Exhibit 10.15
AVALONBAY COMMUNITIES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: RETIREMENT AGREEMENT
Dear ▇▇. ▇▇▇▇▇:
This letter agreement (the "Agreement") confirms the terms that will
govern your resignation, by reason of retirement, from your offices and
employment with AvalonBay Communities, Inc. (the "Company," a term which for
purposes of this Agreement includes its related or affiliated entities).
1. Retirement; Nomination as Director at 2000 Annual Meeting. You
and the Company hereby confirm that you will retire (i) effective immediately
following the next annual meeting of the shareholders of the Company if held in
May 2000, or (ii) if such annual meeting is held after May 2000, effective as of
May 10, 2000 (such date as may apply, the "Date of Retirement"). Accordingly,
you hereby irrevocably tender your resignation, as of the Date of Retirement, as
Executive Chairman of the Company and (except for your position as a Director of
AvalonBay Communities, Inc.) from all positions and offices you hold with the
Company or any of its affiliated entities. The Company hereby acknowledges your
retirement and accepts your resignations effective as of the Date of Retirement.
Subject to the execution in good faith by the Company's Board
of Directors of its fiduciary duties, the Company agrees that the Board (i)
shall nominate you for re-election at the Company's 2000 annual meeting of
stockholders as a Director of the Company and, (ii) following the 2000 annual
meeting shall grant you the honorary title of "Founder". Following the Date of
Retirement and upon your re-election as a Director, if applicable, in calendar
year 2001 and thereafter for so long as you remain a Director, you will receive
the same compensation as other outside non-employee Directors of the Company.
You waive your right, if any, to receive compensation, whether in the form of
stock grants, options awards or otherwise, as an outside non-employee Director
during calendar year 2000.
The Company will make a public announcement on or promptly
following the date hereof, in a mutually acceptable form, regarding your
retirement in May 2000.
2. Compensation Through Date of Retirement.
(a) Through the Date of Retirement, you will continue to
receive a base salary at a rate of $410,000 per year (subject to applicable
withholding).
(b) On the Date of Retirement, you will be paid in lieu
of a prorated cash bonus for calendar year 2000 the amount of $73,374.32
(subject to applicable withholding).
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 2
(c) As of the date of this letter, your accrued but
unused vacation is 56 days. From and after the date hereof, you will no longer
accrue additional vacation per bi-weekly pay period and/or be charged against
such accrual for vacation days you reasonably use between the date of this
letter and the Date of Retirement. You will be paid $62,904.11 (i.e., 56/365
($410,000)) for all accrued but unused vacation days on the Date of Retirement
(subject to applicable withholding).
(d) Through the Date of Retirement, you will receive the
benefits for which you are eligible under the Company's other generally
applicable employee benefit plans, practices and policies.
(e) By vote of the Compensation Committee on February 28,
2000, your cash bonus and equity awards in respect of service during 1999 are
as follows: $243,200 cash bonus (which is fully vested and has been paid to you
in accordance with the Company's practice for senior managers); 7,260
restricted shares of common stock; and 59,400 stock options with an exercise
price equal to the market closing price on February 28, 2000. Such options and
shares will vest in accordance with the customary terms provided therein,
subject, in the case of options, to acceleration on the Date of Retirement as
provided herein, and, in the case of restricted shares, subject to Section 4
hereinbelow.
3. Split Dollar Life Insurance/Term Life.
(a) In recognition of your services to the Company, the
Company will continue to pay, for so long as such payments are due, all
premiums then due and payable on, but only to the extent relating to, the
whole-life portion of, the split dollar life insurance policy obtained for you
pursuant to Section 3(d) of the Employment Agreement dated March 9, 1998, by
and between you and the Bay Apartment Communities, Inc. (a predecessor name of
the Company) (the "Employment Agreement"); provided that the Company's
obligations to pay under this Section 3 are conditioned upon your payment of
all premiums payable on, but only to the extent relating to, the term-life
portion of, said split dollar life insurance policy. You agree to cooperate
with the Company in verifying your continuing satisfaction of the foregoing
condition. The Company agrees to promptly notify you and you agree to promptly
notify the Company of any premium notice or other notice it or you receive from
the insurer relating to the policy. In the event that the Company determines
that its obligation to make payments under this Section 3 has ceased by reason
of your non-payment of premiums relating to the term-life portion of said split
dollar life insurance policy, the Company shall provide you with thirty (30)
days advance written notice of its intent to terminate payments hereunder. Such
notice shall identify specifically your non-payment of the term life premium
that is the basis on which the Company asserts its right to cease payments and
shall provide you with a
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 3
reasonable opportunity to cure.
(b) As an additional retirement benefit, the Company has
agreed to provide you with the following death benefit, which shall provide
assurances to you that the fees payable to you under the Consulting Agreement
in respect of your services during the three year period following the date
hereof will accrue to you or your estate in the event of your death during such
period:
(i) In the event that you die during the three year
period following the Date of Retirement, the Company
will pay in accordance with Sections 14(j) below, on
the date or dates when such payments would otherwise
have been due, the remaining cash consulting Fees due
to you under the Consulting Agreement.
(ii) You agree to use reasonable best efforts to cause a
life insurance company to tender to you an offer of a
term life insurance policy with reasonable commercial
rates that will provide a death benefit approximately
equal to the cash consulting Fees still due you under
the Consulting Agreement. You will advise the Company
of the premiums due therefor prior to entering into
such life insurance policy, and the Company will
advise you as to whether the Company intends to
reimburse you for the premiums therefor in accordance
with the next clause (iii). To satisfy this clause
(ii), you may procure two policies, one of which may
lapse after one year.
(iii) If the Company reimburses you for the premiums
therefore, you will enter into such policy,
whereupon, during the term of such policy, the
Company's obligations under clause (i) shall not
apply. You shall have the right to designate, and
from time to time change, the beneficiary(ies) under
such policy.
(iv) If the Consulting Period is terminated by the Company
for Cause (as set forth in the Consulting Agreement),
the Company's obligations in this Section 3(b) shall
not apply after the date of such termination.
(v) By way of clarification, you and the Company agree
that in no event shall you or your estate or other
beneficiaries be paid in the aggregate, by virtue of
the Company's obligations hereunder, or under the
Consulting Agreement, or by virtue of the term life
insurance policy that may be procured as contemplated
hereby, an
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 4
amount in cash that exceeds the cash consulting Fees
that you otherwise would have received under the
Consulting Agreement for full service thereunder,
and, in the event that you or your estate does
receive such excess cash payments, the amount of such
excess shall be promptly reported to and remitted to
the Company.
(c) As an additional retirement benefit, the Company
further has agreed that, in the event you die before all common stock
deliverable to you as Additional Fees under the Consulting Agreement has been
delivered, the Company shall deliver such installment or installments of common
stock in accordance with Section 14(j) below, on the date or dates when such
deliveries would otherwise have been due under Section 1(b) of the Consulting
Agreement.
4. Restricted Stock, Deferred Stock Awards and Founder's Stock.
(a) You and the Company agree and acknowledge that the
Company's 1994 Stock Incentive Plan, as amended (the "Stock Incentive Plan")
provides that all remaining shares of the restricted common stock of the
Company that you were granted as Restricted Stock Awards are to continue to
vest from and after the Date of Retirement in accordance with the terms of each
such grant. For clarification, Exhibit A hereto describes all such Restricted
Stock. Notwithstanding the foregoing, for good and valuable consideration, you
hereby waive your right to and forfeit, as of the Date of Retirement, all then
remaining unvested Restricted Stock. To the extent the Company has not already
done so with respect to previously vested Restricted Stock, the Company shall
(or shall cause the Company's transfer agent to) (i) promptly deliver to you
certificates representing such stock with no restrictive legends, and such
stock shall be freely transferable by you subject to applicable securities laws
and the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy, which shall apply to you in your
capacity as a Director; and (ii) remove all restrictive legends on shares
previously issued to you. In the event that you hold or were given certificates
regarding such restricted shares, the Company's obligation in the preceding
sentence is subject to: (A) delivery by you to the Company or its agent of such
certificate; or (B) your delivery to the Company or its agent of a loss
affidavit. You acknowledge that the Company has advised you to consult an
attorney regarding your continuing obligations under Section 16 of the
Securities Exchange Act of 1934, as amended, as well as other federal and state
securities (including ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇) laws. You agree that you shall continue
to be bound by the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy for so long as you are a
Director.
(b) The Company acknowledges that as of the date hereof,
you have 24,977 Deferred Stock Awards, which number will continue to grow as a
result of the reinvestment of "phantom" dividends in accordance with the
Company's current practice and shall be adjusted equitably to reflect stock
splits, stock dividends or similar changes
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 5
affecting the common stock of the Company prior to your conversion of such
Deferred Stock as provided hereinbelow. The Company agrees that you may convert
some or all of your Deferred Stock Awards into common stock of the Company at
any time after May 10, 2000 upon ten (10) business days written notice (with
stock certificates promptly delivered to you). Your right to convert the
Deferred Stock Awards remains subject to all applicable securities laws.
Promptly upon your ceasing to serve as a Director, any remaining Deferred Stock
Awards promptly shall be converted into common stock of the Company and paid to
you. Your right to have the Deferred Stock Awards convert into common stock and
be paid to you will in no way depend on your service under the Consulting
Agreement or any defaults by you thereunder.
(c) The Company shall (or shall cause the Company's
transfer agent to) remove all restrictive legends from your founder's shares
(i.e., stock you held in Bay Apartment Communities, Inc. at the time of its
initial public offering). In the event that you hold or were given
certificates regarding such founder's shares, the Company's obligation in the
preceding sentence is subject to: (i) delivery by you to the Company or its
agent of such certificate; or (ii) your delivery to the Company or its agent of
a loss affidavit.
5. Stock Options.
(a) You and the Company agree and acknowledge that the
Stock Incentive Plan provides that by reason of your retirement, all options to
purchase shares of the Company's common stock that you were granted shall
automatically vest as of the Date of Retirement. For clarification, Exhibit B
hereto lists all such options and their respective exercise prices. The Company
acknowledges that, assuming that you continue to serve as a Director
immediately following your retirement, the exercise periods with respect to
your various options are unaffected by your retirement. Accordingly, (i) you
have until the earlier of (A) the expiration of three (3) months following the
termination of your membership on the Company's board of directors (or six (6)
months from your death if you die while a director) or (B) the expiration of
the original term of such option (i.e., ten years after its grant date), in
which to exercise those options granted to you prior to 1999; and (ii) you have
until the earlier of (A) the expiration of twelve months following the
termination of your membership on the Company's board of directors (or six (6)
months from your death if you die while a director) or (B) the expiration of
the original term of such option (i.e., ten years after its grant date) in
which to exercise those options granted to you in or after 1999.
(b) Notwithstanding the foregoing, the Board of
Directors, or the Compensation Committee of the Board of Directors of the
Company, has taken such action as is necessary so that with respect to options
granted on January 24, 1997, January 30, 1998, and February 28, 2000 you will
have until January 24, 2007,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 6
January 30, 2008 and February 28, 2010, respectively in which to exercise such
options (collectively, the "Extended Options") subject to the following
provisions. In the event that you wilfully and materially breach the terms of
the Consulting Agreement or the Mutual Release and Separation Agreement each
dated as of March 24, 2000, by and between you and the Company (respectively,
the "Consulting Agreement" and the "Separation Agreement"), (a "Material
Breach") at any time after the date hereof and within thirty-six (36) months of
the Date of Retirement, in addition to the Company's rights to obtain equitable
relief or damages for such breach, the Company may suspend thirty-three percent
(33%) of the original amount of each tranche of the Extended Options (or, with
respect to a tranche of Extended Options for which less than thirty-three
percent (33%) of the original amount is outstanding at that time, all such
tranche of Extended Options) ("Suspended Options"). The Company shall suspend
your right to exercise the Suspended Options by (i) filing a request for
arbitration within a reasonable time after any Senior Manager (i.e., any
individual holding the title of Senior Vice President or higher) learns of the
Material Breach, which request specifically states that the Company is
suspending your right to exercise, or (ii) in the event the Company reasonably
determines that your asserted Material Breach is curable, by sending you a
written notice describing the Material Breach and the steps you must take to
cure such Material Breach. In the event that the Company asks you to cure a
Material Breach and you fail to cure such breach to the Company's satisfaction
within five (5) business days following delivery to you of written notice from
the Company, the Company then may commence an arbitration proceeding, in which
case your right to exercise the Suspended Options will remain suspended. In the
event that an arbitrator determines that you have not committed a Material
Breach, the arbitrator may award you damages directly caused by the suspension
of your right to exercise the Suspended Options. In the event that an
arbitrator determines that you have committed a Material Breach, the exercise
period of the Suspended Options shall terminate immediately, without prejudice
to the Company's right to obtain equitable relief or damages for such Material
Breach; provided that an award of additional damages (if any) shall take into
account termination of the Suspended Options. Nothing contained herein
otherwise shall be deemed to limit the Company's right to obtain equitable
relief or damages for a Material Breach that occurs before or after thirty-six
(36) months after the date you execute this Agreement.
In the event of your death, your options shall be exercisable by
your legal representative or legatee in accordance with their terms.
6. Loan Forgiveness. The Company will forgive, on the Date of
Retirement, the amount you owe in consideration of loans the Company made to
you in connection with the grant of restricted stock prior to the date hereof
(i.e., approximately $72,500). On or promptly following the Date of Retirement,
the promissory notes representing the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 7
approximately said indebtedness shall be returned to you marked "Paid in Full."
You understand and acknowledge that the Company will not make any further loans
to you with respect to restricted stock awarded to you in calendar year 2000.
7. Expense Reimbursement. You shall continue to be entitled to
reimbursement of reasonable business expenses incurred through the Date of
Retirement in accordance with Section 4(a) of the Employment Agreement. As a
Director, you will be entitled to reimbursement of reasonable business expenses
in accordance with the Company's customary practices, from and after the Date
of Retirement.
8. Status of Other Benefits. Except as expressly provided
hereinabove, your eligibility to participate in any of the Company's employee
benefit plans or programs ceases on or after the Date of Retirement in
accordance with the terms and conditions of each of those benefit plans and
programs and your rights to benefits under any of the employee benefit plans or
programs, if any, are governed by the terms and conditions of each of those
employee benefit plans and programs; provided, that nothing in this Section 8
shall be construed to affect you or your dependents' rights thereafter to
receive continuation coverage to the extent authorized by and consistent with
29 U.S.C. Section 1161, et. seq. (commonly known as "COBRA") and applicable
group health and dental plan terms, entirely at your or their own cost (as
determined for COBRA premium purposes). Notwithstanding any shorter period that
may be provided under COBRA, the Company will make its group health and dental
plans (or reasonably comparable health and dental insurance) available to you
and your qualified dependents for three years following the Date of Retirement,
such coverage to be entirely at your or their own cost (as determined for COBRA
premium purposes).
9. Return of Property. In accordance with Section 4 of the
Nondisclosure Agreement, dated as of March 9, 1998, by and between you and Bay
Apartment Communities, Inc. (a predecessor name to the Company), and
incorporated in the Employment Agreement as Annex B ("Nondisclosure
Agreement"), you agree that, on or promptly following the Date of Retirement,
you will promptly return to the Company (a) all records, correspondence, notes,
financial statements, computer printouts and other documents and recorded
material of every nature (including copies thereof) that may be in your
possession or control dealing with Confidential Information (as defined in
Section 8 of the Nondisclosure Agreement), provided, however, that you may keep
your laptop computer and personal home computer, but at the Company's request,
you will allow the Company to delete all Company records therefrom and to
discontinue computer access to the Company's computer files. Additionally, you
may keep materials you properly possess in your capacity as a Director, and may
download and keep your calendar and rolodex (except to the extent that the
Company reasonably and specifically notifies you that any such information
constitutes Confidential Information, in which case the specifically cited
information may not be downloaded).
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 8
10. Non-Compete Section 8(a) of the Employment Agreement is
hereby amended and restated and incorporated herein as of the Effective Date as
follows:
For so long as Executive remains a Director of the Company,
Executive shall not, without the prior written consent of
the Board of Directors, become associated with, or engage in
any "Restricted Activities" with respect to any "Competing
Enterprise," as such terms are hereinafter defined, whether
as an officer, employee, principal, partner, agent,
consultant, independent contractor or shareholder.
"Competing Enterprise," for purposes of this Agreement,
shall mean any person, corporation, partnership, venture or
other entity which (a) is a publicly traded real estate
investment trust, or (b) is engaged in the business of
managing, owning, leasing or joint venturing residential
real estate within 30 miles of residential real estate owned
or under management by the Company or its affiliates.
"Restricted Activities," for purposes of this Agreement,
shall mean executive, managerial, directorial,
administrative, strategic, business development or
supervisory responsibilities and activities relating to all
aspects of residential real estate ownership, management,
residential real estate franchising, and residential real
estate joint-venturing.
(a) The Executive's interest in and performance of
services for Greenbriar Homes Communities, Inc. and
its affiliates (collectively, "Greenbriar"), shall
not be deemed to be an association with or engaging
in Restricted Activities with respect to any
Competing Enterprise within the meaning of this
Section 8(a) of the Employment Agreement, but only to
the extent that his association with or involvement
with Greenbriar relates to the single family,
for-sale home business.
(b) The Executive's investment of personal funds in
apartment buildings, developments or complexes and
the Executive's investment of personal funds in
partnerships that invest in apartment buildings,
developments or complexes shall not be deemed to be
an association with or engaging in Restricted
Activities with respect to any Competing Enterprise
within the meaning of this Section 8(a) of the
Employment Agreement, but only to the extent that (i)
such personal investments of equity capital do not
exceed $20,000,000 in the aggregate (inclusive of
such investments already made) for all such
investments (which value is determined at cost as of
the date of the Executive's initial
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 9
cash investment) and (ii) such personal funds account
for at least 75% of the equity capital invested in
any such building, development, complex or
partnership. Personal funds include the funds of the
Executive's immediate family, any family trusts and
any family partnership.
(c) In addition the Executive may request consent from
the Board to engage in any activity that he believes
is not competitive with the Company's then current
business or prospective business, and the Board will
not unreasonably withhold its consent if the Board
concludes in good faith that such activity is not in
competition with the Company's then current business
or prospective business.
(d) The provisions regarding non-competition above in no
way shall limit the Executive's fiduciary and common
law obligations to the Company in his role as a
Director of the Company.
11. Exclusivity. This Agreement sets forth all the consideration
to which you are entitled by reason of your retirement and resulting
termination of your employment, and you agree that you shall not be entitled to
or eligible for any payments or benefits under any other Company severance,
bonus, retention or incentive policy, arrangement or plan.
12. Tax Matters. All payments and other consideration provided
to you pursuant to this Agreement shall be subject to any deductions,
withholding or tax reporting that the Company reasonably determines to be
required for tax purposes; provided, that nothing contained in this Section 12
affects your independent obligation and primary responsibility, which
obligation and responsibility you hereby affirm, to determine and make proper
judgments regarding the payment of taxes under applicable law. In the case of
non-cash compensation (i.e., vesting of restricted stock, loan forgiveness,
etc.) you hereby authorize the Company to offset amounts required to be
withheld against any other cash compensation or fees then payable by the
Company to you, including Fees under the Consulting Agreement.
13. Sale of Equity Interests. On or prior to the Date of
Retirement, you will sell to ▇▇▇▇▇ ▇▇▇▇▇ or another designee of the Company all
of your interests in AvalonBay Services I, Inc. and AvalonBay Services II, Inc.
pursuant to documents substantially similar in terms to those used when you
purchased such shares from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The price therefor will be the fair
price as determined by you and the Company, which price you acknowledge has not
changed significantly since you purchased said shares from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 10
14. Notices, Acknowledgments and Other Terms
(a) This Agreement shall become effective on the
Effective Date of the Separation Agreement (as defined in Section 7(d) thereof)
(the "Effective Date").
(b) You are advised to consult with an attorney and tax
advisor before signing this Agreement. You acknowledge that you have consulted
with an attorney of your choice.
(c) By signing this Agreement, you acknowledge that you
are doing so voluntarily and knowingly, fully intending to be bound by this
Agreement. You also acknowledge that you are not relying on any representations
by any representative of the Company concerning the meaning of any aspect of
this Agreement.
(d) In the event of any dispute, this Agreement will be
construed as a whole, will be interpreted in accordance with its fair meaning,
and will not be construed strictly for or against either you or the Company.
Section headings and parenthetical explanations of section references are for
convenience only and shall not be used to interpret the meaning of any
provision or term of this Agreement.
(e) Any notices required to be given under this Agreement
shall be provided in writing and delivered by hand or certified mail, and shall
be deemed to have been duly given when received at the following addresses,
unless and to the extent that notice of change of address has been duly given
hereunder
If to you at:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to the Company, to it at:
AvalonBay Communities, Inc.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 11
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
AvalonBay Communities, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
and a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq,
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Exchange Place
Boston, MA 02109-2881
(f) The law of the State of Maryland will govern any
dispute about this Agreement, including any interpretation or enforcement of
this Agreement.
(g) In the event that any provision or portion of a
provision of this Agreement shall be determined to be illegal, invalid or
unenforceable, the remainder of this Agreement shall be enforced to the fullest
extent possible and the illegal, invalid or unenforceable provision or portion
of a provision will be amended by a court of competent jurisdiction, or
otherwise thereafter shall be interpreted, to reflect as nearly as possible
without being illegal, invalid or unenforceable the parties' intent if
possible. If such amendment or interpretation is not possible, the illegal,
invalid or unenforceable provision or portion of a provision will be severed
from the remainder of this Agreement and the remainder of this Agreement shall
be enforced to the fullest extent possible as if such illegal, invalid or
unenforceable provision or portion of a provision was not included.
(h) This Agreement may be modified only by a written
agreement signed by you and an authorized representative of the Company.
(i) This Agreement, the Separation Agreement and the
Consulting Agreement and Sections 4(b), 6, 7(d), 8(a) (as amended by Section 10
of the Retirement Agreement), 8(b) (as clarified hereinbelow), 8(c) and 13(a)
(as amended by Section 5 of the Separation Agreement), and Annex B of the
Employment Agreement which are incorporated herein, constitute the entire
agreement between the parties with respect to the subject matter hereof and,
except as expressly provided therein, supersede all prior
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 12
agreements between the parties with respect to any related subject matter.
Without limiting your fiduciary duties as a Director, it is hereby acknowledged
that the contractual one year non-solicitation clause in Section 8(b) of the
Employment Agreement expires one year after the May 10, 2000, Date of
Retirement.
(j) Subject in all events to applicable law, in the event
of your death any payments or other consideration then due and payable or
deliverable to you by the Company under this Agreement will be paid or
delivered to your designated beneficiary, or, if you are not survived by such
designated beneficiary, or you fail to effectively designate a beneficiary, to
your estate. The Company acknowledges that you have designated The ▇▇▇▇▇ 1997
Irrevocable Trust, dated February 10, 1997, Jo ▇▇▇ ▇▇▇▇▇▇, or her successor,
Trustee, as the beneficiary. You may designate a beneficiary or change such
designation from time-to-time in accordance with the notice provisions of this
Agreement. The Company will reasonably cooperate with you to modify this
provision to the extent reasonably necessary so as to give effect to the
purpose of this provision in a manner that complies with applicable laws.
(k) This Agreement shall be binding upon each of the
parties and upon their respective heirs, administrators, representatives,
executors, successors and assigns, and shall inure to the benefit of each party
and to their heirs, administrators, representatives, executors, successors, and
assigns.
If you agree to these terms, please sign and date below and return
this Agreement to the Company's Chief Executive Officer. This Agreement may be
executed in counterparts and/or by facsimile transmission, each of which shall
be deemed to be an original but all of which together shall constitute one and
the same instrument. The execution of this Agreement may be by actual or
facsimile signature.
Sincerely,
AvalonBay Communities, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Executive Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 13
Accepted and Agreed to:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Dated: March 24, 2000
----------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 14
EXHIBIT A
RESTRICTED STOCK GRANTS
--------------------------------------
Issue Date Total Shares
--------------------------------------
1/24/97 20,000
--------------------------------------
1/30/98 10,000
--------------------------------------
2/17/99 6,200
--------------------------------------
2/28/00 7,260
--------------------------------------
TOTAL: 43,460
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
March 24, 2000
Page 15
EXHIBIT B
STOCK OPTIONS
- ----------------------------------------------------------------------------------------------------------
ISSUE DATE SHARES STRIKE $ EXERCISED OUTSTANDING
- ----------------------------------------------------------------------------------------------------------
3/10/94 100,000 $20.0000 -- 100,000
- ----------------------------------------------------------------------------------------------------------
3/31/95 60,000 $18.3750 -- 60,000
- ----------------------------------------------------------------------------------------------------------
1/26/96 40,000 $23.3750 -- 40,000
- ----------------------------------------------------------------------------------------------------------
1/24/97 100,000 $36.6250 -- 100,000
- ----------------------------------------------------------------------------------------------------------
1/30/98 100,000 $37.9375 -- 100,000
- ----------------------------------------------------------------------------------------------------------
2/17/99 62,000 $32.0000 -- 62,000
- ----------------------------------------------------------------------------------------------------------
2/28/00 59,400 $33.7500 -- 59,400
- ----------------------------------------------------------------------------------------------------------
TOTAL: 521,400 N/A -- 521,400
- ----------------------------------------------------------------------------------------------------------
