THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.15
The Employment Agreement (the “Agreement”) made as of the 26th day of February,
2001 by and between AvalonBay Communities, Inc., a Maryland corporation (the “Company”), and
Xxxxxxx X. Xxxxxxxx (“Executive”), as previously amended, is hereby further amended as follows (new
language is bold and underlined and deleted language is struck through:
1. The last sentence of Section 3(b) of the Agreement is hereby amended to read as follows:
“Any Cash Bonuses for a fiscal year hereunder shall be paid
as a lump sum not later than 75 days after the end of the Company’s
preceding fiscal year but not later than March 14 after the end
of the fiscal year.”
2. Section 7(c)(i)(b)(A) of the Agreement is hereby amended to read as follows:
“The Company may defer the determination of the Cash Bonus and the
restricted stock portion of the LT Equity Bonus until such bonuses
in respect of such year are determined for other officers, and at
such time the amounts to be used for determining Executive’s pro
rata bonuses shall be a percentage of his target Cash Bonus and a
percentage of his target number of restricted shares with such
percentages being equal to the average of the percentages that apply
to the Cash Bonus and restricted shares, respectively, of other
officers ranked Senior Vice President or higher, but in no event
shall such Cash Bonus and the restricted stock portion of the LT
Equity Bonus be paid to Executive later than March 14 of the
calendar year following the calendar year that includes the Date of
Termination; and”
3. The first sentence of Section 7(c)(iii) of the Agreement is hereby amended to read as
follows:
“In the event the Company elects to terminate Executive’s employment
during the Employment Period on account of Disability, the Company
shall, in addition to paying the amounts set forth in Section
7(c)(i) and subject to Executive first entering into a separation
agreement, including a general release of all claims, in a form
reasonably acceptable to the Company (‘Separation
Agreement‘) within 21 days of the Date of Termination, pay to
Executive, in one lump sum, no later than the later of the effective
date31 days following the Date of
Termination, an amount equal to one times Average Covered Total
Compensation.”
4. The first sentence of Section 7(c)(iv) of the Agreement is hereby amended to read as
follows:
“In the event the Company gives Executive a notice of non-renewal
pursuant to Section 1 above, and either (I) within one year after
expiration of the Employment Period the Executive voluntarily
terminates his employment (‘Post-Expiration Resignation‘) or
(II) within two years after expiration of the Employment Period the
Executive’s employment is terminated by the Company without Cause or
Constructively Terminated without Cause (‘Post-Expiration
Termination‘), then, in either such case, the Company shall, in
addition to paying the amounts set forth in Section 7(c)(i), and
subject to Executive first entering into a Separation Agreement
within 21 days of the Date of Termination, pay to Executive,
for 12 consecutive months beginning with the first business day of
the calendar month following the Effective Date of said Separation
Agreement, a monthly amount equal to one-twelfth (1/12) of in
one lump sum, 31 days following the Date of Termination, an amount
equal to the sum of one times his then applicable Base Salary
plus one times Average Covered Cash Bonus Compensation.”
5. The first sentence of Section 7(c)(v) of the Agreement is hereby amended to read as
follows:
“In the event the Company or any successor to the Company terminates
Executive’s employment without Cause, or if Executive terminates his
employment in a Constructive Termination without Cause, in either
case prior to the effective time of any Change in Control of the
Company or at any time after two years after a Change in Control of
the Company, the Company shall, in addition to paying the amounts
provided under Section 7(c)(i), and subject to Executive first
entering into a Separation Agreement within 21 days of the Date
of Termination, pay to Executive, in one lump sum, no later than
the later of the Effective Date of said Separation Agrement or 31
days following the Date of Termination, an amount equal to the sum
of (x) two times Average Covered Base and Cash Bonus Compensation
plus (y) one times Average Covered LT Equity Compensation
(such sum, the ‘Section 7(c)(v) Payment‘); provided,
however, that in the event that the Constructive Termination
without Cause is a Relocation Termination, the payment shall be in
an amount equal to one times Average Covered Total Compensation.”
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6. The first sentence of Section 7(c)(vi) of the Agreement is hereby amended to read as
follows:
“In the event the Company or any successor to the Company terminates
Executive’s employment without Cause (or Executive’s employment is
Constructively Terminated without Cause) within two years following
the effective time of a Change in Control of the Company, the
Company shall, in addition to paying the amounts provided under
Section 7(c)(i), and subject to Executive first entering into a
Separation Agreement within 21 days of the Date of
Termination, pay to Executive, in one lump sum, no later than
the later of the effective date of said Separation Agreement or 31
days following the Date of Termination, an amount equal to three
times Average Covered Total Compensation.”
7. The second sentence of Section 7(d)(ii) of the Agreement is hereby amended to read as
follows:
“The initial Partial Gross-Up Payment, if any, as determined
pursuant to this 7(d)(ii), shall be paid to the Executive within
five days of the receipt of the Accounting Firm’s determination
appropriate tax authorities as withholding taxes on behalf of
Executive at such time or times when each Excise Tax payment is
due.”
8. The following section shall be inserted as a new Section 7(i) to the Agreement:
“(i) Section 409A.
(a) Anything in this Agreement to the
contrary notwithstanding, if at the time of Executive’s
‘separation from service’ within the meaning of Section 409A
of the Code, the Company determines that Executive is a
‘specified employee’ within the meaning of Section
409A(a)(2)(B)(i) of the Code, then to the extent any payment
or benefit that Executive becomes entitled to under this
Agreement would be considered deferred compensation subject
to the 20 percent additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, such payment shall not
be payable and such benefit shall not be provided prior to
the date that is the earlier of (A) six months and one day
after Executive’s separation from service, or (B)
Executive’s death. Any such delayed cash payment shall earn
interest at an annual rate equal to the applicable federal
short-term rate published by the
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Internal Revenue Service for the month in which
separation from service occurs, from the date of separation
from service until the payment date.
(b) The right to reimbursement or in-kind
benefits under this Agreement is not subject to liquidation
or exchange for another benefit and does not affect the
expenses eligible for reimbursement, or in-kind benefits, to
be provided in any other taxable year.
(c) The reimbursement of expenses under
this Agreement will be made on or before the last day of
Executive’s taxable year following the taxable year in which
the expense was incurred.
(d) The parties intend that this Agreement
will be administered in accordance with Section 409A of the
Code. The determination of whether and when a separation
from service has occurred shall be made in accordance with
the presumptions set forth in Treasury Regulation Section
1.409(A)-1(h). The parties agree that this Agreement may be
amended, as reasonably requested by either party, and as may
be necessary to fully comply with Section 409A of the Code
and all related rules and regulations in order to preserve
the payments and benefits provided hereunder without
additional cost to either party.”
9. Except as amended herein, the Agreement is hereby confirmed in all other respects.
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IN WITNESS WHEREOF, this Amendment is entered into this 14th day of December, 2008.
| AVALONBAY COMMUNITIES, INC. |
||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxxx Xxxxxxxx | |||
| Title: | EVP-Human Resources | |||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxx | |||
| Title: | SVP, General Counsel & Secretary | |||
| /s/ Xxxxxxx X. Xxxxxxxx | ||||
| Executive | ||||
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