exv10w3



 





Exhibit 10.3




[Form of Employee Stock Grant and Restricted Stock Agreement]




AVALONBAY COMMUNITIES, INC.

STOCK GRANT AND RESTRICTED STOCK AGREEMENT




In consideration for services
rendered and to be rendered to AvalonBay Communities, Inc. (the “Company”) and
for other good and valuable consideration, which the Company has determined to
be equal to the fair market value of the Shares, as defined below, the Company
is issuing to the Employee named below contemporaneously herewith the Shares,
upon the terms and conditions set forth herein and in the Restricted Stock
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.



	 	 	 	 
	Employee:

	 	 	 
	Award Date:

	 	 	 
	Vesting Commencement Date:

	 	 	 
	Number of Shares Granted (“Shares”):

	 	 	 







	 	 	 	 	 
	Vesting Schedule:	 	Subject to the provisions of the Terms and the discretion of the
Company to accelerate the vesting schedule, the Employee’s
ownership interest in the Shares shall vest, and the status of
the Shares as Restricted Stock and all Restrictions with respect
to the Shares shall terminate, in accordance with the following
schedule of events:
	

	 	Vesting Event
	 	Shares Vested
	 
	 	 	 	 
	

	 	March 1, 200_  [Year of Grant]	 	[20%]
	

	 	March 1, 200_  [Second Year]	 	[20%]
	

	 	March 1, 200_  [Third Year]	 	[20%]
	

	 	March 1, 200_  [Fourth Year]	 	[20%]
	

	 	March 1, 200_  [Fifth Year]	 	[20%]
	 
	 	 	 	 
	

	 	Termination of the Employee’s	 	 
	

	 	Employment by the Company, other than	 	 
	

	 	for Cause
	 	[Total RSA]*
	 
	 	 	 	 
	

	 	The death or disability of the Employee
	 	[Total RSA]*
	 


	

	 	The Retirement of the Employee
	 	[Total RSA]*
	 
	 	 	 	 
	

	 	If earlier than any of the above events,	 	 
	

	 	a Change of Control
	 	[Total RSA]*
	 
	 	 	 	 
	

	 	
 	 	 
	

	 	*or, if fewer, all Restricted Shares	 	 







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



	 	 	 
	AVALONBAY COMMUNITIES, INC.

	 	EMPLOYEE:
	 
	 	 
	By:                                                                               

	 	                                                                                                  
	Signature

	 	Signature
	
Title:                                                                            

	 	
Name (Print):                                                                            
	
Date:                                                                            

	 	
Date:                                                                                         







ATTACHMENT: Restricted Stock Agreement Terms




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AVALONBAY COMMUNITIES, INC.




RESTRICTED STOCK AGREEMENT TERMS




ARTICLE I




DEFINITIONS




Section 1.1 - Cause




     “Cause” means and shall be limited to a vote of the Board of Directors
resolving that the Employee should be dismissed as a result of (i) any material
breach by the Employee of any agreement to which the Employee and the Company
are parties, (ii) any act (other than retirement) or omission to act by the
Employee which may have a material and adverse effect on the business of the
Company or any Subsidiary (as hereinafter defined) or on the Employee’s ability
to perform services for the Company or any Subsidiary, including, without
limitation, the Employee being convicted of any crime (other than ordinary
traffic violations) or (iii) any material misconduct or neglect of duties by
the Employee in connection with the business or affairs of the Company or any
Subsidiary.



Section 1.2 - Change of Control




     “Change of Control” means the occurrence of any one of the following
events:




       (i)     any “person,” as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Act”) (other
than the Company, any of its Subsidiaries, 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), directly or
indirectly, of securities of the Company representing 30% or more of
either (A) the combined voting power of the Company’s then outstanding
securities having the right to vote in an election of the Company’s Board
of Directors (“Voting Securities”) or (B) the then outstanding shares of
Common Stock (as hereinafter defined), in either such case other than as
a result of an acquisition of securities directly from the Company; or




     (ii)      persons who, as of the Award Date, constitute the Company’s
Board of Directors (the “Incumbent Directors”) cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger, acquisition of Voting Securities or similar transaction,
to constitute at least a majority of the Board of Directors, provided
that any person becoming a director of the Company subsequent to the
Award Date whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors shall, for
purposes of this Agreement, be considered an Incumbent Director; or




     (iii)     the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 30% of the
voting shares of the corporation or other entity issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation or other entity, if any), (B) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company or (C) any plan or
proposal for the liquidation or dissolution of the Company.



     Notwithstanding the foregoing, a “Change of Control” shall not be deemed
to have occurred for purposes of the foregoing clause (i) solely as the result
of an acquisition of securities by the Company which, by reducing the number of
shares of Common Stock or other Voting Securities outstanding, increases (x)
the proportionate number of shares of Common Stock beneficially owned by any
person to 30% or more of the shares of Common Stock then
outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any


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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 clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any additional shares
of Common Stock or other Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction), then a “Change of Control”
shall be deemed to have occurred for purposes of the foregoing clause (i).



Section 1.3 - Common Stock




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



Section 1.4 - Fair Market Value




     “Fair Market Value” on any given date means the last reported sale price
at which the Common Stock is traded on such date or, if no Common Stock is
traded on such date, the most recent date on which Common Stock was traded, as
reflected on the New York Stock Exchange or, if applicable, any other national
stock exchange on which the Common Stock is traded.



Section 1.5  - Restricted Stock




     “Restricted Stock” shall mean the Shares issued under this Agreement for
as long as such shares are subject to the Restrictions (as hereinafter defined)
imposed by this Agreement.



Section 1.6 - Restrictions




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



Section 1.7 – Retirement




     “Retirement” in accordance with the Plan shall mean:



the Employee’s termination of employment with the Company and its
Subsidiaries, other than for Cause, following the date on which the
sum of (i) the number of full months the Employee has been employed
by the Company and any Predecessor Company (as defined in the Plan)
and (ii) the Employee’s age on the date of termination, equals or
exceeds 70 years, provided that:




	(x)	 	the Employee has been employed by the
Company and any Predecessor Company for a period of at
least 120 contiguous full months at the time of
termination;
	 
	(y)	 	the Employee gives at least six
months’ prior written notice to the Company of his
intention to retire; and
	 
	(z)	 	upon termination of employment, the
Employee enters into a “Non-Compete and Non-Solicitation
Agreement” (as defined in the Plan) and a general
release of all claims in a form reasonably satisfactory
to the Company.





Section 1.7 - Secretary




     “Secretary” shall mean the secretary of the Company.



Section 1.8 - Subsidiary




     “Subsidiary” means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning
with the Company if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting power of all classes of stock or
other interests in one of the other corporations or entities in the chain.



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ARTICLE II




RESTRICTED STOCK




Section 2.1 - Restricted Stock




     Any shares of Common Stock granted pursuant to this Agreement which vest
on a date other than the Award Date shall be considered Restricted Stock for
purposes of this Agreement and shall be subject to the Restrictions until such
time or times and except to the extent that the Employee’s ownership interest
in Shares vests in accordance with the Vesting Schedule set forth on the first
page of this Agreement.



Section 2.2 - Escrow




     The Secretary or such other escrow holder as the Company may from time to
time appoint shall retain physical custody of the certificates representing
Restricted Stock, including shares of Restricted Stock issued pursuant to
Section 3.5, until all of the Restrictions expire or shall have been removed;
provided, however, that in no event shall the Employee retain physical custody
of any certificates representing Restricted Stock issued to him.



Section 2.3 - Rights as Stockholder




     From and after the Award Date, the Employee shall have all the rights of a
stockholder with respect to the Shares, subject to the Restrictions herein
(including the provisions of Article IV), including the right to vote the
Shares and to receive all dividends or other distributions paid or made with
respect to the Shares unless and to the extent that the Employee’s interest in
Restricted Stock shall have terminated and the Restricted Stock reverts to the
Company as provided in Section 3.1 of this Agreement.



ARTICLE III




RESTRICTIONS




Section 3.1 - Reversion of Restricted Stock




     Except as provided in Section 2.3, this Section 3.1, and the Vesting
Schedule set forth on the first page of this Agreement, the Restricted Stock
shall be the property of the Company for as long as and to the extent that the
Shares are Restricted Stock pursuant to Section 2.1. In the event that the
Employee’s employment by the Company terminates for any reason other than (a)
death, (b) disability or (c) termination of the Employee’s employment by the
Company other than for Cause, any interest of the Employee in Shares that are
Restricted Stock shall thereupon immediately terminate and all rights with
respect to the Restricted Stock shall immediately revert to and unconditionally
be the property of the Company; provided, however, that the Employee shall be
entitled to retain any cash dividends paid before the date of such event on the
Restricted Stock.



Section 3.2 - Restricted Stock Not Transferable




     No Restricted Stock or any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Employee 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 the Employee may
designate one or more trusts or other similar arrangements for the benefit of
the Employee or members of his immediate family as the registered holders of
Restricted Stock if and as long as the Employee acts as trustee or in a similar
capacity with respect to such trust or arrangement. Any Restricted Stock so
registered shall for all purposes hereunder be deemed to be held of record by
the Employee and shall be subject to all of the terms and conditions of this Agreement,
including but not limited to the Restrictions and the provisions of Article III
of this Agreement.



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Section 3.3 - Legend



     (a)      Certificates representing shares of Restricted Stock issued pursuant
to this Agreement shall, until all Restrictions lapse and new certificates are
issued pursuant to Section 3.4, bear the following legend:



	 	 	 	 	 
	

	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE
SUBJECT TO FORFEITURE TO AVALONBAY COMMUNITIES, INC.
(THE “COMPANY”) UNDER THE TERMS OF THAT CERTAIN
RESTRICTED STOCK AGREEMENT BY AND BETWEEN THE COMPANY
AND THE HOLDER OF THE SECURITIES. PRIOR TO VESTING OF
OWNERSHIP IN THE SECURITIES, THEY MAY NOT BE, DIRECTLY
OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER
ANY CIRCUMSTANCES. COPIES OF THE ABOVE REFERENCED
AGREEMENT ARE ON FILE AT AND MAY BE OBTAINED ON
REQUEST AND WITHOUT CHARGE FROM THE OFFICES OF THE
COMPANY AT 2900 EISENHOWER AVENUE, SUITE 300,
ALEXANDRIA, VA 22314.”	 	 







     (b)      Certificates representing any shares of Common Stock issued pursuant
to this Agreement shall bear the following or substantially similar legend:



	 	 	 	 	 
	

	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”). NO SALE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION OF THESE
SECURITIES MAY BE MADE UNLESS EITHER (A) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (B) PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”	 	 







Section 3.4 - Lapse of Restrictions




     Upon the vesting of some or all of the Restricted Stock as provided in the
Vesting Schedule set forth on the first page of this Agreement, and subject to
the conditions to issuance set forth in Article IV, the Company shall cause new
certificates to be issued with respect to such vested Shares and delivered to
the Employee or his legal representative, free from the legend provided for in
Section 3.3(a).



Section 3.5 - Restrictions on New Shares




     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, such new,
additional or different shares or securities which are held or received by the
Employee (or his designee) in his capacity as a holder of Restricted Stock
shall be considered to be Restricted Stock and shall be subject to all of the
terms and conditions of this Agreement, including but not limited to the
Restrictions.



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:



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     (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; and




     (d)     The payment by the Employee of all amounts required to be
withheld under federal, state and local tax laws, with respect to the
issuance of Restricted Stock and/or the lapse or removal of any of the
Restrictions; and



Section 4.2 - 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 Employee shall be addressed to him at his address as set forth
in the Company’s records. By a notice given pursuant to this Section 4.2,
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 Employee
shall, if the Employee is then deceased, be given to the Employee’s personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 4.2. 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.



Section 4.3 - 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 4.4 - 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 4.5 - Tax Withholding




       The Company’s obligation (i) to issue or deliver to the Employee any
certificate or certificates for unrestricted shares of stock or (ii) to pay to
the Employee any dividends or make any distributions with respect to the Common
Stock issued under this Agreement is expressly conditioned on the Company’s
satisfaction of its obligation, if any, to withhold taxes. The Company may, if
the employee so elects in writing, withhold from any distribution made to the
Employee under this Agreement shares of Common Stock valued at Fair Market
Value on the date of such withholding to cover any applicable withholding and
employment taxes. In lieu of withholding shares of Common Stock, the Employee
may elect to pay to the Company any amounts required to be withheld in cash.



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.



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Section 4.8 - No Special Employment Rights




       This Agreement does not, and shall not be interpreted to, create any right
on the part of the Employee to continue in the employ 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
employment.



[End of Text]





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