EXHIBIT 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made between Alexandria
Real Estate Equities, Inc. (the "Company") and James H. Richardson
("Employee"), effective as of January 1, 2005 (the "Effective
Date").
RECITALS
Whereas, Employee is currently employed by the Company as its
President, pursuant to an Executive Employment Agreement originally
adopted on December 31, 1997 and subsequently extended through
December 31, 2004; and
Whereas, the Company desires to continue to employ Employee as its
President, and Employee is willing to continue such employment by
the Company, on the terms and subject to the conditions set forth
in this Agreement.
AGREEMENT
Now, Therefore, in consideration of the mutual promises and subject
to the terms and conditions set forth herein, the parties hereto
agree as follows:
SECTION 1.
POSITION; DUTIES; LOCATION.
During the Term (as defined in Section 2 below), Employee agrees to
be employed by and to serve the Company as its President, and the
Company agrees to employ and retain Employee in such capacity. In
addition, Employee agrees to serve in such capacities for the
Company's subsidiaries, and in such additional capacities
consistent with Employee's current position as a senior executive
of the Company, as may be determined by the Board of Directors of
the Company (the "Board"), and the Company agrees to employ
Employee in such capacities. Employee shall devote such of his
business time, energy, and skill to the affairs of the Company and
its subsidiaries as shall be necessary to perform the duties of
such positions. Notwithstanding the foregoing, subject to any
written policies of the Company, nothing in this Agreement shall
preclude Employee from (i) engaging in charitable and community
affairs and not-for- profit activities, so long as they are
consistent with his duties and responsibilities under this
Agreement; (ii) managing his personal investments; (iii) serving on
the boards of directors of non-profit companies; and (iv) serving
on the boards of directors of other for-profit companies; provided,
however, that, prior to accepting a position on any such for-profit
board of directors, Employee shall obtain the approval of the Board
(or, if applicable, the appropriate committee thereof), which shall
not be unreasonably withheld; and provided, further, however, that
Employee shall submit to the Board (or the appropriate committee
thereof) a list of any for-profit boards of directors on which
Employee is serving as of the Effective Date of this Agreement.
Employee shall report to the Chief Executive Officer ("CEO") and at
all times during the Term shall have powers and duties at least
commensurate with his position as a senior executive officer.
Employee shall be based in the San Francisco Bay Area, except for
required travel on the Company's business.
SECTION 2.
TERM.
The term of this Agreement (the
"Term") shall be for a period commencing on the "Effective Date"
and ending on December 31, 2009, unless terminated earlier pursuant
to Section 3 of this Agreement. Commencing on December 31, 2009,
and on each subsequent anniversary thereof, the Term shall be
automatically extended for one (1) additional year unless, no later
than six (6) months before such date, either party shall have given
written notice to the other that it does not wish to extend the
Term. References herein to the Term shall refer to both the initial
Term and any such extended Term.
SECTION 3.
COMPENSATION AND OTHER BENEFITS.
In consideration of Employee's
employment, and except as otherwise provided herein, Employee shall
receive from the Company the compensation and benefits described in
this Section 3. Employee authorizes the Company to deduct and
withhold from all compensation to be paid to Employee any and all
sums required to be deducted or withheld by the Company pursuant to
the provisions of any federal, state, or local law, regulation,
ruling, or ordinance, including, but not limited to, income tax
withholding and payroll taxes.
3.1
Base Salary. During the
Term and subject to the terms and conditions set forth herein, the
Company agrees to pay Employee an annual base salary equal to Four
Hundred and Seventy Five Thousand Dollars ($475,000), less standard
payroll deductions and tax withholdings, payable on the Company's
regular payroll schedule (the "Base Salary"). Employee's Base
Salary shall be reviewed no less frequently than on each
anniversary of the Effective Date during the Term by the Board (or
such committee as may be appointed by the Board for such purpose).
The Base Salary payable to Employee shall be increased on each such
anniversary date (and such other times as the Board or a committee
of the Board may deem appropriate during the Term) to an amount
determined by the Board (or a committee of the Board). Each such
new Base Salary shall become the base for each successive annual
increase; provided, however, that such increase, at a minimum,
shall be equal to the cumulative cost-of-living increment as
reported in the "Consumer Price Index, San Francisco, California,
All Items," published by the U.S. Department of Labor (using
January 1, 2005 as the base date for comparison). Any increase in
Base Salary or other compensation shall in no way limit or reduce
any other obligations of the Company hereunder and, once
established at an increased specified rate, Employee's Base Salary
shall not be reduced unless Employee otherwise agrees in
writing.
3.2
Bonus. Employee shall be eligible to receive a
bonus for each fiscal year of the Company (or portion thereof)
during the Term (each, a "Bonus"), with the Bonus to consist of (i)
a retention bonus equal to 50% of Employee's Base Salary (the
"Retention Bonus") for the Employee's continued good faith service
through the end of such fiscal year, which shall be deemed to be
earned as of January 1 of the next fiscal year and paid no later
than the end of the first quarter of that next fiscal year at the
time at which such Retention Bonuses are paid by the Company to
senior executives; and (ii) an amount (the "Performance Bonus") as
determined in the sole discretion of the Board (or a committee of
the Board) based upon its evaluation of Employee's performance and
the performance of the Company during such year and such other
factors and conditions as the Board (or a committee of the Board)
deems relevant (the "Performance Bonus Criteria"), with the amount
payable upon achievement of target levels of performance being no
less than 50% of Base Salary (the "Performance Bonus Target");
provided, however, that the Board, in its reasonable discretion,
may provide for an award in an amount less than the Performance
Bonus Target in the event that the Performance Bonus Criteria are
not fully achieved and for an award in an amount more than the
Performance Bonus Target in the event that the Performance Bonus
Criteria are exceeded. Any such Performance Bonus shall be payable
within 185 days after the end of Corporation's fiscal year (the
"Bonus Year") to which such Performance Bonus relates; provided
that, in the event that Employee terminates employment with the
Company for any reason other than a termination by the Company for
Cause after the end of the Bonus Year and prior to the date when
such Performance Bonuses are paid by the Company to senior
executives, then Employee shall receive the same Performance Bonus
that would have been awarded to Employee in the absence of such
termination and it shall be paid to Employee at the same time that
Performance Bonuses are paid by the Company to other senior
executives. The Performance Bonus Criteria shall be developed in
the reasonable discretion of the Board (or a committee of the
Board) after consultation with Employee.
3.3
Restricted Stock; Options. As of January 1, 2006, Employee
shall be granted 12,500 shares (the "Signing Bonus Shares") of
restricted Company stock, as a signing bonus in recognition of,
among other things, his superior performance during his previous
period of employment, which shares shall vest in equal monthly
increments over a period of twenty-four (24) months. Employee shall
also be eligible for additional grants of restricted stock in the
Company from time to time as shall be determined by the
Compensation Committee of the Board in its sole discretion, and
subject to such vesting, exercisability, and other provisions as
the Board may determine in its discretion, after reviewing the
performance of both Employee and the Company. Any stock options
that Employee has already been granted by the Company prior to the
execution of this Agreement shall continue to be governed in all
respects by the terms of the applicable stock option agreement,
grant notice and plan documents.
3.4
Vacation. Employee shall be entitled to accrue a minimum of six
(6) weeks of paid vacation during each calendar year during the
Term and any extensions thereof, prorated for partial years. Any
accrued vacation not taken during any year may be carried forward
to subsequent years; provided that Employee may not accrue more
than twelve (12) weeks of unused vacation at any time. Unused
vacation in excess of Employee's allowable accrued vacation under
the foregoing proviso shall be promptly paid to Employee at the end
of each year in a cash amount equal to the number of weeks of
excess vacation time, multiplied by Employee's weekly Base
Salary.
3.5
Life Insurance. During the Term, the Company shall, at its sole
cost and expense, procure and keep in effect term life insurance on
the life of Employee, payable to such beneficiaries as Employee may
from time to time designate, in the aggregate amount of $2,500,000.
Such policy shall be owned by Employee or by a member of his
immediate family. The Company shall have no incidents of ownership
therein.
3.6
Disability Insurance. During the Term, the Company
shall, at its sole cost and expense, procure and keep in effect
long-term disability, accidental death and disability, and
short-term disability insurance coverage comparable to Employee's
current disability insurance policy, payable to Employee in an
annual amount not less than sixty percent (60%) of Employee's then
existing Base Salary.
3.7
Other Benefits. Employee shall be eligible to participate in
such of the Company's benefit and deferred compensation plans as
may be made available to executive officers of the Company,
including, without limitation, the Company's stock incentive plans,
annual incentive compensation plans, profit sharing/pension plans,
deferred compensation plans, annual physical examinations, dental
plans, vision plans, sick pay, medical plans, personal catastrophe
and accidental death insurance plans, financial planning,
automobile arrangements, retirement plans and supplementary
executive retirement plans, if any. For purposes of establishing
the length of service under any benefit plans or programs of the
Company, Employee's employment with the Company shall be deemed to
have commenced on July 31, 1997.
3.8
Reimbursement for Expenses. During the Term, the
Company shall reimburse Employee for all reasonable out-of-pocket
business and/or entertainment expenses incurred by Employee for the
purpose of and in connection with the performance of his services
pursuant to this Agreement. Employee shall be entitled to such
reimbursement upon the presentation by Employee to the Company of
vouchers or other statements itemizing such expenses in reasonable
detail consistent with the Company's policies. In addition,
Employee shall be entitled to reimbursement for (i) dues and
membership fees in professional organizations and/or industry
associations in which Employee is currently a member or becomes a
member; (ii) appropriate industry seminars and mandatory continuing
education and (iii) membership in a health club of Employee's
choosing up to a maximum annual fee of $2,500.
SECTION 4.
TERMINATION; SEVERANCE.
4.1
Termination. Either the
Company or Employee may terminate this Agreement at any time prior
to the end of the Term, with or without Cause or Good Reason,
subject to the terms and conditions set forth herein.
4.2
Compensation and Benefits Upon Termination. Upon the termination of this Agreement for any
reason, the Company shall pay Employee: (a) all of Employee's
accrued and unused vacation and unpaid Base Salary earned through
Employee's last day of employment (the "Separation Date"); and (b)
any Bonus earned but unpaid as of the Separation Date (i.e., in the
event Employee has worked through the end of the fiscal year and
earned a Bonus, but such Bonus has not been paid as of the
Separation Date).
4.3
Termination For Cause. The Company shall be entitled to terminate this
Agreement for Cause (as defined herein) immediately upon written
notice to Employee, which notice shall specify the reason for and
the effective date of such termination. In that event, the Company
shall pay Employee the compensation set forth in Section 4.2 of
this Agreement, and Employee shall not be entitled to any further
compensation from the Company, including severance
benefits.
4.4
Termination Without Cause. The Company shall be entitled to terminate this
Agreement without Cause (as defined herein) immediately upon
written notice to Employee. In that event, the Employee shall
receive the following severance benefits:
(a)
A lump sum amount (payable within ten (10) days following the
Separation Date) equal to the Base Salary otherwise payable to
Employee during the remainder of the Term had such early
termination of this Agreement not occurred (but in no event less
than two years of Base Salary), plus a lump sum amount equal to
Employee's target bonus for the fiscal year in which Employee's
employment termination is effective as determined by the Board (or
a committee thereof) (or if such target has not yet been
determined, the average of the annual bonuses earned by Employee in
the two (2) years immediately preceding the date of termination)
("Target Bonus"). These amounts shall be subject to standard
payroll deductions and withholdings.
(b)
The Company shall accelerate the vesting of any equity awards
previously granted to Employee by the Company (whether in the form
of stock options or shares of restricted stock) such that all
unvested shares shall be deemed vested as of the Separation
Date.
In the event the Company
terminates Employee's employment without Cause following a Change
in Control (as defined herein), then Employee shall be entitled to
the accelerated vesting set forth above in Section 4.4(b) of this
Agreement, as well as the cash severance payments set forth in
Section 4.4(a) of this Agreement, except that such lump-sum amounts
shall be multiplied by three (3); provided that the total of such
lump sums shall not exceed three times Employee's Base Salary plus
three times Employee's Target Bonus.
4.5
Term
