Document:

Employment Agreement

 
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

	 	 	

	
	 Its:
	 	 President and Chief Executive Officer

	 	 	

	
	 EXECUTIVE:  EDWARD F. LANGE, JR.

	
	 	 	 /s/    Edward F. Lange, Jr.

	

 

14Retirement Plan for Employees

 
EXHIBIT 10.45

 
 
 
 
 
 
 
RETIREMENT PLAN FOR EMPLOYEES 
OF BRE PROPERTIES, INC. 
 
SUMMARY PLAN DESCRIPTION 
 
 

 
TABLE OF
CONTENTS 
 

	 INTRODUCTION
	  	 2

	
	 PLAN TYPE
	  	 2

	
	   1.    What is a 401(k) Plan?
	  	 2

	
	 PLAN PARTICIPATION
	  	 2

	
	   2.    Are all employees eligible to participate in the
Plan?
	  	 2

	
	   3.    What are the requirements for participation in the
Plan?
	  	 2

	
	   4.    When will I become a Participant in the
Plan?
	  	 2

	
	   5.    What happens if I leave my job and then I am
re-employed by my Employer?
	  	 3

	
	 PLAN CONTRIBUTIONS
	  	 3

	
	   6.    Am I required to contribute to the
Plan?
	  	 3

	
	   7.    May I voluntarily contribute to the
Plan?
	  	 3

	
	   8.    How can I request that my Employer make Elective
Deferrals to the Plan on my behalf?
	  	 4

	
	   9.    Can I change the amount of my Elective Deferrals
to the Plan?
	  	 4

	
	 10.    Are there legal limits on my Elective
Deferrals?
	  	 4

	
	 11.    Aside from Elective Deferrals, will my Employer make other
types of contributions to the Plan?
	  	 5

	
	 12.    What are Employer Matching Contributions?
	  	 5

	
	 13.    Are there legal limits on Matching
Contributions?
	  	 5

	
	 14.    What are Qualified Matching Contributions?
	  	 6

	
	 15.    What are Qualified Non-Elective
Contributions?
	  	 6

	
	 16.    Am I entitled to any minimum contribution?
	  	 6

	
	 17.    Who is responsible for accounting to me for my benefits in
the Plan?
	  	 6

	
	 18.    Will I receive all the funds in my Account when I leave
employment?
	  	 7

	
	 19.    Can I lose all or part of my Account?
	  	 7

	
	 DISTRIBUTION OF BENEFITS
	  	 8

	
	 20.    How do I become entitled to receive a distribution from the
Plan?
	  	 8

	
	 21.    When will my benefit distribution occur?
	  	 8

	
	 22.    May I postpone distribution of my benefits?
	  	 8

	
	 23.    May I assign or pledge my interest in the
Plan?
	  	 9

	
	 24.    Who is entitled to receive my Account if I die before it is
distributed?
	  	 9

	
	 25.    How will my benefits be distributed?
	  	 9

	
	 26.    How will my benefits be taxed?
	  	 10

	
	 INVESTMENT OF PLAN ASSETS
	  	 11

	
	 27.    How are contributions to the Plan invested?
	  	 11

	
	 WITHDRAWALS AND LOANS
	  	 11

	
	 28.    Is any portion of my Account available to me while I am still
working for the Employer?
	  	 11

	
	 29.    Are loans available to Participants under the
Plan?
	  	 12

	
	 CLAIMS PROCEDURES
	  	 12

	
	 30.    How may I file a claim for benefits?
	  	 12

	
	 ADDITIONAL INFORMATION
	  	 13

	
	 31.    May changes be made to the Plan?
	  	 13

	
	 32.    Who has the authority to make decisions in connection with
the Plan?
	  	 13

	
	 33.    Are there limitations on my rights under the
Plan?
	  	 13

	
	 34.    Are my benefits guaranteed by the Pension Benefit Guaranty
Corporation (PBGC)?
	  	 13

	
	 35.    What legal rights do I have as a Participant in the
Plan?
	  	 13

 
 

-i- 

 

	 Name of Plan:
	  	 Retirement Plan for Employees of BRE Properties, Inc. (the “Plan”)

	
	 Employer:
	  	 BRE Properties, Inc.
 44 Montgomery Street
 36th Floor
 San Francisco, CA 94104
 415-445-6597

	
	 Plan Administrator:
 

	  	 BRE Properties, Inc.
 44 Montgomery Street
 36th Floor
 San Francisco, CA 94104
 415-445-6597
  

The Employer is responsible for administering the Plan.

	
	 Employer’s Federal Tax
Identification Number:
	  	 94-1722214

	
	 Plan Number:
	  	 001

	
	 Plan Year begins:
	  	 January 1

	
	 Plan Year ends:
	  	 December 31

	
	 Plan Effective Date:
 

	  	 January 2, 2002
  
 This Plan replaces the existing plan, originally effective October 1, 1987.

	
	 Trustee and Recordkeeper:
	  	 Putnam Fiduciary Trust Company
 One Post Office Square
 Boston, MA 02109

	
	 Agent for Service of
Legal Process:
 

	  	 BRE Properties, Inc.
 44 Montgomery Street
 36th Floor
 San Francisco, CA 94104
  
 Service of legal
process may also be made upon the Plan Administrator or the Trustee.

 

 
INTRODUCTION

 
This is a general summary of the Retirement Plan for
Employees of BRE Properties, Inc., a Putnam prototype retirement plan that has been adopted by your Employer. The Plan is designed to allow you to save for your retirement on a tax-deferred basis by making a salary reduction agreement with your
Employer and to provide you with the opportunity to share in your Employer’s contributions to the Plan. 
 
This summary highlights the most important provisions of the Plan, but it is not the complete Plan. In case of any difference between this summary and the Plan, the provisions of the Plan will control.
A copy of the complete Plan is available for inspection at your Employer’s office. 
 
PLAN TYPE 
 

	1.	 	What is a 401(k) Plan? 

 
A 401(k) Plan is a deferred compensation plan designed to allow you to save for your retirement on a tax-deferred basis by entering into a
salary reduction agreement with your Employer. 
 
All contributions under the Plan will be held in a Trust Fund. A separate Account will be established to record your share of the amount held in the Trust Fund. 
 
PLAN PARTICIPATION 
 

	2.	 	Are all employees eligible to participate in the Plan? 

 
All employees of the Employer are eligible to participate in the Plan except members of a collective
bargaining unit, leased employees and temporary employees. 
 

	3.	 	What are the requirements for participation in the Plan? 

 
You will begin to participate in the Plan after you have completed one 6-month Eligibility Period.

 
An Eligibility Period is a period of 6
consecutive months, starting on your first day of work, or any anniversary of that day, or the period of 6 consecutive months following your first day of work or any anniversary thereof. 
 
If you are an employee of an acquired business, the Eligibility Period for you will be the period described
above beginning on the date you began work with the acquired business. 
 

	4.	 	When will I become a Participant in the Plan? 

 
If you were a Participant in a Plan of the Employer on the day before the Effective Date, you automatically continue to participate in the
Plan. 
 
Otherwise, you will begin to participate
in the Plan on the first day of the month following the date you fulfill the requirements. 
 
If you are a member of an ineligible group of employees when you satisfy the eligibility requirements, you will become a Participant on the date when you change to an eligible group. 
 

-2- 

 

	5.	 	What happens if I leave my job and then I am re-employed by my Employer? 

 
If you were not a Participant in the Plan before you left your job, you must satisfy the eligibility
requirements described in Questions 2 and 3 before you can participate in the Plan after your re-employment. If you were a Participant in the Plan before you left your job, and some portion of your Employer Matching Account had become vested (see
Question 18), you will become a Participant again as soon as you become a member of an eligible group of employees of the Employer.  
 
If you were a Participant in the Plan before you left your job, but no portion of your Employer Matching Account had become vested
(see Question 18), you will become a Participant again when you become a member of an eligible group of employees of the Employer only if your time away from the Employer did not extend for five consecutive One-Year Eligibility Breaks. A
One-Year Eligibility Break is a period of 12 consecutive months, starting on your first day of work or any anniversary of that day, in which you are credited with not more than 500 Hours of Service. If you return to work with the Employer after you
have five consecutive One-Year Eligibility Breaks, you will be considered a new employee. 
 
PLAN CONTRIBUTIONS 
 

	6.	 	Am I required to contribute to the Plan? 

 
You are not required to contribute to the Plan, but you will receive Employer Matching Contributions under the Plan only if you
contribute. 
 

	7.	 	May I voluntarily contribute to the Plan? 

 
You may save for your retirement on a tax-deferred basis by requesting that your Employer make Elective Deferrals to the Plan on your
behalf through payroll deductions. The amount you choose to have contributed as an Elective Deferral reduces the amount of compensation on which you must pay federal income tax. 
 
You may only make Elective Deferrals to the Plan. You may not make voluntary after-tax contributions. Any
after-tax contributions you made in prior Plan Years will remain in the Plan until they are distributed or withdrawn. Your voluntary after-tax contributions will be accounted for separately from any employer contributions, and the earnings on these
contributions will not be taxed until they are distributed or withdrawn. 
 
If you are in a group of employees eligible to participate in the Plan, you may contribute to the Plan as a “rollover” contribution certain amounts distributed to you from another employer’s qualified
retirement plan. You do not have to satisfy the Plan’s age and service requirements before you make a rollover contribution. Amounts so contributed will be credited to a Rollover Account for your benefit. 
 

-3- 

 

	8.	 	How can I request that my Employer make Elective Deferrals to the Plan on my behalf? 

 
You can arrange to make Elective Deferrals to the Plan by
entering into a salary reduction agreement with your Employer. The amount you designate in your salary reduction agreement will be contributed by your Employer to the Plan as an Elective Deferral on your behalf. 
 
You may enter into a salary reduction agreement effective as
of the first business day of each month. 
 
In your salary reduction agreement, you can elect to reduce your Earnings by an amount up to 15% of your Earnings for the Plan Year. 
 
You may not separately elect to have separate Elective Deferrals taken out of cash bonuses you receive from your Employer. 
 
For purposes of determining the amount and allocation of
Elective Deferrals and Employer Matching Contributions under the Plan, your Earnings include the first $200,000 (for 2002) of Form W-2 compensation as defined in Section 2.8 of the Plan and any amounts you contribute to a 401(k) plan, Section 125
plan, Section 403(b) plan, SARSEP, Section 457 plan or Section 414(h)(2) plan. 
 
The $200,000 limit on Earnings will be adjusted periodically to reflect changes in the cost of living. For any short Plan Year, the $200,000 limit will be pro-rated based upon the number of months in
the short Plan Year. 
 
Compensation is based on
what you earn during the Plan Year. However, for your initial year of participation in the Plan, compensation is recognized from the date you enter the Plan. 
 

	9.	 	Can I change the amount of my Elective Deferrals to the Plan? 

 
Once you enter into a salary reduction agreement with your Employer, you can change the amount of Elective
Deferrals being made on your behalf by entering into a new salary reduction agreement effective as of any date listed in Question 8. You can stop Elective Deferrals altogether at any time by terminating your salary reduction agreement with your
Employer, effective as soon as administratively feasible. 
 

	10.	 	Are there legal limits on my Elective Deferrals?  

 
There are legal limits on the amount of Elective Deferrals that may be made to the Plan on your behalf.
First, the total amount of Elective Deferrals that can be made during any calendar year, to this Plan and any other 401(k) plan in which you participate, is $11,000 for 2002. These dollar amounts are adjusted periodically for inflation by the
IRS. 
 

-4- 

 
If you exceed
this limit in any calendar year, you can request that the excess amount be returned to you from this Plan. To do so, you must notify your Employer that you made excess Elective Deferrals during the calendar year, and specify the amount of excess
Elective Deferrals to be distributed from this Plan. Your Employer must receive your notice no later than March 15 following the end of the calendar year in which you contributed the excess amount. The amount of your excess Elective Deferrals
(adjusted for income or loss) will be returned to you by April 15. 
 
A second limitation applies only to certain highly compensated Participants. Highly compensated Participants are certain owners of the Employer’s business and Participants who earn over a certain dollar amount. The
maximum amount of Elective Deferrals that may be made on behalf of those Participants in any Plan Year depends on the amount of Elective Deferrals made for all other Participants. If the elective Deferrals for any highly compensated Participant
exceed this limit during any Plan Year, then the excess Elective Deferrals (adjusted for income or loss) will be returned to the highly compensated Participant by the last day of the following Plan Year. 
 
If you are or have ever been a Participant in another
Qualified Plan maintained by your Employer, certain limitations may apply to allocations under this Plan. If these limitations apply to you, your Employer will contact you. 
 

	11.	 	Aside from Elective Deferrals, will my Employer make other types of contributions to the Plan? 

 
Yes, your Employer may also make the following contributions
to the Plan: 
 

	 	a.	 	Employer Matching Contributions. 

 

	 	b.	 	Qualified Matching Contributions. 

 

	 	c.	 	Qualified Non-Elective Contributions. 

 

	12.	 	What are Employer Matching Contributions? 

 
Your Employer makes Employer Matching Contributions to the Plan on behalf of all Qualified Participants. 
 
The amount of Employer Matching Contributions for each
Qualified Participant for each Plan Year will be 75% of Elective Deferrals up to 4% of Earnings. 
 
To be a Qualified Participant eligible to receive Employer Matching Contributions for a Plan Year, an Employee must be credited with one
Hour of Service in the Plan Year. 
 
Forfeitures
of Employer Matching Contributions by Participants who leave employment will be applied toward the Employer Matching Contribution for remaining Participants. 
 

	13.	 	Are there legal limits on Matching Contributions? 

 
There are legal limits on the amount of Matching Contributions that can be made for certain highly-paid
Participants, based on the Matching Contributions made for all other Participants. If the Matching Contributions for any highly-paid Participant exceed the limit during any Plan Year, the excess amount (adjusted for income or loss) shall be
forfeited if forfeitable under the Plan, or if not forfeitable, distributed to the highly-paid Participant no later than the end of the following Plan Year. 
 

-5- 

 

	14.	 	What are Qualified Matching Contributions? 

 
Your Employer may make Qualified Matching Contributions to the Plan on behalf of all Qualified Participants who have made Elective
Deferrals to the Plan. 
 
The amount of Qualified
Matching Contributions, if any, for each eligible Qualified Participant for each Plan Year will be a variable amount, selected by the Employer. 
 

	15.	 	What are Qualified Non-Elective Contributions? 

 
Your Employer may make Qualified Non-Elective Contributions to the Plan on behalf of all Participants who are non-highly compensated
employees who made Elective Deferrals during the Plan Year in which the Qualified Non-Elective Contributions are made. 
 
The amount of Qualified Non-Elective Contributions made by your Employer each Plan Year is an amount determined by your Employer each
year, to be shared in proportion to the earnings by Participants on whose behalf the Qualified Non-Elective Contributions are made. 
 

	16.	 	Am I entitled to any minimum contribution? 

 
For any Plan Year when the Plan is a “top heavy” plan, certain Participants (called non-Key Employees) who are employed on the
last day of the Plan Year must receive a minimum contribution. The minimum contribution for these Participants is three percent of their Earnings (or the highest percentage of Earnings that is allocated to any Key Employee, if that is less than
three percent). A plan is “top-heavy” if more than 60% of the assets in its Trust Fund are held in the Accounts of certain owners or officers of the Employer. 
 

	17.	 	Who is responsible for accounting to me for my benefits in the Plan? 

 
The Plan Administrator is required to account for each Participant’s interest in the Plan. When you
become a Participant, a separate Account will be set up for you on the records of the Plan, showing the different types of contributions to the Plan allocated to your Account, such as: 
 

	 	a.	 	Elective Deferrals; 

 

	 	b.	 	Employer Matching Contributions; 

 

	 	c.	 	Qualified Matching Contributions; 

 

	 	d.	 	Qualified Non-Elective Contributions; and 

 

	 	e.	 	Rollover Contributions. 

 
Your Employer will provide you with a periodic statement of your Account in the Plan. 
 

-6- 

 

	18.	 	Will I receive all the funds in my Account when I leave employment? 

 
You will receive the funds in your Elective Deferral Account and Rollover Account when you reach Normal
Retirement Age (which is age 65), or when you die or become disabled, or when your employment terminates for any other reason. You are always 100% vested in your Elective Deferral and Rollover Accounts. 
 
You will receive only that portion of your Employer Matching
Account that has become vested under the vesting schedule below. You will have a 100% vested interest in your Account when you reach Normal Retirement Age (age 65), or when you die or become disabled. If you leave your job with the Employer before
one of these events occurs, you will be vested in your Employer Matching Account in accordance with the following schedule: 
 

	 Employer Matching Account
	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 
	
	 Five-Year Graded Schedule:
	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 
	 Vested Percentage:
	  	 20
	 %
	  	 40
	 %
	  	 60
	 %
	  	 80
	 %
	  	 100
	 %

	 Years of Service
	  	 1
	  
	  	 2
	  
	  	 3
	  
	  	 4
	  
	  	 5
	  

 

	19.	 	Can I lose all or part of my Account? 

 
Upon termination of employment, you can lose only the portion of your Account that is not vested. Any part of your Employer
Matching Account in which you are not vested will be forfeited, and lost to you as a benefit, at the end of the Plan Year in which you incur five consecutive One-Year Breaks in Service, unless you take a distribution of your vested balance before
the five-year break, in which case the nonvested portion is considered forfeited in the year of distribution. If you return to work with the Employer before you have five consecutive One-Year Breaks in Service, you will not forfeit any portion of
your Account. (Exception: If the vested portion of your Account was distributed to you upon your termination of employment, you must repay the distributed amount back to the Plan in order to reclaim the non-vested portion when you return to
employment.) 
 
Forfeited amounts will be used to
reduce other contributions required of the Employer. 
 
You can lose only the portion of your Account that is not vested. You will always be 100% vested in any amounts in the following Accounts: 
 

	 	a.	 	Elective Deferral Account; 

 

	 	b.	 	Rollover Account; 

 

	 	c.	 	Qualified Matching Contribution Account; and 

 

	 	d.	 	Qualified Non-Elective Contribution Account. 

 
In addition, if you made after-tax contributions to a plan your Employer formerly maintained, those contributions and their earnings will
be 100% vested at all times and will be held in a separate Account under this Plan. 
 

-7- 

 
DISTRIBUTION OF BENEFITS

 

	20.	 	How do I become entitled to receive a distribution from the Plan? 

 
You (or your beneficiary) will be entitled to receive a distribution of your vested Account in the Plan upon
termination of your employment; your retirement, death or disability; termination of the Plan, without the establishment of a successor plan; the Employer’s sale to an unrelated corporation of the business in which you are employed; or upon
your request after you reach age 59 1/2. 
 

	21.	 	When will my benefit distribution occur? 

 
If you terminate employment, retire or become disabled, your distribution will begin no later than 60 days after the end of the Plan Year
in which you become entitled to a distribution. 
 
If you retire before you reach 70 1/2 and you elect to postpone your distribution, you must begin to receive your distribution no later than the April 1 following the year you reach age 70 1/2. 
 
You will be eligible for a distribution on account of
disability if you have terminated employment with the Employer, and you are unable to engage in substantial gainful activity on account of a mental or physical impairment that can be expected to last for at least 12 months or to result in your
death. 
 
If you continue to be employed after you
reach Normal Retirement Age, you will continue to be eligible to make Elective Deferrals and to continue to receive any Employer Matching Contributions. 
 
If you are still employed after age 70 1/2, you will not be required to receive a distribution from the Plan until the April 1 following
the year you retire. As described in “Withdrawals and Loans,” you may make a voluntary withdrawal from your vested Account before you retire. 
 
However, if you are a 5% or greater owner of the Employer’s business, your distribution must begin no later than the April 1
following the year you reach age 70 1/2, regardless of when you retire. 
 

	22.	 	May I postpone distribution of my benefits? 

 
The Plan will automatically distribute in a lump sum any vested Account balance that does not exceed $5,000, as soon as administratively
feasible and no later than 60 days after the end of Plan Year in which you terminate employment. If your vested Account balance is more than this dollar amount, you may elect to postpone distribution of your benefits until you are required to begin
receiving distributions as described above. 
 

-8- 

 

	23.	 	May I assign or pledge my interest in the Plan? 

 
No. However, your interest in the Plan may be subject to claims under a “qualified domestic relations
order” issued by a court, granting to your spouse, former spouse, children or other dependents a right to receive all or part of your Account as support, alimony, or property settlement. 
 

	24.	 	Who is entitled to receive my Account if I die before it is distributed? 

 
If you are married at the time of your death, your Account will be distributed to your surviving spouse
unless your spouse has previously consented in writing, before a Plan representative or notary public, to payment of the death benefit to another beneficiary you have named. If you are unmarried at the time of your death, the death benefit
will be distributed to your named beneficiary. 
 
You may name a beneficiary only by completing a form provided to you for this purpose by the Employer, and returning the completed form to the Employer. If you wish to change the beneficiary you have named, you must complete a
second form and return it to the Employer. The latest form you have completed and returned to the Employer before your death will control. 
 
If you do not have a spouse or a named beneficiary living at the time of your death, your death benefit will be distributed to the
personal representative (executor or administrator) of your estate. 
 

	25.	 	How will my benefits be distributed? 

 
You may elect any of the following forms of payment: 
 

	 	a.	 	a single cash payment (If your Account is invested in Employer Stock, a lump sum payment may be made in cash or in Employer Stock or in a combination of
both); or 

 

	 	b.	 	a series of cash payments, or Employer Stock, in substantially equal installments; or 

 

	 	c.	 	any other optional form of distribution available under the Plan of the Employer in effect prior to the Effective Date. 

 
Exception:    If the value
of the vested portion of your Account is not more than $5,000, your benefits will be distributed in a single payment in cash. 
 

-9- 

 
If you choose
a form other than a single payment, the period over which payments are made cannot be longer than one of the following: 
 

	 	i.	 	your lifetime, or 

 

	 	ii.	 	the lifetime of you and your designated beneficiary, or 

 

	 	iii.	 	a number of years no longer than your life expectancy, or the joint life expectancy of you or your designated beneficiary. 

 
If you die after payments begin but before they are finished,
payments will continue to your beneficiary at least as rapidly as under the method of distribution you selected. 
 
Spousal Benefit Rules 
 
If this Plan is an amendment to a prior plan that provided a life annuity as the normal or automatic form of benefit, the Spousal Benefit
Rules described in the following paragraphs apply to every married Participant. 
 
The Spousal Benefit Rules provide that: 
 

	 	a.	 	If you are married when distributions begin, your Account will be distributed in the form of a joint and survivor annuity for you and your spouse, unless you elect
otherwise and your spouse consents to your election in writing before a Plan representative or a notary public. The joint and survivor annuity contract will provide monthly payments to you during your lifetime, and if you die before your
spouse, monthly payments equal to 50% of the payments made during your life will continue to your surviving spouse until his or her death. The amount of the annuity payments will depend on the value of the annuity that can be purchased with your
Account at the time distribution begins. 

 

	 	b.	 	If you are unmarried, your Account will be distributed in the form of a life annuity unless you elect otherwise in writing. The life annuity will provide for monthly
payments to you during your lifetime and all payments will end at your death. The amount of the annuity payments will depend upon the value of the annuity that can be purchased with your Account at the time distribution begins.

 
If the Spousal Benefit Rules do
not apply to you, then you cannot elect any annuity payable for a person’s lifetime, but you can elect an annuity for a specified number of years. 
 

	26.	 	How will my benefits be taxed?  

 
Income tax withholding rules apply to distributions from the Plan. If your Account distributions will continue over a period of at least
10 years in substantially equal installments, you may elect whether to have federal income tax withheld. If your Account will be distributed in any other form—such as a single payment—then the Plan must withhold federal income tax equal to
20% of the distribution unless you arrange for a direct transfer to an individual retirement account (IRA) or another employer’s qualified retirement plan. You will receive a special tax notice explaining the choices available to you about
withholding before any payment is made to you from the Plan. 
 

-10- 

 
INVESTMENT OF PLAN ASSETS

 

	27.	 	How are contributions to the Plan invested? 

 
Contributions to the Plan are invested by the Trustee in shares of Putnam mutual funds or other investments available under the Plan as
chosen by your Employer. The Plan Administrator will provide you with current copies of the prospectus describing each investment option on request to the Plan Administrator. 
 
Investments for your Accounts will be selected by you and may be changed daily. Please see your Plan
Administrator for an explanation of the procedures you must follow to direct the investment of your Account. 
 
Employer stock will be voted in accordance with the Participant’s instructions. 
 
Employer Stock will be tendered in accordance with the
Participant’s instructions. 
 
WITHDRAWALS AND LOANS

 

	28.	 	Is any portion of my Account available to me while I am still working for the Employer? 

 
If you contributed a Rollover Contribution to the Plan, you
may withdraw all or part of such Rollover Contribution for any reason upon request, even if you are still employed by the Employer. 
 
If you have made after-tax contributions to the Plan prior to the Plan Year in which your Employer adopted this Plan, you may withdraw all
or part of them on the same terms that applied under your Employer’s prior plan. 
 
You may withdraw from your Elective Deferral Account (adjusted for income or loss through December 31, 1988), Rollover Account, and Employer Matching Contribution Account if you demonstrate to the Plan
Administrator that you are experiencing financial need. Hardship distributions can be made only for uninsured medical expenses, purchase of your principal residence, payment of the next 12 months of post-secondary education for you or a member of
your immediate family, or to prevent the loss of your residence. You must stop making Elective Deferrals for 12 months after a hardship distribution, and your yearly dollar limit for Elective Deferrals in the calendar year you resume participation
will be reduced by the amount of Elective Deferrals you made in the calendar year of your hardship distribution. 
 
If you have reached age 59 1/2, you may withdraw all or part of the vested portion of your Account. 
 

-11- 

 

	29.	 	Are loans available to Participants under the Plan? 

 
You may borrow from your Account, subject to the Loan Program established by your Employer and the following
requirements: 
 
The total amount of all loans may
not exceed the lesser of: 
 

	 	a.	 	one-half of your vested Account balance; or 

 

	 	b.	 	$50,000 (reduced by the highest outstanding loan balance for all loans during the one-year period ending on the day before the date this loan becomes effective).

 
This limit applies to all loans
from the Plan and other tax qualified retirement plans of the Employer and considers all loans outstanding from all plans. 
 
A loan must be repaid over a period of no more than five years, unless it is used to acquire your principal residence, in which case the
repayment period may exceed five years. You must make payments of principal and interest no less frequently than quarterly over the term of your loan. Payment will be made through payroll deduction. Interest will be charged at a rate established by
the Employer, on a nondiscriminatory basis, taking into consideration the interest rates then being charged on similar loans by independent commercial lenders (for example, savings and loan companies in your locality). You will be required to sign a
promissory note pledging up to half of the value of your vested Plan Account as collateral for the loan. 
 
Your loan will be accounted for separately. After the loan proceeds are paid to you, the value of your Account will include your
obligation to repay the loan (usually represented by the promissory note or credit agreement that you signed (“Note”)). Repayments of principal and interest will be deposited in your Account and applied against this Note reducing your
outstanding loan balance. If your employment with the Employer ends while a loan is outstanding, the remaining unpaid balance of the loan is offset against the remaining value of the Note. The Note will be canceled and you will receive any remaining
cash held in the Account (to the extent vested). You may be subject to income taxes and a penalty tax on the distribution from your Account, including the value of any principal and interest on your Plan loan that you have not repaid. You may avoid
income taxes by repaying the full amount of your loan and then making a direct rollover of your Account balance to an IRA or another employer’s plan. Contact your Plan Administrator for more information. 
 
CLAIMS PROCEDURES 
 

	30.	 	How may I file a claim for benefits? 

 
You or your beneficiary may notify the Plan Administrator in writing of a claim for benefits under the Plan. If your claim is denied, the
Plan Administrator will provide you with written notice specifying the reason for denial and pointing out the Plan provisions on which the denial is based, and explaining what additional evidence (if any) you should submit to prove that you are
entitled to the benefit claimed. You must be given a reasonable opportunity for a full and fair review of your claim, and you are entitled to examine Plan documents and records and to submit issues and comments in support of your claim in writing or
orally. The Plan Administrator’s decision on review of your denied claim will be made and communicated in writing no later than 120 days after receipt of your request for review. 
 

-12- 

 
ADDITIONAL INFORMATION

 

	31.	 	May changes be made to the Plan? 

 
Although it intends to continue the Plan indefinitely, your Employer specifically reserves the right to amend or to terminate the Plan,
but no amendment to the Plan may take away any amount already credited to your Account. If the Plan is terminated, every Participant’s Account will become fully vested and will be distributed from the Trust in one of the forms described in
Question 25. 
 

	32.	 	Who has the authority to make decisions in connection with the Plan? 

 
The Plan Administrator has discretionary authority to interpret the written terms of the Plan and to apply
them to specific situations (for example, to determine whether a person has completed the requirements for Plan participation). 
 

	33.	 	Are there limitations on my rights under the Plan? 

 
The Plan does not give any person the right to remain as an employee of the Employer. It creates only those
rights specifically provided in the Plan. 
 
Section 415 of the Internal Revenue Code of 1986 limits the amount of benefits and contributions that may be made to qualified retirement plans for a person in a given year. If this limit ever affects your Account in the Plan, the
Employer will notify you. 
 

	34.	 	Are my benefits guaranteed by the Pension Benefit Guaranty Corporation (PBGC)? 

 
Benefits under the Plan are not insured by the Pension
Benefit Guaranty Corporation, because the Plan is a “defined contribution” plan. The retirement benefit you receive will depend on how long you work for the Employer, the amount you and the Employer contribute, the amount of your earnings
and the investment performance of your Account. 
 

	35.	 	What legal rights do I have as a Participant in the Plan? 

 
As a Participant in the Plan, you are entitled to certain rights and protections under the Employee
Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan Participants shall be entitled to: 
 
Receive Information About Your Plan and Benefits 
 

	 	a.	 	Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites and union halls, all documents governing the
Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and
Welfare Benefits Administration. 

 

-13- 

 

	 	b.	 	Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective
bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description. The Plan Administrator may make a reasonable charge for the copies. 

 

	 	c.	 	Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each Participant with a copy of this Summary
Annual Report. 

 

	 	d.	 	Obtain a statement telling you whether you have a right to receive a pension at Normal Retirement Age and if so, what your benefits would be at Normal Retirement Age
if you stop working under the Plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be requested in writing and is not required to be
given more than once every 12 months. The Plan must provide the statement free of charge. 

 
Prudent Actions By Plan Fiduciaries 
 
In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the
Plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and beneficiaries. No one, including your Employer, your union, or any other
person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. 
 
Enforce Your Rights 
 
If your claim for a pension benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain
copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 
 
Under ERISA, there are steps you can take to enforce the above rights. For instance— 
 

	 	•	 	If you request a copy of the Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court.
In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

 

	 	•	 	If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. 

 

-14- 

 

	 	•	 	If you disagree with the Plan’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may
file suit in Federal court. 

 

	 	•	 	If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the
court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. 

 
Assistance With Your Questions 
 
If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or
about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights
and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration. 
 
Putnam Retail Management 
Call toll free
1-800-752-5766 
 
March 2002 
 

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