Exhibit
10.5


 


FORM OF
AVALONBAY COMMUNITIES, INC. 

DIRECTOR RESTRICTED STOCK 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 Shares, as defined below, the Company is issuing to the Director
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.


	
  Director:

  	
   

  	
   

  
	
  Award Date:

  	
   

  	
   

  
	
  Number of Shares
  Granted (“Shares”):

  	
   

  	
   

  



 


Vesting Schedule:                   Subject to the provisions of the Terms,
the Director’s ownership interest in the Shares shall vest, and the status of
the Shares as Unvested Stock and all Restrictions with respect to the Shares
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%]

  
	
   

  	
   

  	
   

  
	
  [General Vesting Schedule provided above]

  	
   

  	
   

  



 


 


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


 


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  AVALONBAY COMMUNITIES, INC.

  	
   

  	
  DIRECTOR:

  
	
   

  	
   

  	
   

  	
   

  
	
  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


 


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 Restricted Stock Agreement and
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 – Restrictions


 


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


 


Section 1.4 – Secretary


 


“Secretary” shall
mean the secretary of the Company.


 


Section 1.5 – Unvested Stock


 


“Unvested 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, without regard to whether the issuance to and/or resale by the
Director has been registered under the Securities Act of 1933, as amended.


 


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ARTICLE II


ISSUANCE OF STOCK


 


Section 2.1 – Unvested Stock


 


Any shares of
Common Stock granted on the Award Date pursuant to this Agreement shall be
considered Unvested 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
Director’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 Unvested Stock,
including shares of Unvested 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 Director retain physical custody of any certificates
representing Unvested Stock issued to the Director.


 


Section 2.3 – Rights as Stockholder


 


From and after the
Award Date, the Director 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 Director’s interest in Unvested Stock
shall have terminated and the Unvested Stock reverts to the Company as provided
in Section 3.1 of this Agreement.


 


 


ARTICLE III


RESTRICTIONS


 


Section 3.1 – Reversion of Unvested Stock


 


Except as provided
in Section 2.3 and this Section 3.1 and the Vesting Schedule set forth on the
first page of this Agreement, it is expressly understood and agreed that the
Unvested Stock is and at all times shall be the property of the Company for as
long as and to the extent that the Shares are Unvested Stock pursuant to
Section 2.1.  Except as provided in
clauses (a) through (e) of this sentence or in the following paragraph, any
interest of the Director in Shares that are Unvested Stock shall immediately
terminate and all rights with 


 


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respect to the
Unvested Stock shall immediately revert to and unconditionally be the property
of the Company 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.


 


In the event that
the Director resigns or declines to accept nomination for re-election, any
Shares that are Unvested Stock shall continue to vest on the dates provided in
this Agreement as if the Director continued to serve on the Board of Directors
unless the Board of Directors or any authorized committee thereof determines in
good faith that there exist reasonable grounds on which the stockholders of the
Company could remove the Director for Cause (in which case any interest of the
Director in Shares that are Unvested Stock shall immediately upon such
determination terminate and all rights with respect thereto revert to and
unconditionally be the property of the Company).


 


Notwithstanding
the provisions of the preceding two paragraphs, in the event that any Unvested
Stock reverts to the Company, the Director shall be entitled to retain any cash
dividends paid on the Unvested Stock before the date of such event.


 


Section 3.2 – Unvested Stock Not Transferable


 


No Unvested Stock
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. 
Any Unvested Stock registered in the name of any person, trust, or other
nominee shall for all purposes hereunder be deemed to be held of record by the
Director 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.


 


Section 3.3 – Legend


 


Certificates
representing shares of Unvested 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:


 


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“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THAT CERTAIN
RESTRICTED STOCK AGREEMENT BY AND BETWEEN THE HOLDER OF THE SECURITIES AND
AVALON BAY COMMUNITIES, INC. (THE “COMPANY”), INCLUDING CERTAIN VESTING
REQUIREMENTS, AND ARE THE PROPERTY OF, AND MAY BE SUBJECT TO FORFEITURE TO, THE
COMPANY.  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.”


 


Section 3.4 – Lapse of Restrictions


 


Upon the vesting
of some or all of the Unvested 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 Director or
his legal representative, free from the legend provided for in
Section 3.3.


 


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 Director in his capacity as a
holder of Unvested Stock shall be considered to be Unvested Stock and shall be
subject to all of the terms and conditions of this Agreement, including but not
limited to the Restrictions.


 


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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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