Exhibit 10.3
Amended and Restated
Employment Agreement
This Amended and Restated Employment
Agreement (this “ Agreement ”) is made and
entered into on November 20, 2006, by and between BRE
Properties, Inc., a Maryland corporation (the “
Company ”), and Bradley P. Griggs, an individual
(“ Executive ”) and memorializes the terms and
conditions of Executive’s employment by the Company from and
after January 1, 2005 (the “ Effective Date
”).
B ACKGROUND
The Company and Executive entered
into an Employment Agreement, dated December 8, 2000 and a
First Amendment to Employment Agreement dated January 1, 2003
(collectively the “ 2000 Employment Agreement as Amended
in 2003 ”), which governed the Company’s employment
of Executive.
The Company and Executive amend and
restate the 2000 Employment Agreement as Amended in 2003 pursuant
to the terms of this Agreement. The Company’s employment of
Executive will be governed by the terms and subject to the
conditions of this Agreement as of the Effective Date.
A GREEMENT
In consideration of the mutual
covenants set forth in this Agreement, the parties agree as
follows:
1. Amendment and Restatement of 2000 Employment
Agreement. This Agreement amends and restates, in its entirety,
and replaces the 2000 Employment Agreement.
2. Term. Executive shall be employed at will
by the Company commencing on the Effective Date and continuing
thereafter until terminated (the “ Term ”).
Executive’s at-will status means that the Executive may
terminate his employment at any time, with or without reason,
subject only to the notice provisions set forth in Sections 8.1 and
9.2(b), and that the Company may terminate Executive at any time,
with or without reason, subject only to the notice provision in
Section 8.3. The Compensation Upon Termination provisions in
Section 9 do not alter Executive’s at-will
status.
3. Duties. The Company shall employ
Executive as its Executive Vice President and Chief Investment
Officer. The Chief Executive Officer (“ CEO ”)
shall direct and supervise the employment of Executive and shall
determine the powers and duties incident to the position of
Executive Vice President and Chief Investment Officer. Executive
shall perform his duties as Executive Vice President and Chief
Investment Officer faithfully, diligently and to the best of his
ability and devote his full business time and best efforts to the
Company. 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 or as a consultant or adviser
to any other corporation or entity (including as a member of such
entity’s board of directors or similar governing or advising
body), without the prior written consent of the Board of Directors
(“ Board ”).
4. Compensation. During the Term, Executive
shall be entitled to receive compensation in accordance with this
Section 4.
4.1 Base Salary. Executive shall receive an
annual base salary (“ Base Salary ”) of $285,000
commencing as of January 1, 2005. The Board, in its
discretion, may review the Base Salary periodically and adjust the
Base Salary in its sole discretion based on relevant circumstances.
The Base Salary shall be payable by the Company to Executive in
equal installments on the dates payments of salary are regularly
made by the Company to its executive employees subject to all
required tax withholdings.
4.2 Annual Bonus. In addition to the Base
Salary, Executive shall be eligible to receive an annual incentive
bonus (the “ Annual Bonus ”) targeted at 70% of
Base Salary for the achievement of the management by objective
criteria established by the Compensation Committee of the Board
(the “ Committee ”) in its sole discretion (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 any of the MBO
Criteria), to 70% of Base Salary (in the event of achievement of
the MBO Criteria), to between 70% and 122.50% (in the event that a
substantial number of the MBO Criteria are significantly exceeded).
The determination of whether Executive has achieved or
significantly exceeded the MBO Criteria shall be in the
Committee’s sole discretion. The Committee may in its
discretion determine that the MBO Criteria on balance as a whole
have been met notwithstanding the fact that certain of the MBO
Criteria may not have been met if other MBO 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.
4.3 Long-Term Incentive Awards. During the
Term, Executive shall be eligible to receive long-term incentive
awards at the sole discretion of the Board. It is contemplated that
such awards will take into account financial, operating, and other
results achieved as well as future long-term performance goals.
Such awards may be in the form of options, restricted shares which
vest over time or upon satisfaction of performance metrics, SARs,
stock grants, or any other form of long-term compensation, as
determined by the Board in its sole discretion.
5. Life Insurance.
During the Term, the Company agrees
to pay the premiums on a term life insurance policy covering and
for the benefit of Executive with a face amount equal to 100% of
the Base Salary.
6. 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 parking and profit sharing and
insurance plans. Executive shall be entitled to four weeks vacation
for each calendar year which shall accrue in accordance with the
Company’s standard policies and procedures.
7. Expenses. The Company shall pay or
reimburse Executive for all reasonable travel and other expenses
incurred by Executive in performing his duties as Executive Vice
President and Chief Investment Officer of the Company in accordance
with the Company’s standard policies and
procedures.
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8. Termination of
Agreement. The date that
Executive’s employment and this Agreement is terminated is
referred to in this Agreement as the “ Termination
Date .”
8.1 Termination Due to Death or Disability;
Voluntary Termination. If at any time during the Term,
Executive shall die, suffer any Disability (as defined below), or
voluntarily terminate his employment with the Company, then, in any
such event, this Agreement shall automatically terminate on the
date of death, upon any Disability or of the Executive’s
voluntary termination, as the case may be. As used in this
Agreement, the term “ Disability ” shall mean
the inability of Executive to perform his duties for one 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.
8.2 Termination by the Company for Good
Cause. During the term, 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 in this
Agreement, 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
material failure or refusal of Executive to timely perform the
duties or to render the services reasonably assigned to him from
time to time by the Board (other than failures to perform duties or
render services substantially due to circumstances beyond the
control of Executive, including force majeure events),
(iv) Executive’s conviction of or plea of nolo
contendere to a crime which has or reasonably would be expected
to have a material adverse impact on his ability to perform his
duties as Executive Vice President, Chief Investment Officer of the
Company, including any crime involving dishonesty or moral
turpitude or (iv) the material breach by Executive of this
Agreement or the material breach of Executive’s fiduciary
duty or duty of trust to the Company as reasonably determined by
the Company.
8.3 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 with at least 30-days’ prior written
notice.
8.4 Termination by the Company
Incident to a Change in Control. Any termination of this Agreement and the
Executive’s employment by the Company for any reason other
than Good Cause, death, or Disability before a Change in Control
(which Change in fact subsequently occurs), but after (a) the
Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control, or (b) the
Company or any Person publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute a
Change in Control shall be deemed conditioned on a Change in
Control for purposes of 9.2(c) below.
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9. Compensation upon
Termination.
9.1 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 8.1 or 8.2, 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 8.1 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
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 8.3, 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 9.1(c):
(i) In the even of a termination
after the execution date of this Agreement, 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
receive a lump-sum payment from the Company equal to the sum of:
(1) his final annual 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; 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 9.1 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.
9.2 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 90 days after the close of
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the fiscal year in which the death
or Disability occurred, a lump-sum payment equal to the 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. 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 9.2(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 9.2(h), a lump-sum payment from the Company equal to
100% of his then Base Salary plus the average Annual Bonus
awarded in the prior two years. 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 20 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 10 business days thereafter.
(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 9.1(c):
(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;
(ii) the Continuing Employer shall
pay Executive a lump-sum payment equal to two times the sum of:
(1) his final annual 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;
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(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
