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 Arthur G. von Thaden ("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.
2.
(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:
-------------------------------
Eugene P. Carver,
Chairman of the Board
EMPLOYEE:
------------------------------
Arthur G. von Thaden
3.