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, 2001
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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 statements 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, 2001 and 2000, and the
related statements of changes in plan equity for each of the three years in the
period ended December 31, 2001. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide 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, 2001
and 2000, and the changes in plan equity for each of the three years in the
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
Vienna, Virginia
March 25, 2002
AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2001 AND 2000
12-31-01 12-31-00
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Assets:
Receivable from AvalonBay Communities, Inc.:
Participant contributions $ -- $ --
Employer contributions -- --
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Plan Equity $ -- $ --
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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, 2001, 2000 AND 1999
2001 2000 1999
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Plan equity at the beginning of the year $ -- $ 323,121 $ 499,365
Additions:
Participant contributions 572,388 1,132,676 1,026,919
Employer contributions 101,030 431,743 181,221
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Total additions 673,418 1,564,419 1,208,140
Deductions:
Purchase and distribution of common stock to participants 673,418 1,887,540 1,384,384
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Plan equity at the end of the year $ -- $ -- $ 323,121
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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
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,
Avalon Properties, Inc. merged with and into Bay, and in connection with such
merger Bay 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. Until
January 1, 2000, the Plan provided for two purchase periods per year. A purchase
period was a six month period beginning each January 1 and July 1 and ending
each June 30 and December 31, respectively. Since January 1, 2000, there has
been one purchase period per year, which begins May 1 and ends October 31.
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.
Participant 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.
Withdraws
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.
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AVALONBAY COMMUNITIES, INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
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.
4. Distributions
The following table summarizes stock purchased and distributed for the
respective purchase periods:
Date of purchase 11-01-01 11-01-00 1-01-00 7-01-99
Purchase period end 10-31-01 10-31-00 12-31-99 6-30-99
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Participant contributions $ 572,388 $ 1,132,676 $ 274,653 $752,266
Employer contributions 101,030 431,743 48,468 132,753
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Market value of stock $ 673,418 $ 1,564,419 $ 323,121 $885,019
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Market value of stock purchased and
distributed per share $ 45.400 $ 45.938 $ 34.625 $ 33.940
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Shares purchased and distributed 14,833 34,055 9,332 26,076
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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 25, 2002 By: /s/ THOMAS J. SARGEANT
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Name: Thomas J. Sargeant, Chief Financial
Officer and Executive VP
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