Employment Agreement - Catellus Development Corp. and Nelson C. Rising


 
                        CATELLUS DEVELOPMENT CORPORATION
                        --------------------------------



                              Employment Agreement


                                      with



                                NELSON C. RISING
                                ----------------



                                                   July 27, 1994

 
                               TABLE OF CONTENTS
 
                                                   Page
                                                   ----
                                               
1.   Performance of Services......................   1
     (a)      Position............................   1
     (b)      Commitment..........................   2
     (c)      Authority...........................   2
     (d)      Annual Performance Review...........   3
     (e)      Relocation..........................   3
     (f)      Disability..........................   3
     (g)      Agreement Term and Transition Period   4
     (h)      Subsidiary..........................   4

2.   Compensation.................................   4
     (a)      Salary..............................   4
     (b)      Bonus...............................   4
     (c)      Stock Options.......................   5
     (d)      Disability..........................   5
     (e)      Vacation............................   5
     (f)      Benefits and Perquisites............   5
     (g)      Expenses............................   5

3.   Termination..................................   6
     (a)      Death...............................   6
     (b)      Permanently Disabled................   6
     (c)      Cause...............................   6
     (d)      Constructive Discharge..............   7
     (e)      Termination by Executive............   8
     (f)      Mutual Agreement....................   8
     (g)      Termination by Company Without Cause   8
     (h)      Notice of Termination...............   9
     (i)      Date of Termination.................   9

4.   Rights Upon Termination......................   9

5.   Duties on Termination........................  11

6.   Mitigation and Set-Off.......................  11

7.   Confidential Information.....................  12

8.   Non-Disparagement............................  12

9.   Defense of Claims............................  13

10.  Change of Control............................  13
 
11.  Remedies.....................................  16
 
12.  Nonalienation................................  16
 


                                       i

 


                                  
13.  Amendment; Other................  16
 
14.  Applicable Law..................  16
 
15.  Severability....................  16

16.  Waiver of Breach................  17

17.  Successors......................  17

18.  Notices.........................  17

19.  Arbitration of All Disputes.....  18

20.  Costs of Enforcement............  18
 
21.  Survival of Agreement...........  19
 
22.  Title and Headings..............  19
 
23.  Enforceability..................  19
 
24.  Indemnity.......................  19
 
25.  Payment of Fees For Counsel 
      and Fees for Compensation
      Consulting Firm................  19
 
26.  Acknowledgment by Executive.....  19
 
Exhibit A Stock Option Awards to 
 Executive...........................  21


                                       ii


 
                              EMPLOYMENT AGREEMENT
                              --------------------


          THIS EMPLOYMENT AGREEMENT ('Agreement'), made and entered into as of
July 27, 1994 (the 'Effective Date'), by and between Nelson C. Rising (the
     ---                                                                  
'Executive') and Catellus Development Corporation, a Delaware corporation having
its principal executive offices in San Francisco, California (the 'Company');

                                WITNESSETH THAT:
                                --------------- 

     WHEREAS, the Company is engaged in the business of developing, managing and
marketing commercial, industrial and other real estate; and

     WHEREAS, the Executive has substantial experience and expertise in the
field of real estate development; and

     WHEREAS, the Company desires to secure the services of the Executive as
President and Chief Executive Officer of the Company and the Executive desires
to perform such services for the Company on the terms and conditions hereinafter
set forth;

     NOW, THEREFORE, in consideration of the mutual agreements set forth below,
the Executive and the Company hereby agree as follows:

     1.  Performance of Services.  The Executive shall be employed by the
         -----------------------                                         
Company in accordance with the following:

(a)  Position.  Subject to the terms of this Agreement, the Company hereby
     --------                                                             
     agrees to employ the Executive as the President and Chief Executive Officer
     of the Company and each of its principal Subsidiaries during the Agreement
     Term (both as defined below), and the Executive hereby agrees to accept and
     remain in such employment during the Agreement Term.  The parties hereto
     contemplate that during the initial portion of the Agreement Term (defined
     below as the 'Transition Period') the Executive will find it necessary to
     devote substantial portions of his personal time to disengaging from his
     current business activities and will therefore be employed by the Company
     on a reduced time basis as its President, rather than as the President and
     Chief Executive Officer of the Company.  Accordingly, the Executive has
     been elected, effective as of the Effective Date of this Agreement, as the
     President of the Company and as a member the Board of Directors of the
     Company (the 'Board') and has also been elected, such election to become
     effective as of September 15, 1994, as the President and Chief Executive
     Officer of the Company, in each case by action of the Board.  During the
     Agreement Term, while the Executive is employed by the Company, the Board
     shall use

                                       

 
     its best efforts to cause the Executive to continue to be elected as a
     member of the Board.

(b)  Commitment.  At all times during the Agreement Term after the Transition
     ----------                                                              
     Period, while the Executive is employed by the Company, the Executive shall
     devote his full time, energies and talents to serving as the President and
     Chief Executive Officer of the Company.  Notwithstanding the foregoing, the
     Executive may devote reasonable time to activities other than those
     required under this Agreement, including the supervision of his personal
     investments and activities involving professional, charitable, educational,
     religious and similar types of organizations, speaking engagements,
     membership on the boards of directors of other organizations, and similar
     activities (including, without limitation, serving as the Chair of the
     Central City Association (a Los Angeles non-profit organization) and Chair
     of the Los Angeles Development Reform Commission, provided that service as
     chair of both such organizations shall terminate on or before December 31,
     1994), to the extent that such other activities do not in the judgment of
     the Board inhibit the performance of the Executive's duties under this
     Agreement, or conflict with the business of the Company or any Subsidiary;
     provided, however, that the Executive shall not serve on the board of
     --------  -------                                                    
     directors of any business, or hold any other position with any business
     without the consent of the Board.  The Company hereby consents to the
     Executive retaining his ownership interest in Maguire/Thomas Partners
     Master Investments, a California limited partnership, which holds interests
     in various Maguire/Thomas projects, and certain other business positions or
     interests, all as described in a separate letter of even date herewith and
     identified by reference hereto.

(c)  Authority.  The Executive shall have the responsibility and authority for
     ---------                                                                
     the overall conduct of the business of the Company and the Subsidiaries,
     including responsibility for the management and operation of those
     entities, and such additional responsibilities, powers and duties,
     consistent with the foregoing, as the Board, and the respective boards of
     directors of each of the Subsidiaries of which the Executive shall be an
     officer, may from time to time prescribe.  In the performance of his
     duties, the Executive shall only be required to report to the Board as a
     whole and not to the Chair thereof and, with respect to his positions as an
     officer of Subsidiaries of the Company, the separate boards of directors of
     each such Subsidiary.  The Executive shall perform his duties faithfully
     and efficiently, subject to the overall policies and directions of the
     Board and such other respective boards of directors.  The Company agrees
     that the duties which may be assigned to the Executive shall be the usual
     and customary duties of the offices to which he

                                       2

 
     may from time to time be elected and shall not be inconsistent with the
     provisions of the charter documents of the Company or applicable law (both
     as in effect from time to time).  After the Transition Period, the
     Executive shall not, without his consent, be assigned tasks that would be
     inconsistent with those of the President and Chief Executive Officer of the
     Company.  The Executive shall have the corporate authority that shall
     reasonably be required to enable the discharge of duties in any of the
     offices that he may hold.  The Executive, as President and Chief Executive
     Officer of the Company, shall be the senior executive, 'leader' and
     spokesperson for the Company, and he will use his best efforts to work in
     'partnership' with the Chair of the Board, which position is, under current
     Board policy and unless the Board otherwise determines, to be held by a
     person other than the person serving as the President and Chief Executive
     Officer, and shall not, in the event the current Board policy is changed,
     be held by any full-time employee of the Company other than the Executive.

(d)  Annual Performance Review.  The Board shall review the performance by the
     -------------------------                                                
     Executive of his responsibilities as President and Chief Executive Officer
     of the Company (which review shall be separate from reviews conducted for
     purposes of determining annual bonus awards) no less frequently than
     annually and shall communicate the Board's assessment of such performance
     to the Executive on or before July 1 of each year, commencing July 1, 1995.

(e)  Relocation.  In connection with his employment hereunder, and subject to
     ----------                                                              
     the following provisions of this paragraph 1(e), the Executive shall not be
     required, without his prior written consent, to relocate the Company
     headquarters or to be based anywhere other than within 50 miles from the
     site of the current headquarters of the Company.  In lieu of reimbursement
     by the Company of separate relocation costs of the Executive, the Company
     shall make a single payment of $175,000 to the Executive within ten days
     from the date of execution of this Agreement.

(f)  Disability.  The Executive shall not be required to perform services under
     ----------                                                                
     this Agreement during any period that he is Disabled.  The Executive shall
     be considered 'Disabled' during any period in which he has a physical or
     mental disability which renders him incapable, after reasonable
     accommodation, of performing his duties under this Agreement.  In the event
     of a dispute as to whether the Executive is Disabled, the Company may refer
     the same to a licensed practicing physician of the Company's choice, and
     the Executive agrees to submit to such tests and examinations as such
     physician shall deem appropriate.

                                       3

 
(g)  Agreement Term and Transition Period.  For purposes of this Agreement, the
     ------------------------------------                                      
     term 'Agreement Term' means the period beginning on the Effective Date and
     ending on December 31, 1997, and the term 'Transition Period' means the
     period beginning on the Effective Date and ending on September 15, 1994.

(h)  Subsidiary.  For purposes of this Agreement, the term 'Subsidiary' means
     ----------                                                              
     any corporation, partnership, joint venture or other entity during any
     period in which more than a fifty percent interest in such entity is owned,
     directly or indirectly, by the Company (or a successor to the Company),
     except to the extent that the Company is unable, whether by contractual
     restriction or otherwise, to exercise control over any such entity.

     2.   Compensation.  During the Agreement Term, while the Executive is
          ------------                                                    
employed by the Company, the Company shall compensate the Executive for his
services as follows:

(a)  Salary.  The Executive shall receive, in substantially equal monthly or
     ------                                                                 
     more frequent installments, a base salary at an annual rate of $350,000
     ('Salary'); provided, however, that during the Transition Period, the
                 --------  -------                                        
     Executive's Salary shall be at a monthly rate of $20,000.

(b)  Bonus.  The Executive shall be entitled to receive annual bonuses from the
     -----                                                                     
     Company in accordance with an annual bonus plan for the Executive and other
     members of the senior management of the Company (the 'Program'), with an
     annual target bonus for the Executive equal to 50% of Salary and a maximum
     bonus opportunity of 75% of Salary through December 31, 1995; provided,
                                                                   -------- 
     however, that the Executive shall receive (i) a guaranteed bonus of $51,000
     -------                                                                    
     for the period of his service from September 15, 1994 through December 31,
     1994, such $51,000 bonus to be payable on or before February 15, 1995, and
     (ii) a guaranteed target bonus of $175,000 for the period of his service
     from January 1, 1995 through December 31, 1995, such bonus to be payable on
     or before February 15, 1996 and to be subject to increase to a maximum of
     $262,000 if maximum performance standards are attained by the Executive.
     On or before November 30, 1994, the Board shall establish performance
     objectives for the Executive, including objectives for maximum bonus awards
     to the Executive under the Program for the year 1995, which objectives
     shall, in view of the limited period of the Executive's performance as of
     such point, be qualitative rather than quantitative in nature.  For each of
     the years 1996 and 1997, the Board shall establish performance objectives
     for the Executive and the determination of his bonus awards under the
     Program, which objectives may include both individual and corporate
     objectives and may include both qualitative and quantitative standards, on
     or before

                                       4

 
     November 30 of the preceding year.  No bonuses shall be guaranteed for
     either of the years 1996 and 1997, but the Executive's annual target bonus
     for each of such years shall be equal to 50% of the Executive's then Salary
     and the maximum bonus opportunity for each of such years shall be equal to
     100% of the Executive's then Salary.

(c)  Stock Options.  The Executive shall be awarded options to purchase stock of
     --------------                                                             
     the Company in accordance with the provisions of the Company's existing
     Amended and Restated Executive Stock Option Plan and Exhibit A hereto,
     which grants of stock options shall be effective as of the Effective Date
     hereof.

(d)  Disability.  The Executive shall receive from the Company disability income
     ----------                                                                 
     replacement coverage which will provide for replacement of income, to the
     extent available at a commercially reasonable rate of premiums, during any
     period in which the Executive is Disabled if the disability arose during
     the Agreement Term and prior to the Executive's Date of Termination.
     During any period while the Executive is Disabled, and is otherwise
     entitled to receive Salary under this Agreement, any Salary payments to the
     Executive shall be reduced by the amount of any benefits paid for the same
     period of time pursuant to such disability income replacement coverage.

(e)  Vacation.  The Executive shall be entitled to four weeks paid vacation per
     ---------                                                                 
     year.  The Executive shall be entitled to take such vacation at such time
     or times (without regard to the accrual thereof) as he shall choose during
     the first year of the Agreement Term and within each year thereafter, but
     for purposes of calculation of amounts payable pursuant to Section 4(a)(ii)
     hereof, such vacation entitlement shall accrue solely in accordance with
     the terms of the Company's vacation policy for executive officers generally
     as in effect from time to time.

(f)  Benefits and Perquisites.  The Executive shall be entitled to receive
     -------------------------                                            
     benefits to such extent as, and on terms no less favorable to the Executive
     than, those benefits provided by the Company from time to time to the
     Company's other senior management employees and consistent with the
     separate memorandum (the 'Benefits Memorandum') provided to the Executive
     concurrently herewith and identified by reference to this paragraph 2(f).
     The Executive shall also be entitled to receive the perquisites that are
     set forth in the Benefits Memorandum.

(g)  Expenses.  The Executive shall be authorized to incur reasonable expenses
     --------                                                                 
     for entertainment, travel, meals, lodging and similar items in the conduct
     of the Company's

                                       5

 
     business.  The Company shall reimburse the Executive for all reasonable
     expenses so incurred.

     3.   Termination.  The Executive's employment with the Company during the
          -----------                                                         
Agreement Term may be terminated by the Company or the Executive without any
breach of this Agreement only under the circumstances described in the following
paragraphs 3(a) through 3(g):

(a)  Death.  The Executive's employment hereunder will terminate upon his death.
     -----                                                                      

(b)  Permanently Disabled.  The Company may terminate the Executive's employment
     --------------------                                                       
     with the Company during any period in which the Executive is Permanently
     Disabled.  The Executive shall be considered 'Permanently Disabled' during
     any period in which (i) he has a physical or mental disability which
     renders him incapable, after reasonable accommodation, of performing his
     duties under this Agreement; (ii) such disability is determined by the
     Board to be of a long-term nature; and (iii) the Executive is eligible for
     income replacement benefits under the Company's long-term disability plan
     during such period of disability.  In the event of a dispute as to whether
     the Executive is Permanently Disabled, the Company may refer the same to a
     licensed practicing physician of the Company's choice, and the Executive
     agrees to submit to such tests and examinations as such physician shall
     deem appropriate.

(c)  Cause.  The Company may terminate the Executive's employment hereunder at
     -----                                                                    
     any time for Cause.  For purposes of this Agreement, the term 'Cause' shall
     mean:

     (i)  the willful and continued failure by the Executive substantially to
          perform his material duties with the Company (other than any such
          failure resulting from the Executive's being Disabled), after a
          written demand for substantial performance of such duties is delivered
          to the Executive by the Board, which demand identifies the manner in
          which the Board believes that the Executive has not substantially
          performed his duties and the Executive has been given a reasonable
          period of time (but in no event more than 60 days) to correct his
          deficient performance; or

     (ii) the engaging by the Executive in egregious misconduct involving
          serious moral turpitude to such an extent that, in the reasonable
          judgment of the Board, such misconduct substantially impairs the
          Executive's ability effectively to perform his duties with the
          Company.

                                       6

 
     For purposes of this Agreement, no act, or failure to act, on the
     Executive's part shall be deemed 'willful' unless done, or omitted to be
     done, by the Executive without reasonable belief that the Executive's
     action or omission was in the best interest of the Company.

(d)  Constructive Discharge.  If the Company materially breaches its obligations
     -----------------------                                                    
     to the Executive under this Agreement, and:

     (i)  the Executive provides written notice to the Company of the occurrence
          of such breach, which identifies the manner in which the Executive
          believes that the breach has occurred, and which is delivered to the
          Company within a reasonable period (but in no event more than 90 days)
          after the Executive has actual knowledge of the events asserted to
          give rise to the breach; and

     (ii) the Company fails to correct any such breach within a reasonable
          period (but in no event more than 60 days) after receipt of the notice
          described in paragraph (d)(i);

     then, for purposes of this Agreement, the Executive shall be considered to
     have been dismissed by the Company for reasons other than Cause.  A
     material breach of this Agreement by the Company shall include, without
     limitation:

     (I)       assigning duties to the Executive that are inconsistent in any
               substantial respect with the position, authority, or
               responsibilities associated with the position of President and
               Chief Executive Officer of the Company or, after a Change of
               Control of the Company (as defined in paragraph 10(c) hereof) in
               which the Company is not the surviving entity, the Executive is
               not permitted to serve as the chief executive officer and a
               member of the board of directors of the successor entity to the
               Company;

     (II)      assigning additional duties to the Executive that substantially
               impair his ability to function as President and Chief Executive
               Officer of the Company;

     (III)     the failure by the Company to accord to the Executive the title,
               authority and responsibilities of President and Chief Executive
               Officer of the Company;

     (IV)      the failure of the Executive to be elected a member of the Board;

                                       7

 
     (V)       a reduction by the Company in the Executive's Salary from that
               provided for in this Agreement;

     (VI)      a requirement for the relocation of the Executive imposed by the
               Board in violation of this Agreement;

     (VII)     the intentional failure of the Company, without the Executive's
               consent, to pay to the Executive any portion of his Salary,
               earned bonus or other current compensation (if any), or to pay to
               the Executive any portion of any installment of deferred
               compensation under any deferred compensation program of the
               Company, within 10 business days of the date such compensation is
               due or to issue shares of common stock of the Company in
               accordance with the terms of stock options granted to the
               Executive upon valid exercise thereof;

     (VIII)    in the event that there is a successor to the Company, the
               failure of the Company to obtain a satisfactory agreement from
               any such successor to assume and to perform the obligations of
               the Company under this Agreement; or

     (IX)      the failure of the Company to fulfill any of its other material
               obligations to the Executive under this Agreement.

(e)  Termination by Executive.  The Executive may terminate his employment
     ------------------------                                             
     hereunder at any time by giving the Company prior written Notice of
     Termination (as defined in paragraph 3(h)), which Notice of Termination
     shall be effective not less than 30 days after it is given to the Company,
     provided that nothing in this Agreement shall require the Executive to
     specify a reason for any such termination.  However, to the extent that the
     procedures specified in paragraph 3(d) are required, the procedures of this
     paragraph 3(e) may not be used in lieu of the procedures required under
     paragraph 3(d).

(f)  Mutual Agreement.  This Agreement may be terminated at any time by the
     ----------------                                                      
     mutual agreement of the parties.  Any termination of the Executive's
     employment by mutual agreement of the parties shall be memorialized in an
     agreement reduced to writing and signed by the Executive and a duly
     appointed officer of the Company.

(g)  Termination by Company Without Cause.  The Company may terminate the
     -------------------------------------                               
     Executive's employment hereunder at any time for any reason and without
     Cause, and the Company shall not be required to specify a reason for such
     termination,

                                       8

 
     provided that termination of the Executive's employment by the Company
     shall be deemed to have occurred under this paragraph 3(g) only if it is
     not for reasons described in paragraph 3(a), 3(b), 3(c), 3(d), 3(e) or
     3(f).

(h)  Notice of Termination.  Any termination of the Executive's employment by
     ---------------------                                                   
     the Company or the Executive (other than a termination pursuant to
     paragraph 3(a) (relating to termination by death) or paragraph 3(f)
     (relating to termination by mutual agreement)) must be communicated by a
     written Notice of Termination to the other party hereto.  For purposes of
     this Agreement, a 'Notice of Termination' means a dated notice which (i)
     indicates the specific termination provision in this Agreement relied on
     and (ii) sets forth in reasonable detail the facts and circumstances, if
     any, claimed to provide a basis for termination of the Executive's
     employment under the provision so indicated.

(i)  Date of Termination.  For purposes of this Agreement, the 'Date of
     --------------------                                              
     Termination' means the last day the Executive is employed by the Company;
     provided, that (i) the Executive's employment is terminated in accordance
     with the foregoing provisions of this paragraph 3, and (ii) in the event of
     termination for Cause as defined in paragraph 3(c)(ii) hereof such Date of
     Termination shall not be less than two business days after the Executive
     has received written notice of the intention to so terminate the Executive.

     4.   Rights Upon Termination.  The Executive's right to payment and
          -----------------------                                       
benefits under this Agreement upon or for periods after his Date of Termination
shall be determined in accordance with the following provisions of this
paragraph 4:

(a)  If the Executive's Date of Termination occurs during the Agreement Term for
     any reason, the Company shall pay to the Executive:

     (i)       The Executive's Salary for the period through the Date of
               Termination.

     (ii)      An amount in respect of unused vacation days as of the Date of
               Termination, as determined in accordance with Company policy as
               in effect from time to time.

     (iii)     Except in the case of termination pursuant to paragraph 3(c)
               (relating to termination of the Executive for Cause) or paragraph
               3(e) (relating to the Executive's resignation), a pro rata bonus
               payment, which shall be an amount equal to the product of:

                                       9

 
               (A)  the bonus the Executive would have received for the
                    Company's fiscal year which includes his Date of Termination
                    (determined as though he remained in the employ of the
                    Company through the end of such year and that the
                    performance levels required for the award of a target bonus
                    to the Executive were met);

                                 Multiplied By
                                 -------------

               (B)  a fraction, the numerator of which is the number of days in
                    the fiscal year which includes the Executive's Date of
                    Termination, but excluding the days following such Date of
                    Termination, and the denominator of which is 365 (or, for
                    the fiscal year in which the Effective Date occurs, the
                    number of days during which the Executive would have been
                    employed by the Company during that year if he had remained
                    in the employ until the end of such year).

     (iv)      Any other payments or benefits to be provided to the Executive by
               the Company pursuant to any employee benefit plans or
               arrangements adopted by the Company, to the extent such amounts
               are due from the Company.

     Except as may otherwise be expressly provided to the contrary in this
     Agreement, nothing in this Agreement shall be construed as requiring the
     Executive to be treated as employed by the Company for purposes of any
     employee benefit plan or arrangement following the Executive's Date of
     Termination.

(b)  If the Executive's Date of Termination occurs under circumstances described
     in paragraph 3(a) (relating to the Executive's death), paragraph 3(b)
     (relating to the Executive's being Permanently Disabled), paragraph 3(c)
     (relating to termination of the Executive for Cause), paragraph 3(e)
     (relating to the Executive's resignation) or paragraph 3(f) (relating to
     termination by mutual agreement), or if the Executive's employment with the
     Company terminates after the end of the Agreement Term, then, except as
     otherwise expressly provided in this Agreement or otherwise agreed in
     writing between the Executive and the Company, the Company shall have no
     obligation to make payments under this Agreement for periods after the
     Executive's Date of Termination.

(c)  If the Executive's Date of Termination occurs under circumstances described
     in paragraph 3(d) (relating to Constructive Discharge) or paragraph 3(g)
     (relating to

                                       10

 
     termination by the Company without Cause), then, in addition to the amounts
     payable in accordance with paragraph 4(a), the Executive shall receive from
     the Company for the period continuing through the end of the Agreement
     Term, but not to exceed two years, the Salary described in paragraph 2(a),
     as in effect on his Date of Termination, in monthly or more frequent
     installments as is required under that paragraph, and the bonus amounts the
     Executive would have received, calculated at the applicable target bonus
     levels for the periods involved, had the Executive remained in the employ
     of the Company for such period pursuant to the terms of this Agreement.
     The Company's obligation to make payments under this paragraph 4(c) shall
     cease with respect to periods after the earlier to occur of the date of the
     Executive's death, or a date, if any, of the breach by the Executive of the
     provisions of paragraph 7 or paragraph 8.

(d)  Except as may be otherwise specifically provided in an amendment of this
     paragraph (d) adopted in accordance with paragraph 13, payments under this
     paragraph 4 shall be in lieu of any benefits that may be otherwise payable
     to or on behalf of the Executive pursuant to the terms of any severance pay
     arrangement of the Company or any Subsidiary or any other, similar
     arrangement of the Company or any Subsidiary providing benefits upon
     involuntary termination of employment.

     5.   Duties on Termination.  Subject to the terms and conditions of this
          ---------------------                                              
Agreement, during the period beginning on the date of delivery of a Notice of
Termination and ending on the Date of Termination, the Executive shall continue
to perform his duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate for a smooth
transition to the Executive's successor, if any. Notwithstanding the foregoing
provisions of this paragraph 5, the Company may suspend the Executive from
performing his duties under this Agreement following (i) the delivery of a
Notice of Termination by the Executive providing for the resignation by the
Executive of his positions with the Company provided for herein, or (ii)
delivery by the Company of a Notice of Termination providing for the Executive's
termination of employment for any reason, or (iii) notification to the Executive
of the intention to terminate the Executive for Cause as defined in paragraph
3(c)(ii); provided, however, that during the period of suspension in any of the
          --------  -------                                                    
foregoing cases (which shall in each such case end on the Date of Termination),
the Executive shall continue to be treated as employed by the Company for all
other purposes, and his rights to compensation or benefits shall not be reduced
by reason of the suspension.

     6.   Mitigation and Set-Off.  The Executive shall not be required to
          ----------------------                                         
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise.  The

                                       11

 
Company shall not be entitled to set off against the amounts payable to the
Executive under this Agreement any amounts owed to the Company by the Executive,
any amounts earned by the Executive in other employment after termination of his
employment with the Company, or any amounts which might have been earned by the
Executive in other employment had he sought such other employment.

     7.   Confidential Information.  Except as may be required by the lawful
          ------------------------                                          
order of a court or agency of competent jurisdiction, or except to the extent
that the Executive has express authorization from the Company, the Executive
agrees, both while he is employed by the Company and thereafter, to keep secret
and confidential all non-public information (including, without limitation,
information regarding litigation and pending litigation) concerning the Company
and the Subsidiaries which was acquired by or disclosed to the Executive during
the course of his employment with the Company, or during the course of his
consultation with the Company following his termination of employment
(regardless of whether consultation is pursuant to paragraph 9), and not to
disclose the same, either directly or indirectly, to any other person, firm or
business entity, or to use it in any way.  The Executive agrees that, to the
extent that any court or agency seeks to have him disclose Confidential
Information, the Executive shall promptly inform the Company and shall take such
reasonable steps as are available to the Executive to prevent disclosure of such
Confidential Information until the Company has been informed of such requested
disclosure, and the Company has an opportunity to respond to such court or
agency; provided, that the Executive shall not be required hereby to do so if
        --------                                                             
and to the extent that the Executive would thereby incur personal financial or
other risk.  To the extent that the Executive obtains information on behalf of
the Company or any of the Subsidiaries that may be subject to attorney-client
privilege as to the Company's or any Subsidiaries' attorneys, the Executive
shall take reasonable steps to maintain the confidentiality of such information
and to preserve such privilege.  Nothing in the foregoing provisions of this
paragraph 7 shall be construed so as to prevent the Executive from using, in
connection with his employment for himself or an employer other than the Company
or any of the Subsidiaries, knowledge which was acquired by him during the
course of his employment with the Company and the Subsidiaries that is generally
known to persons of his experience in other companies in the same industry.
Nothing in this paragraph 7 or in paragraph 8 shall be construed as limiting the
Executive's duty of loyalty to the Company while he is employed by the Company,
or any other duty he may otherwise have to the Company while he is employed by
the Company or thereafter.

     8.   Non-Disparagement.  The Executive agrees that both while he is
          -----------------                                             
employed by the Company and after his Date of Termination he shall not make any
false, defamatory or disparaging statements about the Company, the Subsidiaries,
or

                                       12

 
the officers or directors of the Company or the Subsidiaries. Both while the
Executive is employed by the Company and after his Date of Termination, the
Company agrees, on behalf of itself and the Subsidiaries, that neither the
officers nor the directors of the Company or the Subsidiaries shall make any
false, defamatory or disparaging statements about the Executive.

     9.   Defense of Claims.  The Executive agrees that, for the period
          -----------------                                            
beginning on the Effective Date and continuing after his Date of Termination,
the Executive will cooperate with the Company in defense of any claims that may
be made against the Company, and will cooperate with the Company in the
prosecution of any claims that may be made by the Company, to the extent that
such claims may relate to services performed by the Executive for the Company.
The Executive agrees promptly to inform the Company if he becomes aware of any
lawsuits involving such claims that may be filed against the Company.  The
company agrees to reimburse the Executive for all of the Executive's reasonable
out-of-pocket expenses associated with such cooperation, including travel
expenses.  The Executive also agrees promptly to inform the Company if he is
asked to assist in any investigation of the Company (or its actions) that may
relate to services performed by the Executive for the Company, regardless of
whether a lawsuit has then been filed against the Company with respect to such
investigation.

     10.  Change of Control.  In the event that a Change of Control (as defined
          -----------------                                                    
in paragraph 10(c) hereof) occurs during the Agreement Term, while the Executive
is employed by the Company:

(a)  If, within twelve months after the occurrence of the Change of Control, the
     Executive's employment by the Company or its successor is terminated
     pursuant to paragraph 3(d) (relating to Constructive Discharge) or
     paragraph 3(g) (relating to termination by the Company without Cause), then
     the Executive shall be entitled to receive from the Company or such
     successor, in lieu of, and not in addition to, the amounts otherwise
     payable to the Executive pursuant to paragraph 4(c) hereof, a lump sum
     payment in an amount which is equal to three times the 'base amount' in
     respect of the Executive as defined in section 280G of the Internal Revenue
     Code of 1986, as amended (the 'Code'), or any successor to that provision.
     In addition, the stock options described in Exhibit A hereto shall become
     fully vested in such event.

(b)  If any payments under this Agreement, after taking into account all other
     payments to which the Executive is entitled from the Company, or any
     affiliate thereof, are more likely than not to result in a loss of a
     deduction to the Company by reason of Section 280G of the Code or any
     successor provision to that section, such payments shall be reduced to the
     extent required to avoid such loss of deduction.  The Executive shall be
     entitled to select the

                                       13

 
     order in which payments are to be reduced in accordance with the preceding
     sentence.  If requested by the Company, the Executive shall provide
     complete compensation and tax data on a timely basis to the Company and to
     an accounting or law firm designated by the Company in order to enable the
     Company to determine the extent to which payments from the Company and its
     affiliates may result in a loss of a deduction.  If the Executive incurs
     fees or costs in accumulating such information, the Company shall reimburse
     the Executive for any reasonable fees and expenses so incurred.  If the
     Executive and the Company disagree as to whether a payment under this
     Agreement is more likely than not to result in the loss of a deduction, the
     matter shall be resolved by an opinion of tax counsel chosen by the
     Company's independent auditors.  The Company shall pay the fees and
     expenses of such counsel, and shall make available such information as may
     be reasonably requested by such counsel to prepare the opinion.  If, by
     reason of the limitations of this paragraph 10(b), the maximum amount
     payable to the Executive cannot be determined prior to the due date for
     such payment, the Company shall pay on the due date the minimum amount
     which it in good faith determines to be payable and shall pay the remaining
     amount, with interest at a rate, compounded semi-annually, equal to 120% of
     the applicable Federal rate determined under section 1274(d) of the Code,
     as soon as such remaining amount is determined in accordance with this
     paragraph 10(b).

(c)  A 'Change of Control' of the Company shall be deemed to have occurred upon
     the happening of any of the following events:

     (1)  the acquisition or holding, other than in or as a result of a
          transaction approved by the Continuing Directors (as defined in
          paragraph (b) below) of the Company, by any individual, entity or
          group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
          Exchange Act) (an 'Acquiror') of beneficial ownership (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
          more of the combined voting power of the then outstanding shares of
          common stock and other stock of the Company entitled to vote generally
          in the election of directors, but excluding for this purpose:

          (i)       any such acquisition (or holding) by Bay Area Real Estate
                    Investment Associates L.P., a limited partnership that as of
                    the Effective Date holds approximately 42% of the issued and
                    outstanding common stock of the Company (together with the
                    limited partner thereof, 'BAREIA'), or while BAREIA is the
                    beneficial owner of shares having a greater percentage

                                       14

 
                    of such combined voting power than the shares held by the
                    Acquiror;

          (ii)      any such acquisition (or holding) by the Company or any of
                    its Subsidiaries, or any employee benefit plan (or related
                    trust) of the Company or such Subsidiaries; or

          (iii)     any such acquisition (or holding) by any corporation with
                    respect to which, following such acquisition, more than 50%
                    of, respectively, the then outstanding shares of common
                    stock of such corporation and the combined voting power of
                    the then outstanding voting securities of such corporation
                    entitled to vote generally in the election of directors is
                    then beneficially owned, directly or indirectly, by all or
                    substantially all of the individuals and entities who were
                    the beneficial owners, respectively, of the common stock and
                    other voting securities of the Company immediately prior to
                    such acquisition in substantially the same proportion as
                    their ownership, immediately prior to such acquisition, of
                    the then outstanding shares of common stock of the Company
                    and of the combined voting power of the then outstanding
                    voting securities of the Company entitled to vote generally
                    in the election of directors;

     (2)  individuals who, as of the date hereof, constitute the Board (the
          'Continuing Directors') cease for any reason to constitute at least a
          majority of the Board, provided that any individual becoming a
          director subsequent to the date hereof whose election, or nomination
          for election by the Company's stockholders, was approved by a vote of
          at least a majority of the persons then comprising the Continuing
          Directors or who was nominated for such election by BAREIA, shall be
          considered a Continuing Director, but excluding, for this purpose, any
          such individual whose initial election as a member of the Board is in
          connection with an actual or threatened 'election contest' relating to
          the election of the directors of the Company (as such term is used in
          Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

          (3)  approval by the Company's stockholders of (i) a reorganization,
               merger or consolidation of the Company, with respect to which in
               each case all or substantially all of the individuals and
               entities who were the respective beneficial owners of the

                                       15

 
               common stock and voting securities of the Company immediately
               prior to such reorganization, merger or consolidation do not,
               following such reorganization, merger or consolidation,
               beneficially own, directly and indirectly, more than 50% of,
               respectively, the then outstanding shares of common stock and the
               combined voting power of the then outstanding voting securities
               entitled to vote generally in the election of directors, of the
               corporation or other entity resulting from such reorganization,
               merger or consolidation, or (ii) of a complete liquidation or
               dissolution of the Company, or (iii) the sale or other
               disposition of all or substantially all of the assets of the
               Company.

     11.  Remedies.  The Executive acknowledges that the Company would be
          --------                                                       
irreparably injured by a violation of paragraph 7 or 8, and agrees that the
Company, in addition to any other remedies available to it for such breach or
threatened breach, shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining the Executive from
any actual or threatened breach of paragraph 7 or paragraph 8.  If a bond is
required to be posted in order for the Company to secure an injunction or other
equitable remedy, the parties agree that said bond need not be more than a
nominal sum.

     12.  Nonalienation.  The interests of the Executive under this Agreement
          -------------                                                      
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive's beneficiary.

     13.  Amendment; Other.  This Agreement may be amended or cancelled only by
          ----------------                                                     
mutual agreement of the parties in writing and may be amended without the
consent of any other person.  So long as the Executive lives, no person, other
than the parties hereto, shall have any rights under or interest in this
Agreement or the subject matter hereof.  All judgments made and actions taken by
the parties to this Agreement shall be made or taken, as the case may be, in
good faith.

     14.  Applicable Law.  The provisions of this Agreement shall be construed
          --------------                                                      
in accordance with the laws of the State of California without regard to the
conflict of law provisions of any state.

     15.  Severability.  The invalidity or unenforceability of any provision of
          ------------                                                         
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement shall be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).

                                       16

 
     16.  Waiver of Breach.  No waiver by any party hereto of a breach of any
          ----------------                                                   
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
shall operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time.  The failure of any party hereto to take any action by
reason of such breach shall not deprive such party of the right to take action
at any time while such breach continues.

     17.  Successors.  This Agreement shall be binding upon, and inure to the
          ----------                                                         
benefit of, the Company and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business.  The rights of
the Executive to receive payment of amounts of compensation provided for in this
Agreement shall inure to the benefit of, and may be enforced by, the Executive's
estate in the event of his death.

     18.  Notices.  Notices and all other communications provided for in this
          -------                                                            
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or at such other addresses as shall be specified by the parties by
like notice).  Such notices, demands, claims and other communications shall be
deemed given:

(a)  in the case of delivery by overnight service with guaranteed next day
     delivery, such next day or the day designated for delivery;

(b)  in the case of certified or registered U.S. mail, five days after deposit
     in the U.S. mail; or

(c)  in the case of facsimile, the date upon which the transmitting party
     received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received.  Communications that
are to be delivered by the US. mail or by overnight service are to be delivered
to the addresses set forth below:

                                      17

 
to the Company:

               Catellus Development Corporation
               201 Mission Street, 30th Floor
               San Francisco, California 94105

               Attention:  General Counsel


to the Executive:

               Nelson C. Rising
               435 Georgian Road
               La Canada, California 91011

Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.

     19.  Arbitration of All Disputes.  Any controversy or claim arising out of
          ---------------------------                                          
or relating to this Agreement (or the breach thereof) shall be settled by
binding and non-appealable arbitration in San Francisco, California by an
arbitrator.  The Executive and the Company shall initially confer and attempt to
reach agreement on the individual to be appointed as such arbitrator.  If no
agreement is reached, the parties shall request from the San Francisco office of
the Judicial Arbitration and Mediation Services ('JAMS') a list of five retired
judges affiliated with JAMS.  The Executive and the Company shall each
alternately strike names from such list until only one name remains and such
person shall thereby be selected as the arbitrator.  Except as otherwise
provided for herein, such arbitration shall be conducted in conformity with the
procedures specified in the California Arbitration Act (Cal. C.C.P. (S)(S) 1280
et. seq.)  The arbitrator shall not be authorized to award punitive damages with
--  ---                                                                         
respect to any claim, disputes or controversy.  The parties intend that this
paragraph 19 shall be valid, binding, enforceable and irrevocable and shall
survive the termination of this Agreement and that any arbitration proceeding
hereunder shall be concluded within 60 days after the initiation thereof.  The
Company and the Executive shall jointly so instruct the Arbitrator chosen to
arbitrate any dispute arising hereunder and agree that the criteria used by them
to select such arbitrator shall include his or her availability to act
expeditiously within not more than the 60-day period referred to herein.  The
parties hereto agree that the final decisions of the arbitrator so chosen may be
enforced by a court of competent jurisdiction.

     20.  Costs of Enforcement.  In the event any legal action is brought or
          --------------------                                              
that arbitration is commenced in connection with any dispute relating to the
rights and obligations of the parties hereunder the prevailing party or parties
shall be entitled to

                                       18

 
recover reasonable attorneys' fees and other costs incurred in such action or
proceeding in addition to any other relief to which such party may be entitled.

     21.  Survival of Agreement.  Except as otherwise expressly provided in this
          ---------------------                                                 
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive's employment with the Company.

     22.  Title and Headings.  Titles and headings in this Agreement are for
          ------------------                                                
ease of reference ad convenience only, and shall not be construed to affect the
meaning of any provision of this Agreement.

     23.  Enforceability.  Except as otherwise noted herein, the enforceability
          --------------                                                       
of this Agreement shall not cease or otherwise be adversely affected by the
termination of the Executive's employment with the Company.

     24.  Indemnity.  To the fullest extend permitted by applicable law and the
          ---------                                                            
bylaws of the Company as from time to time in effect, the Company shall
indemnify the Executive and hold the Executive harmless against and from any
acts or decisions made in good faith while performing services for the Company,
and the Company shall use its best efforts to obtain coverage for the Executive
under any liability insurance policy or policies now in force or hereafter
obtained during the term of this Agreement.  To the same extent, the Company
will, upon receipt of such undertaking from the Executive as may be required by
applicable law, pay as incurred all expenses, including reasonable attorneys'
fees and costs of court approved settlements, actually and reasonably incurred
by the Executive in connection with defense of or settlement of any action, suit
or proceeding and in connection with any appeal thereon, which has been brought
against the Executive by reason of the Executive's service as an officer or
agent of the Company or of a Subsidiary of the Company.

     25.  Payment of Fees For Counsel and Fees for Compensation Consulting Firm.
          --------------------------------------------------------------------- 
The Company shall pay the Executive's legal fees for the negotiation of this
Employment Agreement and shall pay the fees for the retention of a compensation
consulting firm which payments, in the aggregate, shall not exceed $20,000.

     26.  Acknowledgment by Executive.  The Executive represents to the Company
          ---------------------------                                          
that he is knowledgeable and sophisticated as to business matters, including the
subject matter of this Agreement, that he has read this Agreement and that he
understands its terms.  The Executive acknowledges that, prior to assenting to
terms the terms of this Agreement, he has been given a reasonable time to review
it, to consult with counsel of his choice, and to negotiate at arm's-length with
the Company as to its contents.  The Executive and the Company agree that the
language used in

                                       19

 
this Agreement is the language chosen by the parties to express their mutual
intent, and that no rule of strict construction is to be applied against any
party hereto.

     IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Effective Date.



                                    /s/  NELSON C. RISING
                                    ---------------------
                                      Nelson C. Rising



Catellus Development Corporation


By /s/  JOSEPH R. SEIGER
  ----------------------
  JOSEPH R. SEIGER
  Chairman of the Board
  of Directors and Acting
  Chief Executive Officer

                                       20

 
                                   Exhibit A
                                   ---------

                        Stock Option Awards to Executive
                        --------------------------------


 
Shares         Term     Initial Exercise Price
----------   --------   ----------------------
                  
 
350,000      10 years        $ 6.975
350,000       7 years        $ 6.975
 


          The terms and conditions of the stock options to be granted to the
Executive shall be set forth in two separate agreements, one relating to the
stock options having terms of 7 years and one relating to the stock options
having terms of 10 years.  Each agreement shall provide that (i) the options
covered thereby will become exercisable in three equal annual installments
commencing January 1, 1996; provided, that such options shall become immediately
                            --------                                            
exercisable in full in the event that the Executive is terminated after December
31, 1995 pursuant to paragraph 3(d) (relating to 'Constructive Discharge', as
defined in the Employment Agreement) or paragraph 3(g) (relating to termination
by the Company without Cause) of the Employment Agreement to which this Exhibit
A is attached (the 'Employment Agreement') or that the Executive is terminated
pursuant to such paragraphs of the Employment Agreement at any time within
twelve months following a 'Change of Control' of the 'Company' (both as defined
in the Employment Agreement); (ii) the initial exercise prices of the respective
classes of options indicated above shall increase by 5% each January 1 during
the respective terms thereof, commencing January 1,1996; and (iii) the options
shall otherwise conform to the requirements of the Company's existing Amended
and Restated Executive Stock Option Plan and the terms of the Employment
Agreement.