EX-10.1 2 dex101.htm EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (this “Agreement”) is made and entered into on August 7, 2009, by and between BRE Properties, Inc., a Maryland corporation (the “Company”), and Xxxx X Xxxxxxxx, an individual (“Executive”) and memorializes the terms and conditions of Executive’s employment by the Company from and after October 5, 2009 (the “Effective Date”).
In consideration of the mutual covenants set forth in this Agreement, the parties agree as follows:
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hundred eighty (180) consecutive days or for one hundred eighty (180) days in any twelve month period because of physical or mental illness or incapacity as determined by the Board. If Executive shall voluntarily terminate his employment with the Company, Executive shall provide the Company with at least 30-days’ prior written notice of such termination, which notice period the Company may elect to shorten.
8. Compensation upon Termination.
8.1 Termination Other Than in Connection With a Change in Control.
(a) In the event of termination of this Agreement and Executive’s employment pursuant to Section 7.1 or 7.2, the Company shall not be obligated, from and after the Termination Date, 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 two and one-half months after the close of the fiscal year in which the death or Disability occurred, a lump-sum payment equal to the
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estimated Annual Bonus that 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, in each case up to the date of death or Disability), calculated on a pro-rated basis to the Termination Date. In addition, Executive shall be entitled to the vesting benefits set forth in any performance stock award agreement or other equity award agreement whether now in existence or entered into during the term of this Agreement.
(b) In the event of termination of this Agreement and Executive’s employment pursuant to Section 7.3, the Company shall provide Executive with the following compensation within 15 days after the Company’s receipt of the release of Executive described in Section 8.1(c):
(i) Executive shall be entitled to a lump-sum payment equal to the estimated Annual Bonus that 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, in each case up to the date of termination, calculated on a pro-rated basis to the Termination Date.
(ii) Executive shall be entitled to receive a lump-sum payment from the Company equal to the sum of: (1) his final Base Salary and (2) the average of the Annual Bonuses awarded to Executive for the two fiscal years prior to the year in which Executive terminates. If Executive terminates before having been employed for two full fiscal years, then the lump sum payment shall be equal to: (1) the sum of his final Base Salary and his Target Bonus if he terminates before his first full fiscal year of employment; or (2) the sum of his final Base Salary and the amount of the Annual Bonus awarded in the immediately preceding year if he terminates after his first full fiscal year of employment but before the end of his second full fiscal year of employment; and
(iii) Executive shall be entitled to the vesting benefits set forth in any performance stock award agreement or other equity award agreement whether now in existence or entered into during the term of this Agreement.
(c) Executive’s right to receive any of the payments or other compensation to be made to Executive pursuant to this Section 8.1 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 in the form set forth on Exhibit A to this Agreement to be executed no later than forty-five (45) days after the Termination Date.
8.2 Termination Following a Change in Control.
(a) If within 12 months after the effective date of a Change in Control (as defined below) this Agreement and Executive’s employment is terminated due to Executive’s death or Disability, then Executive or his estate shall receive, within two and one-half months after the close of the fiscal year in which the death or Disability occurred, a lump-sum payment equal to the
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average annualized Annual Bonus that Executive received during the Term pro-rated based on the number of days between the effective date of the Change in Control and the date of death or Disability. If the date of death or Disability is before the Executive has been employed for one full fiscal year, then the lump-sum payment shall be equal to his Target Bonus pro-rated based on the number of days between the effective date of the Change in Control and the date of Death or Disability. In addition, (i) Executive shall be entitled to a lump-sum payment equal to the estimated Annual Bonus that 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, in each case up to the date of termination), calculated on a pro-rated basis to the Termination Date; and (ii) Executive shall be entitled to the vesting benefits set forth in any performance stock award agreement or other equity award agreement whether now in existence or entered into during the term of this Agreement.
(b) If within 12 months after the effective date of a Change in Control, Executive terminates his employment with the Continuing Employer without Good Reason (as defined below), then Executive shall receive the amounts set forth in Section 8.2(a) and, provided if Executive gives the Company not less than 90-days’ prior written notice of such voluntary termination and uses his reasonable efforts to assist the Company with the necessary transition during the period between the notice of termination and the termination itself, then the Company shall pay Executive, within 15 days after the Company’s receipt from Executive of the release described in Section 8.2(g) (provided that such release is received within 45 days of the Termination Date), a lump-sum payment from the Company equal to: (i) if Executive resigns after having been employed through two full fiscal years, the sum of his final Base Salary and the average Annual Bonus awarded in the prior two years; (ii) if Executive resigns after having been employed more then one but less than two full fiscal years, the sum of his final Base Salary and the Annual Bonus he was awarded in the immediately preceding year; or (iii) if the Executive resigns before having been employed through one full fiscal year, the sum of his final Base Salary and his Target Bonus. As used in this Agreement, the term “Good Reason” means (i) a material reduction in Executive’s target pay, duties, responsibilities, or authority of Executive immediately prior to such Change in Control, without Executive’s consent, or (ii) the relocation of Executive, without Executive’s consent, to a location more than 50 miles from the Executive’s work location as of the Termination Date, provided in each case that, within 90 business days of the event set forth in (i) or (ii), Executive presents the Company or the Continuing Employer, as the case may be, with at least 30-days’ prior written notice of his termination of employment stating that such termination was for a reason set forth in (i) or (ii) and the Company or the Continuing Employer, as the case may be, did not cure such material reduction or relocation within 30 days after receipt of such notice.
(c) If within 12 months after the effective date of a Change in Control, Executive terminates his employment with the Continuing Employer for Good Reason or the Continuing Employer terminates this Agreement and Executive’s employment without Good Cause, then the Continuing Employer shall provide Executive with the following compensation within 15 days after the Company’s receipt from Executive of the release described in Section 8.2(g) (provided that such release is received within 45 days of the Termination Date):
(i) In the event of a termination after the execution date of this Agreement, the Continuing Employer shall pay Executive a lump-sum payment equal to the estimated Annual Bonus that 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, in each case up to the date of termination), calculated on a pro-rated basis to the Termination Date;
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(ii) the Continuing Employer shall pay Executive a lump-sum payment equal to: (a) if the termination occurs after Executive has been employed through two full fiscal years, two times the sum of (A) his final Base Salary and (B) the average of the Annual Bonuses awarded to Executive for the two fiscal years prior to the year in which Executive terminates; (b) if the termination occurs after Executive has been employed more then one but less than two full fiscal years, two times the sum of (C) his final Base Salary and (D) the Annual Bonus he was awarded in the immediately preceding year; or (c) if the termination occurs before Executive has been employed through one full fiscal year, two times the sum of (E) his final Base Salary and (F) his Target Bonus;
(iii) all restrictions (except applicable federal and state securities law) on any restricted shares or share equivalents (including, but not limited to, stock units or performance units) of Common Stock, other securities of the Continuing Employer or, if such shares of Common Stock or other securities shall have been exchanged or converted into the right to receive other securities, cash or property, such other securities, cash or property received upon such exchange or conversion, including restrictions which lapse with the passage of time or the satisfaction of performance criteria, to the extent there are any, would lapse and be eliminated and such securities, cash or property would be unrestricted (except with respect to restrictions imposed by applicable federal and state securities law);
(iv) all options to purchase shares of Common Stock or other securities of the Continuing Employer that are subject to vesting shall become fully vested and exercisable for a period of three months after the date of termination; and
(d) For purposes of this Agreement, the term “Continuing Employer” means (A) the Company, (B) an affiliate of the Company (as such term is defined in the Exchange Act) or (C) such entity that the Company has merged or consolidated with or an affiliate (as such term is defined in the Exchange Act) of such entity that employs Executive immediately after or in connection with such Change in Control.
(e) For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred when any of the following events occur:
(i) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, directly or indirectly, either by remaining outstanding or by being converted into voting securities of the surviving entity, more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity thereof outstanding immediately after such merger or consolidation; or
(ii) any sale of substantially all of the assets of the Company, or any liquidation or dissolution of the Company, other than as part of a transaction or series of transactions immediately after which the beneficial holders of the voting securities of the Company outstanding immediately prior thereto hold, directly or indirectly, more than fifty percent (50%) of the total voting power represented by the voting securities of any acquirer or successor corporation or entity; or
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(iii) 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 Effective Date, (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 voting securities; or
(iv) 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 none of the events described in (i) through (iv) of this Section 8.2(e) 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 (A) who is a member of the Board on the Effective Date, or (B) 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 Effective Date, 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 (A) and (B) (including clause (B)(y)), as applicable.
(f) In the event that the benefits provided for in the Agreement, when aggregated with any other payments or benefits received by Executive (the “Aggregate Benefits”), would (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s Aggregate Benefits will be either: (a) delivered in full, or (b) delivered as to such lesser extent as would result in no portion of such Aggregate Benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis of the greatest amount of Aggregate Benefits, notwithstanding that all or some portion of such Aggregate Benefits may be taxable under Section 4999 of the Code. Unless the Company and Executive otherwise agree in writing, any determination required under this paragraph will be made in writing by the independent public accountants mutually agreeable to the Company and Executive (the “Accountants”) whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph. To the extent any reduction in Aggregate Benefits is required by this paragraph, Aggregate Benefits shall be reduced or eliminated in reverse order of time of payment (that is, Aggregate Benefits payable later shall be reduced or eliminated before any reduction or elimination of Aggregate Benefits payable sooner), Aggregate Benefits payable at the same time shall be reduced or eliminated in accordance with the Executive’s instructions provided the Company has no reasonable objection thereto, and all reductions or eliminations shall be based on the value of the Aggregate Benefits established for purposes of the determination required under this paragraph.
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(g) Executive’s right to receive any of the payments or other compensation to be made to Executive pursuant to this Section 8.2 shall be contingent on Executive providing the Continuing Employer a full and complete release of all known and unknown claims against the Continuing Employer and its affiliates and representatives, in the form set forth on Exhibit A to this Agreement.
11.1 In consideration of the Company employing Executive and the wages and benefits provided under this Agreement, Executive and the Company each agree that all claims arising out of or relating to Executive’s employment, including its termination, shall be resolved by binding arbitration in San Francisco, California. This agreement does not prohibit either party from seeking provisional injunctive relief, pursuant to California Code of Civil Procedure Section 1281.8.
11.2 The dispute will be arbitrated in accordance with the then-current rules of the American Arbitration Association applicable to employment disputes. The Company agrees to pay the fees and expenses for the arbitration, except those related to Executive’s legal fees and costs. If either party prevails on a statutory claim which affords the prevailing party attorneys’ fees and
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costs, the arbitrator may award reasonable fees and costs to the prevailing party, under the standards for an award of fees and costs provided by law. The parties agree to file any demand for arbitration within the time limit established by the applicable statute of limitations for the asserted claims or within one year of the conduct that forms the basis of the claim if the claim asserts a breach of express or implied contract. The failure to demand arbitration within the prescribed time period shall result in waiver of said claims.
11.3 This arbitration agreement will cover all matters directly or indirectly related to Executive’s recruitment, employment or termination of employment by the Company, including but not limited to claims involving laws against any form of discrimination whether brought under federal or state law, and claims involving present and former Executives, officers and directors of the Company, but excluding workers’ compensation and unemployment insurance claims. THE PARTIES UNDERSTAND AND AGREE THAT THEY ARE WAIVING THEIR RIGHTS TO BRING SUCH CLAIMS TO COURT, INCLUDING THE RIGHT TO A JURY TRIAL.
| If to the Company: | BRE Properties, Inc. | |||
| 000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx | ||||
| Xxx Xxxxxxxxx, XX 00000 | ||||
| Attn: General Counsel | ||||
| If to Executive: | To the contact address of Executive maintained in the Company’s Human Resources records |
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14.3 Governing Law. This Agreement shall be governed by and interpreted according to the laws of the State of California.
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14.12 Survival. Sections 9, 10, 11, 12, 13 and 14 and Section 7 or 8, as the case may be, if this Agreement shall be terminated pursuant to Section 7, shall survive the termination of this Agreement and remain in full force and effect.
IN WITNESS WHEREOF, this Agreement has been executed as of the Effective Date.
| BRE PROPERTIES, INC. | EXECUTIVE | |||
| /s/ Xxxxxxxxx X. Xxxxx | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxxxxxxx X. Xxxxx | Xxxx X. Xxxxxxxx | |||
| Chief Executive Officer |
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EXHIBIT A
RELEASE
THIS RELEASE (“Release”), is entered into by and between Xxxx X. Xxxxxxxx (referred to herein as “Executive”), and BRE Properties, Inc., a Maryland corporation (the “Company”), as of this , day of , .
WHEREAS, the Executive and the Company are parties to an Amended and Restated Employment Agreement (“Agreement”) entered on ;
A. Executive’s Release Of Claims. In consideration of the benefits under Section 9 of the Employment Agreement and any reference to rights or benefits set forth therein, the Executive hereby waives all rights under Section 1542 of the Civil Code of the State of California. Section 1542 provides:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
Notwithstanding the provisions of Section 1542 of the Civil Code of the State of California, the Executive hereby irrevocably and unconditionally releases and forever discharges the Company, and each and all of its related entities and its officers, directors, employees, agents, and representatives and their successors and assigns, and all persons acting by, through, under, or in concert with any of them, from any and all charges, complaints, claims, and liabilities of any kind or nature whatsoever, known or unknown, suspected or unsuspected (hereinafter referred to as “Executive Claims”), which the Executive at any time had or claims to have or which the Executive at any time may have or claim to have regarding incidents that have occurred as of the date of this Release, including, without limitation, any and all Executive Claims relating to the Executive’s employment or the termination of the
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Executive’s employment with the Company. It is expressly understood by the Executive that among the various rights and claims being waived in this Release are those arising under the Age Discrimination in Employment Act of 1967, the United States and California Constitutions, California common law, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, state and federal family leave acts, the California Fair Employment and Housing Act, the Employee Retirement Income Security Act, and any and all federal and state executive orders and other statutes and regulations. The parties understand that the waived Executive Claims include all actions, claims and grievances, whether actual or potential, known or unknown, and specifically but not exclusively, all claims regarding offenses that have occurred as of the date of this Release, including claims arising out of the Executive’s employment and the termination of that employment with the Company. All such claims (including related attorneys’ fees and costs) are forever barred by this Release without regard to whether those claims are based on any alleged breach of a duty arising in contract or tort, or any alleged unlawful act, including, without limitation, discrimination or harassment, any other claim or cause of action, and regardless of the forum in which it might be brought. The foregoing notwithstanding, the parties understand and agree that the following Executive Claims are not released: (a) claims for indemnification due under Section 7237 of the California Corporations Code; (b) claims for indemnification due under Section 2802 of the California Labor Code; (c) claims for indemnification under the Company’s By-Laws, or otherwise; (d) any rights to coverage under any Company Director’s and Officers liability policy; (e) claims for workers’ compensation benefits; (f) claims for unemployment insurance benefits; (g) claims for vested retirement benefits; and (h) claims for any benefits that the Executive has under the Employment Agreement.
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
Notwithstanding the provisions of Section 1542 of the Civil Code of the State of California, the Company hereby irrevocably and unconditionally releases and forever discharges the Executive, and each of the Executive’s agents, representatives, successors and assigns, from any and all charges, complaints, claims, and liabilities of any kind or nature whatsoever, known or unknown, suspected or unsuspected (hereinafter referred to as “Company Claims”), which the Company at any time had or claims to have or which the Company at any time may have or claim to have regarding incidents that have occurred as of the date of this Release, including, without limitation, any and all charges relating to the Executive’s employment relationship with the Company. The released Company Claims include all actions, claims and grievances, whether actual or potential, known or unknown, and specifically but not exclusively, all claims regarding offenses that have occurred as of the date of this Release, including Company Claims arising out
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of the Executive’s employment relationship with the Company. All such Company Claims (including related attorneys’ fees and costs) are forever barred by this Release without regard to whether those claims are based on any alleged breach of a duty arising in contract or tort, any alleged unlawful act, any other claim or cause of action, and regardless of the forum in which it might be brought.
2. KNOWING AND VOLUNTARY RELEASE.
The Executive understands and agrees that the Executive:
A. Is entitled to, but need not take, a full twenty-one (21) days within which to consider this Release before executing it;
B. Has carefully read and fully understands all the provisions of this Release;
C. Is, through this Release, releasing the Company, its related entities, and each and all of its officers, directors, employees, agents, and representatives, of any and all claims the Executive may have against them;
D. Knowingly and voluntarily agrees to all the terms set forth in this Release;
E. Knowingly and voluntarily intends to be legally bound to this Release;
F. Was advised and hereby is advised in writing to consider the terms of this Release and consult with an attorney of the Executive’s choice prior to execution of this Release;
G. Has a full seven (7) days following the execution of this Release to revoke this Release and has been advised in writing that the Release shall not become effective or enforceable until the revocation period has expired; and
H. Understands that rights or claims under the Age Discrimination in Employment Act of 1967 that may arise after the date of this Release is executed are not waived.
3.1 No effect. This Release shall not affect any claim which cannot be waived by private agreement.
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4. PROPRIETARY AND CONFIDENTIAL INFORMATION.
Any agreements the Executive may have signed with the Company concerning trade secrets, secrecy, new products, ideas, inventions, business plans, inventions, and confidential data will remain in full force and effect. The Executive shall return to the Company on or before the Executive’s final date of employment with the Company, and not take, copy, use, or distribute in an form or manner, Company documents or information which is proprietary and/or confidential, including, but not limited to, lists of customers or potential customers, lists of investors or potential investors, financial information, business and strategic plans, software programs and codes, access codes, and other similar confidential materials or information. The Executive further agrees to return all Company property by the Executive’s final date of employment. It is understood and agreed that any unauthorized use of Company proprietary or confidential information under this provision voids the Company’s obligation to provide Compensation Upon Termination as described in Section 8 of the Agreement.
The Executive agrees to assist the Company in defending or prosecuting any claim which arose or may arise or continue after the Executive’s cessation of employment with the Company. Such assistance shall include, but not be limited to the Executive being reasonably available as a witness for the Company regardless of the location of the deposition or trial, being reasonably prepared for testimony, and providing the Company and its counsel with information or materials within the Executive’s knowledge related to the Executive’s employment or pertinent to the claim. The Company agrees to reimburse the Executive only for out-of-pocket expenses (including travel) actually incurred by the Executive in providing assistance at the Company’s request pursuant to this provision.
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6.1 Executive and the Company each agree that any and all controversy pertaining to the subject matter of this Release, including but not limited to, those involving construction or application or performance of any terms, provisions, or conditions of this Release, shall be resolved by binding arbitration in San Francisco, California. This Release does not prohibit either party from seeking provisional injunctive relief, pursuant to California Code of Civil Procedure Section 1281.8.
6.2 The dispute will be arbitrated in accordance with the then-current rules of the American Arbitration Association applicable to employment disputes. The Company agrees to pay the fees and expenses for the arbitration, except those related to the Executive’s legal fees and costs. The parties agree to file any demand for arbitration within the time limit established by the applicable statute of limitations for the asserted claims or within one year of the conduct that forms the basis of the claim if the claim asserts a breach of express or implied contract. The failure to demand arbitration within the prescribed time period shall result in waiver of said claims. THE PARTIES UNDERSTAND AND AGREE THAT THEY ARE WAIVING THEIR RIGHTS TO BRING SUCH CLAIMS TO COURT, INCLUDING THE RIGHT TO A JURY TRIAL.
IN WITNESS WHEREOF, this Release has been executed as of the date first above written.
| BRE PROPERTIES, INC. | EXECUTIVE | |||
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