EXHIBIT 10.13

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of June
23, 2000 (the “Effective Date”), by and between BRE PROPERTIES, INC., a Delaware
corporation (the “Company”), and EDWARD F. LANGE, JR. (the “Executive”).

 

Background

 

WHEREAS, the Company desires to employ Executive, and Executive desires to be
employed by the Company, on the terms and subject to the conditions of this
Agreement.

 

NOW, THEREFORE, in consideration of the covenants, duties, terms, and conditions
set forth in this Agreement, the parties agree as follows:

 

1.    Term.    The term of this Agreement is from June 23, 2000 to June 23,
2003, unless earlier terminated pursuant to Section 7 (the “Term”). Executive
shall commence the rendering of services under this Agreement no later than July
24, 2000.

 

2.    Duties.    Executive shall be employed by the Company as its Executive
Vice-President and Chief Financial Officer. Executive shall be under the
direction and supervision of the Company’s Chief Executive Officer (“CEO”) and
its Board of Directors (the “Board”). Executive shall devote his full business
time and best efforts to the Company, with his powers and duties to be
determined by the CEO. Executive shall not, except for incidental management of
his personal financial affairs, engage in any other business, nor shall he serve
in any position with any other corporation or entity, without the prior written
consent of the CEO.

 

3.    Compensation.    During the Term, Executive shall be entitled to receive
compensation in accordance with this Section 3.

 

3.1    Base Salary.    Executive shall receive an annual base salary (“Base
Salary”) of $250,000 commencing on his first day of work. The Board, in its
discretion, may review the Base Salary annually and increase the Base Salary
based on relevant circumstances.

 

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The Base Salary shall be payable by the Company to the Executive in equal
installments on the dates payments of salary are regularly made by the Company
to its executive employees.

 

3.2    Annual Performance Bonus.    Executive shall be eligible to receive an
annual incentive bonus (the “Annual Bonus”) targeted at 40% of Base Salary for
each fiscal year of the Company during the Term (except that the initial Annual
Bonus shall be computed on a pro rata basis for fiscal year 2000). The amount of
the Annual Bonus shall be based on the achievement of management by objective
criteria established by the Board (the “MBO Criteria”). It is anticipated that,
for any given year, the amount of the Annual Bonus could range from 0% of Base
Salary (in the event of a failure to achieve the Annual Criteria), to 40% of
Base Salary (in the event of achievement of the Annual Criteria), to between 40%
and 80% of Base Salary (in the event the Annual Criteria are exceeded). Except
as otherwise specified in this Agreement, Executive shall earn the Annual Bonus
only at the end of each of the Company’s fiscal years during the Term. The
Annual Bonus, if earned, shall be paid within 90 days after the end of each
fiscal year.

 

3.3    Initial Long-Term Incentive Awards.

 

(a)    On the Effective Date of this Agreement and subject to Executive
commencing work, pursuant to the 1999 BRE Stock Incentive Plan, the Company
shall grant Executive an incentive stock option to purchase 50,000 shares of the
Company’s Common Stock (“Common Stock”) at an exercise price equal to the Market
Value on the date of this Agreement which shall vest in equal annual 10,000
share installments over five years (the “Options”) and the Options shall be
evidenced by a stock option agreement containing the terms and provisions of
such Options (including, without limitation, term and termination provisions)
together with such other terms and conditions as the Company may reasonable
require to assure compliance with applicable law and stock exchange
requirements.

 

(b)    The Company shall also make a full recourse, five-year loan to Executive
in an amount equal to the aggregate price for 10,000 shares of Common Stock at
Market Value on the Effective Date of this Agreement (the “Stock Loan”). The
Stock Loan shall be made pursuant to a loan agreement between Company and
Executive in the form of

 

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Exhibit A to this Agreement (the “StockLoan Agreement”), under which the shares
so acquired (and any securities resulting from ownership of such shares) shall
be pledged by Executive to the Company as collateral for amounts payable under
the Stock Loan Agreement.

 

(c)    Within five days of each of the Company’s dividend payment dates,
commencing September 1, 2000, during the term of this Agreement, and provided
that Executive has not exercised any of the stock options granted to him
pursuant to Section 3.3(a), Executive shall be entitled to receive a bonus equal
to the dividend a shareholder of the Company would receive on 10,000 shares of
Common Stock. In the event Executive exercises his option in whole or in part,
the number of deemed shares on which the dividend is based would be reduced pro
rata based on the ratio of the number of options exercised as compared to
50,000. This benefit will terminate on the first to occur of the following: (i)
the fifth anniversary of the Effective Date; (ii) the termination of Executive’s
employment for any reason; or (iii) the exercise or termination of all of the
options granted to Executive pursuant to Section 3.3(a).

 

3.4    Future Long-Term Incentive Awards.    Beginning with the year commencing
on January 1, 2001, and continuing with each subsequent fiscal year during the
Term, Executive shall be eligible to receive additional long-term incentive
awards at the discretion of the Board. It is contemplated that such awards will
take into account financial, operating, and other results achieved during the
preceding fiscal year as well as future long-term performance goals. Such awards
may be in the form of options, restricted shares, SARs, stock sales, stock
grants, forgivable loans, or any other form of long-term compensation, as
determined by the Board. However, regardless of form, it is contemplated that
the annual awards to Executive will provide Executive with the opportunity to
receive, assuming achievement of all applicable performance goals, the financial
equivalent of (i) a forgivable performance-based five-year loan to purchase
6,000 shares of Common Stock (with interest payable quarterly), and (ii) options
to purchase 25,000 shares of Common Stock at Market Value on the date of award.

 

4.    Benefits.    During the Term, Executive shall be entitled to receive such
other benefits and to participate in such benefit plans as are generally
provided by the Company to its executive employees, including, without
limitation, parking and profit sharing and insurance plans. Executive shall be
entitled to four weeks vacation for each calendar year.

 

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5.    Expenses.    The Company shall pay or reimburse Executive for all
reasonable travel and other expenses incurred by Executive in performing his
duties under this Agreement in accordance with Company policy. In addition,
Executive shall be reimbursed by the Company (upon presentation of appropriate
documentation) for reasonable out-of-pocket expenses related to relocating to
the San Francisco Bay Area for moving expenses for household goods, travel for
Executive and family to the San Francisco Bay Area, trips for locating housing,
and either, at Company’s election, a temporary housing allowance not to exceed
$3,000 per month for a period of up to six months or the right to occupy an
apartment reasonably selected by the Company on a rent-free basis for six
months. In addition, Executive shall be reimbursed for a maximum of $25,000 of
brokerage commissions on the sale of his Ohio residence.

 

6.    Moving Assistance.    The Company shall provide Executive with a five
year, full recourse loan (the “Moving Assistance Loan”) in an original principal
amount of $150,000 at an interest rate equal to the mid-term federal rate as
defined in Section 1274 of the Internal Revenue Code. Interest shall accrue and
shall be payable solely at the election of Executive.

 

The Moving Assistance Loan documentation shall contain provisions for
acceleration upon termination of employment by the Company with cause or upon
termination by the Executive without good reason as specified below and for
forgiveness on a pro-rata basis of the principal amount of the loan and all
accrued interest on each anniversary of the Effective Date and full forgiveness
in the event Executive remains continuously employed by the Company for five
years, dies, becomes disabled, is terminated without cause or terminates his
employment with good reason pursuant to Section 8.2(c).

 

7.    Termination of Employment.

 

7.1    Termination Due to Death or Disability; Voluntary Termination.    If at
any time during the Term, Executive shall die, suffer any Disability (as defined
below), or voluntarily terminate his employment by the Company, then, in any
such event, his employment under this Agreement shall automatically terminate on
the date of death, upon any Disability, or the date of voluntary termination, as
the case may be. As used herein, the term “Disability” shall mean the

 

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inability of Executive to perform his duties because of physical or mental
illness or incapacity as determined by the Board.

 

7.2    Termination by the Company for Good Cause.    The Company may terminate
this Agreement and Executive’s employment at any time for Good Cause. In such
event, this Agreement shall terminate on such date as shall be specified in
writing by the Company. As used herein, the term “Good Cause” shall mean (i) any
act or omission of gross negligence, willful misconduct, dishonesty, or fraud by
Executive in the performance of his duties hereunder or in material violation of
the Company’s employment policies and practices, (ii) the failure or refusal of
Executive to perform the duties or to render the services assigned to him from
time to time by the CEO or the Board, (iii) the charging or indictment of
Executive in connection with a felony or any misdemeanor involving dishonesty or
moral turpitude, or (iv) the material breach by Executive of this Agreement or
the breach of Executive’s fiduciary duty or duty of trust to the Company.

 

7.3    Termination by the Company Other Than for Good Cause.    The Company may
terminate this Agreement and Executive’s employment for any reason other than
for Good Cause. In such event, this Agreement shall terminate on the 30th day
following written notice of such termination by the Company.

 

8.    Compensation upon Termination.

 

8.1    Termination Other Than in Connection With a Change in Control.

 

(a)    In the event of termination of Executive’s employment pursuant to Section
7.1 or 7.2, the Company shall not be obligated, from and after the date of
termination, to provide to Executive, and Executive shall not be entitled to
receive from the Company, any compensation (including any payments of Base
Salary, Annual Bonus, or other awards) or other benefits; except that if
termination pursuant to Section 7.1 is due to death or Disability, Executive or
his estate shall receive, within 90 days after the close of the fiscal year in
which the death or Disability occurred, a lump-sum payment equal to the
estimated Annual Bonus that the Executive would have earned for the fiscal year
in question (based on actual performance relative to MBO Criteria for the fiscal
year and Executive’s contribution up to the date of death or

 

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Disability), calculated on a pro-rated basis to the date of termination. In the
case of any termination of employment pursuant to Sections 7.1 prior to the
fifth anniversary of this Agreement, the outstanding principal balance (but not
accrued interest which shall be forgiven) of the Moving Assistance Loan shall be
due and payable in full 180 days following the termination date; provided,
however, that in the case of termination based upon death or Disability, the
outstanding balance on the Moving Assistance Loan shall be forgiven. In the case
of any termination of employment pursuant to Sections 7.2 prior to the fifth
anniversary of this Agreement, the outstanding principal balance (but not
accrued interest which shall be forgiven) of the Moving Assistance Loan shall be
due and payable in full 15 days following the termination date. In the case of
any termination of employment pursuant to Sections 7.1 or 7.2, the outstanding
balance under the Stock Loan Agreements set forth in Exhibit A, and any other
similar agreements Executive and the Company enter into pursuant to Section 3.3
(collectively the “Stock Loan Agreements”), and all accrued interest, shall be
due and payable in full 15 days following the termination date; provided,
however, that in the case of termination based upon death or Disability, the
outstanding balance on each such Loan shall be reduced by such amount by the Pro
Rata Calculation (in which case, the Company may delay the due date to complete
the Pro Rata Calculation). For the purpose of this Agreement, “Pro Rata
Calculation” shall mean a pro rata application of Sections 6.1, 6.2, and 6.3 of
each of the Loan Agreements as described in Exhibit B to this Agreement, taking
into consideration the number of full months worked and the Company’s
performance data through the last quarter having ended 45 days or more prior to
the termination date, not withstanding the fact that such sections of the Loan
Agreements may not provide for such pro rata application.

 

(b)    In the event of termination of Executive’s employment pursuant to Section
7.3, provided that Executive provides to the Company a full and complete release
of all known and unknown claims against the Company and its representatives, the
Company shall provide Executive with the following compensation within fifteen
(15) days after such termination:

 

(i)    Executive shall be entitled to receive a lump-sum payment from the
Company equal to (a) one hundred and forty percent (140%) of his then Base
Salary if

 

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termination occurs prior to Executive’s first Annual Bonus being determined
pursuant to Section 3.2; (b) his then Base Salary plus the amount of the Annual
Performance Bonus awarded in the immediately preceding year if termination
occurs subsequent to the determination of the Annual Performance Bonus for his
first full year and prior to the determination for the second full year; or (c)
for any subsequent termination, his then Base Salary plus the average of the
Annual Performance Bonus awarded in the prior two years;

 

(ii)    all restrictions (other than applicable federal and state securities
laws) on the shares of any Common Stock awarded to Employee under Section 3.3
would be eliminated and such shares would fully vest in Executive;

 

(iii)    the amount payable under the Moving Assistance Loan shall be forgiven;
and

 

(iv)    the amount payable under each Stock Loan Agreement shall be reduced by
the Pro Rata Calculation, and the balance of each Stock Loan shall be due and
payable within fifteen (15) days after such termination.

 

8.2    Termination Following a Change in Control.    The following provisions
shall apply in lieu of Section 8.1 if, and only if, the termination of
Executive’s employment occurs within 12 months following a Change in Control (as
defined in Section 8.2(d)):

 

(a)    In the event of termination of Executive’s employment pursuant to Section
7.1 due to death or disability, or pursuant to Section 7.2, the provisions of
Section 8.1(a) apply.

 

(b)    In the event of termination of Executive’s employment pursuant to Section
7.1 due to voluntary termination by Executive without Good Reason (as defined
below), the provisions of Section 8.1(a) shall apply except that the Company
shall pay Executive within 15 days after such termination: a lump-sum payment
from the Company equal to: (x) one hundred and forty percent (140%) of his then
Base Salary if termination occurs prior to Executive’s first Annual Bonus being
determined pursuant to Section 3.2; (y) his then Base Salary plus the amount of
the Annual Performance Bonus awarded in the immediately preceding

 

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year if termination occurs subsequent to the determination of the Annual
Performance Bonus for his first full year and prior to the determination for the
second full year; or (z) for any subsequent termination, his then Base Salary
plus the average of the Annual Performance Bonus awarded in the prior two years.
As used herein, the term “Good Reason” means (i) a material change in
Executive’s duties, responsibilities, or authority, or (ii) the Company’s
relocation of the Executive, without the Executive’s consent, to a location
outside of the San Francisco metropolitan area.

 

(c)    In the event of termination of Executive’s employment pursuant to Section
7.1 due to voluntary termination by Executive with Good Reason, or pursuant to
Section 7.3, provided that Executive provides to the Company a full and complete
release of all known and unknown claims against the Company and its
representatives, the Company shall provide Executive with the following
compensation within 15 days after such termination:

 

(i)    Executive shall be entitled to receive a lump-sum payment from the
Company equal to: (x) two hundred and eighty percent (280%) of his then Base
Salary if termination occurs prior to Executive’s first Annual Bonus being
determined pursuant to Section 3.2; (y) two times his then Base Salary plus two
times the amount of the Annual Performance Bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of the
Annual Performance Bonus for his first full year and prior to the determination
for the second full year; or (z) for any subsequent termination, two times his
then Base Salary plus the sum of the Annual Performance Bonus awarded in the
prior two years;

 

(ii)    all restrictions (except applicable federal and state securities law) on
any shares of Common Stock awarded to Employee under Section 3 would be
eliminated and such shares would fully vest in Executive;

 

(iii)    any unvested stock options (including the Options) held by Executive at
the date of termination, would vest and become fully exercisable for a period of
three months from the date of termination;

 

(iv)    the amount payable under the Moving Assistance Loan shall be forgiven;
and

 

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(v)    the amount payable under each Stock Loan Agreement shall be reduced by
the Pro Rata Calculation, and the balance of each Stock Loan shall be due and
payable within fifteen (15) days of termination.

 

(d)    As used herein, a “Change in Control” shall be deemed to have occurred
when any of the following events occur:

 

(i)    any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”), as in effect on the date
hereof, (a “Person”)) acquiring “beneficial ownership” (as defined in Rule 13D-3
under the Exchange Act), of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities; or

 

(ii)    a change in the Board that is the result of a proxy solicitation(s) or
other action(s) to influence voting at a shareholders’ meeting of the Company
(other than by voting one’s own stock) by a Person or group of Persons who has
Beneficial Ownership of 5% or more of the combined voting power of the
securities of the Company and which causes the Continuing Directors (as defined
below) to cease to constitute a majority of the Board; provided, however, that
neither of the events described in (i) or (ii) of this Section 8.2(d) shall be
deemed to be a Change in Control if the event(s) or election(s) causing such
change shall have been approved specifically for purposes of this Agreement by
the affirmative vote of at least a majority of the members of the Continuing
Directors. For these purposes, a “Continuing Director” shall mean a member of
the Board (i) who is a member of the Board on the date of this Agreement, or
(ii) who subsequently becomes a member of the Board and who either (x) is
appointed or recommended for election with the affirmative vote of a majority of
the Directors then in office who are Directors on the date hereof, or (y) is
appointed or recommended for election with the affirmative vote of a majority of
the Directors then in office who are described in clauses (i) and (ii)
(including clause (ii)(y)), as applicable.

 

(e)    Notwithstanding anything to the contrary in this Section 8.2, if any of
the payments or other compensation to be made to Executive pursuant to this
Section 8.2 are determined to be “parachute payments” as defined in Section 280G
of the Internal Revenue Code

 

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of 1986, as amended (the “Code”), then the amount of such payments or other
compensation shall be reduced to the largest amount which would not constitute
“parachute payments” as so defined.

 

9.    Confidentiality.    It is specifically understood and agreed that some of
the Company’s business activities are secret in nature and constitute trade
secrets, or are otherwise confidential and/or proprietary in nature, including
but not limited to the Company’s “know-how,” methods of business and operations,
and property and financial analyses and reports (all such information,
“Proprietary Information”). All of the Company’s Proprietary Information is and
shall be the sole property of the Company for its own exclusive use and benefit,
and Executive agrees that upon termination of his employment for any reason
whatsoever, he shall return to the Company all Proprietary Information in his
possession or under his control. Executive further agrees that he shall hold all
of the Company’s Proprietary Information in strictest confidence and shall not
at any time, either during or after his employment by the Company, use or
disclose, or permit the use or disclosure of, the same for his own benefit or
for the benefit of others, unless authorized to do so by the Company’s written
consent or by a contract or agreement to which the Company is a party or by
which it is bound. The provisions of this Section 9 shall perpetually survive
the termination of the Agreement, and Executive shall likewise be bound by all
other agreements between him and the Company relating in any way to the
protection of the Company’s Proprietary Information.

 

10.    Arbitration.    If a dispute arises between Company and Executive
concerning this Agreement, or in any way relating to Executive’s employment by
the Company and/or the termination thereof, the disputed matter shall first be
submitted to mandatory mediation, such mediation to be conducted in the City of
San Francisco pursuant to the then-current rules of the Judicial Arbitration and
Mediation Services (“JAMS”) by a mediator affiliated with JAMS, or by such other
mediator as is mutually agreeable to the parties. If the mediation does not
successfully resolve such dispute, then the dispute shall be submitted to
mandatory, final, and binding arbitration in the City of San Francisco,
California in accordance with the employment arbitration rules of the American
Arbitration Association (“AAA Rules”). Any judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof. The

 

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arbitrators shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve the
disputed matter. The arbitrators shall apply the law of the State of California
in making any determination hereunder. Notwithstanding anything to the contrary
which may now or hereafter be contained in the AAA Rules, the parties agree any
such arbitration shall be conducted before a panel of three arbitrators, who
shall be compensated for their services at a rate to be determined by the
American Arbitration Association in the event the parties are not able to agree
upon their rate of compensation. Each party shall have the right to appoint one
arbitrator (to be appointed within twenty days of the notice of a dispute to be
resolved by arbitration hereunder), and the two arbitrators so chosen shall
mutually agree upon the selection of the third, impartial arbitrator. The
majority decision of the arbitrators will be final and conclusive upon the
parties hereto. The parties hereby acknowledge and agree that final and binding
arbitration shall be the sole and exclusive means of resolving any such dispute,
that they waive all rights to a civil court action, and that the dispute shall
be fully and finally resolved by the arbitrators and shall not be resolved by a
jury or a court.

 

11.    Taxes; Withholdings.    All compensation payable by the Company to the
Executive under this Agreement which is or may become subject to withholding
under the Code or other pertinent provisions of laws or regulation shall be
reduced for all applicable income and/or employment taxes required to be
withheld.

 

12.    Administration by the Board.    The Board, or its Compensation Committee
as determined by the Board, shall be (i) solely responsible for the
interpretation and administration of this Agreement, the Moving Assistance Loan
and the Stock Loans, and (ii) entitled to modify this Agreement and the
(including, without limitation, performance criteria and targets) as necessary
or appropriate to achieve the purposes and intents of the same in light of
changing or extenuating circumstances. All such actions, decisions, and
modifications regarding this Agreement, the Moving Assistance Loan or the Stock
Loans made in good faith by the Board, or by its Compensation Committee, shall
be final and binding on Executive.

 

13.    Upon Termination of this Agreement.    The Company shall have the right,
without any notice to the Executive, to offset any amounts payable to the
Company under any of the

 

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Stock Loans or Moving Assistance Loan against any amount payable to the
Executive pursuant to this Agreement.

 

14.    Miscellaneous.

 

14.1    Written notices required by this Agreement shall be sent to Company or
Executive by certified mail, with a return receipt requested, to Company’s
registered address and to Executive’s last shown address on Company’s records,
respectively. Such notice shall be deemed to be delivered two days after
mailing.

 

If to Company:

  

BRE Properties, Inc.

Forty Four Montgomery Street, Suite 3600

San Francisco, CA 94104-4809

Attn:  Frank McDowell

With Copy to:

  

Farella Braun & Martel LLP

235 Montgomery Street, Suite 3000

San Francisco, CA 94104

Attn:  Daniel E. Cohn, Esq.

If to Executive:

  

Edward F. Lange, Jr.

29672 Durham Drive

Perrysburg, OH 43551

 

14.2    This Agreement contains the full and complete understanding of the
parties and supersede all prior representations, promises, agreements, and
warranties, whether oral or written.

 

14.3    This Agreement shall be governed by and interpreted according to the
laws of the State of California.

 

14.4    With respect to the Company, this Agreement shall inure to the benefit
of and be binding upon any successors or assigns of Company. With respect to
Executive, this Agreement shall not be assignable but shall inure to the benefit
of estate of Executive or his legal successor upon death or disability.

 

14.5    The captions of the various sections of this Agreement are inserted only
for convenience and shall not be considered in construing this Agreement.

 

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14.6    This Agreement can be modified, amended, or any of its terms waived only
by a writing signed by both parties.

 

14.7    If any provision of this Agreement shall be held invalid, illegal, or
unenforceable, the remaining provisions of the Agreement shall remain in full
force and effect, and the invalid, illegal, or unenforceable provision shall be
limited or eliminated only to the extent necessary to remove such invalidity,
illegality, or unenforceability in accordance with the applicable law at that
time.

 

14.8    Without limiting the provisions of Section 10, if either party
institutes arbitration proceedings pursuant to Section 10 or an action to
enforce the terms of this Agreement, the prevailing party in such proceeding or
action shall be entitled to recover reasonable attorneys’ fees, costs, and
expenses.

 

14.9    No remedy made available to Company by any of the provisions of this
Agreement is intended to be exclusive of any other remedy. Each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder as well as those remedies existing at law, in equity, by statute, or
otherwise.

 

14.10    Executive represents that the execution of this Agreement by Executive
will not violate any other agreement to which Executive is a party.

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date specified in
the first paragraph.

 

COMPANY:  BRE PROPERTIES, INC.

By:

 

/s/    Frank C. McDowell

   

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Its:

 

President and Chief Executive Officer

   

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EXECUTIVE:  EDWARD F. LANGE, JR.

   

/s/    Edward F. Lange, Jr.

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