THIRD AMENDMENT
TO
EMPLOYMENT AGREEMENT
The Employment
Agreement (the “Agreement”) made as of the 1
st day of July, 2003 by and between AvalonBay
Communities, Inc., a Maryland corporation (the
“Company”), and Thomas J. Sargeant
(“Executive”), as previously amended, is hereby further
amended as follows (new language is bold and underlined and deleted
language is struck through):
1. Section 3(b)
of the Agreement is hereby amended by deleting the last sentence
thereof and substituting the following in lieu thereof:
“Any Cash
Bonuses for a fiscal year hereunder shall be paid as
a lump sum no 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 date of said Separation
Agreement or 31 days
following the
Date of Termination, an amount equal to two times Covered Average
Compensation.”
4. Section 7(c)(iv)
of the Agreement is hereby amended to read as follows:
"(iv)
Non-Renewal . In the event the Company gives Executive a
notice of non-renewal pursuant to Section 1 above, the Company
shall, in addition to paying the amounts provided under
Section 7(c)(i), subject to Executive entering into a
Separation Agreement within 21 days of the Date of
Termination, pay to Executive, in one lump sum 31 days
following the Date of Termination, an amount equal to Covered
Average Compensation. The Company shall also, subject to the
Executive entering into a Separation Agreement , commencing
upon the Date of Termination,
(A) Pay
to Executive, for 12 consecutive months, commencing with the first
day of the month immediately following the Date of Termination, a
monthly amount equal to the result obtained by dividing Covered
Average Compensation by twelve;
(B)
(A) Continue, without cost to Executive, benefits comparable
to the medical benefits provided to Executive immediately prior to
the Date of Termination under Section 3(c) for a period of
24 months following the Date of Termination or until such
earlier date as Executive obtains compara
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