FORM OF INDEMNITY AGREEMENT BETWEEN THE COMPANY AND EACH OF ITS DIRECTORS
Exhibit 10.1
FORM OF INDEMNITY AGREEMENT
BETWEEN THE COMPANY AND EACH OF ITS DIRECTORS
[The Company has entered into an Indemnity Agreement with each of its Directors in substantially
the following form as of the following dates: Xxxxx Xxxxx-November 29, 2001; Xxxxx X.
Xxxxxx-October 30, 1998; Xxxx X. Xxxxx, Xx.-October 30, 1998; Xxxxxxx X. Xxxxx-October 30, 1998;
Xxxxxxx X. Xxxxxxx, Xx.-November 29, 2001; Xxxxx X. Xxxxxx-October 30, 1998; Xxxxx X.
Xxxxxxxx-October 30, 1998; Xxx X. Xxxxxxxx-November 29,
2001; Xxxxxxx X. Xxxxxxxx-November 7,
2005; and H. Xxx Xxxxxx-November 7, 2005.]
AGREEMENT, as of ___(the “Agreement”), between AvalonBay Communities, Inc., a
Maryland corporation (the “Company”) and ___(the “Indemnitee”).
WHEREAS, it is essential to the success of the Company to retain and attract as directors and
officers the most capable persons available;
WHEREAS, Indemnitee has agreed to serve as a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public companies in today’s environment;
WHEREAS, the Bylaws (the “Bylaws”) and the Articles of Incorporation (the ‘Articles”) of the
Company require the Company to indemnify and advance expenses to its directors and officers to the
fullest extent provided by law, and the Indemnitee has agreed to serve as a director of the Company
in part in reliance on such provisions in the Bylaws and Articles;
WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in an effective manner
and Indemnitee’s reliance on the foregoing provisions in the Bylaws and Articles, and in part to
provide Indemnitee with specific contractual protections in addition to those protections promised
Indemnitee in the Bylaws and Articles and with specific contractual assurance that the protection
promised by such provisions in the Bylaws and Articles will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of such provisions in the Bylaws or Articles
or any change in the composition of the Company’s Board of Directors or any acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest extent permitted by law, in addition
to any other right to indemnification to which Indemnitee may be entitled, and as set forth in this
Agreement and, to the extent insurance is maintained, for the continued coverage of Indemnitee
under the Company’s directors’ and officers’ liability insurance policies;
[Form of
Indemnity Agreement]
NOW THEREFORE, in consideration of the premises and of the Indemnitee agreeing to continue to
serve as a director of the Company, and intending to be legally bound hereby, the parties agree as
follows:
1. Certain Definitions.
(a) Change in Control. Change in control shall be deemed to have occurred upon any of
the following events:
(i) The acquisition in one or more transactions by any “Person” (as the term person is used
for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) of “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the 0000
Xxx) of twenty percent (20%) or more of the combined voting power of the Company’s then outstanding
voting securities (the “Voting Securities”), provided, however, that for purposes
of this Section 1(a)(i), the Voting Securities acquired directly from the Company by any Person
shall be excluded from the determination of such Person’s Beneficial Ownership of voting securities
(but such Voting Securities shall be included in the calculation of the total number of Voting
Securities then outstanding); or
(ii) The individuals who, as of the date hereof, are members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least two-thirds of the Board; provided, however,
that if the election, or nomination for election by the Company’s shareholders, of any new director
is hereafter approved by a vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; or
(iii) Approval by shareholders of the Company of (A) a merger or consolidation involving the
Company if the shareholders of the Company immediately before such merger or consolidation do not
own, directly or indirectly immediately following such merger or consolidation, more than eighty
percent (80%) of the combined voting power of the outstanding voting securities of the corporation
resulting from such merger or consolidation in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger or consolidation or (B) a complete
liquidation or dissolution of the Company or an agreement for the sale or other disposition of all
or substantially all of the assets of the Company.
(iv) Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because twenty percent (20%) or more of the then outstanding Voting Securities is acquired
by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its subsidiaries or (ii) any corporation which, immediately
prior to such acquisition, is owned directly or indirectly by the shareholders of the Company in
the same proportion as their ownership of stock in the Company immediately prior to such
acquisition. Nor shall a Change in Control be deemed to occur solely because any Person (the
“Subject Person”) acquired Beneficial Ownership of 20% or more of the outstanding Voting
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Indemnity Agreement]
Securities
as a result of the subsequent acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases
the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.
(b) Claim. Any threatened, pending or completed action, suit or proceeding, or any
inquiry or investigation, whether threatened, commenced or conducted by the Company or any other
party, that Indemnitee in good faith believes might lead to the institution of any such action,
suit or proceeding, whether civil, criminal, administrative, investigative or other.
(c) Expenses. Expenses consist of attorneys’ fees and all other costs, charges and
expenses paid or incurred in connection with investigating, defending, settling, being a witness in
or participating in (including on appeal), or preparing to defend, be a witness in or participate
in, any Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event. Any event or occurrence related to the fact that Indemnitee
is, was or has agreed to become a director, officer, employee, agent or fiduciary of the Company,
or is, is deemed to be, or was serving or has agreed to serve in any capacity, at the request of
the Company, in any other corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity.
For the purposes of the preceding sentence, the term “Company” shall be deemed to include Avalon
Properties, Inc., a Maryland corporation which was merged into the Company on June 4, 1998.
(e) Potential Change in Control. A potential change in control shall be deemed to
have occurred if (i) the Company enters into an agreement or arrangement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any person (including the Company)
publicly announces an intention to take or to begins taking actions which if completed would
constitute a Change in Control; or (iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
(f) Voting Securities. Any securities of the Company which vote generally in the
election of directors.
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[Form of
Indemnity Agreement]
2. Indemnification; Expenses; Procedure.
(a) Basic Indemnification Agreement. In the event Indemnitee was, is or becomes a
party to or witness or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee (without regard to the negligence or other fault of the
Indemnitee) to the fullest extent permitted by applicable law, as soon as practicable but in no
event later than thirty days after written demand is presented to the Company, against any and all
Expenses, judgments, fines, penalties, excise taxes and amounts paid or to be paid in settlement
(including all interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties, excise taxes or amounts paid or to be paid
in settlement) of or in connection with such Claim, provided, however, that the
Company shall not be required to indemnify Indemnitee for amounts paid or to be paid in settlement
unless such settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld, or subsequently deemed reasonable by the Company, a court of appropriate
jurisdiction, or an independent legal counsel chosen and approved by both the Company and
Indemnitee. The Company’s obligation to indemnify Indemnitee under this paragraph shall be deemed
mandatory in all cases without regard to the fault or negligence of Indemnitee unless it is
determined, by final adjudication, that the liability imposed upon Indemnitee was the result of
Indemnitee’s actual improper receipt of a personal benefit or profit or of Indemnitee’s active and
deliberate dishonesty to the Company. The Company shall indemnify Indemnitee’s spouse (whether by
statute or at common law and without regard to the location of the governing jurisdiction) and
children to the same extent and subject to the same limitations applicable to Indemnitee hereunder
for claims arising out of the status of such person as a spouse or child of Indemnitee, including
claims seeking damages from marital property (including community property) or property held by
such Indemnitee and such spouse or child or property transferred to such spouse or child but such
indemnity shall not otherwise extend to protect the spouse or child against liabilities caused by
the spouse’s or child’s own acts. If Indemnitee makes a request to be indemnified under this
Agreement (which request need not be made prior to the incurrence of any Indemnifiable Expenses),
the Board of Directors (acting by majority vote of a quorum consisting of directors who are not
parties to the Claim with respect to the Indemnifiable Event or by majority vote of a committee of
two or more directors who are duly designated to act on the matter by the full Board, or, if such a
quorum is not obtainable and no such committee has been designated, acting upon an opinion in
writing of special independent legal counsel selected by majority vote of the full Board of
Directors (“Board Action”)) shall, as soon as practicable but in no event later than thirty days
after such request, authorize such indemnification. Notwithstanding anything in the Company’s
Restated Articles of Incorporation, as amended from time to time, (the “Articles”), the Company’s
Bylaws, as amended from time to time, (the “Bylaws”) or this Agreement to the contrary, following a
Change in Control Indemnitee shall, unless prohibited by law, be entitled to indemnification
pursuant to this Agreement in connection with any Claim initiated by Indemnitee.
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[Form of
Indemnity Agreement]
(b) Advancement of Expenses. Notwithstanding anything in the Articles, the
Bylaws or this Agreement to the contrary, if so requested by Indemnitee, the Company shall advance
(within ten business days of such request) any and all Expenses relating to a Claim to Indemnitee
(an “Expense Advance”), upon the receipt of a written undertaking by or on behalf of Indemnitee
(and without regard to any determination of Indemnitee’s financial ability to repay such Expense Advance) to repay such Expense Advance if a judgment or other final adjudication
adverse to Indemnitee establishes that Indemnitee, with respect to such Claim, is not eligible for
indemnification.
(c) Notice to Insurers. If, at the time of the receipt of a notice of a Claim
pursuant to Section 2(c) hereof, the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
policies.
(d) Selection of Counsel. In the event the Company shall be obligated under Section
2(b) hereof to pay the Expenses of any proceeding against Indemnitee, the Company, unless the
Indemnitee determines that a conflict of interest exists between the Indemnitee and the Company
with respect to a particular Claim, shall be entitled to assume the defense of such proceeding,
with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the
delivery to Indemnitee of written notice of its election to do so and of written notice that it is
so obligated. After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will be not be liable to Indemnitee under
this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (i) Indemnitee shall have the right to employ his own separate counsel in
any such proceeding in addition to or in place of any counsel retained by the Company on behalf of
Indemnitee at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has
been previously authorized by the Company, (B) Indemnitee shall have concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C)
the Company shall not, in fact, have employed counsel to assume the defense of such proceeding,
then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.
(e) Litigation Concerning Right to Indemnification. If there has been no Board
Action or Arbitration (as defined in Section 3), or if Board Action determines that Indemnitee
would not be permitted to be indemnified, in any respect, in whole or in part, in accordance with
Section 2(a) of this Agreement, Indemnitee shall have the right to commence litigation in the court
which is hearing the action or proceeding relating to the Claim for which indemnification is sought
or in any court having subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any Board Action or any aspect thereof, and the
Company hereby consents to service of process and to appear in any such proceeding.
Notwithstanding anything in the Articles, the Bylaws or this Agreement to the contrary, if
Indemnitee has commenced legal proceedings in a court of competent jurisdiction or Arbitration to
secure a determination that Indemnitee should be indemnified under this Agreement, the Articles,
the Bylaws or applicable law, any Board Action that Indemnitee would not be permitted to be
indemnified in accordance with Section 2(a) of this Agreement shall not be binding in the event
that such legal proceedings are finally adjudicated. Any Board Action not followed by such litigation or Arbitration shall be conclusive and binding on the Company and
Indemnitee.
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[Form of
Indemnity Agreement]
3. Change in Control. The Company agrees that if there is a Change in Control,
Indemnitee, by giving written notice to the Company and the American Arbitration Association (the
“Notice”), may require that any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration (the “Arbitration”) in San Jose, California
or, at the election of the Indemnitee, Alexandria, Virginia, in accordance with the Rules of the
American Arbitration Association (the “Rules”). The Arbitration shall be conducted by a panel of
three arbitrators selected in accordance with the Rules within thirty days of delivery of the
Notice. The decision of the panel shall be made as soon as practicable after the panel has been
selected, and the parties agree to use their reasonable efforts to cause the panel to deliver its
decision within ninety days of its selection. The Company shall pay all fees and expenses of the
Arbitration. The Arbitration shall be conclusive and binding on the Company and Indemnitee, and
the Company or Indemnitee may cause judgment upon the award rendered by the arbitrators to be
entered in any court having jurisdiction thereof.
4. Establishment of Trust. In the event of a Potential Change in Control or a Change
in Control, the Company shall, promptly upon written request by Indemnitee, create a Trust for the
benefit of Indemnitee and from time to time, upon written request by or on behalf of Indemnitee to
the Company, shall fund such Trust in an amount, as set forth in such request, sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and
all Claims relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid. The terms of the Trust shall provide that upon a
Change in Control (i) the Trust shall not be revoked or the principal thereof invaded, without the
written consent of Indemnitee; (ii) the Trustee shall advance, within ten business days of a
request by Indemnitee, any and all Expenses to Indemnitee, not advanced directly by the Company to
Indemnitee (and Indemnitee hereby agrees to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section 2(b) of this Agreement); (iii)
the Trust shall continue to be funded by the Company in accordance with the funding obligation set
forth above; (iv) the Trustee shall promptly pay to Indemnitee all amounts for which Indemnitee
shall be entitled to indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in such Trust shall revert to the Company upon a final determination by Board
Action or Arbitration or a court of competent jurisdiction, as the case may be, that Indemnitee has
been fully indemnified under the terms of this Agreement. The Trustee shall be an independent
third party chosen by Indemnitee. Nothing in this Section 4 shall relieve the Company of any of
its obligations under this Agreement.
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[Form of
Indemnity Agreement]
5. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including without limitation attorneys’ fees, subject to
Section 20 hereof) and, if requested by Indemnitee, shall (within ten business days of such
request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any claim asserted by or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under law, the Articles, the Bylaws, this Agreement, or any
other agreement now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors’ and officers’ liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties, excise taxes and amounts paid or to be paid in settlement of a Claim but not,
however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or
in defense of any issue or matter therein, including, without limitation, dismissal without
prejudice, Indemnitee shall be presumed to be entitled to indemnification against any and all
Expenses, judgments, fines, penalties, excise taxes and amounts paid or to be paid in settlement of
such Claim or Claims in connection with any determination made or to be made by Board Action,
Arbitration or a court of competent jurisdiction whether and to what extent Indemnitee is entitled
to be indemnified hereunder, and the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding, by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contenders, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable law or this
Agreement.
8. Contribution. In the event that the indemnification provided for in this Agreement
is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines,
penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any Claim relating to an Indemnifiable Event, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such action by Board Action or Arbitration
or by the court before which such action was brought in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event (s) and/or transaction (s) giving
cause to such action; and/or (ii) the relative fault of the Company (and its other directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s). Indemnitee’s right to contribution under this Section 8 shall be determined in
accordance with, pursuant to and in the same manner as, the provisions in Sections 2 and 3 hereof
relating to Indemnitee’s right to indemnification under this Agreement.
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[Form of
Indemnity Agreement]
9. Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any Claim made against Indemnitee for which indemnification will
or could be sought under this Agreement. Such notice shall contain the written affirmation of
the Indemnitee that the standard of conduct necessary for indemnification hereunder has been
satisfied. Notice to the Company shall be directed to the Secretary of the Company in the manner
provided in Section 19 hereof. Indemnitee shall give the Company such information and cooperation
with respect to such Claim as it may reasonably require and as shall be within Indemnitee’s power.
A delay or defect in the notice under this Section 9 shall not invalidate the Indemnitee’s right to
indemnity under this Agreement unless, and only to the extent that, such delay or defect materially
prejudices the defense of the Claim or the availability to the Company of insurance coverage for
such Claim. Failure to give notice under this Section shall not be a defense if the Company has
actual notice of the Indemnitee’s claim for indemnification.
10. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under the Articles or Bylaws or applicable law, and nothing
herein shall be deemed to diminish or otherwise restrict Indemnitee’s right to indemnification
under any such other provision. To the extent applicable law or the Articles or the Bylaws of
Company, as in effect on the date hereof or at any time in the future, permit greater
indemnification than as provided for in this Agreement, the parties hereto agree that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such law or provision of the
Articles or Bylaws and this Agreement shall be deemed amended without any further action by the
Company or Indemnitee to grant such greater benefits. Indemnitee may elect to have Indemnitee’s
rights hereunder interpreted on the basis of applicable law in affect at the time of execution of
this Agreement, at the time of the occurrence of the Indemnifiable Event giving rise to a claim or
at the time indemnification is sought.
11. Liability Insurance.
(a) To the extent the Company maintains at any time an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the coverage available
for any other Company director or officer under such insurance policy. The purchase and
maintenance of such insurance shall not in any way limit or affect the rights and obligations of
the parties hereto, and the execution and delivery of this Agreement shall not in any way be
construed to limit or affect the rights and obligations of the Company and/or of the other parties
under any such insurance policy.
(b) For seven years after the Indemnitee no longer serves as a director or officer of
the Company, the Company (or its successor or successors) shall continue to provide directors’ and
officers’ liability insurance for events occurring during his service with the Company on terms no
less favorable in terms of coverage and amount than such insurance maintained by the Company at the
date of the Indemnitee’s separation from the Company. In the event such coverage is not available,
the maximum available coverage shall be maintained pursuant to this covenant.
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[Form of
Indemnity Agreement]
12. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or on behalf of the Company or any affiliate of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and any claim or cause of
action of the Company or its affiliate shall be extinguished and deemed released unless asserted by
the timely filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
13. Amendments Etc. Except as provided in Section 10 hereof, no supplement,
modification or amendment of this Agreement shall be binding unless executed in writing by both of
the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
14. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery with respect to such
payment of Indemnitee, who shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
15. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, Bylaw or otherwise) of the
amounts otherwise Indemnifiable hereunder.
16. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable against and by the parties hereto and their respective successors,
assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business and/or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place, but the absence of any such writing shall not be a defense to any claim
for indemnity made hereunder. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director and/or officer of the Company or of any other
enterprise at the Company’s request.
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[Form of
Indemnity Agreement]
17. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single section, paragraph
or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, and the remaining provisions shall remain enforceable to the fullest extent
permitted by law.
18. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement to indemnify the Indemnitee
in the following circumstances:
(a) Insured Claims. The Company shall not be obligated to indemnify Indemnitee for
expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) to the extent that Indemnitee has
otherwise actually received payment, or payments have been made on behalf of Indemnitee, with
respect to such expense or liability (under any insurance policy, provision of the Company’s
Articles or Bylaws, or otherwise) of amounts otherwise Indemnifiable hereunder; or
(b) Claims Under Section 16(b). The Company shall not be obligated to indemnify
Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee
of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or
any similar successor statute.
19. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered
by hand or when mailed by certified registered mail, return receipt requested, with postage
prepaid:
| (a) | If to Indemnitee, to: |
||
| ____________ ____________ ____________ |
or to such other person or address which Indemnitee shall furnish to the Company in writing
pursuant to the above.
| (b) | If to the Company, to: |
||
| AvalonBay Communities, Inc. 0000 Xxxxxxxxxx Xxxxxx — Xxxxx 000 Xxxxxxxxxx, XX 00000 ATTN: Secretary |
or to such person or address as the Company shall furnish to Indemnitee in writing pursuant to the
above.
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[Form of
Indemnity Agreement]
20. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled
to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by
Indemnitee with respect to such action, unless as a part of such action, a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action instituted by or in the
name of the Company under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and expenses, including
attorneys’ fees, incurred by Indemnitee in defense of such action (including with respect to
Indemnitee’s counterclaims and cross-claims made in such action), unless as a part of such action
the court determines that each of Indemnitee’s material defenses to such action were made in bad
faith or were frivolous.
21. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland, which laws are applicable to contracts made and
to be performed in such state without giving effect to the principles of conflicts of laws.
22. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the date first set forth above.
| AVALONBAY COMMUNITIES, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| INDEMNITEE | ||||
| Name: | ||||
11
