EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into as of July 25, 2002 by and between BRE PROPERTIES, INC., a
Maryland corporation (the "Company"), and XXXXX X. XXXXXXX (the "Executive").
Background
WHEREAS, the Company and Executive entered into an Employment
Agreement, dated March 15, 1996 whereby Executive was to be employed by the
Company as its Executive Vice President and Chief Financial Officer (the
"Original Agreement").
WHEREAS, Executive was subsequently promoted to the position of
Executive Vice President and Chief Operating Officer.
WHEREAS, the Executive and the Company have agreed to a change in the
Executive's role and responsibilities in the Company at a time to be later
specified by the Company.
WHEREAS, the Company and Executive desire to amend and restate the
terms of the Original Agreement as set forth herein.
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 shall expire on December 31, 2003
unless earlier terminated pursuant to Section 6 (the "Term").
2. Duties. Executive shall be employed by the Company as its Executive
Vice-President and Chief Operating Officer until October 1, 2002 (the
"Transition Start Date"). Until the Transition Start Date, Executive shall
report to the Company's Chief Executive Officer and perform the duties he has
performed to date as Executive Vice President and Chief Operating Officer and
such other duties, consistent with duties customarily accorded an Executive Vice
President and Chief Operating Officer, that the Chief Executive Officer (the
"CEO") or the Company's Board of Directors (the "Board") may from time to time
specifically direct. After the Transition Start Date, although he will not be
required to be present in the offices of the Company on a daily basis, Executive
shall remain generally available during normal business hours to the Company to
perform special projects and transition services at the direction of and upon
reasonable notice from the CEO. In advance of each calendar quarter, Executive
shall provide the Company with the dates that he desires to be unavailable due
to travel in the forthcoming quarter (the "Blackout Dates") and the CEO will use
reasonable efforts to design and schedule the transition services projects so
that they may be performed by Executive at times other than the Blackout Dates.
In the event of conflicts, Executive shall make himself available to perform the
transition services projects. During the Term, Executive shall devote his full
business time to the Company. During the Term, Executive shall not, except for
incidental management of his personal financial affairs (which the Company
acknowledges include non-public real estate investments), 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 Board. Executive
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agrees, that, upon the request of the Company subsequent to the Transition Start
Date, he will promptly resign from the Board.
3. Compensation. During the Term, Executive shall be entitled to
receive compensation in accordance with this Section 3.
3.1 Base Salary. Until the Transition Start Date, Executive
shall receive an annual base salary ("Base Salary") of $275,000. Upon the
Transition Start Date and for the remainder of the Term, Executive shall receive
a Base Salary of $360,000. 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.
3.2 Annual Incentive Bonus. Executive shall be eligible to
receive an annual incentive bonus (the "Annual Bonus") for 2002. The amount of
the Annual Bonus shall be based on the achievement of predefined operating or
performance and other criteria established by the Chief Executive Officer or the
Compensation Committee of the Board (the "Annual Criteria"). The Annual Bonus,
if earned, will be prorated to reflect Executive's nine months of full time
service in 2002. The Annual Bonus, if earned, shall be paid within 90 days of
the Transition Start Date. Executive shall not be eligible to earn an Annual
Bonus with respect to any services rendered by Executive on or subsequent to the
Transition Start Date.
3.3 Long-Term Incentive Awards. The Executive is entitled to the
restricted stock, stock options and forgivable stock loans as set forth in
Schedule 3.3 to this Agreement. Executive agrees that he has no claim or right
to any restricted stock, stock option or forgivable stock loan from the Company
other than as set forth in Schedule 3.3. Executive further acknowledges and
agrees that he will not receive any additional awards of restricted stock, stock
options, stock loans or other incentive awards (with the exception of the 2002
Annual Bonus) during the remainder of the Term. If this Agreement expires at the
conclusion of its full term on December 31, 2003, then Executive shall be deemed
to be vested in full in all restricted shares described in Schedule 3.3.
Furthermore, upon any expiration of this Agreement at the conclusion of its full
term on December 31, 2003, Executive shall be deemed to have retired as of such
date for purposes of the stock option plans and agreements applicable to the
stock options described in Schedule 3.3 hereto.
4. Benefits. During the Term, Executive shall be entitled to receive
such other benefits and to participate in such benefit plans as are generally
provided by the Company to its executive employees, including 401(k) and health
and life insurance plans; provided, however, that Executive, subsequent to the
Transition Start Date, shall not be entitled to participate in any benefit plan
from which he may be disqualified as a result of providing services on a less
than full time basis for the Company. Executive shall be entitled to four weeks
vacation for each full twelve months of employment hereunder and agrees to take
such vacation during the term of this Agreement such that no vacation shall be
accrued and unpaid as the termination of this Agreement.
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5. Expenses. The Company shall pay or reimburse Executive for all
reasonable travel and other expenses incurred by Executive in performing his
duties under this Agreement in accordance with Company policy.
6. Termination of Employment.
6.1 Termination Due to Death or Disability; Voluntary
Termination. If at any time during the Term, Executive shall die, suffer any
Disability which is deemed to be permanent (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 normal duties for Company for a period of ninety (90) calendar days,
or for one hundred twenty (120) days during any period of one hundred eighty
(180) calendar days, whether or not consecutive. An additional determination of
permanent disability may be made at any time by a physician chosen by a majority
of the independent members of the Board, which physician shall opine as to the
physical condition of Executive.
6.2 Termination by the Company for Good Cause. The Company may
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, (ii) the failure
or refusal of Executive, after the receipt of written notice by the Executive,
to perform the duties or to render the services assigned to him from time to
time by the CEO or the Board, (iii) the charging or indictment of Executive in
connection with a felony or any misdemeanor involving dishonesty or moral
turpitude, (iv) the material breach by Executive of this Agreement or the breach
of Executive's fiduciary duty or duty of trust to the Company provided that, if
such breach is curable, Executive first receives notice of the breach and seven
(7) days to cure such breach; or (v) any other act or omission by Executive
either in disregard of the Company's policies or conduct which may cause
material loss, damage or injury to the Company, its property, reputation or
employees.
6.3 Termination by the Company Other Than for Good Cause. During
the Term, the 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 30/th/ day following written notice of such termination by the
Company.
7. Compensation upon Termination.
7.1 Termination Other Than in Connection With a Change in
Control.
(a) In the event of termination of Executive's employment
pursuant to Section 6.1 due to death or Disability, Executive or his estate
shall receive and shall be obligated with respect to, within 30 days of such
death or Disability, the following:
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(i) Executive shall be entitled to receive a lump-sum
payment from the Company equal to (a) if termination occurs prior to the
Transition Start Date, the average of the Annual Bonuses awarded in the prior
two years reduced on a pro-rated basis to the date of termination; or (b) if
termination occurs subsequent to the Transition Start Date, any accrued but
unpaid Annual Bonus with respect to his services prior to Transition Start Date
prorated for any partial year of service;
(ii) the amount payable under each Loan and Stock Pledge
Agreement shall be due and payable; and
(iii) Executive shall be entitled to receive payment under
the Bonus Arrangement in such amount as determined by the Pro Rata Calculation
as of the date of termination. For the purposes of this Agreement, "Pro Rata
Calculation" shall mean a pro rata application of Sections 2.1, 2.2, and 2.3 of
each of the Bonus Arrangements as described in Schedule 3.3 to this Agreement,
taking into consideration the number of full months worked and the Company's
performance data through the last quarter having ended 45 days or more prior to
the termination date, notwithstanding the fact that such sections of the Bonus
Arrangements may not provide for such pro rata application.
(b) In the event of termination of Executive's employment
pursuant to Section 6.1 based on voluntary termination by the Executive or
pursuant to Section 6.2 (Termination by the Company for Good Cause) or due to
the expiration of the Term on December 31, 2003, 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. Further, all amounts payable under each Loan and Stock Pledge
Agreement shall be due and payable.
(c) In the event of termination of Executive's employment without
cause pursuant to Section 6.3, the Company shall provide Executive with the
following compensation within 30 days after such termination:
(i) Executive shall be entitled to receive a lump-sum
payment from the Company equal to (a) if termination occurs prior to the
Transition Start Date, the Base Salary plus the average of the Annual Bonus
awarded in the prior two years and (b) if termination occurs subsequent to the
Transition Start Date, the remaining amount of Base Salary to be paid hereunder
not to exceed one year's salary; provided, that, Executive shall retain his
right to any accrued but unpaid Annual Bonus with respect to his services prior
to Transition Start Date.
(ii) the amount payable under each Loan and Stock Pledge
Agreement shall be due and payable on the termination date; and
(iii) Executive shall be entitled to receive payment under
the Bonus Arrangement in such amount as determined by the Pro Rata Calculation
determined as of the termination date.
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7.2 Termination Following a Change in Control. The following provisions
shall apply in lieu of Section 7.1 if, and only if, the termination of
Executive's employment occurs within 12 months following a Change in Control (as
defined in Section 7.2(d)):
(a) In the event of termination of Executive's employment
pursuant to Section 6.1 due to death or Disability, or in the event of
termination of Executive's employment due to voluntary termination by Executive
without Good Reason, the provisions of Section 7.1(a) apply.
(b) In the event of termination of Executive's employment
pursuant to Section 6.2 (Termination by the Company with Good Cause) or due to
the expiration of the Term on December 31, 2003, the provisions of Section
7.1(b) apply.
(c) In the event of termination of Executive's employment due to
voluntary termination by Executive with Good Reason, or pursuant to Section 6.3
(Termination by the Company Other Than for Good Cause), the provisions of
Section 7.1(c) shall apply. 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.
(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.
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(e) Notwithstanding anything to the contrary in this
Section 7.2, if any of the payments or other compensation to be made to
Executive pursuant to this Section 7.2 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.
7.3 Release. Executive's right to receive any of the
payments or other compensation (including, without limitation, loan forgiveness)
to be made to Executive pursuant to this Section 7 shall be contingent on
Executive providing the Company a full and complete release of all known and
unknown claims against the Company and its representatives.
8. Confidentiality and Restrictive Covenant.
(a) It is specifically understood and agreed that some
of 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,
"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 her 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 8 shall perpetually survive
the termination of the Agreement, and Executive shall likewise be bound by all
other agreements between he and the Company relating in any way to the
protection of the Company's Proprietary Information.
(b) For a period of two (2) years following any
termination of this Agreement, the Executive shall not recruit, attempt to hire,
direct, assist others in recruiting or hiring, or encourage any employee of the
Company to terminate his employment with the Company or to accept employment
with any subsequent employer or business with whom the Executive is affiliated
or receiving compensation in any way.
9. Arbitration. If a dispute arises between Company and Executive
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
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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 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.
10. Taxes; Withholdings. All compensation payable by the Company 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.
11. Administration by the Board. The Board, or its Compensation
Committee as determined by the Board, shall be (i) solely responsible for the
interpretation and administration of any Loan and Stock Pledge Agreements and
related Bonus Arrangements, and (ii) entitled to modify any Loan and Stock
Pledge Agreements and related Bonus Arrangements (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 of any Loan and
Stock Pledge Agreements and related Bonus Arrangements made in good faith by the
Board, or by its Compensation Committee, shall be final and binding on
Executive.
12. Offset. The Company shall have the right, without any notice to
the Executive, to offset any amounts payable to the Company under any Loan and
Stock Pledge Agreements and related Bonus Arrangements against any amount
payable to the Executive pursuant to this Agreement.
13. Miscellaneous.
13.1 All notices and any other communications permitted or
required under this Agreement must be in writing and shall be effective (a) on
the first business day after delivery in person, or (b) on the first business
day after deposit with a commercial courier or delivery service for overnight
delivery. All notices must be properly addressed and delivered to the parties at
the addresses set forth below:
If to Company:
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BRE Properties, Inc.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx XxXxxxxx
With Copy to:
Xxxxxxx, Xxxxx + Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
If to Executive:
Xxxxx X. Xxxxxxx
BRE Properties, Inc.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
With Copy to:
_______________________
_______________________
_______________________
Attn: ________________
or at such other addresses as either party may subsequently
designate by written notice given in the manner provided in this section.
13.2 This Agreement and any Loan and Stock Pledge Agreements and
related Bonus Arrangements contain the full and complete understanding of the
parties and supersede all prior representations, promises, agreements, and
warranties, whether oral or written.
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,
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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 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.
13.9 This Agreement may be executed in one or more counterparts. Any
copy of this Agreement with the original signatures of all parties approved
shall constitute an original.
13.10 Without limiting the provisions of Section 9, if either party
institutes arbitration proceedings pursuant to Section 9 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.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
specified in the first paragraph.
COMPANY: BRE PROPERTIES, INC.
By: /s/ Xxxxx X. XxXxxxxx
-----------------------------------
Xxxxx X. XxXxxxxx
Chief Executive Officer
EXECUTIVE: Xxxxx X. Xxxxxxx
/s/ XxXxx Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx
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SCHEDULE 3.3
STOCK LOAN SUMMARY
Number of
Loan Date Maturity Date Shares Original Cost Principal Rate
--------------------------------------------------------------------------------------------------------
03/02/98 03/03/03 5,000 26.88 134,375 5.40%
05/11/99 05/11/04 6,000 26.00 156,000 6.00%
01/28/00 01/28/05 10,000 22.56 225,625 6.91%
02/16/01 02/16/06 7,500 28.70 215,250 6.48%
01/24/02 01/24/07 7,500 29.16 218,700 6.69%
------------- ---------
Total Shares 36,000 Total o/s principal 949,950
============= =========
RESTRICTED STOCK SUMMARY
Restricted Shares Shares Vested Shares Restricted
Granted 5/11/99 to Date 06/17/02
----------------------------------------------------------
Xxxxxxx 1,875 780 1,095
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