EX-10.11 6 exh10-11.htm EXHIBIT 10.11

EXHIBIT 10.11

AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"),
originally made and entered into as of the 5th day of January, 1994 (the
"Original Effective Date"), and thereafter amended from time to time, by and
between Alexandria Real Estate Equities, Inc., a Maryland corporation
("Corporation") and Joel S. Marcus, an individual ("Officer"), is hereby amended
and restated in its entirety effective as of January 1, 2005 (the "Effective
Date") to read as follows:

RECITAL

WHEREAS, Corporation desires to continue to employ Officer as its Vice Chairman
and Chief Executive Officer, and Officer is willing to continue to accept such
employment by Corporation, on the terms and subject to the conditions set forth
in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree to amend and restate this
Agreement as follows:

Position and Duties; Location.

During the Term (as defined below), Officer agrees to be employed by and to
serve Corporation as its Vice Chairman and Chief Executive Officer. In addition,
Officer agrees to serve in such capacities for Corporation's subsidiaries, and
in such additional capacities consistent with Officer's current position as a
senior executive officer, as may be determined by the Board of Directors of
Corporation (the "Board"). Corporation agrees to employ and retain Officer in
such capacities. Officer shall devote such of his business time, energy, and
skill to the affairs of Corporation and its subsidiaries as shall be necessary
to perform the duties of such positions. Notwithstanding the foregoing, subject
to any written policies of Corporation, nothing in this Agreement shall preclude
Officer 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 family and other 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 hereafter on any such for-profit
board of directors, Officer 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 Officer shall submit to the Board
(or the appropriate committee thereof) a list of any for-profit boards of
directors on which Officer is serving as of the Effective Date. Officer shall
only report to and be responsible directly to the Chairman of the Board and to
the Board and at all times during the Term shall have powers and duties at least
commensurate with his positions, including, without limitation, the right to
hire or terminate any subordinate officers and any employees without the
approval or consent of the Board or any other officer of Corporation; provided,
however, that Officer shall consult with the Board before exercising his right
to hire or terminate the Chief Financial Officer, Chief Operating Officer, and
President of Corporation; and provided further that Officer and Corporation
acknowledge that nothing in this Agreement modifies the authority of the
Compensation Committee of the Board to establish the aggregate compensation
levels of senior officers, above the level of vice president, of Corporation.
Officer shall be based at the principal executive offices of Corporation in the
Los Angeles, California metropolitan area, except for reasonable required travel
on Corporation's business.

Term of Employment.

The Term of this Agreement (the "Term") shall be for a period commencing on
January 1, 2005 and ending on December 31, 2009 (together with any later date
resulting from an extension as contemplated below, the "Termination Date"),
unless terminated earlier pursuant to this Agreement (the "Early Termination
Date," and, as the context so requires, a "Termination Date"). Commencing on
December 31, 2009, and on each subsequent anniversary thereof, the Term shall be
automatically extended for one additional year unless, no later than six 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.

Compensation, Benefits and Reimbursement.

3.1  Base Salary

. During the Term, Officer shall be entitled to the following base salary:

Minimum Base Salary.

During the Term and subject to the terms and conditions set forth herein,
Corporation agrees to pay to Officer an annual "Base Salary" of $675,000, or
such higher amount as may from time to time be determined by Corporation. Unless
otherwise agreed in writing by Officer and Corporation, the salary shall be
payable in substantially equal semi-monthly installments in accordance with the
standard policies of Corporation in existence from time to time.

Earned Base Salary

. For purposes of any early termination of this Agreement as provided in
Paragraph 4 below, the term "Earned Base Salary" shall mean all semi-monthly
installments of the Base Salary which have become due and payable to Officer,
together with any partial monthly installment prorated on a daily basis up to
and including the applicable Termination Date.

3.2  Increases in Base Salary

.  Officer'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 Officer 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, Los Angeles, 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 Corporation hereunder and, once established at an increased
specified rate, Officer's Base Salary shall not be reduced unless Officer
otherwise agrees in writing.

3.3  Bonus

.  During the Term, Officer is eligible for the following cash bonus (each, a
"Bonus"):

Bonus

.  Officer shall be eligible to receive a Bonus for each fiscal year of
Corporation (or portion thereof) during the Term, with the Bonus to consist of
(i) a retention bonus equal to 50% of Base Salary (the "Retention Bonus"), which
shall be deemed 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; 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 Officer's performance
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 to which such Bonus relates.
Officer shall also receive a cash signing bonus, which shall be earned and paid
on a monthly basis in the form of twelve (12) monthly payments of $100,000 each,
beginning with a $100,000 payment on April 1, 2006, and ending with the twelfth
payment on March 1, 2007.

Determination of Bonus

.  The Performance Bonus Criteria shall be developed in the reasonable
discretion of the Board (or a committee of the Board) after consultation with
Officer.

3.4  Additional Benefit

s.  During the Term, Officer shall be entitled to the following additional
benefits:

Officer Benefits

.  Officer shall be eligible to participate in such of Corporation's benefit and
deferred compensation plans as are made available to executive officers of
Corporation, including, without limitation, Corporation's stock incentive and
other equity- based compensation 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 Corporation, Officer's employment with Corporation shall be
deemed to have commenced on the Original Effective Date of this Agreement.

Vacation

.  Officer shall be entitled to accrue a minimum of six weeks of paid vacation
during each 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 Officer may not accrue more than 12
weeks of unused vacation at any time. Unused vacation in excess of Officer's
allowable accrued vacation under the foregoing proviso shall be promptly paid to
Officer at the end of each year in a cash amount equal to (i) the number of
weeks of excess vacation time, multiplied by (ii) weekly Base Salary.

Life Insurance

.  During the Term, Corporation shall, at its sole cost and expense, procure and
keep in effect term life insurance (a minimum five year term certain policy) on
the life of Officer, payable to such beneficiaries as Officer may from time to
time designate, in the aggregate amount of $5,000,000. Such policy shall be
owned by Officer or by a member of his immediate family. Corporation shall have
no incidents of ownership therein.

Disability Insurance.

  During the Term, Corporation shall, at its sole cost and expense, procure and
keep in effect long-term disability and accidental death and disability
insurance and short-term disability coverage (the "Disability Policy") similar
to Officer's current disability insurance policy on Officer, payable to Officer
in an annual amount not less than 60% of Officer's then existing Base Salary,
Retention Bonus, Performance Bonus, and other cash compensation subject to such
limitations as may be applicable under California law and under standard
insurance underwriters requirements. The premiums for the foregoing coverage
shall be included in Officer's gross income.

Reimbursement for Expenses.

  During the Term, Corporation shall reimburse Officer for all reasonable
out-of-pocket business and/or entertainment expenses incurred by Officer for the
purpose of and in connection with the performance of his services pursuant to
this Agreement. Officer shall be entitled to such reimbursement upon the
presentation by Officer to Corporation of vouchers or other statements itemizing
such expenses in reasonable detail consistent with Corporation's policies. In
addition, Officer shall be entitled to reimbursement for (i) dues and membership
fees in professional organizations and/or industry associations in which Officer
is currently a member or becomes a member; (ii) appropriate industry seminars
and mandatory continuing education and (iii) membership in a health club or
other health-related activity of Officer's choosing up to a maximum annual fee
of $5,000. Corporation shall pay Officer for all reasonable attorney's fees,
disbursements and costs incurred by Officer in connection with the negotiation,
preparation and execution of this Agreement, within 15 days following
presentation of invoices which have been paid.

Withholding

.  Compensation and benefits paid to Officer under this Agreement shall be
subject to applicable federal, state and local wage deductions and other
deductions required by law.

Certain Restricted Stock; Certain Other Equity- Related Provisions

.  Effective as of the date that this Agreement is executed by Corporation and
Officer, Officer shall be granted 30,000 shares of restricted stock of
Corporation as a stock signing bonus in recognition of, among other things, his
superior performance during his previous period of employment. These 30,000
shares of restricted stock shall be granted effective January 1, 2006 and vest
1/24th each month over the 24-month period from January 1, 2006 through December
31, 2007. In addition, without limiting the generality of Paragraph 3.4(a)
above, Officer shall be eligible during the Term to participate in any stock
incentive or other equity-based compensation plans of Corporation on a basis
that is no less favorable than that applicable to other senior executives of
Corporation. With respect to restricted stock and other equity or equity-based
compensation awards (excluding awards of stock options and stock appreciation
rights), Corporation shall pay Officer an additional cash amount as a tax
gross-up upon each vesting or other taxation date with respect to such awards
equal to 40% of the value of the shares, other property or cash included in
Officer's taxable income on such date (but not more than $1 million in any
calendar year; provided that any unused potential gross- up under such $1
million cap shall be carried over and available so as to increase the cap for
the next and all subsequent years for which there could be a required gross-up
payment, until such carried-over amount is used up); regardless of whether the
applicable award was, is or will be made before, concurrently with or after the
date hereof. Officer will receive the full cash dividends attributable to all
nonforfeited shares of restricted stock (or units), regardless of whether such
shares (or units) have become vested on or before the record date for such
dividends on the shares (or, as applicable, the underlying shares). Upon a
Change in Control (as defined below), (i) any and all equity or equity-based
compensation shall vest; and (ii) any and all options shall be exercisable for
their full terms without regard to the termination of Officer's employment.

Termination of this Agreement.

4.1  Termination by Corporation Defined

.

Termination Without Cause

. Subject to the provisions set forth in

Paragraph 4.3 below, "Termination Without Cause" shall constitute any
termination of Officer's employment by Corporation other than termination for
Cause (as defined below).

Termination for Cause

. Subject to the provisions set forth in

Paragraph 4.3 below, prior to the Termination Date, Corporation shall have the
right to terminate this Agreement for Cause 30 days after written notice has
been delivered to Officer, which notice shall specify the specific facts
relating to and reason for, and the effective date of, such termination (which
date shall be the applicable Early Termination Date). For purposes of this
Agreement, "Cause" shall mean the following:

Officer's use of alcohol or narcotics which proximately results in the willful
material breach or habitual willful neglect of Officer's duties under this
Agreement;

Officer's criminal conviction of fraud, embezzlement, misappropriation of
assets, or any felony, but in no event traffic or similar violations; or

Officer's willful Material Breach (as defined below) of this Agreement, if such
willful Material Breach is not cured by Officer within 30 days after
Corporation's written notice thereof specifying the nature of such willful
Material Breach. For purposes of this Paragraph 4.1(b), the term willful
"Material Breach" (A) shall mean the substantial and continual willful
nonperformance of Officer's material duties under this Agreement resulting from
Officer's gross negligence or willful misconduct which the Board reasonably
determines has resulted in material injury to Corporation and (B)
notwithstanding anything in this Paragraph 4.1(b) to the contrary, the term
willful "Material Breach" shall include Officer's willful material violation of
any specific and proper resolution passed by the Board (or a committee thereof)
consistent with this Agreement.

Notwithstanding the foregoing, Cause shall in no event be deemed to exist except
(i) as to any event or condition allegedly constituting Cause, as to which
notice is given not more than 30 days following the date that such event or
condition first becomes known to the Board, and (ii) upon a finding reflected in
a resolution of the Board approved by at least two-thirds of the members of the
Board, excluding Officer (whose finding shall not be binding upon or entitled to
any deference by any court, arbitrator or other decision-maker ruling on this
Agreement), at a meeting of which Officer shall have been given proper notice
and at which Officer (and Officer's counsel) shall have a reasonable opportunity
to present Officer's case.

For purposes of this Paragraph 4.1(b), no act or omission or other conduct shall
be considered "willful" if Officer believed in good faith that such act or
omission or conduct was in or not opposed to the best interests of Corporation.

Termination by Reason of Death or Disability

. Subject to the provisions set forth in Paragraph 4.3 below, prior to the
Termination Date, Corporation shall have the right to terminate this Agreement
by reason of Officer's death or Permanent Disability. For purposes of this
benefit, "Permanent Disability" shall mean any physical or mental disability
which causes Officer to be unable to perform all of Officer's material duties as
an employee of Corporation for 180 consecutive business days. Notwithstanding
the foregoing, if Corporation asserts that Officer has a Permanent Disability;
(i)  Corporation shall give Officer at least 15 business days' advance written
notice thereof; (ii) Officer shall have the right within 10 business days after
such notice to dispute Corporation's assertion; (iii) within 10 business days
after exercising such right Officer shall submit to a physical examination by a
physician affiliated with any major metropolitan hospital and selected by
Officer; provided, however, that, prior to such physical examination, Officer
shall obtain the approval of the Board (or if applicable, its designated
committee) with respect to the selection of such physician, which approval shall
not be unreasonably withheld; and (iv) if such physician shall issue his written
statement to the effect that in his opinion, based on his diagnosis, Officer is
capable of resuming his employment and devoting his full time and energy to
discharging his duties within 10 business days after the date of such statement,
Corporation shall not have the right to terminate Officer under this
Paragraph 4.1(c) without further dispute.

4.2  Termination by Officer Defined

.

Termination Other than for Good Reason

. Subject to the provisions set forth in Paragraph 4.3 below, Officer shall have
the right to terminate this Agreement for any reason other than for Good Reason
(as defined below), at any time prior to the Termination Date, upon written
notice delivered to Corporation 30 days prior to the effective date of
termination specified in such notice (which date shall be the applicable Early
Termination Date).

Termination for Good Reason.

  Subject to the provisions of Paragraph 4.3 below, Officer shall have the right
to terminate this Agreement prior to the Termination Date in the event of Good
Reason. For the purposes of this Agreement, "Good Reason" shall mean, without
Officer's express written consent, the occurrence of any of the following
circumstances, and in the case of clauses (i), (iii), (v), (vi), (vii), (viii)
and (ix) of this Paragraph 4.2(b), failure of Corporation to cure such
circumstances within 30 days after written notice thereof specifying the nature
of such circumstances has been delivered to Corporation (it being agreed that,
if Corporation effects a cure of an event or condition under any particular one
of such clauses, it shall not again be permitted during the Term to cure an
event or condition under that same clause); provided that Officer shall be
required to provide such written notice to Corporation within 30 days following
the date that such circumstance first becomes known to Officer:

the assignment to Officer of any duties inconsistent with Officer's positions as
set forth in Paragraph l, or an adverse alteration in the nature or status of
Officer's responsibilities;

upon or after a Change in Control (as defined below), a substantial change in
the nature of the business operations of Corporation;

a reduction by Corporation in Officer's Base Salary or Retention Bonus as in
effect on the date hereof or as the same may be increased from time to time;

the relocation of Corporation's principal executive offices to a location
outside the Los Angeles and Pasadena, California metropolitan areas, or
Corporation's requiring Officer to be based anywhere other than Corporation's
principal executive offices except for required travel on Corporation's business
to an extent substantially consistent with Officer's business travel obligations
immediately to the date hereof;

the failure by Corporation to pay Officer any portion of his current
compensation, or to pay Officer any portion of an installment of deferred
compensation under any deferred compensation program of Corporation, within
seven days of the date such compensation is due;

upon or after a Change in Control, the failure by Corporation to continue in
effect any compensation plan in which Officer participates immediately prior to
the Change in Control which is material to Officer's total compensation, unless
an equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by Corporation to
continue Officer's participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of participation relative to other participants,
as existed prior to the Change in Control;

upon or after a Change in Control, the failure by Corporation to continue to
provide Officer with benefits substantially similar to those under any of
Corporation's directors and officers liability insurance, life insurance,
medical, health and accident, or disability plans in which Officer was
participating at the time of a Change in Control, the taking of any action by
Corporation which would directly or indirectly materially reduce any of such
benefits or deprive Officer of any material fringe benefit enjoyed by him at the
time of a Change in Control, or the failure by Corporation to provide Officer
with the number of paid vacation days to which he is entitled on the basis of
years of service with Corporation in accordance with Corporation's normal
vacation policy in effect at the time of the Change in Control;

the failure of Corporation to obtain a satisfactory agreement from any successor
to assume and agree to perform this Agreement; or

a material breach of this Agreement by Corporation.

Officer's right to terminate Officer's employment for Good Reason shall not be
affected by Officer's incapacity due to physical or mental illness. In addition,
notwithstanding any other provision of this Agreement, (i) any termination of
employment by Corporation (other than a termination by Corporation for Cause),
or failure to renew this Agreement, during the six-month period following a
Change in Control (the "Six-Month Period") shall be treated as a termination by
Officer for Good Reason, and (ii) any termination of employment (other than a
termination by Corporation for Cause), regardless of the reason therefor or the
party initiating the termination, shall be treated as a termination by Officer
for Good Reason if it occurs within the 30-day period following the Six-Month
Period.

4.3  Effect of Termination

. In the event that this Agreement is terminated by Corporation or Officer prior
to the Termination Date in accordance with the provisions of this Paragraph 4,
the obligations and covenants of the parties under this Paragraph 4 shall be of
no further force and effect, except for the obligations of the parties set forth
below in this Paragraph 4.3, and such other provisions of this Agreement which
shall survive termination of this Agreement as provided in Paragraph 6.11 below.
Except as otherwise specifically set forth in this Agreement, all amounts due
upon termination shall be payable on the date such amounts would otherwise have
been paid had the Agreement continued through its Term; provided, however, that
Deferred Amounts (as defined below) shall be payable within 30 days following
the Early Termination Date. In the event of any such early termination in
accordance with the provisions of this Paragraph 4.3, Officer shall be entitled
to the following:

Termination by Corporation.

Termination Without Cause.  In the event that Corporation terminates this
Agreement without Cause pursuant to Paragraph 4.1(a) above, Officer shall be
entitled to: (i) Earned Base Salary; (ii) any earned Bonus, for the fiscal year
of Corporation immediately prior to the fiscal year in which Officer is
terminated, that Officer is entitled to receive, pursuant to Paragraph 3.3 of
this Agreement, but which has not been paid to Officer as of the Early
Termination Date, in the amount in which such bonus either has been determined
or approved by the Board (or a committee of the Board) or is readily
ascertainable (in all cases without regard to any ability of the Board (or
committee) to exercise any negative discretion regarding payment), at the same
time that other executive bonuses are determined, by reference to Performance
Bonus Criteria previously established by the Board (or a committee of the Board)
(an "Earned Bonus"); (iii) vested benefits pursuant to written employee benefit
plans ("Earned Benefits") and reimbursable expenses; (iv) any compensation
earned but deferred ("Deferred Amounts"); (v) a pro rata Bonus for the portion
of the fiscal year in which Officer's termination occurs, equal to the sum of
(a) a pro rata portion of the Retention Bonus for the applicable year and (b) a
pro rata portion of the Performance Bonus for the applicable year, which shall
be determined by an independent certified public accountant mutually acceptable
to Officer and Corporation, based on Corporation's or Officer's, as applicable,
level of achievement of the Performance Bonus Criteria during the financial
quarters in the year of Officer's termination that were completed prior to such
termination, provided that if such termination occurs prior to the end of the
first financial quarter of the applicable year, the Performance Bonus shall be
determined based on Corporation's or Officer's, as applicable, level of
achievement of the Performance Bonus Criteria for the immediately preceding
year, and provided, further, that in any event, for purposes of this clause (b),
the Performance Bonus that is to be prorated for the applicable year shall not
be less than the Performance Bonus for the immediately preceding year (a "Pro
Rata Bonus"); (vi) the Severance Payment (as defined below); (vii) continued
participation throughout the three-year period following Officer's termination
of employment in all employee welfare and pension benefit plans, programs or
arrangements to the extent permitted by those plans (but at such costs no higher
than as in effect immediately preceding such termination, provided that
Corporation shall in no event be required to provide any benefits otherwise
required by this clause (vii) after such time as Officer becomes entitled to
receive benefits of the same type from another employer or recipient of
Officer's services; (viii) payment of full salary in lieu of all accrued
vacation; (ix) for a period of up to 180 days following Officer's termination of
employment, outplacement services (which shall be reasonable for an officer of
Officer's status at a company such as Corporation) through a bona fide
outplacement organization acceptable to Officer that, at a minimum, agrees to
supply Officer with outplacement counseling, a private office and administrative
support, including telephone service ("Applicable Outplacement Services"); (x)
full and immediate vesting of any and all outstanding and unvested equity or
equity-based compensation awards (including without limitation restricted stock
and stock options) granted to Officer under Corporation's stock option or
incentive compensation plans and exercisability of any and all outstanding
options for their full terms without regard to the termination (for the
avoidance of doubt, such awards for purposes of this Agreement include, without
limitation, the grants of restricted stock and options listed on Schedule A
hereto); and (xi) any payments which would have been payable under the last
sentence of Section 3.3(a) (Bonus) herein if Officer's employment had not
terminated. In the event Officer's participation in any such plan, program or
arrangement described in this Paragraph 4.3(a)(i) is barred, Corporation shall
arrange to provide Officer with substantially similar benefits (on a post-tax
basis).

Termination for Cause.  In the event that Corporation terminates this Agreement
for Cause pursuant to Paragraph 4.1(b) above, Officer shall be entitled to
(i) Earned Base Salary; (ii) any Earned Bonus; (iii) Earned Benefits and
reimbursable expenses; and (iv) any Deferred Amounts. Officer shall not be
entitled to any Pro Rata Bonus, future annual Bonus or Severance Payment.

Termination Due to Death or Permanent Disability.  In the event that Officer's
employment is terminated by reason of death or Permanent Disability, he shall be
entitled to all compensation and benefits described in Paragraph 4.3(a)(i)
above, except subparagraph (ix) therein.

Termination Due to Non-Renewal.  In the event that Corporation does not renew
this Agreement as contemplated by Paragraph 2 above, and either party terminates
Officer's employment upon the scheduled expiration of the Term (and, for the
avoidance of doubt, the termination is not treated as a termination for Good
Reason under the last sentence of Paragraph 4.2(b) above), Officer shall be
entitled to all of the compensation and benefits to which he would be entitled
under Paragraph 4.3(a)(i) above in the event of a termination by Corporation
without Cause, except that the definition of "Severance Payment" in Paragraph
4.4(a) below shall be applied by substituting "two times" for "three times," as
the latter appears therein.

Termination by Officer.

Termination Other than for Good Reason.  In the event that Officer terminates
this Agreement other than for Good Reason, Officer shall be entitled to
(i) Earned Base Salary; (ii) any Earned Bonus; (iii) Earned Benefits and
reimbursable expenses; and (iv) any Deferred Amounts. Officer shall not be
entitled to any Pro Rata Bonus, future annual Bonus or Severance Payment.

Termination for Good Reason.  In the event that Officer terminates this
Agreement for Good Reason, Officer shall be entitled to all of the compensation
and benefits to which he would be entitled under Paragraph 4.3(a)(i) above in
the event of a termination by Corporation without Cause; provided, however, that
in the event that Officer terminates this Agreement for Good Reason pursuant to
Paragraph 4.2(b)(iii), Earned Base Salary shall mean all semi-monthly
installments of Base Salary as in effect on the date of termination or the date
immediately prior to any reduction under Paragraph 4.2(b)(iii), whichever is
greater, which have become due and payable to Officer, together with any partial
monthly installment prorated on a daily basis up to and including the applicable
Termination Date.

4.4  Severance Payment; Post-Employment Consulting

Definition of "Severance Payment

."  For purposes of this Agreement, the term "Severance Payment" shall mean an
amount equal to three times Officer's Aggregate Compensation. For the purposes
of this Agreement, "Aggregate Compensation" shall mean the sum of (i) Officer's
Base Salary as in effect on the date of termination and (ii) the sum of (a) the
Retention Bonus for the applicable year and (b) the Performance Bonus for the
applicable year, as determined pursuant to Paragraph 4.3(a)(i)(v)(b) above;
provided, however, that in the event that Officer terminates this Agreement for
Good Reason pursuant to Paragraph 4.2(b)(iii), Aggregate Compensation shall mean
the sum of (i) Officer's Base Salary, as in effect on the date of termination or
the date immediately prior to any reduction described in Paragraph 4.2(b)(iii),
whichever is greater, and (ii) the sum of (a) the Retention Bonus for the
applicable year or as in effect on the date immediately prior to any reduction
described in Paragraph 4.2(b)(iii), whichever is greater, and (b) the
Performance Bonus for the applicable year, as determined pursuant to Paragraph
4.3(a)(i)(v)(b) above. In the event that Officer is entitled to a Severance
Payment, except by virtue of death or Permanent Disability, Officer shall
provide post-employment consulting services pursuant to Paragraph 4.4(c) below).

Payment of Severance Payment.

  In the event that Officer is entitled to any Severance Payment pursuant to
Paragraph 4.3 above, such Severance Payment shall be payable in a lump sum
within 10 days following Officer's termination. Officer and Corporation agree
that one-half of such Severance Payment shall constitute consideration for
Officer's compliance with the post-employment consulting provisions of Paragraph
4.4(c) below and the noncompetition obligation of Paragraph 5.

Post-Employment Consulting.

Consulting Period.  In the event that Officer is entitled to a Severance
Payment, except by virtue of death or Permanent Disability, Officer shall
continue to provide services to Corporation as a consultant for the period (the
"Consulting Period") from the termination of Officer's employment through the
earlier of: the 12-month period following Officer's termination of employment,
or the date of the termination of Officer's service as a consultant by
Corporation due to Officer's material breach of this Agreement.

Consulting Duties.  Officer shall be available to provide consulting services
during the Consulting Period (or shorter period, if applicable) in Officer's
areas of expertise, as requested by the Chief Executive Officer of Corporation
or the Board (or a committee of the Board). Officer shall make himself available
to provide such services for up to 20 hours per month for the first three months
of the Consulting Period, and five hours per month for the remainder of the
Consulting Period; provided that the Executive shall not be required to provide
services that would conflict with or otherwise interfere in any way with his
duties or responsibilities (including without limitation as to the time, place
and manner of services) for any subsequent employer or other recipient of his
services. Corporation shall require such services at reasonable times and places
mutually agreed upon by Company and Officer. By way of example, it shall not be
a breach of this Agreement if Officer has made himself available to render such
services and Corporation does not require Officer to render all such services.

Independent Contractor Status.  During the Consulting Period (or shorter period,
if applicable), Officer acknowledges and agrees that he (i) shall be an
independent contractor of Corporation and not an employee, and (ii) shall not be
entitled to any of the benefits that Corporation may make available solely to
its employees, except as otherwise specifically set forth in this Agreement or
to the extent that Officer elects continued health care coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") or analogous
provisions of state law. Consultant shall execute Corporation's standard form of
independent contractor consulting agreement, which shall among other things,
require Consultant to refrain from unauthorized use and disclosure of the
Company's confidential and proprietary information (but which shall in no event
be more restrictive than this Agreement as to such matters).

Expense Reimbursement.  Corporation shall reimburse Officer for all reasonable
out-of-pocket business expenses incurred by Officer for the purpose of and in
connection with the performance of his consulting services pursuant to this
Agreement. Officer shall be entitled to such reimbursement upon the presentation
by Officer to Corporation of vouchers or other statements itemizing such
expenses in reasonable detail consistent with Corporation's policies.

Full Settlement of All Obligations.

  Officer hereby acknowledges and agrees that any Severance Payment paid to
Officer hereunder shall be deemed to be in full and complete settlement of all
obligations of Corporation under this Agreement.

Change in Control

.  For purposes of this Agreement, a "Change in Control" shall be deemed to have
occurred if:

Any Person, as such term is used in section 3(a)(9) of the Securities Exchange
Act of 1934 as amended from time to time (the "Exchange Act"), as modified and
used in sections 13(d) and 14(d) thereof, except that such term shall not
include (A) Corporation or any of its subsidiaries, (B) a trustee or other
fiduciary holding securities under an employee benefit plan of Corporation or
any of its affiliates, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities, (D) a corporation owned, directly or
indirectly, by the stockholders of Corporation in substantially the same
proportions as their ownership of stock of Corporation, or (E) a person or group
as used in Rule 13d-1(b) under the Exchange Act, that is or becomes the
Beneficial Owner, as such term is defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of securities of Corporation (not including in the
securities beneficially owned by such Person any securities acquired directly
from Corporation or its affiliates other than in connection with the acquisition
by Corporation or its affiliates of a business) representing 25% or more of the
combined voting power of Corporation's then outstanding securities; or

The following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the date hereof,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of Corporation) whose appointment or election by the Board
or nomination for election by Corporation's stockholders was approved or
recommended by a vote of at least two-thirds of the directors then still in
office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or

There is consummated a merger or consolidation of Corporation with any other
corporation, other than (A) a merger or consolidation which would result in the
voting securities of Corporation outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of Corporation or any
subsidiary of Corporation, at least 75% of the combined voting power of the
securities of Corporation or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of Corporation (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Corporation (not including in the
securities beneficially owned by such Person any securities acquired directly
from Corporation or its affiliates other than in connection with the acquisition
by Corporation or its affiliates of a business) representing 25% or more of the
combined voting power of Corporation's then outstanding securities; or

The stockholders of Corporation approve a plan of complete liquidation or
dissolution of Corporation or there is consummated an agreement for the sale or
disposition by Corporation of all or substantially all of Corporation's assets,
other than a sale or disposition by Corporation of all or substantially all of
Corporation's assets to an entity, at least 75% of the combined voting power of
the voting securities of which are owned by stockholders of Corporation in
substantially the same proportions as their ownership of Corporation immediately
prior to such sale.

4.5  Gross-Up.

  If any of the Total Payments (as hereinafter defined) will be subject to the
tax (the "Excise Tax") imposed by Section 4999 of the Code, Corporation shall
pay to Officer, no later than the 10th day following the Early Termination Date,
an additional amount (the "Gross-Up Payment") such that the net amount retained
by him, after deduction of any Excise Tax on the Total Payments and any federal
and state and local income tax upon the payment provided for by this Paragraph,
shall be equal to the excess of the Total Payments over the payment provided for
by this Paragraph. For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) all
payments or benefits received or to be received by Officer in connection with a
Change in Control or the termination of Officer's employment (whether payable
pursuant to the terms of this Agreement or of any other plan, arrangement or
agreement with Corporation, its successors, any person whose actions result in a
Change in Control or any person affiliated (or which, as a result of the
completion of the transactions causing a Change in Control, will become
affiliated) with Corporation or such person within the meaning of Section 1504
of the Code (the "Total Payments")) shall be treated as "parachute payments"
(within the meaning of Section 280G(b)(2) of the Code) unless, in the opinion of
tax counsel selected by Corporation's independent auditors and reasonably
acceptable to Officer, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of Section 280G(b)(4)(A) of
the Code, and all "excess parachute payments" (within the meaning of Section
280G(b)(1) of the Code) shall be treated as subject to the Excise Tax, unless in
the opinion of such tax counsel such excess parachute payments represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4)(B) of the Code, or are not otherwise subject to the Excise
Tax, and (ii) the value of any noncash benefits or any deferred payment or
benefit shall be determined by Corporation's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Officer shall be deemed to pay
federal income and other taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the residence of Officer on the Early Termination Date,
net of the maximum reduction in federal income taxes that could be obtained from
deduction of such state and local taxes.

4.6  No Mitigation or Offset

.  Officer shall not be required to mitigate damages under this Agreement by
seeking other comparable employment or otherwise, and the amount of any payment
or benefit provided for in this Agreement, shall not be reduced by any
compensation earned by or provided to Officer as the result of employment by an
employer other than Corporation.

Noncompetition.

During the Term and ending 12 months following the date that Officer ceases to
be an employee of Corporation, Officer shall not engage in any activity directly
and materially competitive, with a material adverse impact on Corporation, with
the business of Corporation. (By way of example and for avoidance of ambiguity,
the noncompetition period in the preceding sentence is intended to run for one
year from termination of employment, regardless of whether Executive is
consulting for all or part of that one year period pursuant to the terms of
Paragraph 4.4 above.) This provision shall not be construed to prohibit Officer
from owning up to 5% of the outstanding voting shares of the equity securities
of any corporation whose common stock is listed for trading on any national
securities exchange or on the NASDAQ system.

Miscellaneous.

6.1  Payment Obligations

.  Corporation's obligation to pay Officer the compensation and to make the
arrangements provided herein shall be unconditional, and Officer shall have no
obligation whatsoever to mitigate damages hereunder. If arbitration after a
Change in Control shall be brought to enforce or interpret any provision
contained herein, Corporation shall, to the extent permitted by applicable law
and Corporation's Articles of Incorporation and By-Laws, indemnify Officer for
Officer's attorneys' fees and disbursements incurred in such arbitration.

6.2  Confidentiality

.  Officer agrees that all confidential and proprietary information relating to
the business of Corporation shall be kept and treated as confidential both
during and after the Term, except as may be permitted in writing by the Board or
as such information is within the public domain or comes within the public
domain without any breach of this Agreement; provided, however, that this
Paragraph 6.2 imposes no obligation upon Officer with respect to information
that (i) was in Officer's possession before receipt from Employer; (ii) is
disclosed to immediate family members, or to tax, financial, or legal advisors
for purposes of obtaining such advice; (iii) is rightfully received by Officer
from a third party who does not have a duty of confidentiality; or (iv) is
disclosed as required by law or legal process.

6.3  Waiver

.  The waiver of the breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach of the same or other
provision hereof.

6.4  Entire Agreement; Modifications

.  Except as otherwise provided herein, this Agreement (together with the
agreements and plans referred to herein) represents the entire understanding
among the parties with respect to the subject matter hereof, and this Agreement
supersedes any and all prior understandings, agreements, plans and negotiations,
whether written or oral, with respect to the subject matter hereof, including
without limitation any understandings, agreements or obligations respecting any
past or future compensation, Bonuses, reimbursements or other payments to
Officer from Corporation. All modifications to the Agreement must be in writing
and signed by the party against whom enforcement of such modification is sought.

6.5  Notices

.  All notices and other communications under this Agreement shall be in writing
and shall be given by facsimile or first class mail, certified or registered
with return receipt requested, and shall be deemed to have been duly given three
days after mailing or
24 hours after transmission of a facsimile (if the receipt of the facsimile is
confirmed) to the respective persons named below:

If to Corporation: Alexandra Real Estate Equities, Inc.

385 East Colorado Boulevard
Suite 299

Pasadena, CA  91101

Phone:  (626) 578 0777

If to Officer: Joel S. Marcus,

at the address shown on the execution page hereof.

With a copy to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attention: Andrew L. Oringer, Esq.

Phone:  (212) 878 8171

Any Party may change such Party's address for notices by notice duly given
pursuant hereto.

6.6  Headings

.  The Paragraph headings herein are intended for reference only and shall not
by themselves determine the construction or interpretation of this Agreement.

6.7  Governing Law

.  Other than with respect to Paragraph 6.13 below, this Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to its principles of conflict of laws.

6.8  Arbitration

.  Any dispute arising out of or relating to this Agreement or its enforcement,
breach, performance, or interpretation, that cannot be settled by good faith
negotiation between the parties shall be submitted to Judicial Arbitration and
Mediation Services, Inc. ("JAMS"), or its successor, for final and binding
arbitration by a single arbitrator in Los Angeles, California, pursuant to JAMS'
then applicable arbitration rules (incorporated herein by reference), which
arbitration shall be the exclusive remedy of the parties hereto. By agreeing to
this arbitration procedure, the parties waive the right to resolve any such
dispute through a trial by jury or judge or by administrative proceeding. The
resulting arbitration shall be deemed equivalent to a final order of a court
having jurisdiction over the subject matter, shall not be appealable, and shall
be enforceable in any court of competent jurisdiction. The arbitrator shall (i)
have the authority to compel adequate discovery for the resolution of the
dispute and to award such relief as would otherwise be permitted by law, and (b)
issue a written arbitration decision including the arbitrator's essential
findings and conclusions and a statement of the award. Corporation shall pay all
of JAMS' administrative fees (including but not limited to arbitrator fees) for
this arbitration. Submission to arbitration shall not preclude the right of any
party hereto involved in a dispute regarding this Agreement (each, a "Disputing
Party" and collectively, the "Disputing Parties") to institute proceedings for
injunctive relief to prevent irreparable harm pending the arbitration of a
matter subject to arbitration pursuant to this Agreement. Subject to the
exceptions contained in Paragraph 6.2, any documentation and information
submitted by any party in the arbitration proceeding shall be kept strictly
confidential by the parties and the arbitrator. In addition to any other relief
or award that may be granted by the arbitrator to Officer in a proceeding
conducted under this paragraph, Officer shall be entitled to receive from
Corporation, at least monthly as expenses are incurred, all reasonable
attorneys' fees, disbursements and costs incurred in connection with any dispute
arising under or relating to this Agreement, including but not limited to the
interpretation, enforcement or reasonableness thereof; provided, however, that,
if the arbitrator or other applicable decision-maker presiding over the
proceeding affirmatively finds on each and every material issue that Officer
failed to prevail, Officer shall pay his own attorneys' fees, disbursements and
costs (other than JAMS' administrative fees) and, if applicable, return any
amounts theretofore paid to Officer or on his behalf under this Paragraph 6.8.

6.9  Severability

.  Should a court or other body of competent jurisdiction determine that any
provision of this Agreement is excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
and enforced along with all other provisions of this Agreement to the extent
possible under applicable law consistent with the intent of the parties.

6.10  Survival of Corporation's Obligations

.  Corporation's obligations hereunder shall not be terminated by reason of any
liquidation, dissolution, bankruptcy, cessation of business, or similar event
relating to Corporation. This Agreement shall not be terminated by any merger or
consolidation or other reorganization of Corporation. In the event any such
merger, consolidation or reorganization shall be accomplished by transfer of
stock or by transfer of assets or otherwise, the provisions of this Agreement
shall be binding upon and inure to the benefit of the surviving or resulting
corporation or person. This Agreement shall be binding upon and inure to the
benefit of the executors, administrators, heirs, successors and assigns of the
parties; provided, however, that except as herein expressly provided, this
Agreement shall not be assignable either by Corporation (except to an affiliate
of Corporation, in which event Corporation shall remain liable if the affiliate
fails to meet any obligations to make payments or provide benefits or otherwise)
or by Officer.

6.11  Survival of Certain Rights and Obligations. 

 The rights and obligations of the parties hereto pursuant to Paragraphs 4.3,
4.4, 4.5, 4.6, 5, 6.1 through 6.11, and 6.13 hereof shall survive the
termination of this Agreement.

6.12  Counterparts

.  This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one and the same Agreement.

6.13  Indemnification and Insurance

.  In addition to any rights to indemnification to which Officer is entitled
under Corporation's Articles of Incorporation and By- Laws, Corporation shall
indemnify Officer at all times during and after the Term to the maximum extent
permitted under Section 2-418 of the General Corporation Law of the State of
Maryland or any successor provision thereof and any other applicable state law,
and shall pay Officer's expenses in defending any civil or criminal action,
suit, or proceeding in advance of the final disposition of such action, suit, or
proceeding, to the maximum extent permitted under such applicable state laws. It
is expressly understood and agreed that Corporation shall continue to indemnify
Officer as provided above and maintain such liability insurance coverage for
Officer, after the Term has ended for any claims that may be made against him
with respect to his service as a director or officer of Corporation. Corporation
shall cover Officer, at Corporation's expense, under director and officer
insurance which provides coverage not less than the amount of coverage on the
date hereof, covering any and all claims arising out of Officer's tenure as an
officer or manager of Corporation, both during and, at all times while potential
liability exists, after the Term on a basis no less favorable in each and every
respect as is applicable to any officer (whether current or former) of
Corporation.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

CORPORATION:

ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation

By: /s/Richard B. Jennings
Name: Richard B. Jennings
Title: Director and Chairman of the Compensation Committee

Date: March 13, 2006

 

OFFICER:

By: /s/Joel S. Marcus
Joel S. Marcus

Date: March 13, 2006