Document:

exv10w5

 

Exhibit 10.5

[Form of Director Restricted Stock Agreement]

AVALONBAY COMMUNITIES, INC.

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	%
	 
	 	 	 	 	 	 
	

	 	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 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.

	 	 	 
	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 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

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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:

	 	 	 	 	 
	

	 	“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	 	 

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	 	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.

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.

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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.

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.

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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]

7exv10w1

 

Exhibit 10.1

Executive Officer Fiscal Year 2005 Variable Compensation Plan

	1.	 	Proposed corporate goals for FY05 — officer performance based
compensation will be based on the following Company-wide revenues (in
millions of dollars):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Q1
	 	Q2
	 	Q3
	 	Q4
	 	FY
	 	 	 	 
	Original targets
	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	 	 

	2.	 	The decision to award variable compensation is subject to evaluation each
quarter by the compensation committee, which will consider recommendations
by the CEO, and is based on both company performance (as specified above)
and each officer’s individual performance.

	3.	 	The amounts shall be paid off linearly starting at *% of the sales range
and going to 100%. Should the Company exceed the corporate sales targets,
officers will receive additional compensation calculated by extending the
line starting at *% at the same slope; e.g., the bonus will be double in a
particular quarter if revenues are *% of corporate targets.

It is clearly understood that there is no obligation to push past
corporate targets unless it is deemed in the interest of the Company as a
whole.

	4.	 	The compensation committee recognizes that the Q3 and Q4 targets are
preliminary, and it is likely that the CEO will ask for these numbers to
be reviewed later in the fiscal year.

	5.	 	The compensation committee delegates to the CEO the power to award
Company-wide bonuses to officers provided that the method used to
determine these bonuses is comparable to that used to determine the
bonuses for non-officers.

	*	 	Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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