EXHIBIT 10.56
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
December 1, 2000 (the "Effective Date"), by and between BRE PROPERTIES, INC., a
Delaware corporation (the "Company"), and XXXXX XXXXXXXXX (the "Executive").
Background
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WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, on the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the covenants, duties, terms, and
conditions set forth in this Agreement, the parties agree as follows:
1. Term. The term of this Agreement is from December 1, 2000 to December
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1, 2003, unless earlier terminated pursuant to Section 7 (the "Term"). Executive
shall commence the rendering of services under this Agreement no later than
December 1, 2000.
2. Duties. Executive shall be employed by the Company as its Senior
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Vice-President--Technology Initiatives. Executive shall be under the direction
and supervision of the Company's Chief Operating Officer ("COO") and its Board
of Directors (the "Board"). Executive shall devote his full business time and
best efforts to the Company, with his powers and duties to be determined by the
COO. Executive shall not, except for incidental management of his personal
financial affairs, engage in any other business, nor shall he serve in any
position with any other corporation or entity, without the prior written consent
of the COO. It is a condition to Executive's continued employment that he
relocate his principal residence to the San Francisco Bay Area no later than
December 31, 2000.
3. Compensation. During the Term, Executive shall be entitled to receive
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compensation in accordance with this Section 3.
3.1 Base Salary. Executive shall receive an annual base salary
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("Base Salary") of $200,000 commencing on his first day of work. The Board, in
its discretion, may review the Base Salary annually and increase the Base Salary
based on relevant circumstances. The Base Salary shall be payable by the
Company to the Executive in equal installments on the dates payments of salary
are regularly made by the Company to its executive employees.
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3.2 Annual Performance Bonus. Executive shall be eligible to receive
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an annual incentive bonus (the "Annual Bonus") targeted at 40% of Base Salary
for each fiscal year of the Company during the Term (except that the initial
Annual Bonus shall be computed on a pro rata basis for fiscal year 2000). The
amount of the Annual Bonus shall be based on the achievement of management by
objective criteria established by the Board (the "MBO Criteria"). It is
anticipated that, for any given year, the amount of the Annual Bonus could range
from 0% of Base Salary (in the event of a failure to achieve the Annual
Criteria), to 40% of Base Salary (in the event of achievement of the Annual
Criteria), to between 40% and 80% of Base Salary (in the event the Annual
Criteria are exceeded). Except as otherwise specified in this Agreement,
Executive shall earn the Annual Bonus only at the end of each of the Company's
fiscal years during the Term. The Annual Bonus, if earned, shall be paid within
90 days after the end of each fiscal year.
3.3 Long-Term Incentive Awards. Beginning with the year commencing
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on January 1, 2001, and continuing with each subsequent fiscal year during the
Term, Executive shall be eligible to receive long-term incentive awards at the
discretion of the Board. It is contemplated that such awards will take into
account financial, operating, and other results achieved during the preceding
fiscal year as well as future long-term performance goals. Such awards may be
in the form of options, restricted shares, SARs, stock sales, stock grants,
forgivable loans, or any other form of long-term compensation, as determined by
the Board.
4. Benefits. During the Term, Executive shall be entitled to receive
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such other benefits and to participate in such benefit plans as are generally
provided by the Company to its executive employees, including, without
limitation, parking and profit sharing and insurance plans. Executive shall be
entitled to four weeks vacation for each calendar year.
5. Expenses. The Company shall pay or reimburse Executive for all
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reasonable travel and other expenses incurred by Executive in performing his
duties under this Agreement in accordance with Company policy. In addition,
Executive shall be reimbursed by the Company (upon presentation of appropriate
documentation) for reasonable out-of-pocket expenses related to relocating to
the San Francisco Bay Area for moving expenses for household goods, reasonable
and customary brokerage commissions and other transaction costs related to the
sale of Executive's residence in the Washington metropolitan area, and travel
for Executive to the San Francisco Bay Area. In addition, Executive shall
receive either, at Executive's election, a temporary housing
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allowance not to exceed $2,500 per month for a period of up to six months or the
right to occupy an apartment reasonably selected by the Company on a rent-free
basis for six months.
6. Technology Venture Affiliate. The Company and Executive have discussed
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the formation of an affilliated technology ventures entity (the "TV Entity"). In
the event the TV Entity is formed and, subject to the mutual consent of the
Company and Executive, this agreement shall be assigned to the TV Entity. Under
these circumstances, it is anticipated that Executive would serve the TV Entity
in a senior executive capacity and that an equity component relating to the TV
Entity would be added to Executive's compensation package, and Executive's
rights to an equity participation in the Company pursuant to Section 3.3. would
cease. If by the time of Executive's review in the first quarter of 2001,
substantial progress towards the formation of the TV Entity has not been made,
an equity component will be added to Executive's compensation pursuant to this
Agreement on terms substantially equivalent to those made available to
executives in comparable positions in the Company.
7. Termination of Employment.
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7.1 Termination Due to Death or Disability; Voluntary Termination.
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If at any time during the Term, Executive shall die, suffer any Disability (as
defined below), or voluntarily terminate his employment by the Company, then, in
any such event, his employment under this Agreement shall automatically
terminate on the date of death, upon any Disability, or the date of voluntary
termination, as the case may be. As used herein, the term "Disability" shall
mean the inability of Executive to perform his duties because of physical or
mental illness or incapacity as determined by the Board.
7.2 Termination by the Company for Good Cause. The Company may
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terminate this Agreement and Executive's employment at any time for Good Cause.
In such event, this Agreement shall terminate on such date as shall be specified
in writing by the Company. As used herein, the term "Good Cause" shall mean (i)
any act or omission of gross negligence, willful misconduct, dishonesty, or
fraud by Executive in the performance of his duties hereunder or in material
violation of the Company's employment policies and practices, (ii) the failure
or refusal of Executive to perform the duties or to render the services assigned
to him from time to time by the COO or the Board, (iii) the charging or
indictment of Executive in connection with a felony or any misdemeanor involving
dishonesty or moral turpitude, or (iv) the material breach by Executive of this
Agreement or the breach of Executive's fiduciary duty or duty of trust to the
Company.
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7.3 Termination by the Company Other Than for Good Cause. The
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Company may terminate this Agreement and Executive's employment for any reason
other than for Good Cause. In such event, this Agreement shall terminate on the
30th day following written notice of such termination by the Company.
8. Compensation upon Termination.
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8.1 Termination Other Than in Connection With a Change in Control.
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(a) In the event of termination of Executive's employment
pursuant to Section 7.1 or 7.2, the Company shall not be obligated, from and
after the date of termination, to provide to Executive, and Executive shall not
be entitled to receive from the Company, any compensation (including any
payments of Base Salary, Annual Bonus, or other awards) or other benefits;
except that if termination pursuant to Section 7.1 is due to death or
Disability, Executive or his estate shall receive, within 90 days after the
close of the fiscal year in which the death or Disability occurred, a lump-sum
payment equal to the estimated Annual Bonus that the Executive would have earned
for the fiscal year in question (based on actual performance relative to MBO
Criteria for the fiscal year and Executive's contribution up to the date of
death or Disability), calculated on a pro-rated basis to the date of termination
(b) In the event of termination of Executive's employment
pursuant to Section 7.3, provided that Executive provides to the Company a full
and complete release of all known and unknown claims against the Company and its
representatives, the Company shall provide Executive, within fifteen (15) days
after such termination, a lump-sum payment from the Company equal to (a) one
hundred and forty percent (140%) of his then Base Salary if termination occurs
prior to Executive's first Annual Bonus being determined pursuant to Section
3.2; (b) his then Base Salary plus the amount of the Annual Performance Bonus
awarded in the immediately preceding year if termination occurs subsequent to
the determination of the Annual Performance Bonus for his first full year and
prior to the determination for the second full year; or (c) for any subsequent
termination, his then Base Salary plus the average of the Annual Performance
Bonus awarded in the prior two years.
8.2 Termination Following a Change in Control. The following
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provisions shall apply in lieu of Section 8.1 if, and only if, the termination
of Executive's employment occurs within 12 months following a Change in Control
(as defined in Section 8.2(d)):
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(a) In the event of termination of Executive's employment
pursuant to Section 7.1 due to death or disability, or pursuant to Section 7.2,
the provisions of Section 8.1(a) apply.
(b) In the event of termination of Executive's employment
pursuant to Section 7.1 due to voluntary termination by Executive without Good
Reason (as defined below), the provisions of Section 8.1(a) shall apply except
that the Company shall pay Executive within 15 days after such termination,
provided that Executive provides to the Company a full and complete release of
all known and unknown claims against the Company and its representatives: a
lump-sum payment from the Company equal to: (x) one hundred and forty percent
(140%) of his then Base Salary if termination occurs prior to Executive's first
Annual Bonus being determined pursuant to Section 3.2; (y) his then Base Salary
plus the amount of the Annual Performance Bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of the
Annual Performance Bonus for his first full year and prior to the determination
for the second full year; or (z) for any subsequent termination, his then Base
Salary plus the average of the Annual Performance Bonus awarded in the prior two
years. As used herein, the term "Good Reason" means (i) a material change in
Executive's duties, responsibilities, or authority, or (ii) the Company's
relocation of the Executive, without the Executive's consent, to a location
outside of the San Francisco metropolitan area.
(c) In the event of termination of Executive's employment
pursuant to Section 7.1 due to voluntary termination by Executive with Good
Reason, or pursuant to Section 7.3, provided that Executive provides to the
Company a full and complete release of all known and unknown claims against the
Company and its representatives, the Company shall provide Executive with the
following compensation within 15 days after such termination:
(i) Executive shall be entitled to receive a lump-sum
payment from the Company equal to: (x) two hundred and eighty percent (280%) of
his then Base Salary if termination occurs prior to Executive's first Annual
Bonus being determined pursuant to Section 3.2; (y) his then Base Salary plus
two times the amount of the Annual Performance Bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of the
Annual Performance Bonus for his first full year and prior to the determination
for the second full year; or (z) for any subsequent termination, two times his
then Base Salary plus the sum of the Annual Performance Bonus awarded in the
prior two years;
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(d) As used herein, a "Change in Control" shall be deemed to
have occurred when any of the following events occur:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), as in
effect on the date hereof, (a "Person")) acquiring "beneficial ownership" (as
defined in Rule 13D-3 under the Exchange Act), of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; or
(ii) a change in the Board that is the result of a proxy
solicitation(s) or other action(s) to influence voting at a shareholders'
meeting of the Company (other than by voting one's own stock) by a Person or
group of Persons who has Beneficial Ownership of 5% or more of the combined
voting power of the securities of the Company and which causes the Continuing
Directors (as defined below) to cease to constitute a majority of the Board;
provided, however, that neither of the events described in (i) or (ii) of this
Section 8.2(d) shall be deemed to be a Change in Control if the event(s) or
election(s) causing such change shall have been approved specifically for
purposes of this Agreement by the affirmative vote of at least a majority of the
members of the Continuing Directors. For these purposes, a "Continuing
Director" shall mean a member of the Board (i) who is a member of the Board on
the date of this Agreement, or (ii) who subsequently becomes a member of the
Board and who either (x) is appointed or recommended for election with the
affirmative vote of a majority of the Directors then in office who are Directors
on the date hereof, or (y) is appointed or recommended for election with the
affirmative vote of a majority of the Directors then in office who are described
in clauses (i) and (ii) (including clause (ii)(y)), as applicable.
(e) Notwithstanding anything to the contrary in this Section
8.2, if any of the payments or other compensation to be made to Executive
pursuant to this Section 8.2 are determined to be "parachute payments" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then the amount of such payments or other compensation shall be reduced
to the largest amount which would not constitute "parachute payments" as so
defined.
9. Confidentiality. It is specifically understood and agreed that some of
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the Company's business activities are secret in nature and constitute trade
secrets, or are otherwise confidential and/or proprietary in nature, including
but not limited to the Company's "know-how," methods of business and operations,
and property and financial analyses and reports (all such information,
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"Proprietary Information"). All of the Company's Proprietary Information is and
shall be the sole property of the Company for its own exclusive use and benefit,
and Executive agrees that upon termination of his employment for any reason
whatsoever, he shall return to the Company all Proprietary Information in his
possession or under his control. Executive further agrees that he shall hold all
of the Company's Proprietary Information in strictest confidence and shall not
at any time, either during or after his employment by the Company, use or
disclose, or permit the use or disclosure of, the same for his own benefit or
for the benefit of others, unless authorized to do so by the Company's written
consent or by a contract or agreement to which the Company is a party or by
which it is bound. The provisions of this Section 9 shall perpetually survive
the termination of the Agreement, and Executive shall likewise be bound by all
other agreements between him and the Company relating in any way to the
protection of the Company's Proprietary Information.
10. Arbitration. If a dispute arises between Company and Executive
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concerning this Agreement, or in any way relating to Executive's employment by
the Company and/or the termination thereof, the disputed matter shall first be
submitted to mandatory mediation, such mediation to be conducted in the City of
San Francisco pursuant to the then-current rules of the Judicial Arbitration and
Mediation Services ("JAMS") by a mediator affiliated with JAMS, or by such other
mediator as is mutually agreeable to the parties. If the mediation does not
successfully resolve such dispute, then the dispute shall be submitted to
mandatory, final, and binding arbitration in the City of San Francisco,
California in accordance with the employment arbitration rules of the American
Arbitration Association ("AAA Rules"). Any judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof. The
arbitrators shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve the
disputed matter. The arbitrators shall apply the law of the State of California
in making any determination hereunder. Notwithstanding anything to the contrary
which may now or hereafter be contained in the AAA Rules, the parties agree any
such arbitration shall be conducted before a panel of three arbitrators, who
shall be compensated for their services at a rate to be determined by the
American Arbitration Association in the event the parties are not able to agree
upon their rate of compensation. Each party shall have the right to appoint one
arbitrator (to be appointed within twenty days of the notice of a dispute to be
resolved by arbitration hereunder), and the two arbitrators so chosen shall
mutually agree upon the selection of the third, impartial arbitrator. The
majority decision of the arbitrators will be final and conclusive upon the
parties hereto. The parties hereby acknowledge and agree that final and binding
arbitration shall be the sole
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and exclusive means of resolving any such dispute, that they waive all rights to
a civil court action, and that the dispute shall be fully and finally resolved
by the arbitrators and shall not be resolved by a jury or a court.
11. Administration by the Board. The Board, or its Compensation
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Committee as determined by the Board, shall be (i) solely responsible for the
interpretation and administration of this Agreement, and (ii) entitled to modify
this Agreement and the (including, without limitation, performance criteria and
targets) as necessary or appropriate to achieve the purposes and intents of the
same in light of changing or extenuating circumstances. All such actions,
decisions, and modifications regarding this Agreement made in good faith by the
Board, or by its Compensation Committee, shall be final and binding on
Executive.
12. Upon Termination of this Agreement. The Company shall have the right,
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without any notice to the Executive, to offset any amounts payable to the
Company by Executive against any amount payable to the Executive pursuant to
this Agreement.
13. Miscellaneous.
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13.1 Written notices required by this Agreement shall be sent to
Company or Executive by certified mail, with a return receipt requested, to
Company's registered address and to Executive's last shown address on Company's
records, respectively. Such notice shall be deemed to be delivered two days
after mailing.
If to Company: BRE Properties, Inc.
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Forty Four Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx XxXxxxxx
With Copy to: Xxxxxxx Xxxxx & Xxxxxx LLP
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000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
If to Executive: Xxxxx Xxxxxxxxx
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000 Xxxxxx Xx #0000
Xxxxxx Xxxx, Xx 00000
13.2 This Agreement contains the full and complete understanding of
the parties and supersede all prior representations, promises, agreements, and
warranties, whether oral or written.
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13.3 This Agreement shall be governed by and interpreted according to
the laws of the State of California.
13.4 With respect to the Company, this Agreement shall inure to the
benefit of and be binding upon any successors or assigns of Company. With
respect to Executive, this Agreement shall not be assignable but shall inure to
the benefit of estate of Executive or his legal successor upon death or
disability.
13.5 The captions of the various sections of this Agreement are
inserted only for convenience and shall not be considered in construing this
Agreement.
13.6 This Agreement can be modified, amended, or any of its terms
waived only by a writing signed by both parties.
13.7 If any provision of this Agreement shall be held invalid,
illegal, or unenforceable, the remaining provisions of the Agreement shall
remain in full force and effect, and the invalid, illegal, or unenforceable
provision shall be limited or eliminated only to the extent necessary to remove
such invalidity, illegality, or unenforceability in accordance with the
applicable law at that time.
13.8 Without limiting the provisions of Section 10, if either party
institutes arbitration proceedings pursuant to Section 10 or an action to
enforce the terms of this Agreement, the prevailing party in such proceeding or
action shall be entitled to recover reasonable attorneys' fees, costs, and
expenses.
13.9 No remedy made available to Company by any of the provisions of
this Agreement is intended to be exclusive of any other remedy. Each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder as well as those remedies existing at law, in equity, by statute, or
otherwise.
13.10 Executive represents that the execution of this Agreement by
Executive will not violate any other agreement to which Executive is a party.
13.11 Taxes; Withholdings. All compensation payable by the Company
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to the Executive under this Agreement which is or may become subject to
withholding under the Code or other pertinent provisions of laws or regulation
shall be reduced for all applicable income and/or employment taxes required to
be withheld.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
specified in the first paragraph.
COMPANY: BRE PROPERTIES, INC.
/s/ XxXxx X. Xxxxxxx
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Its: EVP - Chief Operating Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxxxxx
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XXXXX XXXXXXXXX
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