Document:

EXHIBIT 10.1

 

AVALONBAY COMMUNITIES, INC. 

NON-QUALIFIED STOCK OPTION
AGREEMENT

(1994 STOCK INCENTIVE PLAN, AS
AMENDED AND RESTATED)

 

Pursuant to the AvalonBay
Communities, Inc. 1994 Stock Incentive Plan, as amended and restated (the
“Plan”), AvalonBay Communities, Inc. (the “Company”) hereby grants to the
Optionee named below an Option to purchase up to the number of shares of the
Company’s Common Stock, par value $.01 per share (“Common Stock”) set forth
below.  This option is subject to all of
the terms and conditions as set forth herein, in the Non-Qualified Stock Option
Agreement Terms (the “Terms”) which are attached hereto and incorporated herein
in their entirety, and in the Plan. 
Capitalized terms used but not defined herein or in the Terms shall have
the respective meanings ascribed thereto in the Plan.

 

Non-Qualified Stock

	
  Option:

  	
   

  	
  This Option does not qualify as an incentive stock option under
  Section 422 of the Internal Revenue Code of 1986, as amended (the
  “Code”), and consequently shall be treated as a non-qualified stock option
  for tax purposes.

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  Subject to the
  provisions of Section 4 and 6 of the Terms and the discretion of the
  Company to accelerate the vesting schedule, one third of this option shall
  become vested and exercisable on each of the first three anniversary dates of
  this award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In any event this
  Option shall become fully vested and exercisable with respect to all of the
  Option Shares three years after the date hereof.

  

 

Additional
Terms/Acknowledgements: The undersigned Optionee acknowledges receipt of, and understands and
agrees to, this Non-Qualified Stock Option Agreement, including, without
limitation, the Terms.  Optionee further
acknowledges receipt of a copy of the Plan. 
Optionee further acknowledges that as of the Date of Grant, this
Non-Qualified Stock Option Agreement, including, without limitation, the Terms,
and the Plan set forth the entire understanding between Optionee and the
Company regarding the Options described herein and supersede all prior oral and
written agreements on that subject.

 

ATTACHMENT: 
Non-qualified Stock Option Agreement Terms

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

AVALONBAY COMMUNITIES, INC.

1994 STOCK INCENTIVE PLAN, AS
AMENDED AND RESTATED

 

NON-QUALIFIED STOCK OPTION
AGREEMENT TERMS

 

 

1.             Vested Option Shares.  Subject to Section 4, when this Option
is vested with respect to any of the Option Shares, this Option shall continue
to be exercisable with respect to such Option Shares (“Vested Option Shares”)
at any time or times prior to the Expiration Date.

 

2.             Manner of Exercise.  The Optionee may exercise this Option only in
the following manner:  from time to time
on or prior to the Expiration Date, the Optionee may give written notice to the
Company of his election to purchase some or all of the Vested Option Shares
purchasable at the time of such notice, which this notice shall specify the
number of Option Shares to be purchased.

 

Payment of the
purchase price for the Option Shares to be purchased may be made by one or more
of the following methods:  (a) in
cash, by certified bank check or other instrument acceptable to the Company; (b) through
the delivery (or attestation to the ownership) of shares of Common Stock that
have been beneficially owned by the Optionee for at least six (6) months
and are not then subject to restrictions under any Company plan and were not
used in a “stock swap” within the six (6) months preceding the option
exercise, such surrendered shares to be valued at the closing price of the
Common Stock on the principal exchange on which the Common Stock is listed on
the date the Company receives the exercise notice; (c) by the Optionee
delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the Optionee chooses to pay the purchase price as provided in this
subsection (c), the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Company
shall prescribe as a condition of such payment procedure; or (d) with the
consent of the Company, a combination of (a), (b) and (c) above.  Payment instruments will be received subject
to collection.

 

The delivery of
certificates representing the Option Shares will be contingent upon (i) the
Company’s receipt from the Optionee of full payment for the Option Shares, (ii) the
satisfaction of section 10 hereof, and (iii) any agreement, statement or
other evidence that the Company may require to satisfy itself that the issuance
of Option Shares to be purchased pursuant to the exercise of Options under the
Plan and any subsequent resale of the shares will be in compliance with
applicable laws and regulations.

 

If requested upon
the exercise of this Option, certificates for Option Shares may be issued in
the name of the Optionee jointly with another person or in the name of the
executor or administrator of the Optionee’s estate.  The Optionee shall not have the rights of a
stockholder with respect to any Option Shares prior to his acquisition of such
Option Shares upon the exercise of this Option.

 

Notwithstanding
any other provision hereof or of the Plan, no portion of this Option shall be
exercisable after the Expiration Date hereof.

 

3.             Non-transferability of Option.  This Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution and
this Option shall be exercisable, during the Optionee’s lifetime, only by the
Optionee.

 

4.             Termination of Employment.  If the Optionee’s employment (or other
business relationship) by the Company or a Subsidiary (as defined in the Plan)
is terminated, the period within which to exercise the Option may be subject to
earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s employment (or other
business relationship) terminates by reason of death, any Option held by the
Optionee shall be automatically vested on the date of termination and shall be
exercisable by the Optionee’s legal representative or legatee for a period of
twelve (12) months from the date of termination, or until the Expiration Date,
if earlier.

 

 

 

 

 

 

 

 

 

 

2

 

(b)           Termination Due to Disability.  If the Optionee’s employment (or other
business relationship) terminates by reason of Disability (as defined in the
Plan), any Option held by the Optionee shall be automatically vested on the
date of termination, and shall be exercisable for a period of twelve (12)
months from the date of termination, or until the Expiration Date, if
earlier.  The death of the Optionee
during the twelve (12) month period provided in this Section 4(b) shall
extend such period for six (6) months from the date of death or until the
Expiration Date, if earlier.

 

(c)           Termination by Reason of
Retirement.  If the Optionee’s
employment terminates by reason of Retirement (as defined in the Plan), any
Option held by the Optionee shall be automatically vested on the date of
termination, and shall be exercisable for a period of twelve (12) months from
the date of termination, or until the Expiration Date, if earlier.  The death of the Optionee during the twelve
(12) month period provided in this Section 4(c) shall extend such
period for six (6) months from the date of death, or until the Expiration
Date, if earlier.

 

(d)           Termination for Cause.  If the Optionee’s employment (or other business
relationship) terminates for Cause (as defined in the Plan), any Option held by
the Optionee shall immediately terminate and be of no further force and effect.

 

(e)           Termination Without Cause.  If the Optionee’s employment (or other
business relationship) is terminated by the Company without Cause (as defined
in the Plan), any option held by the Optionee shall be automatically vested on
the date of termination, and shall be exercisable for a period of twelve (12)
months from the date of termination, or until the Expiration Date, if
earlier.  The death of the Optionee
during the twelve (12) month period provided in this Section 4(e) shall
extend such period for six (6) months from the date of death, or until the
Expiration Date, if earlier.

 

(f)            Termination at the Election of
the Optionee.  If the Optionee’s
employment (or other business relationship) is voluntarily terminated at the
election of the Optionee (i.e., is terminated other than for death, Disability,
Retirement, or a termination at the Company’s 
election whether for Cause or without Cause), any option held by the
Optionee may be exercised, to the extent exercisable on the date of
termination, for a period of three (3) months from the date of
termination, or until the Expiration Date, if earlier.  For clarification, it is noted that this
means that the remaining unvested portion of the Option shall terminate
immediately and be of no further force or effect.

 

For this purpose, neither
a transfer of employment from the Company to a Subsidiary (or from a Subsidiary
to the Company) nor an approved leave of absence shall be deemed a “termination
of employment.”

 

5.             Option Shares.  The Option Shares are shares of the Common
Stock of the Company as constituted on the date of this Option, subject to adjustment
as provided in the Plan.

 

6.             Effect of Change of Control.  Upon the occurrence of a Change of Control,
as defined in the Plan, this Option shall automatically become fully
exercisable.

 

7.             No Special Employment Rights.  This Option will not confer upon the Optionee
any right with respect to continuance of employment by the Company or a
Subsidiary, nor will it interfere in any way with any right of the Optionee’s
employer to terminate the Optionee’s employment at any time.

 

8.             Rights as a Shareholder.  The Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock that may be purchased
upon exercise of this Option unless and until a certificate or certificates
representing such shares are duly issued and delivered to the Optionee.  Except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.

 

9.             The Plan.  In the event of any discrepancy or inconsistency
between this Agreement and the Plan, the terms and conditions of the Plan shall
control.

 

 

 

 

 

 

 

 

 

 

3

 

                10.           Withholding
Taxes.  The Optionee shall, not later
than the date as of which the exercise of this Option becomes a taxable event
for federal income tax purposes, pay to the Company (or make arrangements
satisfactory to the Company for payment of) any federal, state and local taxes
required by law to be withheld on account of such taxable event.  The Optionee acknowledges and agrees that the
Company has the right to deduct from payments of any kind otherwise due to the
Optionee, or from the Option Shares to be issued in respect of an exercise of
this Option, any federal, state or local taxes of any kind required by law to
be withheld with respect to the issuance of shares of Stock to the Optionee.

 

                11.           Non-Solicitation.  Optionee hereby agrees that, for a period of
at least 12 months following Optionee’s termination of employment with the
Company for any reason, Optionee shall not, without the prior written consent
of the Company, solicit or attempt to solicit for employment with or on behalf
of any other person, firm or entity any employee of the Company or any of its
affiliates or any person who was formerly employed by the Company or any of its
affiliates within the preceding six months, unless such person’s employment was
terminated by the Company or any of such affiliates.

 

12.           Miscellaneous.  Notices hereunder shall be mailed or
delivered to the Company at its principal place of business, 2900 Eisenhower
Avenue, Suite 300, Alexandria, Virginia 22314, Attention:  Director of Compensation and Benefits, and
shall be mailed or delivered to Optionee at his address set forth in the
Company’s records, or in either case at such other address as one party may
subsequently furnish to the other party in writing.  This Option shall be governed by the laws of
the State of Maryland, except to the extent such law is preempted by federal
law.

 

[End
of Text]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4Exhibit 10.2

 

AVALONBAY COMMUNITIES, INC. 

INCENTIVE STOCK OPTION AGREEMENT

(1994 STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED)

 

Pursuant to the AvalonBay
Communities, Inc. 1994 Stock Incentive Plan, as amended and restated (the
“Plan”), AvalonBay Communities, Inc. (the “Company”) hereby grants to the
Optionee named below an Option to purchase up to the number of shares of the
Company’s Common Stock, par value $.01 per share (“Common Stock”) set forth
below.  This option is subject to all of
the terms and conditions as set forth herein, in the Incentive Stock Option
Agreement Terms (the “Terms”) which are attached hereto and incorporated herein
in their entirety, and in the Plan. 
Capitalized terms used but not defined herein or in the Terms shall have
the respective meanings ascribed thereto in the Plan.

 

Incentive Stock

	
  Option:

  	
   

  	
  This Option shall be construed in a manner to qualify it as an
  “incentive stock option” under Section 422 of the Internal Revenue Code
  of 1986, as amended (the “Code”).

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  Subject to the
  provisions of Section 4 and 6 of the Terms and the discretion of the
  Company to accelerate the vesting schedule, one third of this option shall
  become vested and exercisable on each of the first three anniversary dates of
  the award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In any event this
  Option shall become fully vested and exercisable with respect to all of the
  Option Shares three years after the date hereof.

  

 

Additional
Terms/Acknowledgements: The undersigned Optionee acknowledges receipt of, and understands and
agrees to, this Incentive Stock Option Agreement, including, without
limitation, the Terms.  Optionee further
acknowledges receipt of a copy of the Plan. 
Optionee further acknowledges that as of the Date of Grant, this
Incentive Stock Option Agreement, including, without limitation, the Terms, and
the Plan set forth the entire understanding between Optionee and the Company
regarding the Options described herein and supersede all prior oral and written
agreements on that subject.

 

ATTACHMENT: 
Incentive Stock Option Agreement Terms

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

AVALON BAY COMMUNITIES, INC.

1994 STOCK INCENTIVE PLAN, AS
AMENDED AND RESTATED

 

INCENTIVE STOCK OPTION AGREEMENT
TERMS

 

1.             Vested Option Shares.  Subject to Section 4, when this Option
is vested with respect to any of the Option Shares, this Option shall continue
to be exercisable with respect to such Option Shares (“Vested Option Shares”)
at any time or times prior to the Expiration Date.

 

2.             Manner of Exercise.  The Optionee may exercise this Option only in
the following manner: from time to time on or prior to the Expiration Date, the
Optionee may give written notice to the Company of his election to purchase
some or all of the Vested Option Shares purchasable at the time of such notice,
which notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase
price for the Option Shares to be purchased may be made by one or more of the
following methods:  (a) in cash, by certified
bank check or other instrument acceptable to the Company; (b) through the
delivery (or attestation to the ownership) of shares of Common Stock that have
been beneficially owned by the Optionee for at least six (6) months and
are not then subject to restrictions under any Company plan and were not used
in a “stock swap” within the six (6) months preceding the option exercise,
such surrendered shares to be valued at the closing price of the Common Stock
on the principal exchange on which the Common Stock is listed on the date the
Company receives the exercise notice; (c)by the Optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable
and acceptable to the Company to pay the purchase price; provided that in the
event the Optionee chooses to pay the purchase price as provided in this
subsection(c), the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Company
shall prescribe as a condition of such payment procedure; or (d)with the
consent of the Company, a combination of (a), (b) and (c) above.  Payment instruments will be received subject
to collection.

 

The delivery of
certificates representing the Option Shares will be contingent upon (i) the
Company’s receipt from the Optionee of full payment for the Option Shares, as
set forth above, (ii) the satisfaction of section 11 hereof, and (iii) any
agreement, statement or other evidence that the Company may require to satisfy
itself that the issuance of Option Shares to be purchased pursuant to the
exercise of Options under the Plan and any subsequent resale of the shares will
be in compliance with applicable laws and regulations.

 

If requested upon the
exercise of the Option, certificates for Option Shares may be issued in the
name of the Optionee jointly with another person or in the name of the executor
or administrator of the Optionee’s estate, and the foregoing representations
shall be modified accordingly.  The
Optionee shall not have the rights of a stockholder with respect to any Option
Shares prior to his acquisition of such Option Shares upon the exercise of this
Option.

 

Notwithstanding any other
provision hereof or of the Plan, no portion of this Option shall be exercisable
after the Expiration Date hereof.

 

3.             Non-transferability of Option.  This Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution.  This Option shall be exercisable during the
Optionee’s lifetime only by the Optionee.

 

4.             Termination of Employment.  If the Optionee’s employment (or other
business relationship) by the Company or a Subsidiary (as defined in the Plan)
is terminated, the period within which to exercise the Option may be subject to
earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s employment (or other
business relationship) terminates by reason of death, any Option held by the
Optionee shall be automatically vested on the date of termination and shall be
exercisable by the Optionee’s legal representative or legatee for a period of
twelve (12) months from the date of termination, or until the Expiration Date,
if earlier.

 

(b)           Termination Due to Disability.  If the Optionee’s employment (or other
business relationship) terminates by reason of Disability (as defined in the
Plan), any Option held by the Optionee shall be 

 

 

 

 

 

 

2

 

automatically vested on
the date of termination, and shall be exercisable for a period of twelve (12)
months from the date of termination, or until the Expiration Date, if
earlier.  The death of the Optionee
during the twelve (12) month period provided in this Section4(b) shall
extend such period for six (6) months from the date of death or until the
Expiration Date, if earlier.

 

(c)           Termination by Reason of
Retirement.  If the Optionee’s
employment terminates by reason of Retirement (as defined in the Plan), any
Option held by the Optionee shall be automatically vested on the date of
termination, and shall be exercisable for a period of twelve (12) months from
the date of termination, or until the Expiration Date, if earlier.  The death of the Optionee during the twelve
(12) month period provided in this Section 4(c) shall extend such
period for six (6) months from the date of death, or until the Expiration
Date, if earlier.

 

(d)           Termination for Cause.  If the Optionee’s employment (or other
business relationship) terminates for Cause (as defined in the Plan), any
Option held by the Optionee shall immediately terminate and be of no further
force and effect.

 

(e)           Termination Without Cause.  If the Optionee’s employment (or other
business relationship) is terminated by the Company without Cause (as defined
in the Plan), any option held by the Optionee shall be automatically vested on
the date of termination, and shall be exercisable for a period of twelve (12)
months from the date of termination, or until the Expiration Date, if
earlier.  The death of the Optionee
during the twelve (12) month period provided in this Section 4(e) shall
extend such period for six (6) months from the date of death, or until the
Expiration Date, if earlier.

 

(f)            Termination at the Election of
the Optionee.  If the Optionee’s
employment (or other business relationship) is voluntarily terminated at the
election of the Optionee (i.e., is terminated other than for death, Disability,
Retirement, or a termination at the Company’s 
election whether for Cause or without Cause), any option held by the
Optionee may be exercised, to the extent exercisable on the date of
termination, for a period of three (3) months from the date of
termination, or until the Expiration Date, if earlier.  For clarification, it is noted that this
means that the remaining unvested portion of the Option shall terminate
immediately and be of no further force or effect.

 

For this purpose, neither
a transfer of employment from the Company to a Subsidiary (or from a Subsidiary
to the Company) nor an approved leave of absence shall be deemed a “termination
of employment.”

 

5.             Option Shares. 
The Option Shares are shares of the Common Stock of the Company as
constitutedon the date of this Option, subject to adjustment as provided in the
Plan.

 

6.             Effect of Change of Control.  Upon the occurrence of a Change of Control,
as defined in the Plan, this Option shall automatically become fully
exercisable.

 

7.             No Special Employment Rights.  This Option will not confer upon the Optionee
any right with respect to continuance of employment by the Company or a
Subsidiary, nor will it interfere in any way with any right of the Optionee’s
employer to terminate the Optionee’s employment at any time.

 

8.             Rights as a Shareholder.  The Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock that may be purchased
upon exercise of this Option unless and until a certificate or certificates
representing such shares are duly issued and delivered to the Optionee.  Except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.

 

9.             Qualification under Section 422.  It is understood and intended that the Option
granted hereunder shall qualify as an “incentive stock option” as defined in Section 422
of the Code.  Accordingly, the Optionee
understands that in order to obtain the benefits of an incentive stock option
under Section 422 of the Code, no sale or other disposition may be made of
any Option Shares acquired upon exercise of the Option within the one-year
period beginning on the day after the day of the transfer of such Option Shares
to him or her, nor within the two-year period beginning on the day after the
grant of the Option.  If the Optionee
intends to dispose or does dispose (whether by sale, gift, transfer or
otherwise) of any such Option Shares within these periods, he or she will
notify the Company 

 

 

 

 

 

 

 

 

3

 

within thirty (30)
days after such disposition.  In
addition, no more than $100,000 of the aggregate fair market value of Stock
Options granted under the Plan may become exercisable for the first time by the
Optionee during any calendar year and be treated as incentive stock options
under Section 422 of the Code.

 

10.           The Plan.  In the event of any discrepancy or
inconsistency between this Agreement and the Plan, the terms and conditions of
the Plan shall control.

 

11.           Withholding Taxes.  The Optionee shall, not later than the date
as of which the exercise of this Option becomes a taxable event for federal
income tax purposes, pay to the Company (or make arrangements satisfactory to
the Company for payment of) any federal, state and local taxes required by law
to be withheld on account of such taxable event.  The Optionee acknowledges and agrees that the
Company has the right to deduct from payments of any kind otherwise due to the
Optionee, or from the Option Shares to be issued in respect of an exercise of
this Option, any federal, state or local taxes of any kind required by law to
be withheld with respect to the issuance of shares of Stock to the Optionee.

 

12.           Non-Solicitation.  Optionee hereby agrees that, for a period of
at least 12 months following Optionee’s termination of employment with the
Company for any reason, Optionee shall not, without the prior written consent
of the Company, solicit or attempt to solicit for employment with or on behalf
of any other person, firm or entity any employee of the Company or any of its
affiliates or any person who was formerly employed by the Company or any of its
affiliates within the preceding six months, unless such person’s employment was
terminated by the Company or any of such affiliates.

 

13.           Miscellaneous.  Notices hereunder shall be mailed or
delivered to the Company at its principal place of business, 2900 Eisenhower
Avenue, Suite 300, Alexandria, Virginia 22314, Attention:  Director of Compensation and Benefits, and
shall be mailed or delivered to Optionee at his address set forth in the
Company’s records, or in either case at such other address as one party may
subsequently furnish to the other party in writing.  This Option shall be governed by the laws of
the State of Maryland, except to the extent such law is preempted by federal
law.

 

[End of Text]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

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