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Employment Agreement - Catellus Development Corp. and Doug Gardner



TO:    Doug Gardner

FROM:  Nelson Rising

DATE:  November 14, 1997

RE:    Memorandum of Understanding Regarding Employment

On behalf of Catellus Development Corporation ('Catellus'), I am pleased to
confirm our offer of employment to you.  This Memorandum of Understanding
('Memorandum') sets forth the terms of your employment with Catellus Development
Corporation ('Catellus'), and entirely supersedes any previous understandings,
whether oral or in writing.

The following provisions will govern your employment with Catellus:

*    Effective October 1, 1997, you became a full-time, regular employee with 
     the title of Vice President, and you will be continue to be expected to 
     handle such responsibilities and perform such work as may be assigned.

*    You  acknowledge  and agree that your employment will be 'at-will' and
     that either  Catellus or you, at any time,  with or without  cause and
     with or without  notice,  may terminate the  employment  relationship,
     including all  compensation  and benefits.  However,  should  Catellus
     terminate  your  employment  without cause before October 1, 2000, (A)
     Catellus  will pay to you the  amount  of your cash  compensation  and
     total bonus (Target Bonus and Additional Bonus, both as defined below)
     for the preceding  calendar year, or if the termination  without Cause
     occurs  before  December 31, 1998,  the amount of your base salary and
     Target Bonus for the year during which the  termination  without Cause
     occurs,  and (B) the options  awarded to you pursuant hereto will vest
     immediately.  For purposes of this  Agreement,  'Cause' means that the
     Chief Executive  Officer ('CEO') shall have determined that any of the
     following events has occurred: (i) the substandard  performance by the
     Employee  of  his  duties  and  authorities,  based  on the  level  of
     competence,  consistency, quality, integrity or achievement considered
     desirable by the CEO, (ii) the commission by the Employee of an act of
     fraud or embezzlement, (iii) misconduct by the Employee as an employee
     of the Company or any  affiliate,  including  without  limitation  the
     unauthorized  disclosure of confidential or proprietary information of
     the  Company  or any  affiliate  by the  Employee,  or (iv) any  other
     failure  of  the  Employee   properly  to  discharge  the  duties  and
     authorities of his position which the CEO determines (A) constitutes a
     material  neglect  of  the  Employee's  duties  or  authorities,   (B)
     constitutes a breach of the Employee's fiduciary duties to the Company
     and its stockholders or (C) involves

   any criminal activity on the part of the Employee or exposes the Company or 
   any affiliate to any inappropriate risk.

*  You will be compensated at the initial Monthly Salary rate of Fifteen
   Thousand Dollars ($15,000.00), payable in accordance with Catellus' normal
   payroll practices and subject to all applicable tax withholding requirements.

*  You will receive in 1997 a total grant of stock options to purchase 100,000
   shares of Catellus stock under the Company's Executive Stock Option Plan.

*  For 1997, you have received contemporaneously herewith a signing bonus of
   $35,000 (less applicable withholding). In addition, you will be eligible
   for 1997 to receive a Target Bonus of up to 60% of your base salary
   actually paid in 1997, subject to satisfaction of target performance
   criteria as determined by Senior Management. For 1997 you will also be
   eligible for an Additional Bonus of up to 60% of your Base Salary actually
   paid in 1997, subject to satisfaction of the criteria for exceptional
   performance as determined by Senior Management. The performance criteria
   will be established by Senior Management and may relate to individual
   goals, company or division goals, or a combination. The maximum bonus
   potential will be paid only for extraordinary performance. To be eligible
   for either bonus, you must remain employed through the date the bonus is
   paid. Any bonus which you are entitled to receive for 1997 will be paid no
   later than March 31, 1998. With respect to future years, Senior Management
   will determine your eligibility to participate in such bonus programs as
   may be made available by Catellus to executives of your level.

*  You will receive an automobile allowance of $726.75 per month.

*  As a condition of employment, you will be required to review the Company's
   Personnel Policies Manual (sent to you under prior correspondence), execute
   the Manual's Receipt and Acknowledgement (which is the last page of the
   Manual), and return such Receipt and Acknowledgment to Jaime Gertmenian no
   later than December 15, 1997.

*  This Memorandum will be governed by the laws of the State of California.


I agree to the terms of this Memorandum.

Dated:                                /s/ Douglas J. Gardner    
      ____________________________    _____________________________________
                                      Doug Gardner

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