Exhibit 10.1

 

SECOND AMENDED AND RESTATED

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

This SECOND AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”),
made between Alexandria Real Estate Equities, Inc. (the “Company”) and Dean A.
Shigenaga (“Employee”), amends and restates in its entirety the Amended and
Restated  Executive Employment Agreement between the Company and Employee that
was executed by the parties on March 1, 2010 with an effective date of
January 1, 2010 (the “2010 Agreement”).  This Agreement is effective as of
January 1, 2011 (the “Effective Date”).

 

RECITALS

 

WHEREAS, Employee is employed by the Company as its Chief Financial Officer
(“CFO”), having initially been party to an offer letter agreement dated
December 5, 2000 (the “Offer Letter”); and

 

WHEREAS, the Offer Letter was replaced by the Amended and Restated Executive
Employment Agreement between the Company and Employee that was effective as of
January 1, 2007 (the “2007 Agreement”), pursuant to which Employee was employed
as a Senior Vice President and the CFO; and

 

WHEREAS, the 2007 Agreement subsequently was replaced by the 2010 Agreement,
pursuant to which Employee’s employment was continued as a Senior Vice President
and the CFO; and

 

WHEREAS, the Company desires to continue to employ Employee as a Senior Vice
President and the CFO, and Employee is willing to continue such employment by
the Company, on the amended and restated 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.

 

Employee agrees to continue to be employed by and to continue to serve the
Company as a Senior Vice President and the CFO, 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 or
different capacities consistent with Employee’s current position as CFO and a
senior executive of the Company, as may be determined by the Board of Directors
of the Company (the “Board”).  Employee shall devote such of Employee’s 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, and subject to any written policies of the Company, nothing in this
Agreement shall preclude Employee from: (i) engaging

 

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in charitable and community affairs and not-for-profit activities, so long as
they are consistent with Employee’s duties and responsibilities under this
Agreement; (ii) managing Employee’s 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 be provided or withheld within the Board’s sole
discretion; 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 or thereafter.  Employee shall continue to report to the Company’s
Chief Executive Officer.  Employee shall be based in the Los Angeles
metropolitan area, except for required travel on the Company’s business.

 

SECTION 2.          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 2.  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.

 

2.1                            Base Salary.  Subject to the terms and conditions
set forth herein, the Company agrees to pay Employee a base salary at the rate
of three hundred fifteen thousand dollars ($315,000) per year, less standard
payroll deductions and withholdings, payable on the Company’s regular payroll
schedule (the “Base Salary”).  Employee’s Base Salary shall be reviewed no less
frequently than annually by the Board (or such committee as may be appointed by
the Board for such purpose) on or before September 30 each year.  The Base
Salary payable to Employee shall be increased as of each January 1, by action
taken no later than September 30 of such year, and at such additional times as
the Board or a committee of the Board may deem appropriate, 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, 2007 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.

 

2.2                            Annual Bonus.  Employee shall be eligible to
receive a bonus for each calendar year of employment with the Company (each a
“Bonus Year”), in an amount to be 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.  Bonuses are not guaranteed, and the Board may determine that Employee
has not earned a bonus for any Bonus Year.  Any earned bonus shall be payable
within 185 days after the end of the

 

2.

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relevant Bonus Year or as soon thereafter as reasonably practicable, but in no
event after the end of the year following the relevant Bonus Year; provided,
however, that in the event Employee terminates employment with the Company for
any reason other than a termination by the Company for Cause (as defined
herein), after the end of the Bonus Year and prior to the date when such bonuses
are paid by the Company to senior executives, then Employee shall receive the
same cash bonus (not including any restricted stock grant shares) 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 cash bonuses are paid by the Company to
other senior executives.

 

2.3                            Restricted Stock; Options.  Employee shall be
eligible for equity awards from time to time as shall be determined by the
Compensation Committee of the Board (the “Compensation Committee”) in its sole
discretion, and subject to such vesting, exercisability, and other provisions as
the Compensation Committee may determine in its discretion, after reviewing the
performance of both Employee and the Company.  All equity awards shall be
governed in all respects by the terms of the applicable stock option or
restricted stock agreements, grant notice and plan documents, except as
specifically provided in Sections 3.4(b), 3.5 and 3.7(b) hereof. 
Notwithstanding anything in this Agreement to the contrary, upon a Change in
Control (as defined herein), (i) any outstanding equity awards held by Employee
(whether in the form of stock options or shares of restricted stock) shall
become fully vested, and (ii) any outstanding stock options held by Employee
shall become exercisable for their full terms without regard to the termination
of Employee’s employment.

 

2.4                            Vacation.  Employee shall be entitled to accrue
and use paid vacation in accordance with the terms of the Company’s vacation
policy and practices, provided, however, that in no event will Employee’s
vacation accrual rate be lower than three (3) weeks per year.

 

2.5                            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, such service shall be deemed to have
commenced on December 27, 2000, which was Employee’s first date of employment
with the Company.

 

2.6                            Reimbursement For Expenses.  The Company shall
reimburse Employee for all reasonable out-of-pocket business expenses
(including, but not limited to, business entertainment expenses) incurred by
Employee for the purpose of and in connection with the performance of Employee’s
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 industry associations in which Employee is currently a member or becomes a
member; and (ii) appropriate industry seminars and mandatory continuing
education.

 

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The amount of expenses eligible for reimbursement pursuant to this Section 2.6
during a calendar year shall not affect the amount of expenses eligible for
reimbursement in any other calendar year.  Without extending the time of payment
that would apply in the absence of this sentence, the Company shall reimburse
Employee for any expense eligible for reimbursement pursuant to this Section 2.6
in accordance with the Company’s applicable expense reimbursement policies and
procedures and on or before the end of the calendar year following the calendar
year in which the expense was incurred.

 

SECTION 3.          TERMINATION; SEVERANCE.

 

3.1                            Term and Termination.  The term of this Agreement
(“Term”) shall be the period commencing on the Effective Date and ending on the
date that this Agreement is terminated by either party pursuant to the
provisions of this Agreement.  Employee is employed at-will, meaning that,
subject to the terms and conditions set forth herein, either the Company or
Employee may terminate Employee’s employment at any time, with or without Cause.

 

3.2                            Compensation Upon Termination.  Upon the
termination of Employee’s employment for any reason, the Company shall pay
Employee all of Employee’s accrued and unused vacation and unpaid Base Salary
earned through Employee’s last day of employment (the “Separation Date”).  In
addition, Employee will receive reimbursement of business expenses as provided
under Section 2.6, and any bonus owed under Section 2.2 shall be paid in
accordance with the terms of Section 2.2.

 

3.3                            Termination For Cause.  At any time, the Company
shall be entitled to terminate this Agreement for Cause by written notice to
Employee provided in accordance with Section 3.10(b), 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 3.2, and
Employee shall not be entitled to any further compensation from the Company,
including severance benefits.

 

3.4                            Termination Without Cause Or Resignation For Good
Reason Not In Connection With A Change In Control.  The Company shall be
entitled to terminate Employee’s employment without Cause immediately upon
written notice to Employee, and Employee shall be entitled to terminate this
Agreement for Good Reason in accordance with Section 3.10(c).  In either event,
and provided that Employee is not eligible for severance benefits under
Section 3.7 (Termination Without Cause or Resignation For Good Reason In
Connection With A Change In Control), Employee shall receive the following
severance benefits:

 

(a)                              Salary Continuation.  The Company shall pay
Employee severance in an amount equal to one (1) year of Base Salary, less
standard payroll deductions and withholdings, and paid in accordance with
Section 3.9.  The Company’s obligation to provide, or continue to provide, such
severance payments will cease immediately and in full in the event that Employee
materially breaches any of Employee’s continuing obligations to the Company
(including, but not limited to, any continuing obligations under this Agreement
or the Proprietary Information Agreement (as defined herein)).

 

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(b)                              Accelerated Vesting.  To the extent not
previously accelerated pursuant to Section 2.3, 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 of the unvested shares shall be deemed vested as of the Separation Date.

 

(c)                               Bonus.  The Company shall pay Employee a cash
bonus for the year in which the Separation Date occurs in the amount of the cash
bonus that Employee earned for the previous year, if any, or if such amount has
not been determined at the time of termination, for the year prior to the
previous year (provided, however, that if termination is on or after a Change in
Control, and Section 3.7 does not apply, the amount shall in no event be lower
than the highest actual cash bonus amount received by Employee for the two
(2) calendar years preceding the calendar year in which the Change in Control
occurs).  For the avoidance of doubt, the calculation of such cash bonus shall
not include any restricted stock grants, or shares of stock, or the value of
such grants or stock, which may have been provided to Employee at any time.

 

(d)                              Restricted Stock Grants.

 

(i)                                  Prior Year Stock Grant.  The Company shall
grant to Employee, fully vested, a restricted stock grant (the “Prior Year
Grant”) for the Company’s fiscal year prior to the fiscal year in which the
Separation Date occurs (such year to be referred to as the “Prior Year”) in the
amount that is the greater of the following:  (A) any annual performance-based
grants for Employee of restricted stock that may have already then been
determined by the Compensation Committee for the Prior Year but which have not
yet been made to Employee as of the Separation Date; and (B) the average of the
amounts of any such grants that Employee received for the second, third, and
fourth fiscal years prior to the fiscal year in which the Separation Date
occurs.  In the event that, as of the Separation Date, Employee has already
received a restricted stock grant for the Prior Year (the “Actual Prior Year
Grant”), then the Prior Year Grant calculated pursuant to the prior sentence
shall be reduced (but not to below zero) by the number of shares previously
received by the Employee pursuant to such Actual Prior Year Grant, including
shares included in the Actual Prior Year Grant that may become vested as a
result of the Employee’s termination of employment.

 

(ii)                              Separation Year Stock Grant.  The Company
shall grant to Employee, fully vested, a restricted stock grant (the “Separation
Year Grant”) for the Company’s fiscal year in which the Separation Date occurs
(the “Separation Year”) in the amount that is calculated as follows:  (A) the
number of shares of the Prior Year Grant (calculated pursuant to
Section 3.4(d)(i), but without any reduction to account for an Actual Prior Year
Grant); multiplied by (B) a fraction with a numerator equal to the number of
calendar days that Employee was employed by the Company during the Separation
Year, and a denominator equal to 365 (or 366, if the Separation Year is a
calendar leap year).

 

(e)                              Continued Health Benefits.  If Employee timely
elects to continue coverage under the Company’s health insurance plans in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) or any analogous provisions of state law, the Company shall pay the
applicable premiums for such continued

 

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coverage throughout the twelve (12)-month period following the Separation Date;
provided, however, that (i) the Company shall not be required to make any such
payments after such time as Employee becomes entitled to receive similar health
insurance coverage from another employer or recipient of Employee’s services
(and Employee shall promptly notify the Company of any such fact), and (ii) any
applicable premiums that are paid by the Company shall not include any amounts
payable by Employee under an Internal Revenue Code Section 125 health care
reimbursement plan, which amounts, if any, are the sole responsibility of
Employee. Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot pay Employee’s COBRA premiums without a substantial
risk of violating applicable law (including, without limitation, Section 2716 of
the Public Health Service Act), the Company instead shall provide Employee
taxable monthly payments in an amount that is calculated as (A) the amount of
the monthly COBRA premium that Employee would be required to pay to continue
Employee’s group health coverage including coverage for any covered dependents
(which amount shall be based on the premium for the first month of COBRA
coverage immediately following the month in which Employee’s employment with the
Company terminates), plus (B) an additional amount equal to the tax withholdings
taken from the monthly payment (so that the after-tax value of the payment is
equal to the monthly COBRA premium amount under (A)), and such monthly payments
shall be made through the earlier of (i) twelve (12) months from the employment
termination date, or (ii) such date as Employee becomes eligible to receive
similar health insurance coverage from another employer or recipient of
Employee’s services (and Employee shall promptly notify the Company of any such
eligibility).

 

3.5                            Termination Upon Death Or Disability.  The
Agreement shall terminate immediately upon Employee’s death or Disability (as
defined herein).  In that event, the Company shall provide Employee  (or, in the
event of Employee’s death, Employee’s designated beneficiaries or, if Employee
has none, Employee’s estate) with the compensation set forth in Section 3.2, as
well as the severance benefits set forth in Section 3.4.

 

3.6                            Resignation.  Employee shall be entitled to
resign at any time upon written notice to the Company thirty (30) days prior to
the effective date of such resignation, which shall be specified in Employee’s
notice of resignation.  Unless Employee’s resignation is for Good Reason, upon
Employee’s resignation, the Company shall pay Employee the compensation set
forth in Section 3.2, and Employee shall not be entitled to any further
compensation from the Company, including severance benefits.

 

3.7                            Termination Without Cause Or Resignation For Good
Reason In Connection With A Change In Control.  Upon or within two (2) years
following a Change in Control, the Company shall be entitled to terminate
Employee’s employment without Cause immediately upon written notice to Employee,
and Employee shall be entitled to terminate this Agreement for Good Reason in
accordance with Section 3.10(c).  In either event, Employee shall receive the
following severance benefits:

 

(a)                              Salary Continuation.  The Company shall pay
Employee severance in an amount equal to two (2) years of Base Salary, less
standard payroll deductions and withholdings, and paid in accordance with
Section 3.9.  The Company’s obligation to provide, or continue to provide, such
severance payments will cease immediately and in full in

 

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the event that Employee materially breaches any of Employee’s continuing
obligations to the Company (including, but not limited to, any continuing
obligations under this Agreement or the Proprietary Information Agreement).

 

(b)                              Accelerated Vesting.  To the extent not
previously accelerated pursuant to Section 2.3, 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 of the unvested shares shall be deemed vested as of the Separation Date.

 

(c)                               Bonus.  The Company shall pay Employee a cash
bonus for the year in which the Separation Date occurs in an amount equal to two
(2) times the amount of the cash bonus that Employee earned for the previous
year, if any, or, if such amount has not been determined at the time of
termination, two (2) times the amount for the year prior to the previous year
(provided, however, that the amount shall in no event be lower than two
(2) times the highest actual cash bonus amount received by Employee for the two
(2) calendar years preceding the calendar year in which the Change in Control
occurs).  For the avoidance of doubt, the calculation of such cash bonus shall
not include any restricted stock grants, shares of stock, or the value of such
grants or stock, which may have been provided to Employee at any time.

 

(d)                              Restricted Stock Grants.

 

(i)                                  Prior Year Stock Grant.  The Company shall
grant to Employee, fully vested, a restricted stock grant (the “Prior Year
Grant”) for the Company’s fiscal year prior to the fiscal year in which the
Separation Date occurs (such year to be referred to as the “Prior Year”) in the
amount that is the greater of the following:  (A) any annual performance-based
grants for Employee of restricted stock that may have already then been
determined by the Compensation Committee for the Prior Year but which have not
yet been made to Employee as of the Separation Date; and (B) the average of the
amounts of any such grants that Employee received for the second, third, and
fourth fiscal years prior to the fiscal year in which the Separation Date
occurs.  In the event that, as of the Separation Date, Employee has already
received a restricted stock grant for the Prior Year (the “Actual Prior Year
Grant”), then the Prior Year Grant calculated pursuant to the prior sentence
shall be reduced (but not to below zero) by the number of shares previously
received by the Employee pursuant to such Actual Prior Year Grant, including
shares included in the Actual Prior Year Grant that may become vested as a
result of the Employee’s termination of employment.

 

(ii)                              Separation Year Stock Grant.  The Company
shall grant to Employee, fully vested, a restricted stock grant (the “Separation
Year Grant”) for the Company’s fiscal year in which the Separation Date occurs
(the “Separation Year”) in the amount that is calculated as follows:  (A) the
number of shares of the Prior Year Grant (calculated pursuant to
Section 3.4(d)(i), but without any reduction to account for an Actual Prior Year
Grant); multiplied by (B) a fraction with a numerator equal to the number of
calendar days that Employee was employed by the Company during the Separation
Year, and a denominator equal to 365 (or 366, if the Separation Year is a
calendar leap year).

 

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(e)                              Continued Health Benefits.  If Employee timely
elects to continue Employee’s coverage under the Company’s health insurance
plans in accordance with COBRA or any analogous provisions of state law, the
Company shall pay the applicable premiums for such continued coverage throughout
the twelve (12)-month period following the Separation Date; provided, however,
that (i) the Company shall not be required to make any such payments after such
time as Employee becomes entitled to receive similar health insurance coverage
from another employer or recipient of Employee’s services (and Employee shall
promptly notify the Company of any such fact), and (ii) any applicable premiums
that are paid by the Company shall not include any amounts payable by Employee
under an Internal Revenue Code Section 125 health care reimbursement plan, which
amounts, if any, are the sole responsibility of Employee.  Notwithstanding the
foregoing, if the Company determines, in its sole discretion, that it cannot pay
Employee’s COBRA premiums without a substantial risk of violating applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company instead shall provide Employee taxable monthly payments in an amount
that is calculated as (A) the amount of the monthly COBRA premium that Employee
would be required to pay to continue Employee’s group health coverage including
coverage for any covered dependents (which amount shall be based on the premium
for the first month of COBRA coverage immediately following the month in which
Employee’s employment with the Company terminates), plus (B) an additional
amount equal to the tax withholdings taken from the monthly payment (so that the
after-tax value of the payment is equal to the monthly COBRA premium amount
under (A)), and such monthly payments shall be made through the earlier of
(i) twelve (12) months from the employment termination date, or (ii) such date
as Employee becomes eligible to receive similar health insurance coverage from
another employer or recipient of Employee’s services (and Employee shall
promptly notify the Company of any such eligibility).

 

3.8                            Release.  As a condition to receipt of any
accelerated vesting or severance benefits under this Agreement, Employee  (or,
in the event of Employee’s death, Employee’s designated beneficiaries or, if
Employee has none, Employee’s estate) shall be required to provide the Company
with an effective general release of any and all known and unknown claims
against the Company and other specifically identified released parties,
substantially in the form attached hereto as Exhibit A (the “Release”), within
the applicable time period set forth in the specific form of Release provided to
Employee by the Company, but in no event more than sixty (60) days following the
Separation Date.

 

3.9                            Payment Of Severance Benefits; Section 409A.  In
the event that Employee is entitled to any severance benefits pursuant to
Sections 3.4, 3.5 or 3.7 of this Agreement (other than any accelerated vesting
under Sections 3.4(b), 3.5 or 3.7(b)), such severance benefits shall be payable
as follows:  (1) (i) any payment of Base Salary pursuant to Sections 3.4(a) or
3.5, shall be made in the form of substantially equal installments for a period
of one (1) year following the Separation Date, and (ii) any payment of Base
Salary pursuant to Section 3.7(a), shall be made in the form of substantially
equal installments for a period of two (2) years following the Separation Date,
provided, however, that any payments delayed pending the effective date of the
Release shall be paid in arrears no later than ten (10) days after such
effective date; (2) any payment of bonus pursuant to Sections 3.4(c), 3.5, or
3.7(c), shall be made in the form of a lump sum within ten (10) days following
the effective date of the Release; and (3) any restricted stock grants pursuant
to Sections 3.4(d), 3.5, or 3.7(d), shall be made in full

 

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within thirty (30) days following the effective date of the Release; the parties
being in agreement that none of the foregoing is “deferred compensation” under
Section 409A (as defined below), except for amounts under the foregoing clause
(1) that are payable and paid more than two and one-half (2 ½) months following
the end of the calendar year in which Employee’s Separation from Service (as
defined below) occurs; provided, however, that:

 

(a)                              Payment of such amounts and any other amounts
or benefits provided under this Agreement in connection with Employee’s
termination of employment that constitute “deferred compensation” within the
meaning of Section 409A of the Internal Revenue Code of 1986 as amended (the
“Code”), and the regulations and other guidance thereunder and any state law of
similar effect (collectively “Section 409A”), shall not commence in connection
with Employee’s termination of employment unless and until Employee has also
incurred a “separation from service” (as such term is defined in Treasury
Regulations Section 1.409A-1(h) (“Separation From Service”)), unless the Company
reasonably determines that such amounts and benefits may be provided to Employee
without causing Employee to incur the adverse personal tax consequences under
Section 409A; and

 

(b)                              It is intended that (i) each installment of any
amounts or benefits payable under this Agreement be regarded as a separate
“payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i) (and
each such installment is hereby designated as separate for such purpose);
(ii) all payments of any such amounts or benefits satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A provided
under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii); and
(iii) any such amounts or benefits consisting of premiums payable under COBRA
also satisfy, to the greatest extent possible, the exemption from the
application of Section 409A provided under Treasury Regulations
Section 1.409A-1(b)(9)(v).  However, if any such amounts or benefits constitute
“deferred compensation” under Section 409A and Employee is a “specified
employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i),
then, solely to the extent necessary to avoid the imposition of the adverse
personal tax consequences under Section 409A, the timing of such benefit
payments shall be delayed as follows, provided that the Release has become
effective in accordance with its terms: on the earlier to occur of (a) the date
that is six (6) months and one (1) day after Employee’s Separation From Service
and (b) the date of Employee’s death (such applicable date, the “Delayed Initial
Payment Date”), the Company shall (1) pay Employee a lump sum amount equal to
the sum of the benefit payments that Employee would otherwise have received
through the Delayed Initial Payment Date if the commencement of the payment of
the benefits had not been delayed pursuant to this Section 3.9(b) and
(2) commence paying the balance, if any, of the benefits in accordance with the
applicable payment schedule.

 

3.10                    Definitions.  For purposes of this Agreement, the
following definitions shall apply:

 

(a)                              Disability.  The term “Disability” shall mean a
physical or mental disability that renders Employee unable to perform one or
more of the essential functions of Employee’s job, as determined by two
(2) licensed physicians selected jointly by the Board and Employee, for a period
of 180 days during any 365 day period.

 

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(b)                              Cause.  For purposes of this Agreement, “Cause”
shall mean: (1) Employee’s conviction of any felony involving moral turpitude,
fraud or dishonesty; (2) Employee’s persistent, willful and unsatisfactory
performance of job duties (but only as to a termination before a Change in
Control); (3) Employee’s material and willful violation or breach of any
material written Company policy (as in effect prior to a Change in Control) of
which Employee has been provided notice or material statutory or fiduciary duty
to the Company; or (4) Employee’s material and willful violation or breach of
this Agreement or the Proprietary Information Agreement.  In order to terminate
this Agreement for Cause, the Company must provide written notice to Employee of
the occurrence of one or more of the foregoing circumstances within ninety (90)
days following the initial occurrence of the circumstance, and if cured by
Employee within thirty (30) days following receipt of notice such event shall
not provide Cause for termination by the Company; provided, however, that if the
circumstance is part of an ongoing or series of actions or behavior that the
Company considers to be Cause, the Company shall be entitled to provide such
written notice to Employee within ninety (90) days following any occurrence of
such action or behavior.

 

(c)                               Good Reason.  For purposes of this Agreement,
“Good Reason” shall mean, without Employee’s express written consent, the
occurrence of any of the following circumstances: (1) the assignment to Employee
of any duties materially inconsistent with the position in the Company that
Employee held immediately prior, or a materially adverse alteration in the
nature or status of Employee’s responsibilities from those in effect immediately
prior to such change; (2) a material reduction by the Company in Employee’s
annual base salary as in effect on the date hereof or as the same may be
increased from time to time (provided, however, that a reduction in base salary
imposed prior to a Change in Control in connection with an across-the-board
reduction of base salaries of the Company’s other Senior Vice Presidents,
Executive Vice Presidents, and other similarly situated employees, shall not
provide grounds for Good Reason); (3) the relocation of Employee’s offices to a
location outside the greater Los Angeles/Pasadena metropolitan area, or
requiring Employee to travel on Company business to an extent materially greater
than Employee’s previous business travel obligations; (4) the failure by the
Company to pay Employee any material portion of Employee’s current compensation
except pursuant to an across-the-board compensation deferral similarly affecting
all the employees of the Company (and all the employees of any entity whose
actions resulted in a Change in Control, if such compensation deferral occurs
after a Change in Control), or to pay Employee any material portion of an
installment of deferred compensation under any deferred compensation program of
the Company, in each case within seven (7) days of the date such compensation is
due; (5) the failure by the Company to continue in effect any compensation plan
in which Employee participates which is material to Employee’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
the Company to continue Employee’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 previously; (6) a material reduction in the benefits
provided to Employee under any of the Company’s directors and officers liability
insurance, life insurance, medical, health and accident, or disability plans in
which Employee was participating previously (provided, however, that a
modification prior to a Change in Control of any such benefits which impacts the
Company’s

 

10.

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other Senior Vice Presidents, Executive Vice Presidents, and other similarly
situated employees, in the same or a substantially similar manner as Employee
shall not provide grounds for Good Reason), or the failure by the Company to
provide Employee with substantially the same number of paid vacation days to
which Employee is entitled in accordance with the Company’s normal vacation
policy in effect at such time; or (7) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to perform this
Agreement.  In order to terminate this Agreement for Good Reason, Employee must
provide written notice to the Company of the occurrence of one or more of the
foregoing circumstances within ninety (90) days following the initial occurrence
of the circumstance; provided, however, that the Company shall not be required
to provide any benefits under Section 3.4 or Section 3.7 if it is able to remedy
and does remedy such circumstance within a period of thirty (30) days following
such notice.

 

(d)                              Change in Control.  A “Change in Control” shall
be deemed to have occurred if:

 

(i)                                  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) the Company or any of its
subsidiaries, (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates, (C) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) a Company owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company) becomes the Beneficial Owner (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or

 

(ii)                              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 the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
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

 

(iii)                          there is consummated a merger or consolidation of
the Company with any other Company, other than (A) a merger or consolidation
which would result in the voting securities of the Company 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 the

 

11.

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Company or any subsidiary of the Company, at least seventy-five percent (75%) of
the combined voting power of the securities of the Company 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 the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or

 

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

 

3.11                    No Offset.  Employee shall not be required to mitigate
damages under this Agreement by seeking other comparable employment or
otherwise, nor shall Employee’s entitlement to any severance benefit hereunder
be offset by any earned income Employee may receive from employment or
consulting with a third party after Employee’s employment with the Company.

 

SECTION 4.          PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.

 

Employee shall be required to continue compliance with Employee’s obligations
under the Employee Proprietary Information and Inventions Agreement with the
Company that Employee previously executed (the “Proprietary Information
Agreement”), a copy of which is attached as Exhibit B.

 

SECTION 5.          COMPANY POLICIES.

 

Employee shall be required to continue compliance with the Company’s employee
policies and procedures established by the Company from time to time.

 

SECTION 6.          ASSIGNABILITY.

 

This Agreement is binding upon and inures to the benefit of the parties and
their respective heirs, executors, administrators, personal representatives,
successors and assigns.  The Company may assign its rights or delegate its
duties under this Agreement at any time and from time to time.  However, the
parties acknowledge that the availability of Employee to perform services and
the covenants provided by Employee hereunder are personal to Employee and have
been a material consideration for the Company to enter into this Agreement. 
Accordingly, Employee may not assign any of Employee’s rights or delegate any of
Employee’s duties under this Agreement, either voluntarily or by operation of
law, without the prior written consent of the Company, which may be given or
withheld by the Company in its sole and absolute discretion.

 

12.

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SECTION 7.          NOTICES.

 

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

 

 

If to the Company:

Alexandria Real Estate Equities, Inc.

 

 

385 E. Colorado Boulevard, Suite 299

 

 

Pasadena, CA  91101

 

 

Telephone:  (626) 578-0777

 

 

 

 

If to Employee:

Dean Shigenaga

 

 

c/o Alexandria Real Estate Equities, Inc.

 

 

385 East Colorado Boulevard, Suite 299

 

 

Pasadena,  CA 91101

 

 

 

 

 

With a copy to:

 

 

 

 

 

Ropes & Gray LLP

 

 

1211 Avenue of the Americas

 

 

New York, New York  10036

 

 

Attention:  Andrew L. Oringer, Esq.

 

 

Telephone:  (212) 596-9702

 

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

 

SECTION 8.          ARBITRATION.

 

To ensure the timely and economical resolution of disputes that may arise in
connection with Employee’s employment with the Company, Employee and the Company
agree that any and all disputes, claims, or causes of action arising from or
relating to the enforcement, breach, performance, negotiation, execution, or
interpretation of this Agreement, Employee’s employment, or the termination of
Employee’s employment, including but not limited to statutory claims, shall be
resolved to the fullest extent permitted by law by final, binding and
confidential arbitration, by a single arbitrator, in Los Angeles, California,
conducted by JAMS, Inc. (“JAMS”) under the then applicable JAMS rules.  By
agreeing to this arbitration procedure, both Employee and the Company waive the
right to resolve any such dispute through a trial by jury or judge or
administrative proceeding.  The Company acknowledges that Employee will have the
right to be represented by legal counsel at any arbitration proceeding.  The
arbitrator shall:  (a) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be

 

13.

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permitted by law; and (b) issue a written arbitration decision, to include the
arbitrator’s essential findings and conclusions and a statement of the award. 
The arbitrator shall be authorized to award any or all remedies that Employee or
the Company would be entitled to seek in a court of law.  The Company shall pay
all JAMS’ arbitration fees in excess of the amount of court fees that would be
required of the Employee if the dispute were decided in a court of law.  Nothing
in this Agreement is intended to prevent either Employee or the Company from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration.  Any awards or orders in such arbitrations
may be entered and enforced as judgments in the federal and state courts of any
competent jurisdiction.

 

SECTION 9.          MISCELLANEOUS.

 

9.1                            Entire Agreement.  This Agreement, including its
exhibits, contains the full, complete, and exclusive embodiment of the entire
agreement of the parties with regard to the subject matter hereof and supersedes
all other communications, representations, or agreements, oral or written,
including but not limited to the Offer Letter, the 2007 Agreement, and the 2010
Agreement, and all negotiations and communications between the parties relating
to this Agreement.  Employee has not entered into this Agreement in reliance on
any representations, written or oral, other than those contained herein.  Any
ambiguity in this document shall not be construed against either party as the
drafter.

 

9.2                            Amendment.  This Agreement may not be amended or
modified except by an instrument in writing duly executed by Employee and the
Company’s Chief Executive Officer.

 

9.3                            Applicable Law; Choice Of Forum.  This Agreement
has been made and executed under, and will be construed and interpreted in
accordance with, the laws of the State of California, without regard to conflict
of laws principles.

 

9.4                            Provisions Severable.  If any provision of this
Agreement is held to be invalid, illegal or unenforceable, in whole or in part,
such invalidity, illegality or unenforceability shall not affect the other
provisions of this Agreement; and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein
except to the extent that such provision may be construed and modified so as to
render it valid, lawful, and enforceable in a manner consistent with the intent
of the parties to the extent compatible with the applicable law as it shall then
appear.

 

9.5                            Non-Waiver Of Rights And Breaches.  Any waiver by
a party of any breach of any provision of this Agreement shall be in writing and
will not be deemed to be a waiver of any subsequent breach of that provision, or
of any breach of any other provision of this Agreement.  No failure or delay in
exercising any right, power, or privilege granted to a party under any provision
of this Agreement will be deemed a waiver of that or any other right, power or
privilege.  No single or partial exercise of any right, power or privilege
granted to a party under any provision of this Agreement will preclude any other
or further exercise of that or any other right, power or privilege.

 

14.

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9.6                            Headings.  The headings of the Sections and
Paragraphs of this Agreement are inserted for ease of reference only, and will
have no effect in the construction or interpretation of this Agreement.

 

9.7                            Counterparts.  This Agreement and any amendment
or supplement to this Agreement may be executed in two or more counterparts,
each of which will constitute an original but all of which will together
constitute a single instrument.  Transmission by facsimile or .pdf of an
executed counterpart signature page hereof by a party hereto shall constitute
due execution and delivery of this Agreement by such party.

 

9.8                            Indemnification.  In addition to any rights to
indemnification to which Employee may be entitled under the Company’s Charter
and By-Laws, the Company shall indemnify Employee at all times during and after
Employee’s employment 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 Employee’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.

 

IN WITNESS WHEREOF, the parties hereto have caused this Second Amended and
Restated Executive Employment Agreement to be duly executed on the dates
identified below, effective as of the Effective Date stated above herein.

 

ALEXANDRIA REAL ESTATE EQUITIES, INC.

 

DEAN A. SHIGENAGA

 

 

 

 

 

 

 

 

 

By:

 /s/ Joel S. Marcus

 

 /s/ Dean A. Shigenaga

 

Joel S. Marcus

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

Date:

 February 25, 2011

 

 Date:

 February 25, 2011

 

15.

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EXHIBIT A

 

SEPARATION DATE RELEASE

 

(To be signed on or within 21 days after the Separation Date.)

 

 

In exchange for the severance benefits and/or other consideration to be provided
to me by Alexandria Real Estate Equities, Inc. (the “Company”), and as required
by the Second Amended and Restated Executive Employment Agreement between the
Company and me effective as of January 1, 2011 (the “Agreement”), I hereby
provide the following Separation Date Release (the “Release”).

 

I hereby generally and completely release the Company and its parent and
subsidiary entities, and its and their respective directors, officers,
employees, shareholders, partners, agents, attorneys, predecessors, successors,
insurers, affiliates, and assigns (collectively, the “Released Parties”) of and
from any and all claims, liabilities and obligations, both known and unknown,
arising out of or in any way related to events, acts, conduct, or omissions
occurring at any time prior to or at the time that I sign this Release
(collectively, the “Released Claims”).  The Released Claims include, but are not
limited to: (1) all claims arising out of or in any way related to my employment
with the Company or the termination of that employment; (2) all claims related
to my compensation or benefits from the Company, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership or equity interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing (including, but
not limited to, any claims based on or arising from the Agreement); (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal
Family and Medical Leave Act, the California Family Rights Act, the California
Labor Code (as amended), and the California Fair Employment and Housing Act (as
amended).  Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, applicable law, or applicable directors and officers
liability insurance; and (2) any rights which are not waivable as a matter of
law.  In addition, nothing in this Release prevents me from filing, cooperating
with, or participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, the California Department of Fair
Employment and Housing, or any other government agency, except that I
acknowledge and agree that I am hereby waiving my right to any monetary benefits
in connection with any such claim, charge or proceeding.

 

A-1

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I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, and that the consideration given for the
waiver and release in the preceding paragraph is in addition to anything of
value to which I am already entitled.  I further acknowledge that I have been
advised by this writing that:  (1) my waiver and release do not apply to any
rights or claims that may arise after the date I sign this Release; (2) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (3) I have twenty-one (21) days to consider this
Release (although I may choose voluntarily to sign it earlier); (4) I have seven
(7) days following the date I sign this Release to revoke it by providing
written notice of revocation to the Company’s Chief Executive Officer; and
(5) this Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth calendar day after the date I sign
it if I do not revoke it (the “Effective Date”).

 

I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.  I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows:  “A general release does not
extend to claims which the creditor does not know or suspect to exist in his or
her favor at the time of executing the release, which if known by him or her
must have materially affected his or her settlement with the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law or legal principle of similar effect in any jurisdiction with respect to
my release of claims herein, including but not limited to the release of unknown
and unsuspected claims.

 

I hereby represent that I have been paid all compensation owed and for all hours
worked, I have received all the leave and leave benefits and protections for
which I am eligible, pursuant to the federal Family and Medical Leave Act, the
California Family Rights Act, any Company policy or applicable law, and I have
not suffered any on-the-job injury or illness for which I have not already filed
a workers’ compensation claim.

 

I further agree: (1) not to disparage the Company, or any of the other Released
Parties, in any manner likely to be harmful to its or their business, business
reputation, or personal reputation (although I may respond accurately and fully
to any question, inquiry or request for information as required by legal
process); (2) not to voluntarily (except in response to legal compulsion) assist
any third party in bringing or pursuing any proposed or pending litigation,
arbitration, administrative claim or other formal proceeding against the
Company, its parent or subsidiary entities, affiliates, officers, directors,
employees or agents; and (3) to cooperate fully with the Company, by voluntarily
(without legal compulsion) providing accurate and complete information, in
connection with the Company’s actual or contemplated defense, prosecution, or
investigation of any claims or demands by or against third parties, or other
matters, arising from events, acts, or failures to act that occurred during the
period of my employment by the Company.

 

 

 

 

By:

 

 

 

Dean A, Shigenaga

 

 

 

 

 

Date:

 

 

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