exv10w4



 





Exhibit 10.4




 AvalonBay Communities, Inc. 

 Restricted Unit Agreement



Pursuant to the terms of the AvalonBay Communities, Inc. Amended and Restated 1994 Stock Incentive
Plan (as amended from time to time, the “Plan”), in consideration for services rendered and to be
rendered to AvalonBay Communities, Inc. (the “Company”), in order to advance the interests of the
Company and its stockholders and effect the intended purposes of the Plan, and for other good and
valuable consideration, which the Company has determined to be equal to the fair market value of
the Units, as defined below, the Company is awarding to the Director named below contemporaneously
herewith the Units, upon the terms and conditions set forth herein and in the Restricted Unit
Agreement Terms (the “Terms”) which are attached hereto and incorporated herein in their entirety.
Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto
in the Terms.




	 	 	 
	Director:

	 	«First_Name» «Last_Name»
	Award Date:

	 	«Grant_Date»
	Number of Shares of Deferred Stock (“Units”)
Awarded:

	 	«No_SharesUnits_Granted»
	Conversion Date or Event for Units

(previously elected by Director)

	 	«Conversion_Date»






	 	 	 
	Vesting Schedule:

	 	Subject to the provisions of the Terms, the Director’s ownership interest in the
Units shall vest, and the status of the Units as Unvested Units and all Restrictions with
respect to the Units shall terminate, in accordance with the following schedule of events:






	 	 	 	 	 
	Vesting Event	 	Shares Vested	 
	Award Date
	 	 	20	%
	First Anniversary of Award Date
	 	 	40	%
	Second Anniversary of Award Date
	 	 	60	%
	Third Anniversary of Award Date
	 	 	80	%
	Fourth Anniversary of Award Date
	 	 	100	%
	 
	 	 	 	 
	Termination of the Director’s service as a
director by vote of the Company’s stockholders
for any reason other than Cause
	 	 	100	%
	 
	 	 	 	 
	Failure by the Board of Directors or any authorized
committee thereof to nominate the Director for
re-election for any reason other than for Cause
	 	 	100	%
	 
	 	 	 	 
	Failure of the Company’s stockholders to re-elect
the Director
	 	 	100	%
	 
	 	 	 	 
	Death or Disability of the Director
	 	 	100	%
	 
	 	 	 	 
	The Director’s Retirement (as defined in the Plan)
	 	 	100	%
	 
	 	 	 	 
	If earlier than any of the above events,
a Change of Control
	 	 	100	%





Additional Terms/Acknowledgements: The undersigned Director acknowledges receipt of, and
understands and agrees to, this Restricted Unit Agreement, including, without limitation, the
Terms. The Director further acknowledges that as of the Award Date, this Restricted Unit
Agreement, including, without limitation, the Terms, sets forth the entire understanding between
the Director and the Company regarding the grant of Units described herein and supersedes all prior
oral and written agreements on that subject.




	 	 	 	 	 	 	 	 	 	 	 
	AvalonBay Communities, Inc.	 	 	 	Director:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Signature
	 	 	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Name(Print):
	 	«First_Name» «Last_Name»	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 





Attachment: Restricted Unit Agreement Terms




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AVALONBAY COMMUNITIES, INC.

RESTRICTED UNIT AGREEMENT TERMS




ARTICLE I

DEFINITIONS




     The following terms used below in this Agreement shall have the meaning specified below unless
the context clearly indicates to the contrary. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Plan.



Section 1.1 — Cause




     “Cause” means and shall be limited to (a) an affirmative vote of the holders of at least 75
percent of the shares entitled to vote at a meeting of stockholders called for the purpose,
resolving that the Director should be removed from office or (b) a vote of the Board of Directors,
the Nominating Committee, if any, or any other authorized committee of the Board of Directors
resolving that the Director should not be nominated for re-election as a director, in either case,
as a result of (i) conviction of a felony, (ii) declaration of unsound mind by order of a court,
(iii) gross dereliction of duty, (iv) commission of any act involving moral turpitude or (v)
commission of an act that constitutes intentional misconduct or a knowing violation of law if such
action in either event results in both an improper substantial personal benefit to such Director
and a material injury to the Company.



Section 1.2 — Common Stock




     “Common Stock” shall mean the common stock of the Company, $.01 par value.



Section 1.3 – Deferred Stock




     “Deferred Stock” shall mean phantom stock of the Company. Each share of Deferred Stock shall
have the same value as each share of Common Stock and shall be ultimately distributed to the
Director in the form of Common Stock.



Section 1.4 — Restrictions




     “Restrictions” shall mean the restrictions set forth in Article III of this Agreement.



Section 1.5 — Secretary




     “Secretary” shall mean the secretary of the Company.



Section 1.6  — Unvested Units




     “Unvested Units” shall mean the Units (as defined in the Restricted Unit Agreement)
issued under this Agreement for as long as such Units are subject to the Restrictions (as
hereinafter defined) imposed by this Agreement.



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ARTICLE II

RESTRICTED UNITS




Section 2.1 — Unvested Units




     Any Units granted on the Award Date pursuant to this Agreement shall be considered Unvested
Units for purposes of this Agreement and shall be subject to the Restrictions until such time or
times and except to the extent that the Director’s ownership interest in Units vests in accordance
with the Vesting Schedule set forth on the first page of this Agreement.



Section 2.2 — Rights as Stockholder




     From and after the Award Date, the Director shall not have any of the rights of a stockholder
with respect to the Units until the Units are distributed to the Director in the form of Common
Stock, except with respect to Dividend Equivalent Rights as set forth on Section 2.3.



Section 2.3 – Dividend Equivalent Rights




     All Units granted hereunder shall carry Dividend Equivalent Rights which shall entitle the
Director to receive additional Units, based on the amount of actual dividends payable by the
Company with respect to the Common Stock. The amount of dividend equivalents credited to the
Director’s Units following each calendar quarter shall be converted to additional Units based on
the Fair Market Value of the Common Stock on the last day of such calendar quarter. Such
additional Units shall also carry Dividend Equivalent Rights. All additional Units credited to a
Director’s account pursuant to this Section 2.3 shall be fully vested at all times.



ARTICLE III

RESTRICTIONS




Section 3.1 — Reversion of Unvested Units




     Except as provided in clauses (a) through (e) of this sentence or in the following paragraph,
any interest of the Director in Units that are Unvested Units shall immediately terminate if the
Director’s service as a director of the Company terminates for any reason, unless such termination
of service results from (a) death of the Director, (b) Disability of the Director, (c) removal of
the Director from office by vote of the Company’s stockholders for any reason other than for Cause,
(d) failure by the Board of Directors or any authorized committee thereof to nominate the Director
for re-election for any reason other than for Cause or (e) failure of the Company’s stockholders to
re-elect the Director.



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     Notwithstanding the provisions of the preceding paragraph, in the event that any Unvested
Units are forfeited, the Director shall be entitled to retain any Units credited to his
account pursuant to the Dividend Equivalent Rights accrued on the Unvested Units in accordance
with Section 2.3 before the date of such event.



Section 3.2 – Units Not Transferable




     No Units, whether vested or unvested, or any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Director or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or involuntary or by operation
of law or judgment, levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and void and of no
effect; provided, however, that this Section 3.2 shall not prevent transfers by will or by
applicable laws of descent and distribution until the Units are distributed to the Director in
shares of Common Stock. Until such time when the shares of Common Stock are distributed to the
Director, the Director’s rights under this Agreement shall be similar to that of an unsecured
creditor of the Company.



Section 3.3 – Adjustments; Restrictions on New Units




     In the event that the outstanding shares of the Company’s Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of the Company, or a stock
split-up or stock dividend, the Committee shall make an appropriate adjustment to the number of
Units credited to the Director. Any such additional Units attributable to Unvested Units shall be
considered to be Unvested Units and shall be subject to all of the terms and conditions of this
Agreement, including but not limited to the Restrictions.



Section 3.4 – Timing and Form of Distribution




     The Units shall be exchanged into shares of Common Stock on a one-for-one basis and shall be
distributed to the Director at such time as the Director may have previously elected in writing to
the Company. Any fractional Unit shall be distributed in cash at the same time.



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ARTICLE IV

MISCELLANEOUS




Section 4.1 — Conditions to Issuance of Stock Certificates




     The Company shall not be required to issue or deliver any certificate or certificates for
shares of stock pursuant to this Agreement prior to fulfillment of all of the following conditions:




	 	(a)	 	The admission of such shares to listing on all stock exchanges on which such
class of stock is then listed; and
	 
	 	(b)	 	The completion of any registration or other qualification of such shares under
any state or Federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which
the Company shall deem necessary or advisable; and
	 
	 	(c)	 	The obtaining of any approval or other clearance from any state or Federal
governmental agency which the Company shall, in its absolute discretion,
determine to be necessary or advisable.





Section 4.2 — Administration




     The Committee shall have the power to interpret the Plan, this Agreement and all other
documents relating to Unvested Stock and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret, amend or revoke any such
rules. All actions taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon the Director, the Company and all other interested person.
No member of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or Unvested Stock and all members of the
Committee shall be fully protected by the Company in respect to any such action, determination or
interpretation. The Board shall have no right to exercise any of the rights or duties of the
Committee under the Plan and this Agreement.



Section 4.3 — Notices




     Any notice to be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the Director shall be addressed
to him at the address maintained in the Company’s records. By a notice given pursuant to this
Section 4.3, either party may hereafter designate a different address for notices to be given to it
or him. Any notice which is required to be given to the Director shall, if the Director is then
deceased, be given to the Director’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this Section 4.3. Any
notice shall have been deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid and deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.



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Section 4.4 — Titles




     Titles and captions are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.



Section 4.5 — Amendment




     This Agreement may be amended only by a writing executed by the parties hereto which
specifically states that it is amending this Agreement.



Section 4.6 — Governing Law




     The laws of the State of Maryland shall govern the interpretation, validity, administration,
enforcement and performance of the terms of this Agreement regardless of the law that might be
applied under principles of conflicts of laws.



Section 4.7 — Counterparts




     This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.



Section 4.8 — No Special Rights




     This Agreement does not, and shall not be interpreted to, create any right on the part of the
Director to nomination, election or continued service as a director of the Company or any
subsidiary or affiliate thereof, nor to any continued compensation, prerequisites or other current
or future benefits or other incidents of such service nor shall it interfere with or restrict in
any way any right or power, which is hereby expressly reserved, to remove or not to renominate the
Director at any time for any reason whatsoever, with or without cause.



[End of Text]





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