AVALONBAY COMMUNITIES, INC. Item 8.01 Other Events.
On
The Sales Agency Financing Agreements amend and restate the original sales
agency financing agreements that the Company entered into with certain of the
Sales Agents on
In accordance with the terms of the Sales Agency Financing Agreements, the
Company may offer and sell up to
Concurrently with the entry into the Sales Agency Financing Agreements, the
Company entered into 14 separate master forward sale agreements (collectively,
the "Master Forward Sale Confirmations") between the Company and each of
The Sales Agency Financing Agreements provide that, in addition to the issuance
and sale of the Shares by the Company through the Sales Agents, the Company may
enter into separate forward sale agreements pursuant to the Master Forward Sale
Confirmations. In connection with any particular forward sale agreement pursuant
to the relevant Master Forward Sale Confirmation, the relevant Forward Purchaser
will, at the Company's request, attempt to borrow from third parties and,
through the relevant Sales Agent acting as agent for such Forward Purchaser,
sell Shares to hedge such Forward Purchaser's exposure underlying the particular
forward sale agreement pursuant to the relevant Master Forward Sale Confirmation
(the Sales Agents, when acting as agents for Forward Purchasers, are referred to
in this Current Report as the "Forward Sellers"). In no event will the aggregate
number of Shares sold through the Sales Agents, whether as an agent for the
Company or as a Forward Seller, under the Sales Agency Financing Agreements and
under any forward sale agreements pursuant to the relevant Master Forward Sale
Confirmations (including the aggregate offering price of Shares sold under the
Original Sales Agency Financing Agreements and the Original Master Forward Sale
Confirmations), have an aggregate sales price in excess of
2
The Company will not initially receive any proceeds from any sale of borrowed shares of Common Stock by a Forward Seller. In the event of full physical settlement of any forward sale agreement pursuant to the relevant Master Forward Sale Confirmation, which the Company expects to occur on one or more dates specified by the Company on or prior to the maturity date of such forward sale agreement, the Company expects to receive aggregate cash proceeds equal to the product of the forward sale price under such forward sale agreement and the number of shares of Common Stock underlying such forward sale agreement, subject to the price adjustment and other provisions of such forward sale agreement. If, however, the Company elects to cash settle or net share settle a particular forward sale agreement pursuant to the relevant Master Forward Sale Confirmation, the Company would expect to receive an amount of proceeds that is significantly lower than the product set forth in the preceding sentence (in the case of any cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares of Common Stock (in the case of net share settlement) to the relevant Forward Purchaser.
The Sales Agents will offer the Shares at market prices prevailing at the time of sale. The Company will pay each Sales Agent a commission at a mutually agreed rate that will not exceed, but may be lower than, 1.50% of the sales price of all of the Shares issued by the Company and sold through the relevant Sales Agent as the Company's sales agent under the relevant Sales Agency Financing Agreement. The compensation to each Sales Agent acting as a Forward Seller will be a mutually agreed commission in the form of a reduction to the initial forward price under the related forward sale agreement that will not exceed, but may be lower than, 1.50% of the sales prices of all borrowed shares of Common Stock sold by the Forward Seller during the applicable forward hedge selling period (which sales price will be adjusted if an "ex-dividend" date occurs during such forward hedge selling period).
The foregoing description of the Sales Agency Financing Agreements and the
Master Forward Sale Confirmations does not purport to be complete and is
qualified in its entirety by reference to the terms and conditions of the forms
of Sales Agency Financing Agreement and Master Forward Sale Confirmation which
are filed as Exhibits 1.1 and 1.2, respectively, to this Current Report and are
incorporated herein by reference. The Shares will be issued pursuant to the
prospectus supplement, dated
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
1.1 Form of Amended and Restated Sales Agency Financing Agreement (filed
herewith)
1.2 Form of Master Forward Sale Confirmation (filed herewith)
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document) (filed herewith)
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