AVALONBAY COMMUNITIES, INC. DEFERRED COMPENSATION PLAN

Page

PURPOSE

1

ARTICLE 1—DEFINITIONS

1

1.1  "Annual Bonus"

1

1.2  "Annual Deferral Amount"

1

1.3  "Base Annual Salary"

1

1.4  "Beneficiary"

1

1.5  "Beneficiary Designation Form"

1

1.6  "Claimant"

1

1.7  "Code"

1

1.8  "Compensation Committee"

1

1.9  "Deferral Account"

1

1.10 "Election Form"

2

1.11 "Employee"

2

1.12 "ERISA"

2

1.13 "Non-Qualified Predetermined Annuity Account"

2

1.14 "Participant"

2

1.15 "Plan"

2

1.16 "Plan Year"

2

1.17 "Retirement," "Retire(s)" or "Retired"

2

1.18 "Retirement Planning Committee"

2

1.19 "Sponsor"

2

1.20 "Trust"

2

1.21 "Unforeseeable Financial Emergency"

2

1.22 "Years of Service"

2

ARTICLE 2—SELECTION, ENROLLMENT, ELIGIBILITY

3

2.1  Selection by Compensation Committee

3

2.2  Enrollment Requirements

3

2.3  Eligibility; Commencement of Participation

3

2.4  Termination of Participation and/or Deferrals

3

ARTICLE 3—DEFERRAL COMMITMENTS/VESTING/CREDITING/TAXES

3

3.1  Minimum Deferrals—Annual Deferral Amount

3

3.2  Maximum Deferral—Base Annual Salary and Annual Bonus

3

3.3  Election to Defer; Effect of Election Form.

3

3.4  Withholding of Annual Deferral Amounts

4

3.5  Vesting

4

3.6  Crediting/Debiting of Deferral Accounts

4

3.7  FICA and Other Taxes.

5

ARTICLE 4—RETIREMENT BENEFIT

5

4.1  Retirement Benefit

5

4.2  Payment of Retirement Benefit

5

4.3  Death Prior to Completion of Retirement Benefit

5

ARTICLE 5—DEATH BENEFIT

6

5.1  Death Benefit

6

5.2  Payment of Death Benefit

6

ARTICLE 6—TERMINATION BENEFIT

6

6.1  Termination Benefit

6

6.2  Payment of Termination Benefit

6

ARTICLE 7—SHORT-TERM PAYOUTS

6

7.1  Short-Term Payouts

6

7.2  Grandfathered Election

6

7.3  Withdrawal for Unforeseeable Financial Emergencies

6

ARTICLE 8—BENEFICIARY DESIGNATION

6

8.1  Beneficiary

7

8.2  Beneficiary Designation; Change; Spousal Consent

7

8.3  Acknowledgment

7

8.4  No Beneficiary Designation

7

8.5  Doubt as to Beneficiary

7

8.6  Discharge of Obligations

7

ARTICLE 9—LEAVE OF ABSENCE

7

9.1  Leave of Absence

7

ARTICLE 10—TERMINATION, AMENDMENT OR MODIFICATION

7

10.1 Termination

7

10.2 Amendment

8

10.3 Delegation to Retirement Planning Committee

8

10.4 Effect of Payment

8

ARTICLE 11—ADMINISTRATION

8

11.1 Retirement Planning Committee Duties

8

11.2 Agents

8

11.3 Binding Effect of Decisions

8

11.4 Exculpation and Indemnity of Retirement Planning Committee

8

11.5 Sponsor Information

8

ARTICLE 12—OTHER BENEFITS AND AGREEMENTS

9

12.1 Coordination with Other Benefits