Exhibit 10.4


 


[Form of Director Restricted Stock Agreement]


 


AVALONBAY COMMUNITIES, INC. 

STOCK GRANT AND RESTRICTED STOCK AGREEMENT


 


Pursuant to the terms of
the AvalonBay Communities, Inc. 2009 Stock Option and Incentive Plan (the “Plan”),
in consideration for services rendered and to be rendered to AvalonBay
Communities, Inc. (the “Company”) and for other good and valuable
consideration, 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 Plan or in the
Terms, as applicable.


 


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 Restricted 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

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  If earlier than
  any of the above events, a Sale Event

  	
   

  	
  100

  	
  %

  



 






*or, if fewer, all
Restricted Shares


 


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


 


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 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, the Nominating Committee, if any, or any other authorized
committee of the Board 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 – Disability


 


“Disability” shall mean
the Director’s inability to perform his normal required services for the
Company and its Subsidiaries for a period of six consecutive months by reason
of the individual’s mental or physical disability, as determined by the
Administrator in good faith in its sole discretion.


 


Section 1.4  -
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 1.5 - Restrictions


 


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


 


Section 1.6 - Secretary


 


“Secretary” shall mean
the secretary of the Company.


 


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 Director’s ownership interest in Shares vests in accordance
with the Vesting Schedule set forth on the first page of this Agreement.


 


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Section 2.2 - Escrow


 


If the Restricted Stock
is certificated, 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, 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 Restricted Stock
issued to him.  The Company may cause a
book entry deposit of Restricted Stock at the Company’s transfer agent in lieu
of physical custody.


 


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 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 Director’s service as a director of the Company
terminates for any reason other than (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, any interest of the
Director 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 Director 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 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 the Director may designate one
or more trusts or other similar arrangements for the benefit of the Director or
members of his immediate family as the registered holders of Restricted Stock
if and as long as the Director 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 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 Restricted Stock or book entries for 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


 


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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.”


 


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, if such Shares are certificated, 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.


 


ARTICLE IV


 


MISCELLANEOUS


 


Section 4.1 - Conditions to Issuance of Stock


 


The Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock or enter the Director’s name as the stockholder of record on the books
of the Company 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; and


 


(d)           The payment by the Director 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.


 


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
Director shall be addressed to him at the address maintained 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 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 4.2.  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.


 


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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 – 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 4.6 - 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 4.7 - 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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