Document:

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                                                                    Exhibit 10.1

                       FORM OF RESTRICTED STOCK AGREEMENT

         THIS RESTRICTED STOCK AGREEMENT, dated as of _____________ (the
"Effective Date"), is made by and among Arden Realty, Inc., a Maryland
corporation (the "Company"), Arden Realty Limited Partnership, a Maryland
limited partnership (the "Partnership"), and _____________, an employee of the
Company (the "Holder"):

         WHEREAS, the Company and the Partnership have established the Second
Amended and Restated 1996 Stock Option and Incentive Plan of Arden Realty, Inc.
and Arden Realty Limited Partnership (the "Plan");

         WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement);

         WHEREAS, the Plan provides for the issuance of shares of the Company's
Common Stock (as defined herein) subject to certain restrictions thereon; and

         WHEREAS, the Compensation Committee of the Company's Board of Directors
(the "Committee"), has determined that it would be to the advantage and in the
best interest of the Company and its stockholders to obtain and retain the
services of key Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.
                                  DEFINITIONS

         1.1 General. Wherever the following terms are used in this Agreement
they shall have the meanings specified below, unless the context clearly
indicates otherwise. Capitalized terms not defined herein shall have the
meanings assigned to such terms in the Plan. The masculine pronoun shall include
the feminine and neuter, and the singular the plural, where the context so
indicates.

         1.2 Change in Control. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following events:

                 (a) the individuals constituting the Board as of the Effective
         Date (the "Incumbent Board") cease for any reason to constitute at
         least two-thirds (2/3rds) of the Board; provided, however, that if the
         election, or nomination for election by the Company's stockholders, of
         any new director was approved by a vote of at least two-thirds (2/3rds)
         of the Incumbent Board, such new director shall be considered a member
         of the Incumbent Board;
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                  (b) an acquisition of any voting securities of the Company
         (the "Voting Securities") by any "person" (as the term "person" is used
         for purposes of Section 13(d) or Section 14(d) of the Securities
         Exchange Act of 1934, as amended (the "1934 Act")) immediately after
         which such person has "beneficial ownership" (within the meaning of
         Rule 13d-3 promulgated under the 1934 Act) ("Beneficial Ownership") of
         20% or more of the combined voting power of the Company's then
         outstanding Voting Securities; or

                  (c) approval by the stockholders of the Company of:

                      (i) a merger, consolidation, share exchange or
                      reorganization involving the Company, unless

                           (ii) the stockholders of the Company, immediately
           before such merger, consolidation, share exchange or reorganization,
           own, directly or indirectly immediately following such merger,
           consolidation, share exchange or reorganization, at least 80% of the
           combined voting power of the outstanding voting securities of the
           corporation that is the successor in such merger, consolidation,
           share exchange or reorganization (the "Surviving Company") in
           substantially the same proportion as their ownership of the Voting
           Securities immediately before such merger, consolidation, share
           exchange or reorganization; and

                           (iii) the individuals who were members of the
           Incumbent Board immediately prior to the execution of the agreement
           providing for such merger, consolidation, share exchange or
           reorganization constitute at least two-thirds (2/3rds) of the members
           of the board of directors of the Surviving Company;

                      (ii) a complete liquidation or dissolution of the Company;
                      or

                      (iii) an agreement for the sale or other disposition of
                      all or substantially all of the assets of the Company.

                  (d) any Person is or becomes the Beneficial Owner of
         securities of the Company representing ten percent (10%) or more of the
         combined voting power of the Company's then outstanding securities and
         (A) the identity of the Chief Executive Officer of the Company is
         changed during the period beginning sixty (60) days before the
         attainment of the ten percent (10%) beneficial ownership and ending two
         (2) years thereafter, or (B) individuals constituting at least
         one-third (1/3) of the members of the Board at the beginning of such
         period shall leave the Board during the period beginning sixty (60)
         days before the attainment of the ten percent (10%) beneficial
         ownership and ending two (2) years thereafter.

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         1.3 Consultant. "Consultant" shall mean any consultant or adviser if:

            (a) the consultant or adviser renders bona fide services to the
         Company;

            (b) the services rendered by the consultant or adviser are not
         in connection with the offer or sale of securities in a capital-raising
         transaction and do not directly or indirectly promote or maintain a
         market for the Company's securities; and

            (c) the consultant or adviser is a natural person who has contracted
         directly with the company to render such services.

         1.4 Disability, "Disability" shall mean permanent and total disability
(within the meaning of Section 22(e)(3) of the Code).

                                   ARTICLE II.
                           AWARD OF RESTRICTED STOCK

         2.1 Award of Shares, For good and valuable consideration which the
Committee has determined to exceed the par value of its Common Stock, on the
date hereof the Company issues to the Holder ________ shares of its Common Stock
(the "Shares") upon the terms and conditions set forth in this Agreement.

         2.2 Consideration to the Company. As partial consideration for the
issuance of the Shares by the Company, the Holder agrees to remain in the employ
of or as a Consultant to the Company, the Partnership, or any Subsidiary
(whichever is applicable), as applicable, with such duties and responsibilities
as the Company, the Partnership or any Subsidiary (as applicable) shall from
time to time prescribe, for a period of at least one year after the Shares are
issued. Nothing in this Agreement or in the Plan shall confer upon the Holder
any right to continue in the employ of or in the service of the Company, the
Partnership or any Subsidiary or shall interfere with or restrict in any way the
rights of the Company, the Partnership or any Subsidiary which are hereby
expressly reserved, to discharge a Holder who is an Employee or Consultant at
any time for any reason whatsoever, with or without cause.

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                                  ARTICLE III.
                                  RESTRICTIONS

         3.1 Forfeiture. Upon the Holder's Termination of Employment or
Termination of Consultancy (each as defined in the Plan), all of the Unreleased
Shares (as defined below) shall thereupon be forfeited immediately and without
any further action by the Company (the "Forfeiture Restriction").

         3.2      Release of Shares from Restrictions.

            (a) Subject to Sections 3.1, 3.5, 3,6 and 4.4 each Share shall be
         released from the Forfeiture Restriction and the Transfer Restriction
         in accordance with the following schedule:

 Twenty-five percent (25 %) of the Shares (rounded up to the next whole number
 of shares) shall be released from the Forfeiture Restriction and the Transfer
 Restriction on each anniversary of the grant date, so that all of the Shares
 shall be released from the Forfeiture Restriction and the Transfer Restriction
 on the fourth (4th) anniversary after the grant date.

            (b) Any of the Shares which, from time to time, have not yet been
         released from the Forfeiture Restriction and the Transfer Restriction
         are referred to herein as "Unreleased Shares."

            (c) In the event of a Change of Control, or the death or Disability
         of the Holder, all of the Unreleased Shares shall cease to be subject
         to the Forfeiture Restriction or the Transfer Restriction.

         3.3 Legend. Certificates representing Shares issued pursuant to this
Agreement shall, until such Shares are released from the Forfeiture Restriction
and the Transfer Restriction and new certificates are issued therefor, bear the
following legend:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
         FORFEITURE AND CERTAIN RESTRICTIONS ON TRANSFERABILITY UNDER THE TERMS
         OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN ARDEN REALTY,
         INC. (THE "COMPANY"), ARDEN REALTY LIMITED PARTNERSHIP AND THE
         REGISTERED OWNER OF SUCH SHARES, AND SUCH SHARES MAY NOT BE DIRECTLY OR
         INDIRECTLY. OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
         OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO
         THE PROVISIONS OF SUCH AGREEMENT."

         3.4 Issuance of Certificates for Vested Shares. Subject to Section 3.7,
upon the release of Shares from the Forfeiture Restriction and the Transfer
Restriction, the Company shall cause new certificates to be issued with respect
to such vested Shares and delivered to the Holder or his legal

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representative, free from the legend provided for in Section 3.3. Such vested
Shares shall cease to be subject to the terms and conditions of this Agreement

         3.5 Restrictions On New Shares. In the event that the Holder receives
 any new or additional or different shares or securities which are attributable
 to the Holder in his capacity as the registered owner of Shares then subject to
 Forfeiture Restriction and the Transfer Restriction, such new or additional or
 different shares or securities shall be considered to be Shares under this
 Agreement and shall be subject to the Forfeiture Restriction and the Transfer
 Restriction, unless the Board or the Committee provides otherwise.

         3.6 Section 83(b). The Holder covenants that he will not make an
election under Section 83(b) of the Code with respect to the receipt of any of
the Shares.

         3.7 Tax Withholding. Notwithstanding anything to the contrary in this
 Agreement, the Company shall be entitled to require payment in cash or
 deduction from other compensation payable to the Holder of any sums required by
 federal, state or local tax law to be withheld with respect to the issuance,
 lapsing of restrictions on or exercise of the Shares. The Board or the
 Committee may, in their discretion, allow the Holder to deliver shares of
 Common Stock owned by the Holder duly endorsed for transfer to the Company with
 an aggregate Fair Market Value on the date of delivery equal to the statutory
 minimum sums to be withheld. The Company shall not be obligated to deliver any
 new certificate representing vested Shares to the Holder or his legal
 representative unless and until the Holder or his legal representative shall
 have paid or otherwise satisfied in full the amount of all federal, state and
 local taxes applicable to the taxable income of the Holder resulting from the
 grant of the Shares or the lapse or removal of the Forfeiture Restriction and
 the Transfer Restriction.

                                   ARTICLE IV.
                                 MISCELLANEOUS

         4.1 Unreleased Shares Not Transferable. Unless otherwise permitted by
the Committee pursuant to the Plan, no Unreleased Shares or any interest or
right therein or part thereof shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect (the
"Transfer Restriction"); provided, however, that this Section 4.1 shall not
prevent transfers by will or by applicable laws of descent and distribution. In
case of a permitted transfer, the transferee or other recipient shall receive
and hold the Shares so transferred subject to the provisions of this Agreement,
and there shall be no further transfer of such Shares except in accordance with
the terms of this Section. Any transferee shall acknowledge the same by signing
a copy of this Agreement. Transfer or sale of the Shares is subject to
restrictions on transfer imposed by any applicable state and federal securities
laws.

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         4.2 Conditions to Issuance of Stock Certificates. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock pursuant to this Agreement prior to fulfillment of all of the following
conditions:

            (a) The admission of such shares to listing on all stock exchanges
         on which such class of stock is then listed; and

            (b) The payment by the Holder of all amounts required to be
         withheld, under federal, state and local tax laws, with respect to the
         issuance of Shares and/or the lapse or removal of the Forfeiture
         Restriction and/or the Transfer Restriction; and

            (c) The lapse of such reasonable period of time as the Committee may
         from time to time establish for reasons of administrative convenience.

            (d) The completion of any registration or other qualification of
         such shares under any state or federal law or under rulings or
         regulations of the Securities and Exchange Commission or of any other
         governmental regulatory body, which the Committee shall, in its
         absolute discretion, deem necessary or advisable; and

            (e) The obtaining of any approval or other clearance from any state
         or federal governmental agency which the Committee shall, in its
         absolute discretion, determine to be necessary or advisable.

         4.3 Escrow.

            (a) Holder hereby authorizes and directs the Secretary of the
         Company, or such other person designated by the Company, to transfer
         the Unreleased Shares as to which the Forfeiture Option is effective
         from Holder to the Company.

            (b) To insure the availability for delivery of Holder's Unreleased
         Shares upon forfeiture pursuant to Section 3.1, Holder hereby appoints
         the Secretary, or any other person designated by the Company as escrow
         agent, as its attorney-in-fact to sell, assign and transfer unto the
         Company, such Unreleased Shares, if any, forfeited pursuant to the
         Forfeiture Option and shall, upon execution of this Agreement, deliver
         and deposit with the Secretary of the Company, or such other person
         designated by the Company, the share certificates representing the
         Unreleased Shares, together with the stock assignment duly endorsed in
         blank, attached hereto as Exhibit A. The Unreleased Shares and stock
         assignment shall be held by the Secretary in escrow, pursuant to the
         Joint Escrow Instructions of the Company and Holder attached as
         Exhibit B hereto, until the Forfeiture Restriction becomes effective as
         provided in Section 3.1, until such Unreleased Shares are vested, or
         until such time as this Agreement no longer is in effect. Upon vesting
         of the Unreleased Shares, the escrow agent shall promptly deliver to
         the Holder the certificate or certificates representing such Shares in
         the escrow agent's possession belonging to the Holder, and the escrow
         agent shall be

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         discharged of all further obligations hereunder; provided, however,
         that the escrow agent shall nevertheless retain such certificate or
         certificates as escrow agent if so required pursuant to other
         restrictions imposed pursuant to this Agreement.

              (c) The Company, or its designee, shall not be liable for any act
         it may do or omit to do with respect to holding the Shares in escrow
         and while acting in good faith and in the exercise of its judgment.

         4.4 Ownership Limit and REIT Status. The Forfeiture Restriction and/or
the Transfer Restriction on the Shares shall not lapse if the lapsing of such
restrictions would likely result in any of the following:

            (a) a violation of the restrictions or limitations on ownership
         provided for from time to time under the terms of the organizational
         documents of the Company; or

            (b) income to the Company that could impair the Company's status as
         a real estate investment trust, within the meaning of Section 856
         through 860 of the Code.

         4.5 Notices. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of its Secretary, and
any notice to be given to the Holder shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
4.5, either party may hereafter designate a different address for notices to be
given to it or him. Any notice which is required to be given to the Holder
shall, if the Holder is then deceased, be given to the Holder's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 4.5. Any notice shall
have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.

         4.6 Rights as Stockholder. Except as otherwise provided herein, upon
delivery of the Shares to the escrow holder pursuant to Section 4.3, the Holder
shall have all the rights of a stockholder with respect to said shares, subject
to the restrictions herein, including the right to vote the shares and to
receive all dividends or other distributions paid or made with respect to the
Shares; provided, however, that any and all shares of Common Stock received by
the Holder with respect to such Shares as a result of stock dividends, stock
splits or any other form of recapitalization shall also be subject to the
Forfeiture Restriction and the Transfer Restriction until such restrictions on
the underlying Shares lapse or are removed pursuant to this Agreement.

         4.7 Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.

         4.8 Conformity to Securities Laws. The Holder acknowledges that the
Plan and this Agreement are intended to conform to the extent necessary with all
provisions of all applicable federal and state laws, rules and regulations
(including but not limited to, the Securities Act and the Exchange Act) and to
such approvals by any listing, regulatory or other governmental authority as
may,

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in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Notwithstanding anything herein to the contrary, this
Agreement shall be administered, and the Shares shall be issued, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan, this Agreement and the Shares issued
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

         4.9 Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this Agreement, the Plan,
the Shares and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan, this Agreement and the Shares issued hereunder shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule.
Furthermore, notwithstanding any other provision of the Plan or this Agreement,
the Shares shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162{m)(4)(C) of the Code, and this Agreement shall be deemed amended to the
extent necessary to conform to such requirements unless the Committee shall have
determined that the Shares are not intended to so qualify.

         4.10 Governing Law. The laws of the State of Maryland shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

         4.11 Survival of Terms. This Agreement shall apply to and bind Holder
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.

         4.12 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

         4.13 Assignment. Except as otherwise provided herein, the Company's
rights and obligations hereunder may be assigned to any Company Subsidiary or to
any successor pursuant to a merger, consolidation or similar event. Subject to
the foregoing, this Agreement and the respective rights and obligations of the
parties hereto shall inure to the benefit of and be binding upon, the successors
and assigns of the parties.

         4.14 Invalid Provision. The invalidity or unenforceability of any
particular provision hereof shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision was omitted.

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         IN WITNESS HEREOF, this Agreement has been executed and delivered by
the parties hereto.

Holder:                                        ARDEN REALTY, INC., a Maryland
                                               corporation

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Address                                        By:
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City, State, Zip Code                          Its:

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Holder's Taxpayer Identification Number

                                               ARDEN REALTY LIMITED
                                               PARTNERSHIP, a Maryland Limited
                                               Partnership

                                               By: ARDEN REALTY INC.,
                                                   a Maryland corporation
                                                   Its: Sole General Partner

                                               By:
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                                                  Its:<PAGE>
                                                                    EXHIBIT 10.1

                       BROCADE COMMUNICATION SYSTEMS, INC.

                          TERMS OF EMPLOYMENT AGREEMENT

1. Position and Duties:       Consultant to the Chief Executive Officer (the
                              "CEO") of Brocade Communications Systems Inc. (the
                              "Company") and to the Board of Directors of the
                              Company (the "Board"). Consultant reports to the
                              CEO and the Board. Consultant will render such
                              business and professional services in ways and at
                              times as reasonably directed by the CEO and the
                              Board which are consistent with his role as a
                              strategic advisor. Consultant will work
                              exclusively for the Company during the Term of
                              Employment, except that Consultant may continue
                              his affiliation with the San Jose Sharks, serve on
                              other boards of directors (subject to paragraph 14
                              below) and/or perform services for tax-qualified
                              charitable organizations. Consultant agrees he
                              will not stand for reelection as a Board member at
                              the next annual meeting.

2. Term of Agreement:         Two years, beginning effective January 18, 2005
                              (the "Effective Date").

3. Term of Employment:        At will; employment may be terminated by
                              Consultant or the Company, at any time. Severance
                              payable, as described below, upon the Company's
                              termination of Consultant without "Cause" (as
                              defined under "Severance" below) or Consultant's
                              resignation for "Good Reason" (as defined under
                              "Severance" below).

4. Total Cash Compensation:   $910,000 per year, consisting of $520,000 in base
                              salary and $390,000 in incentive compensation.
                              Payment of Total Cash Compensation is based on the
                              fulfillment of the terms and conditions of this
                              agreement. The Total Cash Compensation will be
                              paid periodically in accordance with the Company's
                              normal payroll and incentive compensation
                              practices and procedures and will be subject to
                              the usual, required withholdings.

5. Expenses:                  The Company will reimburse the Consultant for all
                              reasonable travel, entertainment and other
                              expenses incurred by the Consultant in the
                              furtherance of his performance of his duties, in
                              accordance with the Company's expense
                              reimbursement policy in effect from time to time.
                              In addition, the Company will

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                              reimburse the Consultant for the expense incurred
                              by the Consultant in the operation of his private
                              plane, when used for Company business, up to the
                              first class ticket market rate charged by
                              commercial airlines.

6. Options:                   The Consultant's options will continue to vest in
                              accordance with the current vesting schedules in
                              the Consultant's option agreements during the Term
                              of Employment, and subject to the acceleration
                              described under "Severance" below.

7. Benefits:                  During the Term of Employment, Consultant will be
                              eligible to participate in the Company's employee
                              benefit plans, policies and arrangements
                              applicable to other employees, as in place from
                              time to time, subject to the continued benefits
                              described in "Severance" below.

8. Termination of Employment: In the event Consultant's employment with the
                              Company terminates for any reason, the Consultant
                              shall be entitled to (a) all Base Salary accrued
                              up to the effective date of termination, (b) all
                              pay for accrued by unused vacation that the
                              Company is legally obligated to pay Consultant, if
                              any, (c) all benefits or compensation accrued
                              prior to termination, as provided under the terms
                              of any employee benefit and compensation
                              agreements or plans applicable to the Consultant,
                              and (d) all business expenses required to
                              reimbursed under the Company's expense
                              reimbursement policy to the Consultant with
                              respect to business expenses incurred prior to
                              termination. In addition, if the termination is by
                              the Company without Cause or by the Consultant for
                              Good Reason, he shall be entitled to the amounts
                              and benefits specified in paragraph 10; provided,
                              however, that the amounts specified in paragraph
                              10 will be reduced by amounts that Consultant is
                              eligible to receive as severance under any other
                              Company plan, policy, or practice. If the
                              termination is by the Company for Cause, the
                              Consultant is entitled to no severance or "Change
                              of Control" amounts and benefits specified in
                              paragraph 10.

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9. D&O Insurance              Consultant will retain any and all rights under
                              the Company's D&O policy through his employment
                              and while liability exists thereafter.

10. Severance: (1)            In the event that during the term of the
                              Agreement, the Company terminates Consultant's
                              employment without "Cause" or Consultant resigns
                              for "Good Reason," Consultant shall receive: (i)
                              continued payment of Consultant's base salary and
                              incentive compensation for the "Severance Period"
                              (ii) reimbursement for COBRA premiums for
                              Consultant and Consultant's eligible dependents,
                              payable when such premiums are due, provided
                              Consultant elects to continue medical coverage
                              under applicable law for the "Severance Period"
                              and (iii) continued vesting for the "Severance
                              Period" with respect to all outstanding equity
                              awards granted by the Company. "Severance Period"
                              means the period beginning on the day following
                              Consultant's termination of employment and ending
                              on the date that is 24 months from the Effective
                              Date.

                              Consultant's options that vested prior to
                              termination are subject to the terms and
                              conditions in accordance with the applicable
                              option agreements. Consultant shall be permitted
                              to exercise those options that continue vesting
                              for the Severance Period in accordance with this
                              Agreement until ninety days after the end of the
                              Severance Period.

                              If a Change of Control occurs while the Consultant
                              is employed under this Agreement, Consultant will
                              receive accelerated vesting with respect to 100%
                              of the then unvested portion of all outstanding
                              equity awards.

                              The severance payments and accelerated vesting
                              will be subject to applicable tax withholding and
                              to (i) Consultant signing and not revoking a
                              separation

--------
     (1) Under the new Internal Revenue Code Section 409A, such severance may be
subject to an additional 20% income tax and interest penalties to Consultant,
unless the severance is distributed at least 6 months after the Consultant
terminates employment. Therefore, we should discuss accruing the severance
benefits to Consultant during the first 6 months but delaying actual payment of
the benefits until 6 months have elapsed to meet the requirements of Internal
Revenue Code Section 409A to avoid an additional tax on the Consultant under
Section 409A.

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                              agreement and release of claims satisfactory to
                              the Company and (ii) Consultant continuing to
                              comply with the non-solicitation, non-compete, and
                              non-disparagement agreements with the Company
                              described under "Non-Solicitation, Non-Competition
                              and Non-Disparagement" below.

                              "Cause" means (i) Consultant's willful failure to
                              perform his assigned duties and responsibilities
                              reasonably assigned to him that are not corrected
                              within a fifteen (15) day correction period, after
                              there has been delivered to Consultant a written
                              demand for performance from the CEO or the Board
                              of Directors which describes the basis for the
                              belief of the CEO or the Board of Directors that
                              Consultant has not substantially performed his
                              duties and provides Consultant with fifteen (15)
                              days to take corrective action; (ii) any act of
                              personal dishonesty taken by Consultant in
                              connection with his responsibilities as an
                              employee of the Company with the intention or
                              reasonable expectation that such may result in
                              substantial personal enrichment of Consultant;
                              (iii) Consultant's conviction of, or plea of nolo
                              contendere to, a felony which the Board reasonably
                              believes has had or will have a material
                              detrimental effect on the Company's reputation or
                              business; or (iv) Consultant materially breaching
                              Consultant's Confidential Information Agreement
                              (defined below) or the Consultant's exclusive
                              employment, non-compete, non-solicitation and
                              non-disparagement agreements with the Company
                              described under "Terms of Employment" above and
                              "Non-Solicitation, Non-Competition and
                              Non-Disparagement" below, which breach is (if
                              capable of cure) not cured within fifteen (15)
                              days after the Company gives written notice to the
                              Consultant of the breach.

                              "Good Reason" means the occurrence of any of the
                              following, without Consultant's consent, prior to
                              a Change of Control or more than twelve (12)
                              months following a Change of Control: (i) a
                              reduction in Consultant's Base Salary; (ii) the
                              Company requiring Consultant to relocate his
                              principal place of business or the Company
                              relocating its headquarters, in either case to a
                              facility or location outside of a twenty-five (25)

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                              mile radius from Consultant's current principal
                              place of employment; or (iii) any material breach
                              by the Company of this agreement; provided,
                              however, that Consultant only will have Good
                              Reason if the event or circumstances constituting
                              Good Reason specified in any of the preceding
                              clauses is not cured within fifteen (15) days
                              after Consultant gives written notice to the
                              Board.

                              "Change of Control" means (i) an acquisition of
                              the Company through the sale of all or
                              substantially all of its assets; (ii) a merger or
                              other business combination in which the Company is
                              not the surviving entity, or any reverse merger
                              where the Company is the surviving entity in each
                              case where more than 50% of the Company's combined
                              voting power is transferred to a person(s)
                              different from those holding such voting power
                              immediately prior to such acquisition; or (iii) an
                              acquisition by any person or related group of
                              persons, other than a group that includes
                              Consultant and other than the Company, of
                              beneficial ownership of securities possessing more
                              than 50% of the total combined voting power of the
                              Company's outstanding securities.

11. Indemnification:          Full "Rite-Aid" rights.

12. Death and Disability:     In the event of a termination of Consultant's
                              employment due to death or disability, Consultant
                              will be entitled to payments and benefits only in
                              accordance with the Company's standard plans,
                              programs, and practices.

13. Full Release:             Consultant will sign a full release of any and all
                              claims, duties, obligations, actions and causes of
                              action, whether known or unknown, which he now
                              has, ever had, or shall or may hereafter have
                              against the Company, its directors, officers,
                              employees, advisors and related parties arising
                              from, directly or indirectly, any events, acts or
                              omissions that occurred prior to the date of
                              execution of the Employment Agreement. Pursuant to
                              paragraph 10, and as a condition to receive the
                              severance payments as described above, Consultant
                              will sign a supplemental release containing
                              similar terms promptly following termination.

                                                                             -5-
<PAGE>
14. Non-Solicitation,
    Non-Competition and
    Non-Disparagement:        During the period of employment and two years
                              thereafter, Consultant shall not (i) solicit any
                              employee of the Company for employment other than
                              at the Company, (ii) directly or indirectly
                              provide services to, have any ownership interest
                              in or participate in any entity that competes with
                              the Company, or (iii) knowingly disparage,
                              criticize, or otherwise make any derogatory
                              statements regarding the Company and/or its
                              officers or directors. A general advertisement not
                              targeted specifically at a Company employee or
                              employees that is placed in general circulation
                              media outlets will not be a violation of clause
                              (i). Notwithstanding clause (i), upon the request
                              of a Company employee, Consultant may serve as an
                              employment reference for the employee. The Company
                              (in officially sanctioned communications) will not
                              knowingly disparage, criticize, or otherwise make
                              any derogatory statements regarding the
                              Consultant. The Company will instruct its officers
                              and directors to not knowingly disparage,
                              criticize, or otherwise make any derogatory
                              statements regarding the Consultant.

15. Arbitration:              All disputes arising as a result of Consultant's
                              employment, including the termination thereof, or
                              Consultant's compensation or benefits shall be
                              resolved through binding arbitration.

16. Attorneys' Fees:          The Company shall reimburse Consultant up to
                              $50,000 for reasonable attorneys' fees incurred in
                              the negotiation of this term sheet and the
                              preparation, and execution of an Employment
                              Agreement reflecting this term sheet.

17. Supersedes:               The Employment Agreement will supersede all other
                              agreements between the Company or any subsidiary
                              and Consultant except the Confidential Information
                              Agreement and standard forms of equity award grant
                              and/or agreement (provided that the "Severance"
                              and "Change of Control" related acceleration and
                              exercisability provisions contained in the
                              Employment Agreement, to the extent they differ
                              from existing provisions, shall supersede any such
                              provisions contained in the equity award grant
                              and/or agreement).

18. Governing Law:            The Employment Agreement will be governed by the
                              internal laws of the State of California, without
                              reference to the principles of conflicts of laws
                              thereof.

                                                                             -6-

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