Exhibit 10.1

BRE PROPERTIES, INC.

PERFORMANCE STOCK AWARD AGREEMENT

This Performance Stock Award Agreement (this “Agreement”), dated as of
                    ,                      (the “Grant Date”), is entered into
by and between BRE Properties, Inc., a Maryland Corporation (the “Company”), and
                     (“Employee”).

BACKGROUND

The Company and Employee have entered into an                      (the
“Employment Agreement”), which provides that, at the discretion of the
Compensation Committee of the Board of Directors of the Company (“Committee”),
Employee is eligible to receive long term incentive awards.

The Company has established the 1999 BRE Stock Incentive Plan, as amended (the
“Plan”), to provide, among other things, long term incentive awards.

The Committee has determined that Employee be granted shares of Common Stock of
the Company (“Common Stock”) under the Plan subject to the restrictions stated
below and as hereinafter set forth.

The Company and Employee intend that the grant of the portion of shares of
Common Stock subject to vesting pursuant to Sections 4.2 and 4.3 of this
Agreement qualify as “performance-based compensation” under Section 162(m) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

AGREEMENT

The parties to this Agreement, intending to be legally bound, agree as follows:

1. Terms of Plan. All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in the Plan. Employee
confirms and acknowledges that Employee has received and reviewed a copy of the
Plan and the Information Statement with respect to the Plan. Employee and the
Company agree that the terms and conditions of the Plan are incorporated in this
Agreement by this reference.

2. Main Grant of Shares. Subject to the terms and conditions of this Agreement
and of the Plan, including without limitation the vesting provisions set forth
in Sections 3 and 4, the Company hereby grants to Employee                     
(            ) shares of Common Stock (the “Shares”) under the Plan which number
of Shares shall be subject to adjustment pursuant to Sections 11 and 12. The
Shares shall be deemed “Restricted Shares” under the Plan. Shares shall not
include Reserve Performance Shares (as defined in Section 4.3(a) below).

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3. Time Vesting of Shares.                      (            ) Shares (the “Time
Vesting Shares”) shall, subject to continuous employment with the Company, vest
ratably over four years, one-quarter on each anniversary of the Grant Date.

4. Performance Shares.

4.1. Definitions. For the purposes of this Agreement the following terms shall
have the following meaning:.

(a) “Goals” shall mean the performance goals for Relative TSR/RMS and Relative
TSR/Peer Group set forth on Exhibit A.

(b) “Good Cause” shall have the meaning set forth in the Employment Agreement.

(c) “Good Reason” shall have the meaning set forth in the Employment Agreement.

(d) “Maximum” shall mean, with respect to a Goal, the performance metric
associated with that Goal under the column labeled “Maximum” on Exhibit A.

(e) “Peer Group” shall mean AvalonBay Communities, Inc., Camden Property Trust,
Essex Property REIT, Equity Residential REIT and UDR REIT, provided that, if the
stock of any one or more of such entities is no longer publically traded during
the Performance Period then such entity or entities shall be dropped from the
Peer Group.

(f) “Peer Group Total Return” shall mean the sum of the Shareholder Return for
each of the members of the Peer Group during the Performance Period by (ii) the
number of entities in the Peer Group during the Performance Period .

(g) “Performance Period” shall mean the period of time between January 1,
         through and including December 31,          unless an earlier date for
the end of the Performance Period is to be determined pursuant to any other
Section of this Agreement.

(h) “Performance Vesting Date” shall mean December 31,         .

(i) “RMS Total Return” shall mean the MSCI US REIT Index Total Return as
published at the end of each day of trading on the American Stock Exchange at
www.msci.com.

(j) “Relative TSR/Peer Group” shall mean the percentage of the Company’s total
Shareholder Return during the Performance Period to the Peer Group Total Return
during the Performance Period.

 

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(k) “Relative TSR/RMS” shall mean the percentage of the Company’s total
Shareholder Return during the Performance Period to the RMS Total Return during
the Performance Period.

(l) “Reserve Contribution” shall mean for any particular Goal, if the Goal
achieved as of the Performance Vesting Date is

(i) less than or equal to the Target, then zero,

(ii) greater than or equal to the Target and less than the Maximum, then the
product of (x) the Weighting Factor of such Goal multiplied by (y) the
proportion that the Goal achieved as of the Performance Vesting Date is between
the Target and the Maximum, or

(iii) greater than the Maximum, then the Weighting Factor of such Goal.

(m) “Shareholder Return” shall mean, for any period, the percentage increase in
value to a shareholder if such shareholder had acquired the common stock in the
applicable entity at the Stock Price on the first day of the Performance Period,
reinvested any dividends paid on such stock at the Stock Price on the
ex-dividend date and sold the stock on the last day of the Performance Period at
the Stock Price, all in accordance with the methodology used to compute the RMS
Total Return, provided if such methodology changes then the method of
determining Shareholder Return shall be modified to match such methodology as
closely as possible.

(n) “Stock Price” shall mean, for a given day, with respect to BRE, the closing
price of a share of Common Stock as of the end of such day and, with respect to
a member of the Peer Group, the closing price for the common stock or other most
widely and regularly traded equity interest in such member of the Peer Group as
of the end of such day.

(o) “Target” shall mean, with respect to a Goal, the performance metric
associated with that Goal under the column labeled “Target” on Exhibit A.

(p) “Threshold” shall mean, with respect to a Goal, the performance metric
associated with that Goal under the column labeled “Threshold” on Exhibit A.

(q) “Vesting Contribution” shall mean for any particular Goal, if the Goal
achieved as of the Performance Vesting Date is

(i) less than the Threshold, then zero,

(ii) greater than or equal to the Threshold and less than the Target, then the
product of (x) the Weighting Factor of such Goal multiplied by (y) the sum of
(i) 50% plus (ii) the product of (A) the proportion that the Goal achieved as of
the Performance Vesting Date is between the Threshold and the Target multiplied
by (B) 50%,

 

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(iii) greater than or equal to the Target, then the Weighting Factor of such
Goal.

(r) “Weighting Factor” shall mean, with respect to a Goal, the percentage
associated with that Goal under the column labeled “Weighting Factor” on Exhibit
A.

4.2. Vesting Performance Shares.

(a) The Shares that are not Time Vesting Shares, but excluding the Earned
Dividend Shares (as defined in Section 11 below) that shall vest in accordance
with part (a) of the last sentence of Section 11, (such net amount of Shares
being hereinafter referred to as the “Performance Shares”) shall, subject to
Sections 5 and 6, vest on the anniversary of the Grant Date immediately
following the Performance Vesting Date with respect to that percentage (the
“Aggregate Vesting Contribution”) of the Shares determined pursuant to this
Section 4.2.

(b) The Vesting Contribution shall be determined as of the Performance Vesting
Date as soon as all of the information reasonably necessary for determining the
Vesting Contribution is available (such date of determination, the “Vesting
Determination Date”). If any of the information reasonably necessary for
determining the Vesting Contribution is not available through the end of the
year in which the Performance Vesting Date occurs and is not expected to be
available within 60 days of the Performance Vesting Date, then, with respect to
such year (and only for that information that is not available), the year to
date information available through the most recent quarter shall, if
appropriate, be annualized and applied to the computations required by this
Section 4 as though such information represented the information for the full
year. The Aggregate Vesting Contribution shall be computed as the sum of the
Vesting Contribution for each of the Goals.

(c) The Committee has reserved fifteen percent (15%) of the Performance Shares
(separate and apart from the Performance Shares vesting based upon the sum of
the Vesting Contribution for each of the Goals), a percentage of which shares
shall vest in accordance with this Section 4.2(c). The Committee will evaluate
the performance of Company in completing and/or carrying out the execution of
the business plan, the flexibility in decision making and maintenance of the
opportunity to be flexible, portfolio management, balance sheet management,
focus on organizational objectives, progress on initiatives and such other
aspects as the Committee may decide and shall, based upon its evaluation
determine a number (the “Additional Vesting Percentage) between zero and two
hundred percent (200%) with one hundred percent (100%) considered Target as that
term is used with respect to Goals. The separate fifteen percent (15%) of the
Performance Shares reserved from the other Performance Shares shall vest in an
amount equal to the lesser of the Additional Vesting Percentage and one hundred
percent (100%).

(d) The Committee shall have sole responsibility for determining and shall
certify the computation of the Vesting Contribution for each Goal and the amount
of Shares that shall vest pursuant to this Section 4.2.

 

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4.3. Grant and Issuance of Reserve Performance Shares.

(a) The Company has reserved for issuance to Employee up to the
                     (            ) shares of Common Stock as Reserve
Performance Shares (as adjusted for any stock splits, stock dividends,
reclassifications or similar events) (the “Reserve Performance Shares”) to be
granted and issued to Employee pursuant to this Section 4.3. If pursuant to the
Company’s determination pursuant to Section 4.2 it is determined that any Goal
achieved as of the Performance Vesting Date is greater than the Target for such
Goal, then the Company shall grant and issue to Employee a number of the Reserve
Performance Shares equal to the product of (x) the sum of the Reserve
Contribution for each Goal multiplied by (y) the number of Reserve Performance
Shares. For the purposes of the preceding computation only, the evaluation
pursuant to Section 4.2(c) shall be treated as a Goal with respect to which the
Additional Vesting Percentage shall have a Target of one hundred percent
(100%) and a Maximum of two hundred percent (200%) and the Weighting Factor
shall be deemed to be fifteen percent (15%).

(b) If Employee shall be entitled to receive any Reserve Performance Shares,
then the Company shall, promptly after the determination pursuant to
Section 4.2, issue to Employee a stock certificate representing the number of
Reserve Performance Shares determined in accordance with Section 4.3(a) (the
“Reserve Certificate”). The Reserve Certificate shall not have endorsed thereon
the legend set forth in Section 8 and the Company shall not retain or otherwise
escrow or withhold the Reserve Certificate from Employee pursuant to this
Agreement.

(c) Employee shall have no rights as a shareholder (including voting rights or
rights to dividends) with respect to any Reserve Performance Shares until such
time as they may become issuable pursuant to Section 4.3(a).

4.4. Recoupment. If Employee’s Employment Agreement, as of the date of any
restatement, provides for recoupment of any previously paid compensation related
to a restatement, then all Shares received pursuant to this Agreement shall be
subject to such recoupment as provided in any policy adopted by Company to
comply with applicable laws, regulations or requirement of the stock exchange(s)
upon which Company’s securities are listed and shall not be fully and finally
earned for purposes of federal and state wage and hour laws until the applicable
recoupment period has expired.

5. Vesting of Shares Upon Change in Employment Status.

5.1. Termination Without Cause, Resignation With Good Reason, Retirement, or
Upon Death or Disability. Notwithstanding Sections 3 and 4, if prior to the
Performance Vesting Date Employee’s Employment Agreement and employment with the
Company is terminated by Employee due to Good Reason or retirement on or after
the Retirement Age, or by the Company for other than Good Cause, or due to death
or Disability, then effective as of the date of such termination (i) the number
of Shares that would vest pursuant to Section 4 and the number of Reserve
Performance Shares that would be issued will be computed in accordance with
Section 4 using as the Performance Vesting Date, the most recent quarter ending
on or before the Employee’s termination or retirement date and multiplying the
result by a fraction the numerator of which is the number of whole quarters
between January 1,          and the date of such termination and the denominator
of which is sixteen

 

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(16), (ii) the number of Earned Dividend Shares that vest will equal the number
determined pursuant to Section 11 using the Vesting Contribution as computed in
(i) above, and (iii) the number of additional Time Vesting Shares vesting
pursuant to Section 3 shall be determined by multiplying the total number of
Time Vesting Shares by a fraction, the numerator of which is the number of whole
quarters since the Grant Date and the denominator of which is sixteen (16) and
subtracting therefrom, the number of shares that have already vested pursuant to
Section 3.

5.2. Termination for Cause or Resignation Without Good Reason. Notwithstanding
Sections 3 and 4, if Employee’s Employment Agreement and employment with the
Company is terminated by the Company for Good Cause or Employee resigns without
Good Reason prior to the Performance Vesting Date, all of the then-unvested
Shares and any right to any Reserve Performance Shares shall be forfeited by
Employee, ownership of all such unvested Shares shall transfer back to the
Company and Employee shall have no further rights with respect to any of such
unvested Shares or any Reserve Performance Shares.

5.3. Termination Following a Change in Control. If within 12 months after the
effective date of a Change in Control (as defined in the Employment Agreement)
Employee’s Employment Agreement and employment with (i) the Company, (ii) an
affiliate of the Company (as such term is defined in the Exchange Act) or
(iii) 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 (such
entity or affiliate in (i), (ii) or (iii), the “Continuing Employer”) is
terminated by Employee for Good Reason or by the Continuing Employer without
Good Cause, then, notwithstanding Sections 3, 4 and 11, 100% of the
then-unvested Shares (including both unvested Time Vesting Shares and all
Performance Shares) and all Earned Dividend Shares issued as of such date shall
automatically vest on the date of such termination of employment, provided,
however, that, if prior to such termination the outstanding shares of common
stock of the Company shall have been exchanged or converted into the right to
receive other securities, cash or property, whether pursuant to a merger,
consolidation or sale of all or substantially all of the assets of the Company
(a “Conversion Event”), then each Share that could vest pursuant to this
Section 5.3 shall immediately after such Conversion Event represent the right to
receive such other securities, cash or property that Employee would have
received or been entitled to had such Shares been outstanding immediately prior
to such Conversion Event. Employee and Company agree that any termination of
Employee’s Employment Agreement with the Company attendant to any Change in
Control in which Employee is, in connection with such Change in Control, hired
as an employee of a Continuing Employer shall not be deemed a termination of
Employee’s Employment Agreement with a Continuing Employer for purposes of this
Section 5.3 unless Employee resigns following the Change of Control for Good
Reason.

6. Vesting of Shares and Issuance of Reserve Shares upon Committee Action.
Notwithstanding Sections 3, 4, 5 and 11, the Committee reserves its right,
exercisable at its sole discretion, including under Section 4.2 of the Plan to
accelerate the vesting of all or any portion of any unvested Shares or issue all
or any portion of the Reserve Performance Shares, including in connection with a
Change in Control.

7. Restrictions Period. The period of time between the Grant Date and the date
Shares become vested is referred to herein as the “Restriction Period.” Until a
Share becomes vested in accordance with Section 3, 4, 5 or 6, neither such Share
nor any beneficial interest

 

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therein shall be sold, transferred, assigned, pledged, encumbered or otherwise
disposed of in any way at any time (including, without limitation, by operation
of law) other than (i) to the Company or its assignees or (ii), after written
notice to the Company identifying the transferee to the reasonable satisfaction
of the Company, to an intervivos or testamentary trust for the benefit of the
Employee and/or the Employee’s spouse during the Employee’s life or to such
other person or persons (individually or as trustee or trustees of a trust), for
estate planning or gifting purposes, as the Committee may specifically approve.
Any permitted transferee of Shares or any interest therein shall be required as
a condition of such transfer to agree in writing, in form satisfactory to the
Company, that it shall receive and hold such Share or interest subject to the
provisions of this Agreement, including but not limited to the forfeiture
provisions hereof. For purposes of this Agreement, the term “Employee” shall
include such a permitted transferee when appropriate.

8. Legend. All certificates representing any Shares which are not vested shall
have endorsed thereon during the Restriction Period the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT BETWEEN
THE CORPORATION AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS CORPORATION.

9. Retention of Certificate. The certificate or certificates evidencing any of
the unvested Shares shall be deposited with the Secretary of the Company. The
Shares may also be held in a restricted book entry account in the name of
Employee. Such certificates or such book entry shares are to be held by the
Company until termination of the Restriction Period, when they shall be released
by the Company to Employee, provided that, if the number of the Shares
ultimately vested in Employee as of the Vesting Determination Date is different
than the Grant Amount, then the certificate originally issued shall be cancelled
and a new certificate representing the number of the Shares that have vested in
Employee shall be delivered to Employee and all of the unvested Shares
outstanding immediately after the Vesting Determination Date shall be forfeited
by Employee, ownership of all such unvested Shares shall transfer back to the
Company and Employee shall have no further rights with respect to any of such
unvested Shares.

10. Employee Shareholder Rights. During the Restriction Period, Employee shall
have all the rights of a shareholder with respect to unvested Shares except for
the right to transfer the Shares (as set forth in Section 7) and the right to
receive dividends (subject to Section 11) with respect to the Performance
Shares. Accordingly, Employee shall have the right (i) to vote all Shares other
than the Earned Dividend Shares and (ii) to receive dividends on all Time
Vesting Shares.

11. Dividends on Performance Shares. If the Company shall declare a cash
dividend on shares of Common Stock at any time during the Performance Period,
then the Performance Shares shall not receive such dividend, however, the number
of Shares subject to this Agreement shall be increased by and the Company shall
issue to Employee (subject to Section 9) immediately after such dividend a
number of shares of Common Stock equal to (x) the amount of cash dividends
Employee would have received with respect to Performance Shares if

 

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such dividend would have been paid with respect to the Performance Shares
divided by (y) the closing price of a share of Common Stock on the payment date
for such dividend. Of the shares of Common Stock which shall be made subject to
this Agreement which are issuable in lieu of any cash dividend on the
Performance Shares pursuant to the foregoing sentence (the “Earned Dividend
Shares”), (a) such Earned Dividend Shares shall vest on the same date as the
Performance Shares in an amount equal to the Aggregate Vesting Contribution
multiplied by the Earned Dividend Shares, (b) no dividends shall be payable on
such Earned Dividend Shares nor shall the provisions of this Section 11 relating
to increasing the number of shares based upon dividend payments on the
Performance Shares apply to such Earned Dividend Shares and (c) Employee shall
have no right to vote such shares.

12. Changes in Capitalization. In the event that as a result of (a) any stock
dividend, stock split or other change in the outstanding shares of Common Stock,
or (b) any merger or sale of all or substantially all of the assets or other
acquisition of the Company, and by virtue of any such change Employee shall in
his/her capacity as owner of unvested Shares (the “Prior Stock”) be entitled to
new or additional or different shares or securities, such new or additional or,
different shares or securities shall thereupon be considered to be unvested
Stock and shall be subject to all of the conditions and restrictions which were
applicable to the Prior Stock pursuant to this Agreement.

13. Taxes. Employee shall be liable for any and all taxes, including withholding
taxes, arising out of the grant, issuance or vesting of Shares or any grant or
issuance of Reserve Performance Shares or Earned Dividend Shares hereunder.
Employee may elect to satisfy such withholding tax obligation by having the
Company retain Shares, Reserve Performance Shares, or Earned Dividend Shares if
applicable, having a fair market value equal to the Company’s minimum
withholding obligation. To the minimum extent reasonably determined by the
Company to be necessary, the Company shall defer delivery of vested Shares to
avoid any adverse tax consequences to the Employee under Section 409A of the
Internal Revenue Code of 1986, as amended. As of the date this Agreement has
been executed, it is not expected the preceding sentence would apply except
potentially to Earned Dividend Shares to vest pursuant to part (a) of the last
sentence of Section 11.

14. Fractional Shares. The Company shall not be required to deliver any
fractional Shares that may vest or become issuable pursuant to this Agreement or
record or issue any fractional Share that may be issuable pursuant to Section 11
or 12. In lieu of any delivery, recordation or issuance of any such fractional
Share, the Company shall, at such time as such fractional Share would otherwise
be deliverable, subject to recording or issuable, pay to Employee an amount in
cash (rounded to the nearest whole cent) equal to product of (x) the Stock Price
at such time multiplied by (y) the fraction of a Share to which Employee would
otherwise be entitled.

15. Miscellaneous.

15.1. Transfers in Violation of Restrictions. The Company shall not be required
(i) to transfer on its books any Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (ii) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares shall have been
so transferred.

 

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15.2. Further Assurances. The parties agree to execute such further instruments
and to take such action as may reasonably be necessary to carry out the intent
of this Agreement.

15.3. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon delivery to Employee at such
Employee’s address then on file with the Company.

15.4. No Employment Guarantee. Neither the Plan nor this Agreement nor any
provisions under either shall be construed so as to grant Employee any right to
remain in the employ of the Company and neither alters Employee’s at-will
status.

15.5. Arbitration. This Agreement shall be governed by the arbitration
provisions of the Employment Agreement, including the provision relating to
recovery of reasonable attorneys’ fees, costs, and expenses.

[Remainder of Page Intentionally Left Blank]

 

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15.6. Entire Agreement. This Agreement, including the Plan, and the Employment
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

BRE PROPERTIES, INC.      EMPLOYEE   

 

    

 

  

 

      

 

     

 

            

 

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EXHIBIT A

GOALS AND PERFORMANCE METRICS

 

Goal

 

Metric

Description

 

Weighting Factor

 

Threshold

 

Target

 

Maximum

Relative

TSR/RMS

  45%   75%   100%   120%

Relative

TSR/ Peer Group

  40%   65%   105%   Highest of Peers