11-K: Annual report of employee stock purchase, savings and similar plans
Published on March 31, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from to
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Commission file number 1-12672
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
1996 Non-Qualified Employee Stock Purchase Plan
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B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
AvalonBay Communities, Inc.
2900 Eisenhower Ave., Suite 300
Alexandria, VA 22314
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Compensation Committee of the Board of Directors
AvalonBay Communities, Inc.
1996 Non-Qualified Employee Stock Purchase Plan:
We have audited the accompanying statement of financial condition of the
AvalonBay Communities, Inc. 1996 Non-Qualified Employee Stock Purchase Plan as
amended and restated (the Plan) as of December 31, 1998, and the related
statement of changes in plan equity for the year then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at December 31, 1998
and the changes in plan equity for the year then ended, in conformity with
generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
Washington, D.C.
March 26, 1999
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Compensation Committee of the Board of Directors
AvalonBay Communities, Inc.
1996 Non-Qualified Employee Stock Purchase Plan:
We have audited the accompanying statement of financial condition of the
AvalonBay Communities, Inc. (formerly Bay Apartment Communities, Inc.) 1996
Non-Qualified Employee Stock Purchase Plan (the Plan) as of December 31, 1997.
and the related statement of changes in plan equity for the year ended December
31, 1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial condition of the Plan at December 31, 1997 and the
Plan's changes in plan equity for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
March 25, 1998
AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1998 AND 1997
The accompanying notes are an integral part of these financial statements.
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AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PLAN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
The accompanying notes are an integral part of these financial statements.
3
AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. THE PLAN:
Bay Apartment Communities, Inc. ("Bay") adopted the 1996 Non-Qualified
Employee Stock Purchase Plan, as amended and restated (the "Plan"). On
June 4, 1998, Bay merged with Avalon Properties, Inc. and was renamed
AvalonBay Communities, Inc. (the "Company"). The primary purpose of the
Plan is to encourage common stock ownership by eligible directors and
associates (the "Participants") in the belief that such ownership will
increase each Participant's interest in the success of the Company. The
Plan provides for two purchase periods per year. A purchase period is a
six month period beginning each January 1 and July 1 and ending each
June 30 and December 31, respectively. Participants may contribute
portions of their compensation during a purchase period and purchase
common stock at the end thereof. Participation in the Plan entitles each
Participant to purchase common stock at a price which is equal to the
lesser of 85% of the closing price for a share of stock on the first day
of such purchase period or 85% of the closing price on the last day of
such purchase period.
The Company has reserved 1,000,000 shares of common stock for Participants
under the Plan.
PARTICIPANTS CONTRIBUTIONS:
Full time employees who have completed one month of service with the
Company and part time employees who have completed one year of service
in which he or she is credited with at least 1,000 hours of service are
eligible to participate in the Plan either by payroll withholding or
cash payments at any time during each purchase period. Directors who
have completed one month as a member of the Board of Directors are
eligible to participate in the Plan by making cash payments at any time
during each purchase period. Participants elect to participate in the
Plan by completing and submitting an election form to the Company as
plan administrator (the "Plan Administrator").
EMPLOYER CONTRIBUTIONS:
Employer contributions represent the discount or aggregate difference
between the market value price of the Company's common stock and the
established discount purchase price at the end of a purchase period.
DISTRIBUTIONS:
The Company's transfer agent and registrar issues shares of common
stock upon receipt of Participant and Company contributions. The
transfer agent and registrar then prepares stock certificates, which
are registered in the Participant's name, and holds such certificates
on behalf of the Participants or issues stock certificates to the
Participant upon their written request. Accordingly, all shares
purchased under the provisions of the Plan are deemed to be immediately
distributed to the Participants.
Continued
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AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. THE PLAN, CONTINUED:
WITHDRAWALS:
A Participant may withdraw all or any part of the contributions made
during a purchase period by delivering an amended election form to the
plan administrator on or before the last day of such purchase period.
PLAN TERMINATION:
The Board of Directors of the Plan (the "Board") may terminate this
Plan and any purchase period at any time (together with any related
contribution elections) or may terminate any purchase period (together
with any related contribution elections) at any time, provided,
however, no such termination shall be retroactive unless the Board
determines that applicable law requires a retroactive termination of
this Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING:
The accompanying financial statements have been prepared on the accrual
basis of accounting.
ADMINISTRATIVE EXPENSES:
All administrative expenses of the Plan are paid by the Company.
DISTRIBUTIONS:
Distributions are recorded when common stock has been distributed to
Participants.
3. INTERNAL REVENUE SERVICE STATUS:
The Plan is not a qualified plan under Section 423(b) of the Internal
Revenue Code. Participants are subject to any required tax withholding by
the Company on the discount/compensation earned under the Plan.
Continued
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AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
4. DISTRIBUTIONS:
A summary of stock purchased and distributed for the respective purchase
periods are as follows:
5. SUBSEQUENT EVENT:
On January 2, 1999 an additional 14,580 shares of common stock with a
market value of approximately $499,000 were purchased and distributed for
the purchase period ended December 31, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Plan Administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
AVALONBAY COMMUNITIES, INC.
1996 Non-Qualified Employee Stock
Purchase Plan
Dated: March 27, 1999 By: /s/ Thomas J Sargeant
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Name: Thomas J Sargeant