GRUBB & ELLIS CO
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>9
<FILENAME>c28242_ex10-3.txt
<TEXT>

                                                                    EXHIBIT 10.3

December 20, 2002


Mr. Robert J. Walner
1889 Cavell Avenue
Highland Park, IL 60035

Re:    CHANGE OF STATUS AND SEPARATION AGREEMENT

Dear Bob:

This  letter,  upon  your  signature,   will  constitute  the  entire  agreement
("Agreement")  between  you and Grubb & Ellis  Company  ("G&E"),  and all of its
respective   subsidiaries,   divisions,   affiliates,   and   related   entities
(collectively,  the  "Company")  regarding  the  transition  of your  employment
status,  duties and responsibilities and the termination of your employment with
the Company.

1.     You have decided it would be in the best interests of you and your family
       not to move to New York and to seek new employment opportunities. You are
       resigning "with Good Reason" pursuant to your Employment  Agreement dated
       December 14, 2001.

2.     a)     Your transition date shall be January 2, 2003 ("Transition Date").
              On and after the Transition  Date,  until July 2, 2003, or earlier
              upon  45  days  written   notice  by  you  to  the  Company  (your
              "Termination  Date"),  you  shall  have the title  Executive  Vice
              President,  Chief  Administrative  and Legal Officer and Corporate
              Secretary of G&E, and will report to Barry M. Barovick,  the Chief
              Executive Officer of G&E ("CEO"). From the Transition Date through
              July 2,  2003 you  shall  complete  a legal  and  risk  management
              transition.  From the  Transition  Date through  your  Termination
              Date,  you shall work in the  Company's  Northbrook,  IL office on
              various strategic projects and business initiatives as directed by
              the CEO from time to time.

       b)     From the Transition  Date until your  Termination  Date, you shall
              receive  a base  salary  of  Thirty-Seven  Thousand  Five  Hundred
              Dollars   ($37,500)   per  month,   payable   semi-monthly,   less
              withholding taxes and customary payroll deductions.

       c)     You agree to resign as an officer  and  employee of the Company on
              your  Termination  Date,  and  the  Company  hereby  accepts  such
              resignations.  If the  Company  and you  shall  mutually  agree in
              writing, your Termination Date would be extended in which case you
              shall receive a base salary of Thirty-Seven  Thousand Five Hundred
              Dollars   ($37,500)   per  month,   payable   semi-monthly,   less
              withholding taxes and customary payroll deductions.

3.     After the Effective Date, you or your estate will receive the following:

       (i)    On your Termination  Date, a lump sum in cash equal to One Hundred
              Eighty-Seven Thousand Five Hundred Dollars ($187,500) representing
              your calendar year 2002 bonus; and

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       (ii)   On your Termination  Date, you may receive a cash bonus in respect
              of 2003 in the discretion of the Company; and

       (iii)  After your  Termination  Date,  you shall receive cash payments of
              Seventy-Five Thousand Dollars ($75,000) per month, for six months,
              payable semi-monthly,  or an aggregate total of Four Hundred Fifty
              Thousand Dollars ($450,000),  representing one year's base salary;
              and

       (iv)   On your Termination  Date, you shall receive a lump sum in cash in
              the amount of Forty-Three Thousand Dollars ($43,000)  representing
              the annual  equivalent  of your Company  benefits for  healthcare,
              dental,   vision,  life  insurance,   disability  coverages,   and
              perquisites  for the twelve  month  period  after the  Termination
              Date,  which  has in part been  grossed  up to cover  your  income
              taxes; and

       (iv)   On your  Termination  Date,  you will be paid in cash your accrued
              vacation time pay for 4.5 weeks of accrued vacation pay;

       all of the above to be reduced by withholding taxes and customary payroll
       deductions.

4.     In consideration  of and your acceptance of this Agreement,  and provided
       you have fulfilled your other  obligations  set forth in this  Agreement,
       after the Effective Date the Company shall provide you with the following
       benefits:

       i)     up to Eighteen  Thousand  Dollars  ($18,000)  of senior  executive
              outplacement  benefits  from  the  company  of your  choice,  upon
              receipt by the Company of bills for same; and

       ii)    live voicemail,  network access, secretarial services and cellular
              phone through your  Termination  Date;  you may keep your cellular
              phone; and

       iii)   you and the Company  shall  mutually  agree upon a reasonable  and
              appropriate  interoffice  memorandum,   and  a  press  release  if
              necessary, announcing your exit from the Company.

5.     Except as specifically  provided in this  Agreement,  you hereby abrogate
       and repudiate any and all claims you have under any and all other written
       or oral  agreements  between you and the Company  regarding  the terms of
       your  employment  and any and all  compensation  to be paid to you by the
       Company.

6.     After  your  Termination  Date,  except  for your  rights  under  various
       employee stock option,  deferred  compensation  and 401(k) plans in which
       you are a  participant,  and the  indemnification  provisions  under  the
       Company's bylaws, and the  indemnification  agreement between the Company
       and you,  and in  connection  with  matters for which any of the Released
       Parties  has  maintained  or  maintains  insurance  coverage in the past,
       present or future,  all of which are not  waived by this  Agreement,  you
       will no longer be  covered  by or  eligible  for any  benefits  under any
       Company employee benefit plans in which you currently participate, except
       to the extent you may be  entitled to do so under  applicable  disability
       premium  waivers due to a disability  arising  prior to your  Termination
       Date or to the extent you exercise an individual conversion option. After
       your  Termination  Date, you will receive by separate  cover  information
       regarding your rights to health  insurance  continuation  (COBRA) and any
       401(k), stock option and deferred


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       compensation  plan  benefits.  To the extent  that you have such  rights,
       nothing in this Agreement will impair those rights.

7.     (a)    In exchange for the  compensation  and other rights to be provided
              to you  herein,  to which you are not  otherwise  entitled  except
              pursuant to this  Agreement,  you agree to and hereby do waive and
              release,  and promise  never to assert,  any claims of any kind or
              nature whatsoever,  in law or equity, known or unknown, direct and
              indirect,  that you have against the Company,  and its  respective
              predecessors,   subsidiaries,   affiliates,   associates,  owners,
              divisions, representatives, related entities, officers, directors,
              shareholders,  agents, partners,  insurers, employee benefit plans
              (and  their  trustees,   administrators  and  other  fiduciaries),
              attorneys,    employees,    heirs,    successors,    and   assigns
              (collectively, the "Released Parties"), arising from or related to
              your  employment,  the  transition  of  your  employment,  and the
              termination of your employment with the Company.

              The claims that you are waiving,  releasing  and  promising not to
              assert  include,  but are not limited  to,  claims  arising  under
              federal, state and local statutory and common law, such as the Age
              Discrimination  in Employment Act, as amended,  the Americans with
              Disabilities  Act of 1990,  the Family  Medical Leave Act of 1993,
              Title VII of the Civil Rights Act of 1964,  as amended,  the Equal
              Pay Act of 1963,  as  amended,  the Civil  Rights Act of 1866,  as
              amended,  the common law of contract and tort,  and any other laws
              and   regulations   relating   to   employment,    or   employment
              discrimination and/or the payment of wages or benefits.

       (b)    In  consideration  of  the  foregoing  and  the  execution  of the
              Agreement  by you,  the Company and the  Released  Parties  hereby
              waive and release  and  promise  never to assert any claims of any
              kind or nature  whatsoever,  in law or equity,  known or  unknown,
              direct or indirect  that the Company  (and/or any of the  Released
              Parties)   might  have   against  you  (and   including,   without
              limitation, your partners,  associates,  agents,  representatives,
              related  entities  and/or  affiliates,   contractors  and/or  your
              attorneys).

8.     (a)    You  understand  and agree that the claims  that you are  waiving,
              releasing and promising  never to assert  include  claims that you
              now know or have reason to know  exist,  as well as those that you
              do not presently have any reason to know,  believe or suspect that
              you  have,  including  unknown,   unforeseen,   unanticipated  and
              unsuspected   injuries,   damages,  loss  and  liability  and  the
              consequences thereof. By signing this Agreement you agree that you
              are expressly waiving any provision of any state, federal or local
              statute, and common-law doctrine,  providing, in substance, that a
              release shall not extend to claims, demands,  injuries or damages,
              loss or liability,  which are unknown or unsuspected to exist,  by
              the person making the release, when s/he is making the release.

       (b)    The Company (and the Released  Parties) agree and understand  that
              the claims that they are waiving, releasing and promising never to
              assert  include  claims  that they now know or have reason to know
              exist, as well as those that they do not presently have any reason
              to know, believe or suspect that they may have, including unknown,
              unforeseen,  unanticipated and unsuspected injuries, damages, loss
              and  liability  and  the  consequences  thereof.  By  signing  the
              Agreement  the  Company  (on  behalf  of itself  and the  Released
              Parties)  agrees that the Company (and the  Released  Parties) are
              expressly  waiving any  provision  of any state,  federal or local
              statute, and common law doctrine,  providing in substance,  that a
              release shall not extend to claims, demands,  injuries or damages,
              loss or


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              liability,  which are unknown or unsuspected to exist by the party
              making the release, when it/they are making the release.

9.     You agree that you will not voluntarily,  and without compulsion of legal
       process,  assist or encourage  others to assert  claims or to commence or
       maintain  litigation against the Released Parties.  You also agree not to
       take any action or make any statement which  disparages or is intended to
       disparage the Released Parties or their  reputations.  The Company agrees
       that it will not take any action or make any statement  which  disparages
       or is intended to disparage you.

10.    (a)    If your  Termination  Date is more than  forty-five  days from the
              Effective  Date,  you shall  provide  the  Company  with a General
              Release of all claims in form and substance,  attached hereto,  as
              of your Termination Date.

       (b)    You agree to return to the Company,  by your Termination Date, any
              and all  information  and materials,  whether in paper,  magnetic,
              electronic  or  other  form,  that you have  about  the  Company's
              practices,  procedures,  trade secrets, finances, client lists, or
              marketing of the Company's  services.  You may keep form contracts
              that you developed in your role as General  Counsel or Chief Legal
              Officer  of the  Company.  On  your  Termination  Date,  you  will
              promptly  execute  any and all  notices  of  resignation  from any
              Company  position as requested by the CEO. After your  Termination
              Date,  you will take no  further  action to bind or  obligate  the
              Company. On your Termination Date, you will turn in your corporate
              American Express card.

11.    You  agree  that  you  will  not,  unless  required  by law or  otherwise
       permitted by express  written  permission from or request by the Company,
       disclose to anyone any information regarding the following:

       a.     Any non-public  information  regarding the Company,  including its
              practices,  procedures,  trade secrets, finances, client lists, or
              marketing of the Company's services.

       b.     The terms of this  Agreement,  except that you may  disclose  this
              information  to  members  of  your  immediate  family  and to your
              attorney,  accountant or other professional advisor(s) to whom you
              must make the disclosure in order for them to render  professional
              services to you. You will instruct them,  however, to maintain the
              confidentiality  of this  information  just as you  must,  and any
              breach of this obligation of confidentiality by such family member
              or professional  advisor(s) shall be deemed to be a breach by you.
              If required to disclose  the terms of this  Agreement  by law, you
              shall provide the Company with sufficient notice prior to any such
              disclosure,  including  the  basis for the  legal  requirement  to
              disclose,  to  allow  the  Company  to  seek  a  protective  order
              preventing the disclosure.

12.    You agree that,  commencing on the Effective  Date,  and thereafter for a
       period of twelve  months after your  Termination  Date,  except for Donna
       Reschke  and  Carol  Vanairsdale,   you  shall  not,  without  the  prior
       permission of the CEO or CFO of the Company,  directly or indirectly,  on
       behalf of yourself or any other person or entity  solicit for  employment
       any then current  executive,  employee or  independent  contractor of the
       Company,  or request or induce any then  current  executive,  employee or
       independent  contractor  of the  Company  to  leave  the  employ  of,  or
       association with, the Company.

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13.    Except as  required  by law or  administrative  agency or stock  exchange
       rules, the Company will keep the terms of this Agreement confidential. It
       is expected  that the Company  will file this  Agreement as an exhibit to
       its SEC filings.

14.    In the event that you breach any of your obligations under this Agreement
       or as  otherwise  imposed by law, the Company will be entitled to recover
       the  benefits  paid under the  Agreement  and to obtain all other  relief
       provided  by  law  and  equity.  If  the  Company  breaches  any  of  its
       obligations  under this  Agreement,  you will be  entitled  to obtain all
       relief provided by law and equity.  If either you or the Company believes
       there has been a breach of this Agreement, the party alleging such breach
       shall  notify  the  other  party in  writing  and  provide  a  reasonable
       opportunity  to cure such breach.  In the event of a dispute  between the
       parties to this  Agreement,  the  prevailing  party  shall be entitled to
       recover its or his  expenses  and  reasonable  attorneys'  fees  incurred
       therein from the unsuccessful  party.  This Agreement will be governed by
       the  law of the  State  of  Illinois  without  regard  to  principles  of
       conflicts of laws thereof.

15.    To accept the  Agreement,  please date and sign this Agreement and return
       it, either by personal delivery or by mail, to GRUBB & ELLIS COMPANY, c/o
       Barry M. Barovick,  CEO, 55 E. 59th Street,  New York, NY 10022-1122.  An
       extra original for your records is enclosed.

       A.     YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

       B.     THIS  AGREEMENT  AND ITS TERMS WILL  REMAIN  EFFECTIVE  AND MAY BE
              ACCEPTED  BY YOU IN THE MANNER  DESCRIBED  IN THE  ATTACHED  COVER
              LETTER.

       C.     ONCE YOU ACCEPT THIS AGREEMENT, YOU WILL HAVE SEVEN (7) DAYS AFTER
              SIGNING  TO REVOKE  YOUR  ACCEPTANCE.  TO  REVOKE,  YOU MUST SEND,
              EITHER BY PERSONAL  DELIVERY OR BY MAIL,  TO THE CEO AS  INDICATED
              ABOVE, A WRITTEN  STATEMENT OF  REVOCATION.  IF YOU DO NOT REVOKE,
              THE  EIGHTH  DAY  AFTER  THE DATE OF YOUR  ACCEPTANCE  WILL BE THE
              "EFFECTIVE DATE" OF THIS AGREEMENT.

16.    Nothing in this Agreement  shall  constitute an admission of liability or
       wrongdoing by the Company or by you. This Agreement  shall not be binding
       on the Company  unless and until it is signed,  in  unaltered  form,  and
       returned to the Company as provided above.

17.    In the event  that any one or more of the  provisions  contained  in this
       Agreement  shall,  for any  reason,  be held to be  invalid,  illegal  or
       unenforceable  in any respect,  then to the maximum  extent  permitted by
       law, such invalidity, illegality or unenforceability shall not affect any
       other provision of this Agreement.

18.    The  obligations of the Company under this Agreement  shall be binding on
       the Company and its successors and assigns. This Agreement represents the
       sole and entire  agreement  between  you and the  Company  regarding  the
       transition  and then  termination  of your  services  as  Executive  Vice
       President,   Chief  Administrative   Officer,  Chief  Legal  Officer  and
       Corporate Secretary and supersedes any and all previous verbal or written
       promises,  representations,  agreements, negotiations and/or discussions,
       if any,  between you and the Company with respect to the subject  matters
       covered herein.  This Agreement cannot be terminated or changed except in
       writing by you and a duly authorized representative of G&E.

19.    All  notices,  requests,  demands  and  other  communications  which  are
       required  or may be given  under this  Agreement  shall be in writing and
       shall be deemed to have been duly given when

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       received if personally  delivered;  when  transmitted  if  transmitted by
       telecopy,  electronic or digital  transmission  method,  with  electronic
       confirmation;  when received, if sent for next day delivery to a domestic
       address by recognized overnight delivery service (E.G., Federal Express);
       and upon receipt, if sent by certified or registered mail, return receipt
       requested. In each case notice shall be sent to:

    If to you, addressed to:

    Robert J. Walner
    1889 Cavell Avenue
    Highland Park, IL 60035

    If to Grubb & Ellis Company, addressed to:

    Grubb & Ellis Company
    55 E. 59th Street
    New York, NY 10022-1122
    Attention:  Chief Executive Officer
    Fax:  (212) 326-4903


or to such other place and with such other copies as either party may  designate
as to itself by written notice to the others.

20.    This  Agreement  may be executed  in any number of original or  facsimile
       counterparts, each of which shall be deemed an original, but all of which
       when taken together shall constitute one and the same instrument.




                                        GRUBB & ELLIS COMPANY

                                        BY:  /s/BARRY M. BAROVICK
                                             --------------------
                                             Barry M. Barovick
Dated:  December 20, 2002                    President & Chief Executive Officer


By signing this  Agreement,  I acknowledge  that I have had the  opportunity  to
review it carefully  with an attorney of my choice,  that I understand the terms
of the agreements contained therein, and that I voluntarily agree to them.


Dated:  March 10, 2003                   /s/ ROBERT J. WALNER
                                         ----------------------
                                             Robert J. Walner


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                       GENERAL RELEASE BY ROBERT J. WALNER
                       -----------------------------------

       FOR AND IN  CONSIDERATION  OF the terms and  conditions of the Separation
Agreement  dated as of December  20,  2002 by and between  ROBERT J. WALNER (the
"Executive")  and  GRUBB  &  ELLIS  COMPANY  (the  "Company")  (the  "Separation
Agreement"),  the Executive agrees, on behalf of himself, his heirs,  executors,
administrators and assigns, to release and discharge the Company, and all of its
current  and  former  officers,  directors,   employees,  agents,  stockholders,
subsidiaries,  divisions, affiliates, parents, successors and assigns ("Released
Parties") from any and all manner of actions and causes of action, suits, debts,
dues, accounts, bonds, covenants,  contracts,  agreements,  judgments,  charges,
claims,  and  demands  whatsoever  ("Losses")  which the  Executive,  his heirs,
executors,  administrators  and assigns have, or may hereafter  have against the
Released Parties or any of them arising out of or by reason of any cause, matter
or  thing  whatsoever  from the  beginning  of the  world  to the  date  hereof,
including  without  limitation  any and all matters  relating to his  Employment
Agreement  with the Company,  his  employment  by the Company and the  cessation
thereof, and all matters arising under any federal, state or local statute, rule
or  regulation  or principle of contract  law or common law,  including  but not
limited to Title VII of the Civil  Rights  Act of 1964,  AS  AMENDED,  42 U.S.C.
ss.ss.  2000e ET SEQ.,  the Age  Discrimination  in  Employment  Act of 1967, AS
AMENDED,  29 U.S.C.  ss.ss. 621 ET SEQ., the Americans with  Disabilities Act of
1990, AS AMENDED, 42 U.S.C. ss.ss. 12101 ET SEQ., the Employee Retirement Income
Security Act of 1974, AS AMENDED,  29 U.S.C.  ss.ss.  1001 ET SEQ., the New York
State Human Rights Law, AS AMENDED,  N.Y. Exec. Law ss.ss.  290 ET SEQ., the New
York City Human Rights Law, AS AMENDED, N.Y.C. Admin. Code ss.ss. 8-101 ET SEQ.,
and any other equivalent  state or local statute;  PROVIDED,  HOWEVER,  that the
Executive  does not release and discharge  the Released  Parties from any Losses
arising out of or in connection with his Separation Agreement.  It is understood
that  nothing in this  General  Release is to be  construed  as an  admission on
behalf of the Released  Parties of any wrongdoing with respect to the Executive,
any such  wrongdoing  being  expressly  denied.  This General  Release shall not
affect any unpaid claims of Executive under any medical,  accident or disability
insurance policy or employee medical care account.

       Notwithstanding  anything  to  the  contrary  in  this  General  Release,
Executive's rights, if any, to employee stock options, deferred compensation and
401-K plans in which Executive is a participant, as well as indemnification from
the  Company  for  ongoing  defense  costs and any other  liabilities  or Losses
pursuant  to  the  Company's  Bylaws  and/or  pursuant  to  any  indemnification
agreement  with the Company to which  Executive  is a party,  including  without
limitation  independent  contractor  sales  agents,  and/or in  connection  with
matters  for which any of the  Released  Parties  has  maintained  or  maintains
insurance  coverage  in the past,  present  or  future,  are not  waived by this
General Release.

       The Executive represents and warrants that he fully understands the terms
of this General Release,  that he has had the benefit of advice of counsel,  and
that he  knowingly  and  voluntarily,  of his own free will  without any duress,
being fully informed and after due deliberation, accepts its terms and signs the
same as his own  free  act.  The  Executive  understands  that  as a  result  of
executing  this General  Release,  he will not have the right to assert that the
Company  unlawfully  terminated  his employment or violated any of his rights in
connection with his employment.

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       The Executive  affirms that he has not filed,  and agrees not to initiate
or cause to be  initiated  on his  behalf,  any  complaint,  charge,  claim,  or
proceeding  against the Released  Parties  before any federal,  state,  or local
agency,  court  or other  body  relating  to his  employment  and the  cessation
thereof,  and agrees not to voluntarily  participate  in such a proceeding.  The
Executive  waives any right he may have to benefit in any manner from any relief
(whether monetary or otherwise) arising out of any such proceeding.

       The  Executive,  having had the advice of counsel,  knowingly  waives the
remainder  of the 21-day  period he had to  consider  whether  to  execute  this
General Release. Upon the Executive's execution of this General Release, he will
have seven (7) days after  execution  to revoke it. In the event of  revocation,
the Executive must present written notice of revocation to Mr. Barry Barovick of
the  Company.  If seven (7) days pass without  such notice of  revocation,  this
General  Release shall become binding and effective on the eighth (8th) day (the
"Release Effective Date").

       This  General  Release  shall be  governed  by the  laws of the  State of
Illinois without giving effect to the principles of conflicts of law.


/s/ ROBERT J. WALNER                                 MARCH 10, 2003
--------------------                                 --------------
ROBERT J. WALNER                                     DATE


Sworn to before me this
___ day of ______ __, 200_

------------------------------------
Notary Public


                                  Page 8 of 8

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