Sample Business Contracts


Employment Agreement - AvalonBay Communities inc. and Samuel B. Fuller

Employment Forms

  • Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

                             EMPLOYMENT AGREEMENT


        EMPLOYMENT AGREEMENT (this "Agreement") made as of the 31st day of
December, 2001 (the "Effective Date") by and between Samuel B. Fuller and
AvalonBay Communities, Inc., a Maryland corporation (the "Company").

        WHEREAS, Executive has been performing services for the Company; and

        WHEREAS, Executive and the Company desire to enter into an employment
agreement, effective as of the date of execution of this Agreement.

        NOW, THEREFORE, the parties hereto do hereby agree as follows.

        1.      Term. The Company hereby agrees to employ Executive, and
Executive hereby agrees to remain in the employ of the Company subject to the
terms and conditions of this Agreement for the period commencing on the
Effective Date and terminating on April 25, 2004 (the "Original Term"), unless
earlier terminated as provided in Section 7. The Original Term shall be
extended automatically for additional one year periods measured from April 26,
2004 (each a "Renewal Term"), unless notice that this Agreement will not be
extended is given by either party to the other not more than 120 days prior
to, and not less than 60 days prior to, the expiration of the Original Term or
any Renewal Term. Notwithstanding the foregoing, upon a Change in Control, the
Employment Period shall be extended automatically to three years from the date
of such Change in Control. (The period of Executive's employment hereunder
within the Original Term and any Renewal Terms is herein referred to as the
"Employment Period.")

        2.      Employment Duties.

                (a)     During the Employment Period, Executive shall be
employed in the business of the Company and its affiliates. Executive shall
serve as a corporate officer of the Company with the title of EXECUTIVE VICE
PRESIDENT - DEVELOPMENT AND CONSTRUCTION. In the performance of his duties,
Executive shall be subject to the direction of the Board of Directors of the
Company (the "Board"), including any committee of the Board designated by the
Board, if any, and the Company's Chief Operating Officer and any officer
senior to the Chief Operating Officer ("CEO", which term refers to the Chief
Operating Officer and any officer senior to the Chief Operating Officer (such
as the President, Chief Executive Officer and Executive Chairman), each with
authority acting alone to give direction hereunder in the event that more than
one person holds these positions) and shall not be required to take direction
from or report to any other person. Executive will report directly to the
Chief Operating Officer of the Company. Executive's duties and authority shall
be commensurate with Executive's title and position with the Company, and
shall not be materially diminished from, or materially inconsistent with,
Executive's duties and responsibilities with the Company immediately prior to
the date of this Agreement, provided, however, that it will not be a violation
of this Section 2(a), or otherwise be a breach by the Company under any term
of this Agreement, if either (x) or (y) immediately below are true:

                (x) The Company modifies Executive's title or duties, provided
                that all of the following conditions are met:

                        (i) Executive remains on the Management Investment
                        Committee, or a similar successor committee of
                        management that considers and approves investment
                        proposals developed by management; and

<PAGE>

                        (ii) Executive's title is Executive Vice President or a
                        higher ranking title; and

                        (iii) Executive reports directly to the CEO (which term,
                        as noted above, includes the Chief Operating Officer);
                        and

                        (iv) Executive either

                                (I) remains as the most senior officer (other
                                than the CEO) in charge of at least two of the
                                following six principal business functions:
                                finance, human resources, property operations,
                                acquisitions/dispositions, development or
                                construction) or,

                                (II) if the Company's management structure is
                                reorganized to give effect to two or more major
                                geographic regions, Executive is put in charge
                                of all of such principal functions in one region
                                except for any function that is managed on a
                                centralized basis (e.g., if human resources or
                                finance continues to be managed on a nationwide
                                basis rather than by region).

                        (v) Executive's targeted total compensation is not less
                        than what it would have been had Executive remained in
                        the position of Executive Vice President - Development
                        and Construction for AvalonBay Communities (e.g., in
                        determining total compensation in accordance with
                        Section 3(j), Executive's targeted total compensation
                        will not be reduced because, for example, it is
                        determined by the Company to be appropriate for a
                        "President of the West Coast Division" to receive less
                        compensation than the Executive Vice President of
                        Development and Construction of a national company).

                (y) The Executive's duties are modified from time to time as
                Executive and Company mutually reasonably agree.

                (b)     Executive agrees to his employment as described in
this Section 2 and agrees to devote substantially all of his working time and
efforts to the performance of his duties under this Agreement; provided that
nothing in this Section 2(b) shall be interpreted to preclude Executive from
(i) participating with the prior written consent of the Board as an officer or
director of, or advisor to, any other entity or organization that is not a
customer or material service provider to the Company or a Competing
Enterprise, as defined in Section 8, so long as such participation does not
interfere with the performance of Executive's duties hereunder, whether or not
such entity or organization is engaged in religious, charitable or other
community or non-profit activities, (ii) investing in any entity or
organization which is not a customer or material service provider to the
Company or a Competing Enterprise, so long as such investment does not
interfere with the performance of Executive's duties hereunder, or (iii)
delivering lectures or fulfilling speaking engagements so long as such
lectures or engagements do not interfere with the performance of Executive's
duties hereunder.

                (c)     In performing his duties hereunder, Executive shall
be available for reasonable travel as the needs of the business require.
Executive shall be based in Wilton, Connecticut or otherwise in New York City,
Westchester County, New York or Fairfield County, Connecticut (all such areas
collectively, the "Metropolitan Area").

                (d)     Breach by either party of any of his or its
respective obligations under this Section 2 shall be deemed a material breach
of that party's obligations hereunder.

        3.      Compensation/Benefits. In consideration of Executive's
services hereunder, the Company


                                      2
<PAGE>

shall provide Executive the following:

                (a)     Base Salary. During the Employment Period, the
Executive shall receive an annual rate of base salary ("Base Salary") in an
amount not less than $330,000. Executive's Base Salary will be reviewed by the
Company annually and may be adjusted upward (but not downward) at such time.
Base Salary shall be payable in accordance with the Company's normal business
practices, but in no event less frequently than monthly.

                (b)     Bonuses. Commencing at the close of each fiscal
year during the Employment Period, the Company shall review the performance of
the Company and of Executive during the prior fiscal year, and the Company may
provide Executive with additional compensation in the form of a cash bonus
("Cash Bonus") and/or in the form of long term equity incentives such as stock
options and restricted stock grants ("LT Equity Bonus") if the Board, or any
compensation committee thereof, in its discretion, determines that the
performance of the Company and Executive's contribution to the Company
warrants such additional payment and the Company's anticipated financial
performance of the present period permits such payment. Any Cash Bonuses
hereunder shall be paid as a lump sum not later than 75 days after the end of
the Company's preceding fiscal year.

                (c)     Medical and Disability Insurance/Physical. During
the Employment Period, the Company shall provide to Executive and Executive's
immediate family a comprehensive policy of health insurance in accordance with
the Company's general practice applicable to officers (including payment of
all or a portion of the premiums due thereon) and shall provide to Executive a
disability policy in accordance with the Company's general practice applicable
to officers (including payment of all or a portion of the premiums due
thereon). During the Employment Period, Executive shall be entitled to a
comprehensive annual physical performed, at the expense of the Company (but
not including any related travel expense), by the physician or medical group
of Executive's choosing.

                (d)     Split Dollar Life Insurance. During the Employment
Period, the Company shall keep in force and pay the premiums on the
split-dollar life insurance policy referenced in the Split Dollar Insurance
Agreement between the Company and Executive, subject to reimbursement by
Executive as provided in such Split Dollar Insurance Agreement. Executive
agrees to submit to such medical examinations as may be required in order to
maintain such policy of insurance.

                (e)     Vacations. Executive shall be entitled to reasonable
paid vacations during the Employment Period in accordance with the then regular
procedures of the Company governing officers.

                (f)     Office/Secretary, etc.  During the Employment
Period, Executive shall be entitled to secretarial services and a private
office commensurate with his title and duties.

                (g)     Annual Allowance. The Company will provide the
Executive with an annual allowance of up to $5,000 per year (the "Allowance").
The Executive may draw on the Allowance for expenses incurred in his
discretion for items such as country club membership, financial counseling or
tax preparation. Payment of the Allowance shall be subject to substantiation
of expenses in accordance with the Company's policies in effect from time to
time for executive officers of the Company. Unused portions of the Allowance
shall not be carried over from year to year. For purposes of this Section
3(g), a new year shall be deemed to commence on each January 1. For the 2001
calendar year, Executive will receive the full, unprorated $5,000 Allowance.

                (h)     Automobile. The Company shall provide Executive
with a monthly car allowance during the Employment Period in accordance with
the Company's current practices but in no event less than $750 per month.


                                      3
<PAGE>

                (i)     Other Benefits. During the Employment Period, the
Company shall provide to Executive such other benefits, excluding severance
benefits, but including the right to participate in such retirement or pension
plans, as are made generally available to officers of the Company from time to
time. Executive shall be given credit for purposes of eligibility and vesting
of employee benefits and benefit accrual for service prior to the Effective
Date with Avalon Properties, Inc. and its affiliates ("Avalon"), and Trammell
Crow Residential ("TCR") under each benefit plan of the Company and its
subsidiaries to the extent such service had been credited under employee
benefit plans of Avalon or TCR, provided that no such crediting of service
results in duplication of benefits.

                (j)     Total Compensation. The Company acknowledges that
the Executive's Cash Bonus and LT Equity Bonus awarded to the Executive by the
Board or Compensation Committee of the Board in its discretion from
time-to-time, are a material part of total compensation for the Executive. The
Company will endeavor to provide Executive with a reasonable Cash Bonus and/or
reasonable LT Equity Bonus on an annual basis such that the Executive's total
compensation, in light of the Company's performance and his performance in his
role as provided in this Agreement, is reasonable under the circumstances and
reasonable relative to the Cash Bonuses and LT Equity Bonuses awarded other
officers of the Company. The Company shall not be in breach of this provision
unless it can be demonstrated that the Company acted in bad faith in
determining whether to award (or the size of an award of) a Cash Bonus or LT
Equity Bonus, which determination of bad faith shall specifically be made with
reference to the target awards set for other officers and the actual awards
paid other officers.

        4.      Expenses/Indemnification.

                (a)     During the Employment Period, the Company shall
reimburse Executive for the reasonable business expenses incurred by Executive
in the course of performing his duties for the Company hereunder, upon
submission of invoices, vouchers or other appropriate documentation, as may be
required in accordance with the policies in effect from time to time for
executive employees of the Company.

                (b)     To the fullest extent permitted by law, the Company
shall indemnify Executive with respect to any actions commenced against
Executive in his capacity as an officer or director or former officer or
director of the Company, or any affiliate thereof for which he may render
service in such capacity, whether by or on behalf of the Company, its
shareholders or third parties, and the Company shall advance to Executive on a
timely basis an amount equal to the reasonable fees and expenses incurred in
defending such actions, after receipt of an itemized request for such advance,
and an undertaking from Executive to repay the amount of such advance, with
interest at a reasonable rate from the date of the request, as determined by
the Company, if it shall ultimately be determined that he is not entitled to
be indemnified against such expenses. Notwithstanding the foregoing, the
Company shall not indemnify Executive with respect to any acts or omissions
attributable, directly or indirectly, to Executive's gross negligence, willful
misconduct or material breach of this Agreement. The Company agrees that it
shall use reasonable best efforts to secure and maintain officers' and
directors' liability insurance that shall include coverage with respect to
Executive.

        5.      Employer's Authority/Policies.

                (a)     General. Executive agrees to observe and comply
with the rules and regulations of the Company as adopted by its Board
respecting the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the Board or
the CEO.

                (b)     Ethics Policies. Executive agrees to comply with
and be bound by the Ethics Policies of the Company, as reflected in the
attachment at Annex A hereto and made a part hereof. Executive agrees to
comply with and be bound by the Company's insider trading policies and
procedures that are generally applicable to employees and/or senior officers.


                                      4
<PAGE>


        6.      Records/Nondisclosure/Company Policies.

                (a)     General. All records, manuals, financial statements
and similar documents obtained, reviewed or compiled by Executive in the course
of the performance by him of services for the Company, whether or not
confidential information or trade secrets, shall be the exclusive property of
the Company. Executive shall have no rights in such documents upon any
termination of this Agreement.

                (b)     Nondisclosure Agreement. Without limitation of the
Company's rights under Section 6(a), Executive agrees to abide by and be bound
by the Nondisclosure Agreement of the Company executed by Executive and the
Company as reflected in the attachment at Annex B and made a part hereof.

        7.      Termination; Severance and Related Matters.

                (a)     At-Will Employment. Executive's employment hereunder
is "at will" and, therefore, may be terminated at any time, with or without
Cause, at the option of the Company, subject only to the severance obligations
under this Section 7. Upon any termination hereunder, the Employment Period
shall expire.

                (b)     Definitions.  For purposes of this Section 7, the
following terms shall have the indicated definitions:

                        (1)     Cause.  "Cause" shall mean:

                                (i)     Executive is convicted of or enters a
                plea of nolo contendere to an act which is defined as a felony
                under any federal, state or local law, not based upon a traffic
                violation, which conviction or plea has or can be expected to
                have, in the good faith opinion of the Board, a material adverse
                impact on the business or reputation of the Company;

                                (ii)    any one or more acts of theft,
                larceny, embezzlement, fraud or material intentional
                misappropriation from or with respect to the Company;

                                (iii)   a breach by Executive of his fiduciary
                duties under Maryland law as an officer; or material breach by
                Executive of any material rule, material regulation, material
                policy or material procedure, of the Company (including, without
                limitation, as described in Section 5 hereof);

                                (iv)    Executive's commission of any one
                or more acts of gross negligence or willful misconduct which in
                the good faith opinion of the Board has resulted in material
                harm to the business or reputation of the Company; or

                                (v)     default by Executive in the
                performance of his material duties under this Agreement, without
                correction of such action within 15 days of written notice
                thereof.

        Notwithstanding the foregoing, no termination of Executive's employment
by the Company shall be treated as for Cause or be effective until and unless
all of the steps described in subparagraphs (A) through (C) below have been
complied with:

                                        (A)     Notice of intention to terminate
                        for Cause has been given


                                      5
<PAGE>

                        by the Company within 120 days after the Board learns of
                        the act, failure or event (or latest in a series of
                        acts, failures or events) constituting "Cause";

                                        (B)     The Board has voted (at a
                        meeting of the Board duly called and held as to which
                        termination of Executive is an agenda item) to terminate
                        Executive for Cause after Executive has been given
                        notice of the particular acts or circumstances which are
                        the basis for the termination for Cause and has been
                        afforded at least 20 days notice of the meeting and an
                        opportunity to present his position in writing; and

                                        (C)     The Board has given a
                        Notice of Termination to Executive within 20 days after
                        such Board meeting.

        The Company may suspend Executive with pay at any time during the period
commencing with the giving of notice to Executive under clause (A) above until
final Notice of Termination is given under clause (C) above. Upon the giving of
notice as provided in clause (C) above, no further payments shall be due
Executive except as provided in Section 7(c)(vii).

                        (2)     Change in Control.  A "Change in Control"
        shall mean the occurrence of any one or more of the following events
        following the Effective Date:

                                (i)     Any individual, entity or group (a
                "Person") within the meaning of Sections 13(d) and 14(d) of the
                Securities Exchange Act of 1934 (the "Act") (other than the
                Company, any corporation, partnership, trust or other entity
                controlled by the Company (a "Subsidiary"), or any trustee,
                fiduciary or other person or entity holding securities under any
                employee benefit plan or trust of the Company or any of its
                Subsidiaries), together with all "affiliates" and "associates"
                (as such terms are defined in Rule 12b-2 under the Act) of such
                Person, shall become the "beneficial owner" (as such term is
                defined in Rule 13d-3 under the Act) of securities of the
                Company representing 30% or more of the combined voting power of
                the Company's then outstanding securities having the right to
                vote generally in an election of the Company's Board of
                Directors ("Voting Securities"), other than as a result of (A)
                an acquisition of securities directly from the Company or any
                Subsidiary or (B) an acquisition by any corporation pursuant to
                a reorganization, consolidation or merger if, following such
                reorganization, consolidation or merger the conditions described
                in clauses (A), (B) and (C) of subparagraph (iii) of this
                Section 7(b)(2) are satisfied; or

                                (ii)    Individuals who, as of the Effective
                Date, constitute the Company's Board (the "Incumbent Directors")
                cease for any reason to constitute at least a majority of the
                Board, provided, however, that any individual becoming a
                director of the Company subsequent to the date hereof
                (excluding, for this purpose, (A) any such individual whose
                initial assumption of office is in connection with an actual or
                threatened election contest relating to the election of members
                of the Board or other actual or threatened solicitation of
                proxies or consents by or on behalf of a Person other than the
                Board, including by reason of agreement intended to avoid or
                settle any such actual or threatened contest or solicitation,
                and (B) any individual whose initial assumption of office is in
                connection with a reorganization, merger or consolidation,
                involving an unrelated entity and occurring during the
                Employment Period), whose election or nomination for election by
                the Company's shareholders was approved by a vote of at least a
                majority of the persons then comprising Incumbent Directors
                shall for purposes of this Agreement be considered an Incumbent
                Director; or


                                      6
<PAGE>

                                (iii)   Consummation of a reorganization, merger
                or consolidation of the Company, unless, following such
                reorganization, merger or consolidation, (A) more than 50% of,
                respectively, the then outstanding shares of common stock of the
                corporation resulting from such reorganization, merger or
                consolidation and the combined voting power of the then
                outstanding voting securities of such corporation entitled to
                vote generally in the election of directors is then beneficially
                owned, directly or indirectly, by all or substantially all of
                the individuals and entities who were the beneficial owners,
                respectively, of the outstanding Voting Securities immediately
                prior to such reorganization, merger or consolidation, (B) no
                Person (excluding the Company, any employee benefit plan (or
                related trust) of the Company, a Subsidiary or the corporation
                resulting from such reorganization, merger or consolidation or
                any subsidiary thereof, and any Person beneficially owning,
                immediately prior to such reorganization, merger or
                consolidation, directly or indirectly, 30% or more of the
                outstanding Voting Securities), beneficially owns, directly or
                indirectly, 30% or more of, respectively, the then outstanding
                shares of common stock of the corporation resulting from such
                reorganization, merger or consolidation or the combined voting
                power of the then outstanding voting securities of such
                corporation entitled to vote generally in the election of
                directors, and (C) at least a majority of the members of the
                board of directors of the corporation resulting from such
                reorganization, merger or consolidation were members of the
                Incumbent Board at the time of the execution of the initial
                agreement providing for such reorganization, merger or
                consolidation;

                                (iv)    Approval by the shareholders of the
                Company of a complete liquidation or dissolution of the Company;
                or

                                (v)     The sale, lease, exchange or other
                disposition of all or substantially all of the assets of the
                Company, other than to a corporation, with respect to which
                following such sale, lease, exchange or other disposition (A)
                more than 50% of, respectively, the then outstanding shares of
                common stock of such corporation and the combined voting power
                of the then outstanding voting securities of such corporation
                entitled to vote generally in the election of directors is then
                beneficially owned, directly or indirectly, by all or
                substantially all of the individuals and entities who were the
                beneficial owners of the outstanding Voting Securities
                immediately prior to such sale, lease, exchange or other
                disposition, (B) no Person (excluding the Company and any
                employee benefit plan (or related trust) of the Company or a
                Subsidiary or such corporation or a subsidiary thereof and any
                Person beneficially owning, immediately prior to such sale,
                lease, exchange or other disposition, directly or indirectly,
                30% or more of the outstanding Voting Securities), beneficially
                owns, directly or indirectly, 30% or more of, respectively, the
                then outstanding shares of common stock of such corporation and
                the combined voting power of the then outstanding voting
                securities of such corporation entitled to vote generally in the
                election of directors and (C) at least a majority of the members
                of the board of directors of such corporation were members of
                the Incumbent Board at the time of the execution of the initial
                agreement or action of the Board of Directors providing for such
                sale, lease, exchange or other disposition of assets of the
                Company.

                Notwithstanding the foregoing, a "Change in Control" shall not
                be deemed to have occurred for purposes of this Agreement solely
                as the result of an acquisition of securities by the Company
                which, by reducing the number of shares of Voting Securities
                outstanding, increases the proportionate voting power
                represented by the Voting Securities beneficially owned by any
                Person to 30% or more of the combined voting power of all then
                outstanding Voting Securities; provided, however, that if any
                Person referred to in this sentence shall thereafter become the
                beneficial owner of any additional shares of Stock or other
                Voting Securities (other than pursuant to a stock split, stock
                dividend, or similar transaction), then a


                                      7
<PAGE>

                "Change in Control" shall be deemed to have occurred for
                purposes of this Agreement.

                        (3)     Complete Change in Control. A "Complete Change
        in Control" shall mean that a Change in Control has occurred, after
        modifying the definition of "Change in Control" by deleting clause (i)
        from Section 7(b)(2) of this Agreement.

                        (4)     Constructive Termination Without Cause.
        "Constructive Termination Without Cause" shall mean a termination of
        Executive's employment initiated by Executive not later than 12 months
        following the occurrence (not including any time during which an
        arbitration proceeding referenced below is pending), without Executive's
        prior written consent, of one or more of the following events (or the
        latest to occur in a series of events), and effected after giving the
        Company not less than 10 working days' written notice of the specific
        act or acts relied upon and right to cure:

                                (i)     a material adverse change in the
                functions, duties or responsibilities of Executive's position
                which is inconsistent with Section 2(a), except in connection
                with the termination of Executive's employment for Disability,
                Cause, as a result of Executive's death or by Executive other
                than for a Constructive Termination Without Cause;

                                (ii)    any material breach by the Company of
                this Agreement;

                                (iii)   any purported termination of Executive's
                employment for Cause by the Company which does not comply with
                the terms of Section 7(b)(1) of this Agreement;

                                (iv)    the failure of the Company to obtain an
                agreement, satisfactory to the Executive, from any successor or
                assign of the Company, to assume and agree to perform this
                Agreement, as contemplated in Section 10 of this Agreement;

                                (v)     the failure by the Company to continue
                in effect any compensation plan in which Executive participates
                immediately prior to a Change in Control which is material to
                Executive's total compensation, unless comparable alternative
                arrangements (embodied in ongoing substitute or alternative
                plans) have been implemented with respect to such plans, or the
                failure by the Company to continue Executive's participation
                therein (or in such substitute or alternative plans) on a basis
                not materially less favorable, in terms of the amount of
                benefits provided and the level of Executive's participation
                relative to other participants, as existed during the last
                completed fiscal year of the Company prior to the Change in
                Control;

                                (vi)    the relocation of the Company's Wilton,
                Connecticut offices to a new location outside of the
                Metropolitan Area or the failure to locate Executive's own
                office at the Wilton, Connecticut office (or at the office to
                which such office is relocated which is within the Metropolitan
                Area) ("Relocation Termination"); or

                                (vii)   any voluntary termination of employment
                by the Executive for any reason during the 12-month period
                immediately following a Complete Change in Control of the
                Company if such Complete Change in Control occurs during the
                Employment Period (a "CIC Pull").

                Notwithstanding the foregoing, a Constructive Termination
        Without Cause shall not be treated as having occurred unless Executive
        has given a final Notice of Termination delivered after expiration of
        the Company's cure period. Executive or the Company may, at any time
        after the expiration of the Company's cure period and either prior to or
        up until three months after giving a


                                      8
<PAGE>


        final Notice of Termination, commence an arbitration proceeding to
        determine the question of whether, taking into account the actions
        complained of and any efforts made by the Company to cure such actions,
        a termination by Executive of his employment should be treated as a
        Constructive Termination Without Cause for purposes of this Agreement.
        If the Executive or the Company commences such a proceeding prior to
        delivery by Executive of a final Notice of Termination, the commencement
        of such a proceeding shall be without prejudice to either party and
        Executive's and the Company's rights and obligations under this
        Agreement shall continue unaffected unless and until the arbitrator has
        determined such question in the affirmative, or, if earlier, the date on
        which Executive or the Company has delivered a Notice of Termination in
        accordance with the provisions of this Agreement. If the Company
        commences an arbitration proceeding, Executive shall remain fully
        employed by the Company per the terms of this agreement during the
        pendency of this proceeding and the Company shall reimburse the
        Executive in full for all reasonable legal costs and expenses related to
        this arbitration.

                        (5)     Average Covered Total Compensation. "Average
        Covered Total Compensation" shall mean the sum of Executive's Covered
        Total Compensation as calculated for the calendar year in which the Date
        of Termination occurs and for each of the two preceding calendar years,
        divided by three, provided, however, that if the Date of Termination
        occurs before February 26, 2003, then "Average Covered Total
        Compensation" shall mean the sum of Executive's Covered Total
        Compensation as calculated for the calendar year in which the Date of
        Termination occurs and for the preceding calendar year, divided by two.
        "Average Covered Base And Cash Bonus Compensation," "Average Covered
        Cash Bonus Compensation" and "Average Covered LT Equity Compensation"
        shall have analogous meanings but with reference to Covered Base And
        Cash Bonus Compensation, Covered Cash Bonus Compensation and Covered LT
        Equity Compensation, respectively.

                        (6)     Covered Compensation Definitions. "Covered Total
        Compensation," for any calendar year, shall mean an amount equal to the
        sum of (i) Executive's annualized Base Salary for the calendar year,
        (ii) the cash bonus actually earned by Executive with respect to such
        calendar year, and (iii) the value of all stock and other equity-based
        compensation awards made to Executive during such calendar year. In the
        event that the Company has or hereafter makes any special, mid-year or
        other non-routine grant of equity outside of the Company's recurring
        annual equity compensation programs, or in the event that the Company
        grants, outside of the current recurring annual equity compensation
        programs, any equity based compensation pursuant to any long-term plan
        under which equity grants may be made based on multi-year Company
        results, the value of any such mid-year, special, or long-term plan
        equity based compensation shall not be included in clause (iii) of the
        preceding sentence and therefore shall not be included in the
        calculation of Covered Compensation definitions, and the value of such
        equity shall have no impact on any cash payments made under Section 7(c)
        of the Agreement.

                        "Covered Base And Cash Bonus Compensation" for any
                calendar year shall mean Covered Total Compensation for such
                year but without the inclusion of amounts attributable to clause
                (iii) of the definition of Covered Total Compensation.

                        "Covered Cash Bonus Compensation" for any calendar year
                shall mean Covered Total Compensation for such year but without
                the inclusion of amounts attributable to clauses (i) and (iii)
                of the definition of Covered Total Compensation.

                        "Covered LT Equity Compensation" for any calendar year
                shall mean Covered Total Compensation for such year but without
                the inclusion of clauses (i) and (ii) of the definition of
                Covered Total Compensation.

                        For purposes of applying the Covered Compensation
        definitions set forth above, the following rules shall apply:


                                      9
<PAGE>


                                        (A)     In valuing awards for purposes
                        of clause (iii) of the definition of Covered Total
                        Compensation, all such awards shall be treated as if
                        fully vested when granted, stock grants shall be valued
                        by reference to the fair market value on the date of
                        grant of the Company's common stock, par value $.01 per
                        share, and other equity-based compensation awards shall
                        be valued at the value established in good faith by the
                        Compensation Committee of the Board. Reference is made
                        to Section 7(c)(viii) for further clarification
                        regarding this matter.

                                        (B)     In determining the cash bonus
                        actually paid with respect to a calendar year, if no
                        cash bonus has been paid with respect to the calendar
                        year in which the Date of Termination occurs, the cash
                        bonus paid with respect to the immediately preceding
                        calendar year shall be assumed to have been paid in each
                        of the current and immediately preceding calendar years,
                        and if no cash bonus has been paid by the Date of
                        Termination with respect to the immediately preceding
                        calendar year, the cash bonus paid with respect to the
                        second preceding calendar year shall be assumed to have
                        been paid in all three (or two, as applicable) of the
                        calendar years taken into account in determining Average
                        Covered Total Compensation (or any of the derivative
                        definitions under Section 7(b)(5)).

                                        (C)     If (i) any cash bonus paid with
                        respect to the current or immediately preceding calendar
                        year was paid within three months of Executive's Date of
                        Termination, (ii) such cash bonus is lower than the last
                        cash bonus paid more than three months from the Date of
                        Termination, and (iii) it is determined that the Board
                        acted in bad faith in setting such cash bonus (which
                        determination of bad faith shall specifically be made
                        with reference to the target cash bonuses set for other
                        officers and the actual cash bonuses paid other
                        officers), then in such event any such cash bonus paid
                        within three months of the Date of Termination shall be
                        disregarded and the last cash bonus paid more than three
                        months from the Date of Termination shall be substituted
                        for each cash bonus so disregarded.

                                        (D)     In determining the amount of
                        stock and other equity-based compensation awards made
                        during a calendar year during the averaging period,
                        rules similar to those set forth in subparagraphs (B)
                        and (C) of this Section 7(b)(6) shall be followed except
                        that all awards made in connection with the Company's
                        initial public offering shall be disregarded.

                        (7)     Disability. "Disability" shall mean Executive
        has been determined to be disabled and to qualify for long-term
        disability benefits under the long-term disability insurance policy
        obtained pursuant to Section 3(d) of this Agreement.

                (c)     Rights Upon Termination.

                                (i)     Payment of Benefits Earned Through Date
                of Termination. Upon any termination of Executive's employment
                during the Employment Period, Executive, or his estate, shall in
                all events be paid (I) all accrued but unpaid Base Salary and
                (II) (except in the case of a termination by the Company for
                Cause or a voluntary termination by Executive which is not due
                to a Constructive Termination Without Cause, in either of which
                cases this clause (II) shall not apply) a pro rata portion of
                the Executive's Cash Bonus and LT Equity Bonus. For purposes of
                fulfilling the requirements of clause (II) of the prior
                sentence, the following shall apply:


                                      10
<PAGE>

                        (a)     In all events, any stock options issued will be
                                issued prior to Executive's Date of Termination
                                so that such stock options are employee stock
                                options. Such stock options shall have an
                                exercise price equal to the closing price of the
                                Company's stock on the date of grant of such
                                options, and such options shall expire one year
                                after the date of grant.

                        (b)     The Company and Executive shall work in good
                                faith to determine an appropriate Cash Bonus and
                                LT Equity Bonus for the year in which the Date
                                of Termination occurs. Such determination shall
                                be based in good faith on an evaluation of
                                Executive's and the Company's performance. If
                                the Company and Executive cannot agree on
                                appropriate amounts, then:

                                (A)     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; and

                                (B)     The Company may grant to Executive a
                                        number of stock options based on the
                                        assumption that the percentage of the
                                        target number of options Executive would
                                        have received in respect of the year in
                                        which the Date of Termination occurs
                                        would equal the average of the
                                        percentage realization applied to
                                        options granted with respect to the
                                        prior three calendar years.

                        (c)     Once the determination in the preceding
                                paragraph is made, the pro rata portion of such
                                amounts shall equal such amounts multiplied by a
                                fraction, the numerator of which is the number
                                of days from January 1 to the Date of
                                Termination in the year of termination and the
                                denominator of which is 365.

                Executive shall also retain all such rights with respect to
                vested equity-based awards as are provided under the
                circumstances under the applicable grant or award agreement, and
                shall be entitled to all other benefits which are provided under
                the circumstances in accordance with the provisions of the
                Company's generally applicable employee benefit plans, practices
                and policies, other than severance plans.

                                (ii)    Death. In the event of Executive's death
                during the Employment Period, the Company shall, in addition to
                paying the amounts set forth in Section 7(c)(i), take whatever
                action is necessary to cause all of Executive's unvested
                equity-based awards to become fully vested as of the date of
                death and, in the case of equity-based awards which have an
                exercise schedule, to become fully exercisable and continue to
                be exercisable for such period as is provided in the case of
                vested and exercisable awards in the event of death under the
                terms of the applicable award agreements.

                                (iii)   Disability. 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


                                      11
<PAGE>


                Executive first entering into a separation agreement, including
                a general release of all claims, in a form reasonably acceptable
                to the Company ("Separation Agreement"), 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 one times Average Covered Total
                Compensation. The Company shall also, commencing upon the Date
                of Termination and subject to Executive entering into a
                Separation Agreement:

                                        (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 12 months
                        following the Date of Termination or until such earlier
                        date as Executive obtains comparable benefits through
                        other employment;

                                        (B)     Continue to pay, or reimburse
                        Executive, for all premiums then due or thereafter
                        payable on the whole-life portion of the split-dollar
                        insurance policy referenced under Section 3(d) for so
                        long as such payments are due; provided, that the
                        Company's obligations under this Section 7(c)(iii)(B)
                        are contingent on Executive's timely payment of the
                        premiums then due or thereafter payable on the term
                        portion of said split-dollar insurance policy; and

                                        (C)     Take whatever action is
                        necessary to cause Executive to become vested as of the
                        Date of Termination in all stock options, restricted
                        stock grants, and all other equity-based awards and be
                        entitled to exercise and continue to exercise all stock
                        options and all other equity-based awards having an
                        exercise schedule and to retain such grants and awards
                        to the same extent as if they were vested upon
                        termination of employment in accordance with their
                        terms.

                                        (D)     If Executive obtains a
                        disability policy on commercially reasonable terms with
                        the same or similar coverage as provided by the Company
                        prior to the Date of Termination then, until that date
                        that is 12 months following the Date of Termination (or,
                        if earlier, until Executive obtains comparable benefits
                        through other employment), reimburse Executive for an
                        amount equal to the difference between (i) the monthly
                        premiums for such disability policy, less (ii) the
                        amount paid by Executive in respect of a portion of the
                        premiums on the disability policy provided by Company
                        prior to the Date of Termination.

                                (iv)    Non-Renewal by the Company.  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, 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 the
                sum of one times his then applicable Base Salary plus one times
                Average Covered Cash Bonus Compensation. The Company shall also,
                commencing upon the Date of Termination and subject to Executive
                entering into a Separation Agreement, 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 12 months following the Date of
                Termination or until such earlier date as Executive obtains


                                      12
<PAGE>


                comparable benefits through other employment. In addition, if
                Executive obtains a disability policy on commercially reasonable
                terms with the same or similar coverage as provided by the
                Company prior to the Date of Termination then, until that date
                that is 12 months following the Date of Termination (or, if
                earlier, until Executive obtains comparable benefits through
                other employment), reimburse Executive for an amount equal to
                the difference between (i) the monthly premiums for such
                disability policy, less (ii) the amount paid by Executive in
                respect of a portion of the premiums on the disability policy
                provided by Company prior to the Date of Termination.

                In addition to the above, in the case of a Post-Expiration
                Termination the Company additionally shall:

                                        I.   Take whatever action is necessary
                                             to cause Executive to become vested
                                             as of the Date of Termination in
                                             all stock options, restricted stock
                                             grants, and all other equity-based
                                             awards and be entitled to exercise
                                             and continue to exercise all stock
                                             options and all other equity-based
                                             awards having an exercise schedule
                                             and to retain such grants and
                                             awards to the same extent as if
                                             they were vested upon termination
                                             of employment in accordance with
                                             their terms; and

                                        II.  Continue to pay, or reimburse
                                             Executive for, all premiums then
                                             due or thereafter payable on the
                                             whole-life portion of the
                                             split-dollar insurance policy
                                             referenced under Section 3(d) for
                                             so long as such payments are due;
                                             provided, that the Company's
                                             obligations under this Section
                                             7(c)(iv)(B)(II) are contingent on
                                             Executive's timely payment of the
                                             premiums then due or thereafter
                                             payable on the term portion of said
                                             split-dollar insurance policy;

                                (v)     Termination Without Cause or
                Constructive Termination Without Cause Prior to Change in
                Control of Company. 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, 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 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 Section 7(c)(v) Payment shall be an amount
                equal to one times Average Covered Total Compensation. The
                Company shall also, commencing upon the Date of Termination and
                subject to the Executive entering into a Separation Agreement:

                                        (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
                        (12 months in the case of a Relocation Termination)
                        following the Date of Termination or until such earlier
                        date as Executive obtains comparable benefits through
                        other employment;


                                      13
<PAGE>


                                        (B)     Continue to pay, or reimburse
                        Executive, for so long as such payments are due, all
                        premiums then due or payable on the whole-life portion
                        of the split-dollar insurance policy referenced under
                        Section 3(d); provided that the Company's obligations
                        under this Section 7(c)(v)(B) are contingent on
                        Executive's timely payment of the premiums then due or
                        thereafter payable on the term portion of said
                        split-dollar insurance policy; and

                                        (C)     Take whatever action is
                        necessary to cause Executive to become vested as of the
                        Date of Termination in all stock options, restricted
                        stock grants, and all other equity-based awards and be
                        entitled to exercise and continue to exercise all stock
                        options and all other equity-based awards having an
                        exercise schedule and to retain such grants and awards
                        to the same extent as if they were vested upon
                        termination of employment in accordance with their
                        terms.

                                        (D)     If Executive obtains a
                        disability policy on commercially reasonable terms with
                        the same or similar coverage as provided by the Company
                        prior to the Date of Termination then, until that date
                        that is 24 months (12 months in the case of a Relocation
                        Termination) following the Date of Termination (or, if
                        earlier, until Executive obtains comparable benefits
                        through other employment), reimburse Executive for an
                        amount equal to the difference between (i) the premium
                        for such disability policy, less (ii) the amount paid by
                        Executive in respect of a portion of the premiums on the
                        disability policy provided by Company prior to the Date
                        of Termination.

                In the event that, within six months after the Notice of
                Termination which gave rise to the termination of Executive's
                employment under this Section 7(c)(v), a Change in Control of
                the Company occurs, then (provided Executive previously signed a
                Separation Agreement), Executive shall be entitled to receive
                the payments and benefits under Section 7(c)(vi) rather than
                this Section 7(c)(v). To effect this increase in payments and
                benefits, within 31 days of the Change in Control the Company
                shall pay to Executive, in one lump sum, an amount equal to the
                difference between (A) three times Average Covered Total
                Compensation (calculated as of the Date of Termination) less (B)
                the Section 7(c)(v) Payment. No payment in the nature of
                interest or for the time value of money shall be paid by the
                Company. In addition, the benefits described in Section
                7(c)(v)(A) shall continue for 36 months following the Date of
                Termination (or until such earlier date as Executive obtains
                comparable benefits through other employment) rather than 24
                months.

                                (vi)    Termination without Cause within Two
                Years Following a Change in Control. 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 the Executive first entering
                into a Separation Agreement, pay to the 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, provided, however, that in the event the
                termination is due to a CIC Pull, then the payment shall be an
                amount equal to two times Average Covered Total Compensation.
                The Company shall also, commencing upon the Date of Termination:

                                        (A)     Continue, without cost to
                        Executive, benefits comparable to the medical benefits
                        provided to Executive immediately prior to the Date of


                                      14
<PAGE>

                        Termination under Section 3(c) for a period of 36 months
                        (24 months in the case of a termination due to a CIC
                        Pull) following the Date of Termination or until such
                        earlier date as Executive obtains comparable benefits
                        through other employment;

                                        (B)     Continue to pay, or reimburse
                        Executive, for so long as such payments are due, all
                        premiums then due or payable on the whole-life portion
                        of the split-dollar insurance policy referenced under
                        Section 3(d); provided that the Company's obligations
                        under this Section 7(c)(vi)(B) are contingent on
                        Executive's timely payment of the premiums then due or
                        thereafter payable on the term portion of said
                        split-dollar insurance policy; and

                                        (C)     Take whatever action is
                        necessary to cause Executive to become vested as of the
                        Date of Termination in all stock options, restricted
                        stock grants, and all other equity-based awards and be
                        entitled to exercise and continue to exercise all stock
                        options and all other equity-based awards having an
                        exercise schedule and to retain such grants and awards
                        to the same extent as if they were vested upon
                        termination of employment in accordance with their
                        terms.

                                        (D)     If Executive obtains a
                        disability policy on commercially reasonable terms with
                        the same or similar coverage as provided by the Company
                        prior to the Date of Termination then, until that date
                        that is 36 months (24 months in the case of a
                        termination due to a CIC Pull) following the Date of
                        Termination (or, if earlier, until Executive obtains
                        comparable benefits through other employment), reimburse
                        Executive for an amount equal to the difference between
                        (i) the monthly premiums for such disability policy,
                        less (ii) the amount paid by Executive in respect of a
                        portion of the premiums on the disability policy
                        provided by Company prior to the Date of Termination.

                                (vii)   Termination for Cause; Voluntary
                Resignation. In the event Executive's employment terminates
                during the Employment Period other than in connection with a
                termination meeting the conditions of subparagraphs (ii), (iii),
                (iv), (v) or (vi) of this Section 7(c), Executive shall receive
                the amounts set forth in Section 7(c)(i) in full satisfaction of
                all of his entitlements from the Company. All equity-based
                awards not vested as of the Date of Termination shall terminate
                (unless otherwise provided in the applicable award agreement)
                and Executive shall have no further entitlements with respect
                thereto.

                                (viii)  Clarification Regarding Treatment of
                Options and Restricted Stock. The stock option and restricted
                stock agreements (the "Equity Award Agreements") that Executive
                has or may receive may contain language regarding the effect of
                a termination of Executive's employment under certain
                circumstances.

                                        (A)     Notwithstanding such language in
                        the Equity Award Agreements, for so long as this
                        Agreement is in effect, the Company will be obligated,
                        if the terms of this Agreement are more favorable in
                        this regard than the terms of the Equity Award
                        Agreements, to take the actions required under Sections
                        7(c)(ii), 7(c)(iii)(C), 7(c)(iv)(for a Post-Expiration
                        Termination), 7(c)(v)(C) and 7(c)(vi)(C) hereof upon the
                        happening of the circumstances described therein. Those
                        sections provide that in certain situations the Company
                        will cause the Executive to become vested as of the Date
                        of Termination in all or certain equity-based awards,
                        and that such equity-based awards will thereafter be
                        subject to the provisions of the applicable Equity Award
                        Agreement as it applies to vested awards upon a
                        termination. For purposes of clarification, although an
                        option grant may vest


                                      15
<PAGE>


                        in accordance with these above-referenced Sections, such
                        option will thereafter be exercisable only for so long
                        as the related option agreement provides, except that
                        the Compensation Committee of the Board of Directors
                        may, in its sole discretion, elect to extend the
                        expiration date of such option. For example, in general
                        Executive's option agreements granted prior to the date
                        hereof provide that (in the absence of an extension by
                        the Compensation Committee) upon a termination of
                        employment for any reason other than death, disability,
                        retirement or cause, any vested options will only be
                        exercisable for three months from the date of
                        termination or, if earlier, the expiration date of the
                        option.

                                        (B)     Notwithstanding the definition
                        of "Cause" which may appear in the Equity Award
                        Agreements, for so long as this Agreement is in effect
                        (X) any "for Cause" termination must be in compliance
                        with the terms of this Agreement, including the
                        definition of "Cause" set forth herein, and (Y) only in
                        the event of a "for Cause" termination that meets both
                        the definition in this Agreement and the definition in
                        the Equity Award Agreement will the disposition of
                        options and restricted stock under such Equity Award
                        Agreement be treated in the manner described in such
                        Equity Award Agreement in the case of a termination "for
                        Cause."

                                        (C)     For purposes of Section
                        7(b)(6)(A), the value of any option may be determined by
                        the Compensation Committee of the Board at any time
                        after its grant date by setting such value at the value
                        determined by a nationally recognized accounting firm or
                        employee benefits compensation firm, selected by such
                        Committee, that calculates such value in accordance with
                        a Black-Scholes formula or variations thereof using such
                        parameters and procedures (including, without
                        limitation, parameters and procedures used to measure
                        the historical volatility of the Company's common stock
                        as of the relevant grant date) as the Compensation
                        Committee and/or such firm deems reasonably appropriate.
                        In all events, if the parameters used for valuing any
                        option for purposes of Section 7(b)(6)(A) are the same
                        as the parameters used for valuing any other options for
                        purposes of disclosure or inclusion in the Company's
                        financial statements or financial statement footnotes,
                        then such parameters shall be deemed reasonable.

                                        (D)     During the Employment Period any
                        stock options issued to Executive shall provide that if
                        Executive's employment is terminated in any manner which
                        gives rise to an obligation under this Agreement (or any
                        successor Agreement or other severance arrangement) to
                        cause the acceleration of vesting of stock options, then
                        in such event such stock options shall not expire until
                        one year after the Date of Termination (or, if earlier,
                        the expiration of their ordinary term). This covenant of
                        the Company shall not apply to any stock options issued
                        prior to June 1, 2001 or to any stock options issued
                        after the expiration of the Employment Period.

                (d)     Additional Benefits.

                                (i)     Anything in this Agreement to the
                contrary notwithstanding, in the event it shall be determined
                that any payment or distribution by the Company to or for the
                benefit of Executive, whether paid or payable or distributed or
                distributable (1) pursuant to the terms of Section 7 of this
                Agreement, (2) pursuant to or in connection with any
                compensatory or employee benefit plan, agreement or arrangement,
                including but not limited to any grants of stock options (or any
                accelerated vesting thereof), restricted or unrestricted stock
                grants issued to or for the benefit of Executive and forgiveness
                of any loans by the


                                      16
<PAGE>


                Company to Executive or (3) otherwise (collectively, "Severance
                Payments"), would be subject to the excise tax imposed by
                Section 4999 of the Internal Revenue Code of 1986, as amended
                (the "Code"), and any interest or penalties are incurred by
                Executive with respect to such excise tax (such excise tax,
                together with any such interest and penalties, are hereinafter
                collectively referred to as the "Excise Tax"), then Executive
                shall be entitled to receive an additional payment from the
                Company (a "Partial Gross-Up Payment"), such that the net amount
                retained by Executive, before accrual or payment of any Federal,
                state or local income tax or employment tax, but after accrual
                or payment of the Excise Tax attributable to the Partial
                Gross-Up Payment, is equal to the Excise Tax on the Severance
                Payments.

                                (ii)    Subject to the provisions of Section
                7(d)(iii), all determinations required to be made under this
                Section 7, including whether a Partial Gross-Up Payment is
                required and the amount of such Partial Gross-Up Payment, shall
                be made by Arthur Andersen LLP or such other nationally
                recognized accounting firm as may at that time be the Company's
                independent public accountants immediately prior to the Change
                in Control (the "Accounting Firm"), which shall provide detailed
                supporting calculations both to the Company and Executive as
                soon as practicable after the Date of Termination, if
                applicable. The initial Partial Gross-Up Payment, if any, as
                determined pursuant to this Section 7(d)(ii), shall be paid to
                Executive within five days of the receipt of the Accounting
                Firm's determination. If the Accounting Firm determines that no
                Excise Tax is payable by Executive, the Company shall furnish
                Executive with an opinion of counsel that failure to report the
                Excise Tax on Executive's applicable federal income tax return
                would not result in the imposition of a negligence or similar
                penalty. Any determination by the Accounting Firm shall be
                binding upon the Company and Executive. As a result of the
                uncertainty in the application of Section 4999 of the Code at
                the time of the initial determination by the Accounting Firm
                hereunder, it is possible that Partial Gross-Up Payments which
                will not have been made by the Company should have been made (an
                "Underpayment"). In the event that the Company exhausts its
                remedies pursuant to Section 7(d)(iii) and Executive thereafter
                is required to make a payment of any Excise Tax, the Accounting
                Firm shall determine the amount of the Underpayment that has
                occurred, consistent with the calculations required to be made
                hereunder, and any such Underpayment, and any interest and
                penalties imposed on the Underpayment and required to be paid by
                Executive in connection with the proceedings described in
                Section 7(d)(iii), and any related legal and accounting
                expenses, shall be promptly paid by the Company to or for the
                benefit of Executive.

                                (iii)   Executive shall notify the Company in
                writing of any claim by the Internal Revenue Service that, if
                successful, would require the payment by the Company of the
                Partial Gross-Up Payment. Such notification shall be given as
                soon as practicable but no later than 10 business days after
                Executive acquires actual knowledge of such claim and shall
                apprise the Company of the nature of such claim and the date on
                which such claim is requested to be paid. Executive shall not
                pay such claim prior to the expiration of the 30-day period
                following the date on which he gives such notice to the Company
                (or such shorter period ending on the date that any payment of
                taxes with respect to such claim is due). If the Company
                notifies Executive in writing prior to the expiration of such
                period that it desires to contest such claim, Executive shall:

                                        (A)     give the Company any information
                        reasonably requested by the Company relating to such
                        claim,

                                        (B)     take such action in connection
                        with contesting such claim as the Company shall
                        reasonably request in writing from time to time,
                        including,


                                      17
<PAGE>

                        without limitation, accepting legal representation with
                        respect to such claim by an attorney selected by the
                        Company,

                                        (C)     cooperate with the Company in
                        good faith in order effectively to contest such claim,
                        and

                                        (D)     permit the Company to
                        participate in any proceedings relating to such claim;
                        provided, however that the Company shall bear and pay
                        directly all costs and expenses attributable to the
                        failure to pay the Excise Tax (including related
                        additional interest and penalties) incurred in
                        connection with such contest and shall indemnify and
                        hold Executive harmless, for any Excise Tax up to an
                        amount not exceeding the Partial Gross-Up Payment,
                        including interest and penalties with respect thereto,
                        imposed as a result of such representation, and payment
                        of related legal and accounting costs and expenses (the
                        "Indemnification Limit"). Without limitation on the
                        foregoing provisions of this Section 7(d)(iii), the
                        Company shall control all proceedings taken in
                        connection with such contest and, at its sole option may
                        pursue or forego any and all administrative appeals,
                        proceedings, hearings and conferences with the taxing
                        authority in respect of such claim and may, at its sole
                        option, either direct Executive to pay the tax claimed
                        and sue for a refund or contest the claim in any
                        permissible manner, and Executive agrees to prosecute
                        such contest to a determination before any
                        administrative tribunal, in a court of initial
                        jurisdiction and in one or more appellate courts, as the
                        Company shall determine; provided, however, that if the
                        Company directs Executive to pay such claim and sue for
                        a refund, the Company shall advance so much of the
                        amount of such payment as does not exceed the Excise
                        Tax, and related interest and penalties, to Executive on
                        an interest-free basis and shall indemnify and hold
                        Executive harmless, from any related legal and
                        accounting costs and expenses, and from any Excise Tax,
                        including related interest or penalties imposed with
                        respect to such advance or with respect to any imputed
                        income with respect to such advance up to an amount not
                        exceeding the Indemnification Limit; and further
                        provided that any extension of the statute of
                        limitations relating to payment of taxes for the taxable
                        year of Executive with respect to which such contested
                        amount is claimed to be due is limited solely to such
                        contested amount. Furthermore, the Company's control of
                        the contest shall be limited to issues with respect to
                        which a Partial Gross-Up Payment would be payable
                        hereunder and Executive shall be entitled to settle or
                        contest, as the case may be, any other issues raised by
                        the Internal Revenue Service or any other taxing
                        authority.

                                (iv)    If, after the receipt by Executive of an
                amount advanced by the Company pursuant to Section 7(d)(iii),
                Executive becomes entitled to receive any refund with respect to
                such claim, Executive shall (subject to the Company's complying
                with the requirements of Section 7(d)(iii)) promptly pay to the
                Company so much of such refund (together with any interest paid
                or credited thereon after taxes applicable thereto) (the
                "Refund") as is equal to (A) if the Company advanced or paid the
                entire amount required to be so advanced or paid pursuant to
                Section 7(d)(iii) hereof (the "Required Section 7(d) Advance"),
                the aggregate amount advanced or paid by the Company pursuant to
                this Section 7(d) less the portion of such amount advanced to
                Executive to reimburse him for related legal and accounting
                costs, or (B) if the Company advanced or paid less than the
                Required Section 7(d) Advance, so much of the aggregate amount
                so advanced or paid by the Company pursuant to this Section
                7(d) as is equal to the difference, if any, between (C) the
                amount refunded to Executive with respect to such claim and (D)
                the sum of the portion of the Required Section 7(d) Advance that
                was paid by Executive and not paid or advanced by


                                      18
<PAGE>


                the Company plus Executive's related legal and accounting fees,
                as applicable. If, after the receipt by Executive of an amount
                advanced by the Company pursuant to Section 7(d)(iii), a
                determination is made that Executive shall not be entitled to
                any refund with respect to such claim and the Company does not
                notify Executive in writing of its intent to contest such denial
                of refund prior to the expiration of 30 days after such
                determination, then such advance shall be forgiven and shall not
                be required to be repaid and the amount of such advance shall
                offset, to the extent thereof, the amount of Partial Gross-Up
                Payment required to be paid.

                (e)     Notice of Termination. Notice of non-renewal of this
Agreement pursuant to Section 1 hereof or of any termination of Executive's
employment (other than by reason of death) shall be communicated by written
notice (a "Notice of Termination") from one party hereto to the other party
hereto in accordance with this Section 7 and Section 9.

                (f)     Date of Termination. "Date of Termination," with respect
to any termination of Executive's employment during the Employment Period, shall
mean (i) if Executive's employment is terminated for Disability, 30 days after
Notice of Termination is given (provided that Executive shall not have returned
to the full-time performance of Executive's duties during such 30 day period),
(ii) if Executive's employment is terminated for Cause, the date on which a
Notice of Termination is given which complies with the requirements of Section
7(b)(1) hereof, and (iii) if Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination. In the case of a
termination by the Company other than for Cause, the Date of Termination shall
not be less than 30 days after the Notice of Termination is given. In the case
of a termination by Executive, the Date of Termination shall not be less than 15
days from the date such Notice of Termination is given. Notwithstanding the
foregoing, in the event that Executive gives a Notice of Termination to the
Company, the Company may unilaterally accelerate the Date of Termination and
such acceleration shall not result in the termination being treated as a
termination without Cause. Upon any termination of his employment, Executive
will concurrently resign his membership as a director and/or officer of the
Company and all subsidiaries of the Company, to the extent applicable.

                (g)     No Mitigation. The Company agrees that, if Executive's
employment by the Company is terminated during the term of this Agreement,
Executive is not required to seek other employment, or to attempt in any way
to reduce any amounts payable to Executive by the Company pursuant to Section
7(d)(i) hereof. Further, the amount of any payment provided for in this
Agreement shall not be reduced by any compensation earned by Executive as the
result of employment by another employer, by retirement benefits, or, except
for amounts then due and payable in accordance with the terms of any
promissory notes given by Executive in favor of the Company, by offset against
any amount claimed to be owed by Executive to the Company or otherwise.

                (h)     Nature of Payments. The amounts due under this Section 7
are in the nature of severance payments considered to be reasonable by the
Company and are not in the nature of a penalty. Such amounts are in full
satisfaction of all claims Executive may have in respect of his employment by
the Company or its affiliates and are provided as the sole and exclusive
benefits to be provided to Executive, his estate, or his beneficiaries in
respect of his termination of employment from the Company or its affiliates.

        8.      Non-Competition; Non-Solicitation; Specific Enforcement.

                (a)     Non-Competition. Because Executive's services to the
Company are special and because Executive has access to the Company's
confidential information, Executive covenants and agrees that, during the
Employment Period and, for a period of one year following the Date of
Termination by the Company for Cause or Disability or a termination by Executive
(other than a Constructive Termination Without Cause) prior to a Change in
Control, 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


                                       19
<PAGE>


"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 is
engaged in the business of managing, owning, leasing or joint venturing
multifamily rental real estate within 30 miles of multifamily rental 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 multifamily rental
real estate ownership, management, multifamily rental real estate franchising,
and multifamily rental real estate joint-venturing.

                (b)     Non-Solicitation. For so long as the Executive remains
employed by the Company (or any successor thereto) and for one year following
termination of employment, regardless of reason, Executive shall not, without
the prior written consent of the Company, except in the course of carrying out
his duties hereunder, solicit or attempt to solicit for employment with or on
behalf of any corporation, partnership, venture or other business entity, any
employee of the Company or any of its affiliates or any person who was formerly
employed by the Company or any of its affiliates within the preceding six
months, unless such person's employment was terminated by the Company or any of
such affiliates.

                (c)     Specific Enforcement. Executive and the Company agree
that the restrictions, prohibitions and other provisions of this Section 8 are
reasonable, fair and equitable in scope, terms, and duration, are necessary to
protect the legitimate business interests of the Company and are a material
inducement to the Company to enter into this Agreement. Should a decision be
made by a court of competent jurisdiction that the character, duration or
geographical scope of the provisions of this Section 8 is unreasonable, the
parties intend and agree that this Agreement shall be construed by the court in
such a manner as to impose all of those restrictions on Executive's conduct that
are reasonable in light of the circumstances and as are necessary to assure to
the Company the benefits of this Agreement. The Company and Executive further
agree that the services to be rendered under this Agreement by Executive are
special, unique and of extraordinary character, and that in the event of the
breach by Executive of the terms and conditions of this Agreement or if
Executive, without the prior consent of the Board of Directors, shall take any
action in violation of this Section 8, the Company will suffer irreparable harm
for which there is no adequate remedy at law. Accordingly, Executive hereby
consents to the entry of a temporary restraining order or ex parte injunction,
in addition to any other remedies available at law or in equity, to enforce the
provisions hereof. Any proceeding or action seeking equitable relief for
violation of this Section 8 must be commenced in the federal or state courts, in
either case in Virginia. Executive and the Company irrevocably and
unconditionally submit to the jurisdiction of such courts and agree to take any
and all future action necessary to submit to the jurisdiction of and venue in
such courts.

        9.      Notice. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand or by nationally
recognized overnight courier or by Express, registered or certified mail,
postage prepaid, return receipt requested, and addressed, if to the Company at
2900 Eisenhower Avenue, Suite 300, Alexandria, VA 22303, Attention: Chief
Executive Officer (with a second copy, sent by the same means and to the same
address, Attention: General Counsel), and if to Executive at the address set
forth in the Company's records (or to such other address as may be provided by
notice).

        10.     Miscellaneous. This Agreement, together with Annex A and Annex B
and the Split Dollar Insurance Agreement and any Equity Award Agreements now or
hereafter in effect and a letter from the Company of even date herewith
addressing Executive's 2001 compensation, constitutes the entire agreement
between the parties concerning the subjects hereof and supersedes any and all
prior agreements or understandings, including, without limitation, any plan or
agreement providing benefits in the nature of severance, but excluding benefits
provided under other Company plans or agreements, except to the extent this
Agreement provides greater rights than are provided under such other plans or
agreements. This Agreement may not be assigned by Executive without the prior
written consent of the Company, and may be


                                       20
<PAGE>
assigned by the Company and shall be binding upon, and inure to the benefit of,
the Company's successors and assigns. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise. Headings herein are for convenience of reference only and
shall not define, limit or interpret the contents hereof.

        11.     Amendment. This Agreement may be amended, modified or
supplemented by the mutual consent of the parties in writing, but no oral
amendment, modification or supplement shall be effective. No waiver by either
party of any breach by the other party of any condition or provision contained
in this Agreement to be performed by such other party shall be deemed a waiver
of a similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by Executive or an
authorized officer of the Company, as the case may be.

        12.     Severability. The provisions of this Agreement are severable.
The invalidity of any provision shall not affect the validity of any other
provision, and each provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

        13.     Resolution of Disputes.

                (a)     Procedures and Scope of Arbitration. Except for any
controversy or claim seeking equitable relief pursuant to Section 8 of this
Agreement, all controversies and claims arising under or in connection with this
Agreement or relating to the interpretation, breach or enforcement thereof and
all other disputes between the parties, shall be resolved by expedited, binding
arbitration, to be held in the District of Columbia metropolitan area in
accordance with the applicable rules of the American Arbitration Association
governing employment disputes (the "National Rules"). In any proceeding relating
to the amount owed to Executive in connection with his termination of
employment, it is the contemplation of the parties that the only remedy that the
arbitrator may award in such a proceeding is an amount equal to the termination
payments, if any, required to be provided under the applicable provisions of
Section 7(c) and, if applicable, Section 7(d) hereof, to the extent not
previously paid, plus the costs of arbitration and Executive's reasonable
attorneys fees and expenses as provided below. Any award made by such arbitrator
shall be final, binding and conclusive on the parties for all purposes, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

                (b)     Attorneys Fees.

                                (i)     Reimbursement After Executive Prevails.
                Except as otherwise provided in this paragraph, each party shall
                pay the cost of his or its own legal fees and expenses incurred
                in connection with an arbitration proceeding. Provided an award
                is made in favor of Executive in such proceeding, all of his
                reasonable attorneys fees and expenses incurred in pursuing or
                defending such proceeding shall be promptly reimbursed to
                Executive by the Company within five days of the entry of the
                award. Any award of reasonable attorneys' fees shall take into
                account any offer of the Company, such that an award of
                attorneys' fees to the Executive may be limited or eliminated to
                the extent that the final decision in favor of the Executive
                does not represent a material increase in value over the offer
                that was made by the Company during the course of such
                proceeding. However, any elimination or limitation on attorneys'
                fees shall only apply to those attorneys' fees incurred after
                the offer by the Company.


                                       21
<PAGE>


                                (ii)    Reimbursement in Actions to Stay, Enjoin
                or Collect. In any case where the Company or any other person
                seeks to stay or enjoin the commencement or continuation of an
                arbitration proceeding, whether before or after an award has
                been made, or where Executive seeks recovery of amounts due
                after an award has been made, or where the Company brings any
                proceeding challenging or contesting the award, all of
                Executive's reasonable attorneys fees and expenses incurred in
                connection therewith shall be promptly reimbursed by the Company
                to Executive, within five days of presentation of an itemized
                request for reimbursement, regardless of whether Executive
                prevails, regardless of the forum in which such proceeding is
                brought, and regardless of whether a Change in Control has
                occurred.

                                (iii)   Reimbursement After a Change in Control.
                Without limitation on the foregoing, solely in a proceeding
                commenced by the Company or by Executive after a Change in
                Control has occurred, the Company shall advance to Executive,
                within five days of presentation of an itemized request for
                reimbursement, all of Executive's legal fees and expenses
                incurred in connection therewith, regardless of the forum in
                which such proceeding was commenced, subject to delivery of an
                undertaking by Executive to reimburse the Company for such
                advance if he does not prevail in such proceeding (unless such
                fees are to be reimbursed regardless of whether Executive
                prevails as provided in clause (ii) above).

        14.     Survivorship. The provisions of Sections 4(b), 6, 8 (to the
extent described below) and 13 of this Agreement shall survive Executive's
termination of employment. Other provisions of this Agreement shall survive any
termination of Executive's employment to the extent necessary to the intended
preservation of each party's respective rights and obligations. The provisions
of Section 8(a) shall in no event apply if Executive's employment terminates for
any reason after the expiration of the Employment Period (for clarification,
this means that if Executive's employment terminates on or prior to the
expiration of the Original Term or any later Renewal Term then the one year
post-termination non-compete set forth in Section 8(a) will apply if the
termination is for one of the reasons set forth in Section 8(a)). The provisions
of Section 8(b) shall apply during the Employment Period, and shall also apply
with respect to any termination of Executive's employment for any reason during
the two year period following the expiration of the Employment Period (for
clarification, this means that if Executive's employment terminates for any
reason on or prior to the second anniversary of the expiration of the Original
Term or any later Renewal Term, then the non-solicitation requirement of Section
8(b) shall apply to Executive for one year following termination of employment).

        15.     Board Action. Where an action called for under this Agreement is
required to be taken by the Board of Directors, such action shall be taken by
the vote of not less than a majority of the members then in office and
authorized to vote on the matter.

        16.     Withholding. All amounts required to be paid by the Company
shall be subject to reduction in order to comply with applicable federal, state
and local tax withholding requirements.

        17.     Counterparts. This Agreement may be executed in two or more
counterparts, 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.

        18.     Governing Law. This Agreement shall be construed and regulated
in all respects under the laws of the State of Maryland.


                                       22
<PAGE>


        IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.

                                  AVALONBAY COMMUNITIES, INC.

                                  By:  /s/ Bryce Blair
                                       ---------------------------
                                       Bryce Blair
                                  Its: Chief Executive Officer


                                  /s/ Samuel B. Fuller
                                  --------------------------------
                                  Samuel B. Fuller



                                       23


ClubJuris.Com