AGREEMENT
FOR CONTINUING SERVICES
THIS AGREEMENT FOR CONTINUING SERVICES ("Agreement") is made and entered
into this 19th day of December, 1994 by and between BRE Properties, Inc.
("Company") and Xxxxxx X. xxx Xxxxxx ("Employee"). As more fully set forth
below, this Agreement is intended to memorialize certain changes occurring with
respect to Employee's employment relationship with the Company and to clarify
Employee's agreements with the Company concerning his employment terms and
compensation package.
RECITALS
Employee has for many years acted as the Chief Executive Officer ("CEO") of
the Company pursuant to an employment agreement ("Employment Agreement") dated
August 22, 1988. The Company's current Chairman of the Board has decided to
retire, and Employee is 62 years of age. The Company's Board of Directors
("Board") has now decided to begin a search for a new CEO and to elevate
Employee to the position of Chairman of the Board at the time the new CEO is
appointed. The Board desires that Employee remain the Company's CEO until his
successor is appointed, at which time Employee will become the Company's
Chairman of the Board. As Chairman of the Board, Employee will continue to be
employed as a full-time corporate officer of the Company through December 31,
1995 and for such extended periods thereafter as may be agreed to by Company and
Employee.
During Employee's tenure as the Company's CEO, Employee has been granted
incentive stock options ("ISOs"), nonqualified stock options ("NQSOs"), and
restricted shares of the Company's stock ("Restricted Shares"). Pursuant to
this Agreement, the ability of Employee to exercise his ISOs and NQSOs following
the end of his employment will be clarified. In addition, the vesting date for
Employee's Restricted Shares will be accelerated to December 31, 1995 should
Employee remain employed with Company through such date.
NOW, THEREFORE, incorporating the above Recitals, Company and Employee
hereby agree as follows:
(1) In consideration for Employee's enthusiastic support during the one-
year transition period ending December 31, 1995, Employee will continue to be
employed by Company and to serve as the Company's CEO until the Board has chosen
a replacement. At that time, Employee will become the Company's Chairman of the
Board and will continue to be employed by the Company as a full-time corporate
officer subject to the provisions of the Employment Agreement until December 31,
1995, and for such extended periods thereafter as may be agreed to by Company
and Employee.
(2) Upon the termination of Employee's employment with Company, all
compensation and benefits under the Employment Agreement will cease. On or
before
September 30, 1995, Company and Employee will determine whether an extension of
the Employment Agreement beyond December 31, 1995 will be effected. If so
extended, Company and Employee will determine whether any future extensions will
be effected within 90 days before the termination of the then current extension.
(3) Subject to all applicable fiduciary duties of the Company to its
shareholders, Company will use its best efforts to retain Employee as a director
of the Company for his current term.
(4) Should Employee's employment with Company terminate on or after
December 31, 1995 but before Employee reaches 65 years of age, such termination
will be treated as an "early retirement" for purposes of determining Employee's
rights with respect to any NQSOs and ISOs outstanding at that time. Pursuant to
Section 2(c)(ii) of Employee's NQSO and ISO agreements under the Company's 1984
Option Plan, Company hereby agrees that all NQSOs and ISOs of Employee will
become fully vested upon such early retirement and that Employee may exercise
such options up to and including the EARLIER of (i) the end of the applicable
Option Period (as defined and set forth in the applicable option agreement), and
(ii) three years from the date of early retirement. For example, should
Employee's employment with Company terminate on December 31, 1995, NQSOs and
ISOs granted to Employee prior to December 31, 1988 would terminate upon the
expiration of their regular ten-year terms, while options granted to employee on
and after January 1, 1989 would expire on December 31, 1998. Similar treatment
will apply to all NQSOs and ISOs granted to Employee under the Company's 1992
Option Plan. Employee understands that the exercise of ISOs after 3 months from
the date of Employee's termination of employment will NOT qualify the ISO for
favorable tax treatment under the Internal Revenue Code.
(5) Pursuant to Section 6 of the Restricted Share agreements covering the
outstanding Restricted Shares held by Employee, Company hereby agrees that all
of Employee's Restricted Shares will fully vest in Employee on December 31, 1995
should Employee remain employed with Company through such date.
(6) As a full-time corporate officer of the Company through December 31,
1995, Employee will be entitled to continuing participation in the Company's
various benefit plans. In particular, Employee's rights to participate in the
Company's tax-qualified Retirement Plan and Employee's rights to accrue deferred
compensation under his Supplemental Executive Retirement Plan shall remain in
full force and effect through December 31, 1995. Should Employee's employment
terminate on or after December 31, 1995 (unless such employment is terminated
for cause), Employee will be entitled to a pro-rata share of incentive
compensation generally considered and awarded by Company during the fiscal year
of Company in which such termination of employment occurs.
(7) Except as otherwise set forth in this Agreement, the terms of the
Employment Agreement and the terms of Employee's NQSO, ISO, and Restricted Share
agreements shall remain in full force and effect.
(8) Company and Employee have entered into this Agreement in good faith
and hereby agree to use their best efforts to fully implement this Agreement in
accordance with its terms and their mutual intent. The provisions of Sections 6
through 10 of the Employment Agreement (covering arbitration, notices, etc.) are
hereby incorporated into this Agreement by reference. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, Company and Employee have executed this Agreement this
19th day of December, 1994.
COMPANY: BRE PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
XXXXXX X. XXXXXX,
Chairman of the Board
EMPLOYEE: /s/ Xxxxxx X. xxx Xxxxxx
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XXXXXX X. XXX XXXXXX
