURTHER, that during the 24 months following a Change in
Control no such amendment or termination shall have a material adverse effect on
the rights of a Covered Employee with respect to such Change in Control.

         17. GOVERNING LAW. This Plan shall be construed under and be governed
in all respects by the laws of the State of Maryland.

         18. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to perform this Plan in
the same manner and to the same extent that the Employers would be required to
perform if no such succession had taken place.

Adopted by the Compensation Committee of the Board of Directors:  as of
September 9, 1999


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