RETENTION BONUS AGREEMENT

AGREEMENT made as of this 26th day of May 2004 by and between Summit Properties Inc., a Maryland corporation with its principal place of business in Charlotte, North Carolina (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of Charlotte, NC (the "Executive").
1.	Purpose . The Company considers it essential to the best interests of its stockholders to ▇▇▇▇▇▇ the continuous employment of key management personnel. The Board of Directors of the Company (the "Board") recognizes, however, that, as is the case with many publicly held corporations, the possibility of a Change in Control (as defined in Section 2 hereof) exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders. Therefore, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control. Nothing in this Agreement shall be construed as creating an express or implied contract of employment or any right to be retained in the employ of the Company. The Company and the Executive have entered into an Employment Agreement dated February 16, 1994 (as such agreement may be in effect from time to time, and including any amended or replacement employment agreement, the "Employment Agreement") and an Executive Severance Agreement dated April 2, 1997 (as such agreement may be in effect from time to time, and including any amended or replacement severance agreement, the "Severance Agreement") that provide for compensation to the Executive under certain circumstances in the event that the Executive’s employment is terminated. This Agreement is intended to supplement the Employment Agreement and the Severance Agreement.
2.	Change in Control .
	(a)	A "Change in Control" shall be deemed to have occurred in any one of the following events:
		(i)	any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Act") (other than the Company, Summit Properties Partnership, L.P. (together with any other subsidiaries of the Company, the "Subsidiaries"), 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), directly or indirectly, of securities of the Company representing 40% or more of either (A) the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Board ("Voting Securities") or (B) the then outstanding shares of stock of the Company ("Stock"), in either such case other than as a result of an acquisition of securities directly from the Company; or

		(ii)	persons who, as of the date hereof, constitute the Board (the "Incumbent Directors") cease for any reason, including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to the date hereof whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors shall, for purposes of this Agreement, be considered an Incumbent Director; or
		(iii)	the consummation of a consolidation or merger of the Company or any subsidiary where the shareholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate 50% of the voting shares of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company; or
		(iv)	the stockholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have occurred for purposes of the foregoing clause (i) 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 number of shares of Voting Securities beneficially owned by any person to 40% 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 Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 40% or more of the combined voting power of all then outstanding Voting Securities, then a "Change in Control" shall be deemed to have occurred for purposes of the foregoing clause (i).
	(b)	For purposes of determining whether a Change in Control has occurred, all outstanding options, warrants and other convertible securities that are then exchangeable or convertible into Voting Securities of the Company, including, without limitation, all partnership units of any Subsidiary that are convertible into, or under certain circumstances redeemable for, Voting Securities of the Company at the option of the holder or the Company, shall be deemed to have been converted into the applicable number of shares of Voting Securities of the Company immediately prior to making such determination.
3.	Terminating Event . A "Terminating Event" shall mean any of the following events:
	(a)	termination by the Company of the employment of the Executive with the Company for any reason other than:

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		(i)	the death of the Executive (which shall be referred to as a "Death Termination"), the total disability of the Executive (total disability meaning the inability of the Executive to perform his normal required services under this Agreement for a period of six consecutive months during the term of this agreement by reason of the Executive’s mental or physical disability, as determined by the board in good faith in its sole discretion) (which shall be referred to as a "Disability Termination") or the retirement of the Executive;
		(ii)	if the Executive is convicted of, pleads guilty to, or confesses to any felony or any act of fraud, misappropriation or embezzlement which has an immediate and materially adverse effect on the Company and its subsidiaries on a consolidated basis, as determined by the Board in good faith in its sole discretion;
		(iii)	if the Executive engaged in a fraudulent act to the material damage or material prejudice of the Company and its subsidiaries on a consolidated basis or in conduct or activities materially damaging to the property, business or reputation of the Company and its subsidiaries on a consolidated basis, all as determined by the Board in good faith in its sole discretion;
		(iv)	in the event of any material act or omission by the Executive involving malfeasance or negligence in the performance of the Executive’s duties to the Company to the material detriment of the Company and its subsidiaries on a consolidated basis, as determined by the Board in good faith in its sole discretion, which has not been corrected by the Executive within 30 days after written notice from the Company of any such act or omission;
		(v)	failure by the Executive to comply in any material respect with the terms of the Employment Agreement or any written policies or directives of the Board as determined by the Board in good faith in its sole discretion, which has not been corrected by the Executive within 30 days after written notice from the Company of such failure; or
		(vi)	a material breach by the Executive of the non-competition provisions of the Employment Agreement, as determined by the Board in good faith in its sole discretion.
Each of the events described in the foregoing clauses (ii) through (vi) shall be referred to individually and collectively as a "For Cause Termination." Notwithstanding any other provision of this Section 3(a), a Terminating Event shall not be deemed to have occurred pursuant to this Section 3(a) solely as a result of the Executive being an employee of any direct or indirect successor to the business or assets of the Company, rather that continuing as an employee of the Company following a Change in Control. For purposes of clause (i) of this Section 3(a), "retirement" shall mean termination of the Executive’s employment in accordance with the Company’s normal retirement policy, generally applicable to its salaried employees, as in effect immediately prior to the change in Control, or in accordance with any retirement arrangement established with respect to the Executive with the Executive’s express written consent; or

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	(b)	termination by the Executive of the Executive’s employment with the Company for Good Reason. "Good Reason" shall mean the occurrence of any of the following, provided that in either case the Board has not corrected such material reduction described below within 30 days after written notice by the Executive of such material reduction: (i) there is a material reduction in the Executive’s duties, rights or responsibilities under the Employment Agreement without his consent, or (ii) there is a material reduction in the aggregate value of the Executive’s compensation and benefits package from the Company under the Employment Agreement without his consent, other than a reduction in the Executive’s base salary that is permitted under the Employment Agreement and other than a reduction in compensation and/or benefits affecting a broad group of employees of the Company as determined by the Board in good faith in its sole discretion; (iii) there is a relocation of the Company’s offices at which the Executive is principally employed as of the date of this Agreement to a location more than 50 miles from such offices, or the requirement by the Company for the Executive to be based anywhere other than the Company’s offices at such location, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations immediately prior to the date hereof.
4.	Retention Bonus Payment . Provided the Executive is employed by the Company on the Retention Payment Date (as defined below), the Company shall pay to the Executive an amount equal to One Million Nine Hundred Fifty Thousand Dollars ($1,950,000). Said amount shall be paid in one lump sum payment no later than 31 days following the Retention Payment Date. The Company shall also pay to the Executive all reasonable legal and arbitration fees and expenses incurred by the Executive in obtaining or enforcing any right or benefit provided by this Agreement, except in cases involving frivolous or bad faith litigation initiated by the Executive. "Retention Payment Date" shall mean the date that is 11 months following a Change in Control. Notwithstanding anything herein to the contrary, for purposes of this Plan, the Executive shall be deemed to be employed on the Retention Payment Date and therefore entitled to receive the bonus payment provided by this Section 4 in the event the Executive experiences a Terminating Event after a Change in Control or within six months before a Change in Control.
5.	Additional Benefits .
	(a)	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 the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Severance Payments"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, ("the Code"), or any interest or penalties are incurred by the 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 the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Severance Payments, any Federal, state and local income tax, employment tax and Excise Tax upon the payment provided by this subsection, and any interest and/or penalties assessed with respect to such Excise Tax, shall be equal to the Severance Payments.

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		(ii)	take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company,
		(iii)	cooperate with the Company in good faith in order effectively to contest such claim, and
		(iv)	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 (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such contest and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 5(c), 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 the Executive to pay the tax claimed and ▇▇▇ for a refund or contest the claim in any permissible manner, and the 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 the Executive to pay such claim and ▇▇▇ for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension by the Company of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due shall be limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the 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.
	(d)	If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the 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 Gross-Up Payment required to be paid.

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