EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the
Effective Date (as defined below), is entered into by and between BioMed Realty
Trust, Inc., a Maryland corporation (the "REIT"), BioMed Realty, L.P., a
Maryland limited partnership (the "Operating Partnership"), and Xxxxxxx X.
XxXxxxxx (the "Executive").
WHEREAS, the REIT and the Operating Partnership (collectively, the
"Company") desire to employ the Executive and to enter into an agreement
embodying the terms of such employment; and
WHEREAS, the Executive desires to accept employment with the
Company, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. Subject to the provisions for earlier
termination hereinafter provided, the Executive's employment hereunder shall be
for a term (the "Employment Period") commencing on the Effective Date and ending
on the second anniversary of the Effective Date (the "Initial Termination
Date"); provided, however, that this Agreement shall be automatically extended
for one (1) additional year on the Initial Termination Date and on each
subsequent anniversary of the Initial Termination Date (each such extension, a
"Renewal Year"), unless either the Executive or the Company elects not to so
extend the term of the Agreement by notifying the other party, in writing, of
such election not less than six months (6) months prior to the last day of the
Employment Period as then in effect. For purposes of this Agreement, "Effective
Date" shall mean the date of the initial public trading of the REIT's common
stock in connection with its initial public offering.
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall serve as
Vice President, Acquisitions of the REIT and the Operating Partnership and
shall perform such employment duties as are assigned by the REIT's Chief
Executive Officer and usual and customary for such positions. In such
position, the Executive shall report to the REIT's Board of Directors or,
if the Board of Directors delegates such authority, to the REIT's Chief
Executive Officer. At the Company's request, the Executive shall serve the
Company and/or its subsidiaries and affiliates in other offices and
capacities in addition to the foregoing. In the event that the Executive,
during the Employment Period, serves in any one or more of such additional
capacities, the Executive's compensation shall not be increased beyond
that specified in Section 2(b) of this Agreement. In addition, in the
event the Executive's service in one or more of such additional capacities
is terminated, the Executive's compensation, as specified in Section 2(b)
of this Agreement, shall not be diminished or reduced in any manner as a
result of such termination for so long as the Executive otherwise remains
employed under the terms of this Agreement.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote such attention and time during normal business
hours to the business and affairs of the Company as are necessary for the
performance of his duties hereunder. During the Employment Period it shall
not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) fulfill limited
teaching, speaking and writing engagements or (C) manage his personal
investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee
and officer of the Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company; provided
that no such activity that violates any written non-competition agreement
between the parties shall be permitted.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive a base salary (the "Base Salary") of $220,000 per annum. The
Base Salary shall be paid by the Partnership at such intervals as the
Partnership pays executive salaries generally. The Executive shall provide
services to the REIT as described in this Agreement for no additional
salary. During the Employment Period, the Base Salary then in effect shall
be increased, effective on January 1st of each calendar year, beginning on
January 1, 2005, for increases in the cost of living based on inflation as
measured by the federal Consumer Price Index for All Urban Consumers
("CPI"). To determine the adjusted Base Salary using the CPI, the Base
Salary shall be multiplied by a fraction, the numerator of which shall be
the CPI published for the December of the year immediately preceding the
date of the Base Salary adjustment (the "First Adjustment Year"), and the
denominator of which shall be the CPI published for the December of the
year immediately preceding the First Adjustment Year. Any increase in Base
Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. The Base Salary shall not be reduced after
any such increase and the term "Base Salary" as utilized in this Agreement
shall refer to Base Salary as so increased from time to time. The Base
Salary may be reviewed annually by the REIT's Board of Directors, or the
Compensation Committee thereof, and may be increased beyond the
cost-of-living adjustment in the discretion of the REIT's Board of
Directors, or the Compensation Committee thereof.
(ii) Annual Bonus. In addition to the Base Salary, the
Executive shall be eligible to earn, for each fiscal year of the Company
ending during the Employment Period, an annual cash performance bonus (an
"Annual Bonus") under the Company's bonus plan or plans applicable to
senior executives. The Executive's Annual Bonus shall be at least 50% of
his Base Salary actually paid for such year. The Executive's actual Annual
Bonus may be up to 150% of the Base Salary actually paid for such year,
determined on the basis of the Executive's and/or the Company's attainment
of objective financial or other operating criteria established by the
REIT's Board of Directors, or the Compensation Committee thereof in
accordance with the terms and conditions of such
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bonus plan(s). The Annual Bonus shall be paid to the Executive by the
Partnership within seventy-five (75) days following the end of each fiscal
year.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
other incentive plans, practices, policies and programs, and all savings
and retirement plans, practices, policies and programs, in each case that
are applicable generally to senior executives of the Company under the
terms and conditions therein as in effect from time to time.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and the Executive's eligible family members shall be eligible
for participation in the welfare benefit plans, practices, policies and
programs (including, if applicable, medical, dental, disability, employee
life, group life and accidental death insurance plans and programs)
maintained by the Company for its senior executives under the terms and
conditions therein as in effect from time to time; provided, however, that
the Company shall provide the Executive with a long-term disability policy
that provides for the payment of benefits at least equal to 60% of his
Base Salary.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
business expenses incurred by the Executive in accordance with the
policies, practices and procedures of the Company provided to senior
executives of the Company under the terms and conditions therein as in
effect from time to time.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to such fringe benefits and perquisites as are
provided by the Company to its senior executives from time to time, in
accordance with the policies, practices and procedures of the Company, and
shall receive such additional fringe benefits and perquisites as the
Company may, in its discretion, from time-to-time provide. The Company
shall also reimburse Executive for (a) the costs of maintaining a cellular
phone, and (b) the costs of maintaining an automobile in an amount up to
$750 per month.
(vii) Vacation. During the Employment Period, the Executive
shall be entitled to three (3) weeks paid vacation.
(viii) Term Life Insurance. In addition to any term life
insurance provided to other senior executives of the Company, the Company
shall purchase a term life insurance policy in the amount of $1,000,000 on
the life of the Executive, commencing as soon as practicable following the
Effective Date. Except as provided in Section 4 below, the policy shall
remain in effect for the Employment Period. The obligation of the Company
to purchase such policy shall be conditioned on Executive's successful
completion of any required medical examination(s) such that the policy can
be bought at standard rates. The Executive shall, in his sole discretion,
name the beneficiaries of the policy.
(ix) Equity Grant. The REIT shall, as of the date of the
initial trading of the REIT's common stock in connection with its initial
public offering, grant the Executive 30,000 restricted shares of the
REIT's common stock (the "Restricted Stock"). The Restricted Stock shall
be granted to the Executive under the Company's 2004 Incentive Award Plan
(the "Incentive Plan"). Subject to the Executive's continued employment
with the Company, the Restricted Stock shall vest in three equal
installments on January
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1, 2005, January 1, 2006 and January 1, 2007. Consistent with the
foregoing, the terms and conditions of the Restricted Stock shall be set
forth in a restricted stock agreement (the "Restricted Stock Agreement")
to be entered into by the Company and the Executive which shall evidence
the grant of the Restricted Stock.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death or Disability during the Employment
Period. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a full-time basis
for ninety (90) consecutive days or on a total of one hundred eighty (180) days
in any twelve (12) month period, in either case as a result of incapacity due to
mental or physical illness which is determined to be total and permanent by a
physician selected by the Company and reasonably acceptable to the
Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause or without Cause. For purposes of this
Agreement, "Cause" shall mean the occurrence of any one or more of the following
events unless the Executive fully corrects the circumstances constituting Cause
within thirty (30) days following the date written notice is delivered to the
Executive which specifically identifies the circumstances constituting Cause
(provided such circumstances are capable of correction):
(i) the Executive's willful and continued failure
substantially to perform his duties with the Company (other than any such
failure resulting from the Executive's incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to the Executive by the REIT's Board of Directors, which demand
specifically identifies the manner in which the REIT's Board of Directors
believes that the Executive has not substantially performed his duties;
(ii) the Executive's willful commission of an act of fraud or
dishonesty resulting in economic or financial damage to the Company;
(iii) the Executive's conviction of, or entry by the Executive
of a guilty or no contest plea to, the commission of a felony or a crime
involving moral turpitude;
(iv) a willful breach by the Executive of his fiduciary duty
to the Company which results in economic or other damage to the Company;
or
(v) the Executive's willful and material breach of the
Executive's covenants set forth in Section 9(a) or 9(b) hereof.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the REIT's Board of Directors or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith
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and in the best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
REIT's Board of Directors at a meeting of the REIT's Board of Directors called
and held for such purpose (after reasonable notice is provided to the Executive
and the Executive is given an opportunity, together with counsel for the
Executive, to be heard before the REIT's Board of Directors), finding that, in
the good faith opinion of the Board, the Executive is guilty of any of the
conduct described in Section 3(b), and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason or by the Executive without Good Reason. For purposes
of this Agreement, "Good Reason" shall mean the occurrence of any one or more of
the following events without the Executive's prior written consent, unless the
Company fully corrects the circumstances constituting Good Reason within thirty
(30) days following the date written notice is delivered to the REIT's Board of
Directors by the Executive which specifically identifies the circumstances
constituting Good Reason (provided such circumstances are capable of
correction), after:
(i) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) of this Agreement, or any
other action by the Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(ii) the Company's reduction of the Executive's annual Base
Salary or Annual Bonus target, each as in effect on the date hereof or as
the same may be increased from time to time (other than reductions in
annual Base Salary or Annual Bonus target that generally affect all senior
executives of the Company ratably);
(iii) the Company's material reduction of the Executive's
benefits (other than reductions in benefits that generally affect all
senior executives of the Company entitled to such benefits ratably);
(iv) the relocation of the Company's offices at which the
Executive is principally employed as of the Effective Date (the "Principal
Location") to a location more than twenty-five (25) miles from such
location, or the Company's requiring the Executive's principal place of
employment to be at a location more than twenty-five (25) miles from the
Principal Location, except for required travel on the Company's business
to an extent substantially consistent with the Executive's present
business travel obligations;
(v) the Company's failure to obtain an agreement reasonably
satisfactory to the Executive from any successor to assume and agree to
perform this Agreement, as contemplated in Section 10 hereof; or
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(vi) the Company's material breach of this Agreement.
(d) Notice of Termination. Any termination by the Company, or by the
Executive, shall be communicated by Notice of Termination to the other parties
hereto given in accordance with Section 13(c) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than sixty (60) days after
the giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date specified in the Notice of Termination
(which date shall not be prior to the expiration of the applicable correction
period and shall not be more than sixty (60) days after the giving of such
notice), as the case may be, (ii) if the Executive's employment is terminated by
the Company other than for Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such termination (or
such other date specified by the Company, which date shall not be more than
sixty (60) days after the giving of such notice), (iii) if the Executive's
employment is terminated by the Executive without Good Reason, the Date of
Termination shall be the thirtieth (30th) day after the date on which the
Executive notifies the Company of such termination, unless otherwise agreed by
the Company and the Executive, and (iv) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death or Disability of the Executive, as the case may be.
4. Obligations of the Company upon Termination.
(a) Without Cause or For Good Reason. If, during the Employment
Period, the Company shall terminate the Executive's employment without Cause or
the Executive shall terminate his employment for Good Reason:
(i) The Executive shall be paid the aggregate amount of
(A) the Executive's earned but unpaid Base Salary and
accrued but unpaid vacation pay through the Date of Termination, and
any Annual Bonus required to be paid to the Executive pursuant to
Section 2(b)(ii) above for any
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fiscal year of the Company that ends on or before the Date of
Termination to the extent not previously paid (the "Accrued
Obligations"), and
(B) the sum of (x) the Base Salary in effect on the Date
of Termination plus (y) the average Annual Bonus received by the
Executive for the three (3) complete fiscal years (or such lesser
number of years as the Executive has been employed by the Company)
of the Company immediately prior to the Date of Termination (such
amount determined under this clause (B) payable to the Executive,
the "Severance Amount").
The Severance Amount shall be paid to the Executive as
follows: (A) 50% of the Severance Amount shall be paid in a single
lump sum payment within sixty (60) days after the Date of
Termination and (B) the remaining 50% of the Severance Amount shall
be paid in equal monthly installments over one (1) year; provided,
however, that if the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason, in each
case within one (1) year after the effective date of a Change in
Control (as defined below), then the Severance Amount shall be paid
in a single lump sum payment within ten (10) days following the Date
of Termination;
(ii) For a period of eighteen (18) months following the Date
of Termination, the Company shall continue to provide the Executive and
the Executive's eligible family members with group health insurance
coverage at least equal to that which would have been provided to them if
the Executive's employment had not been terminated under the terms and
conditions of the applicable plans; provided, however, that if the
Executive becomes re-employed with another employer and is eligible to
receive group health insurance coverage under another employer's plans,
the Company's obligations under this Section 4(a)(ii) shall be terminated
to the extent comparable coverage is actually provided to the Executive
and the Executive's eligible family members, and any such coverage shall
be reported by the Executive to the Company;
(iii) For a period of twelve (12) months following the Date of
Termination, the Company shall continue to pay the premiums for the
long-term disability and life insurance coverage described in Sections
2(b)(iv) and 2(b)(viii); provided, however, that if the Executive becomes
re-employed with another employer and receives long-term disability and
life coverage under another employer's plans, the Company's obligations
under this Section 4(a)(iii) shall be terminated to the extent comparable
coverage is actually provided to the Executive, and any such coverage
shall be reported by the Executive to the Company; and
(iv) The Company shall, at its sole expense and on an
as-incurred basis, provide the Executive with up to $15,000 towards
outplacement services the scope and provider of which shall be reasonable
and consistent with industry practice for similarly situated executives;
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(v) To the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any vested benefits
and other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliates (such
other amounts and benefits shall be hereinafter referred to as the "Other
Benefits"); and
(vi) On the Date of Termination, 100% of the outstanding
unvested stock options, restricted stock and other equity awards granted
to the Executive under any of the Company's equity incentive plans (or
awards substituted therefore covering the securities of a successor
company) shall become immediately vested and exercisable in full.
Notwithstanding the foregoing, it shall be a condition to the Executive's right
to receive the amounts provided for in Sections 4(a)(i)(B) and 4(a)(ii), (iii)
and (iv) above that the Executive execute, deliver to the Company and not revoke
a release of claims in substantially the form attached hereto as Exhibit A.
(b) For Cause or Without Good Reason. If the Executive's employment
shall be terminated by the Company for Cause or by the Executive without Good
Reason during the Employment Period, the Company shall have no further
obligations to the Executive under this Agreement other than pursuant to
Sections 7 and 8 hereof, and the obligation to pay to the Executive the Accrued
Obligations in cash within thirty (30) days after the Date of Termination and to
provide the Other Benefits.
(c) Death or Disability. If the Executive's employment is terminated
by reason of the Executive's death or Disability during the Employment Period:
(i) The Accrued Obligations shall be paid to the Executive's
estate or beneficiaries or to the Executive, as applicable, in cash within
thirty (30) days of the Date of Termination;
(ii) 100% of the Executive's annual Base Salary, as in effect
on the Date of Termination, shall be paid to the Executive's estate or
beneficiaries or to the Executive, as applicable, in cash within thirty
(30) days following the Date of Termination;
(iii) For a period of twelve (12) months following the Date of
Termination, the Executive and the Executive's eligible family members
shall continue to be provided with group health insurance coverage at
least equal to that which would have been provided to them if the
Executive's employment had not been terminated;
(iv) In the event the Executive's employment is terminated by
reason of the Executive's Disability, for a period of twelve (12) months
following the Date of Termination, the Company shall continue to pay the
premiums for the long-term disability and life insurance coverage
described in Sections 2(b)(iv) and 2(b)(viii); and
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(v) The Other Benefits shall be paid or provided to the
Executive on a timely basis.
5. Definition of Change in Control. For purposes of this Agreement,
"Change in Control" shall mean the occurrence of any of the following events:
(a) A transaction or series of transactions (other than an
offering of the Company's common stock to the general public through a
registration statement filed with the Securities and Exchange Commission)
whereby any "person" or related "group" of "persons" (as such terms are
used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the
Company, any of its subsidiaries, an employee benefit plan maintained by
the Company or any of its subsidiaries or a "person" that, prior to such
transaction, directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company possessing more than 50% of the total
combined voting power of the Company's securities outstanding immediately
after such acquisition; or
(b) individuals who, as of the Effective Date, constitute the
REIT's Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the REIT's Board of Directors; provided,
however, that any individual becoming a director subsequent to the
Effective Date whose election by the REIT's shareholders, or nomination
for election by the REIT's Board of Directors, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an election
contest with respect to the election or removal of directors or other
solicitation of proxies or consents by or on behalf of a person other than
the REIT's Board of Directors;
(c) the consummation by the REIT (whether directly involving
the REIT or indirectly involving the REIT through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or
business combination or (y) a sale or other disposition of all or
substantially all of the REIT's assets or (z) the acquisition of assets or
stock of another entity, in each case, other than a transaction
(A) which results in the REIT's voting securities
outstanding immediately before the transaction continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the REIT or the person that, as a result
of the transaction, controls, directly or indirectly, the REIT or
owns, directly or indirectly, all or substantially all of the REIT's
assets or otherwise succeeds to the business of the REIT (the REIT
or such person, the
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"Successor Entity")) directly or indirectly, at least 50% of the
combined voting power of the Successor Entity's outstanding voting
securities immediately after the transaction, and
(B) after which no person or group beneficially owns
voting securities representing 50% or more of the combined voting
power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this clause (B) as
beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the
REIT prior to the consummation of the transaction; or
(d) approval by the REIT's shareholders of a liquidation or
dissolution of the REIT.
6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and except as
expressly provided, such amounts shall not be reduced whether or not the
Executive obtains other employment. The Company agrees to pay as incurred
(within 30 days following the Company's receipt of an invoice from the
Executive), to the full extent permitted by law, all reasonable legal fees and
expenses which the Executive or his beneficiaries may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive or his beneficiaries
about the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Code. The preceding sentence shall not apply with
respect to any such contest if the court having jurisdiction over such contest
determines that the Executive's claim in such contest is frivolous or maintained
in bad faith.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any Payment
would be subject to the Excise Tax, then the Executive shall be entitled to
receive an additional payment (the "Excise
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Tax Gross-Up Payment") in an amount such that, after payment by the Executive of
all taxes (and any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Excise Tax
Gross-Up Payment, the Executive retains an amount of the Excise Tax Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 8(a), if it shall be determined that the
Executive is entitled to the Excise Tax Gross-Up Payment, but that the Parachute
Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no
Excise Tax Gross-Up Payment shall be made to the Executive and the amounts
payable under this Agreement shall be reduced so that the Parachute Value of all
Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first reducing the
payments under Section 4(a)(i), unless an alternative method of reduction is
elected by the Executive, and in any event shall be made in such a manner as to
maximize the Value of all Payments actually made to the Executive. For purposes
of reducing the Payments to the Safe Harbor Amount, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the reduction of the
amount payable under this Agreement would not result in a reduction of the
Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable
under the Agreement shall be reduced pursuant to this Section 8(a). The
Company's obligation to make Excise Tax Gross-Up Payments under this Section 8
shall not be conditioned upon the Executive's termination of employment.
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when an Excise
Tax Gross-Up Payment is required, the amount of such Excise Tax Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by such nationally recognized accounting firm as may be selected by the
Company and reasonably acceptable to the Executive (the "Accounting Firm");
provided, that the Accounting Firm's determination shall be made based upon
"substantial authority" within the meaning of Section 6662 of the Code. The
Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within fifteen (15) business days of the receipt of
notice from the Executive that there has been a Payment or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Excise Tax Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by the Company to the Executive within
five (5) days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive, unless the Company obtains an opinion of outside legal counsel, based
upon at least "substantial authority" within the meaning of Section 6662 of the
Code, reaching a different determination, in which event such legal opinion
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Excise Tax Gross-Up Payments that will not have been made by the Company should
have been made (the "Underpayment"), consistent with the calculations required
to be made hereunder. In the event the Company exhausts its remedies pursuant to
Section 8(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
-11-
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Excise Tax Gross-Up Payment. Such notification shall be
given as soon as practicable, but no later than ten (10) business days after the
Executive is informed in writing of such claim. The Executive shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that the Company desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties) imposed as a result of such
representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 8(c), the Company shall control
all proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority
in respect of such claim and may, at its sole discretion, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that, if the Company directs
the Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free
basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to such advance or with respect to any
imputed income in connection with such advance; and provided, further,
that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited
to issues with respect to which the Excise Tax Gross-Up Payment would be
payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
-12-
(d) If, after the receipt by the Executive of an Excise Tax Gross-Up
Payment or an amount advanced by the Company pursuant to Section 8(c), the
Executive becomes entitled to receive any refund with respect to the Excise Tax
to which such Excise Tax Gross-Up Payment relates or with respect to such claim,
the Executive shall (subject to the Company's complying with the requirements of
Section 8(c), if applicable) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Excise Tax Gross-Up Payment required to be paid.
(e) Notwithstanding any other provision of this Section 8, the
Company may, in its sole discretion, withhold and pay over to the Internal
Revenue Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Excise Tax Gross-Up Payment, and the
Executive hereby consents to such withholding.
(f) Any other liability for unpaid or unwithheld Excise Taxes shall
be borne exclusively by the Company, in accordance with Section 3403 of the
Code. The foregoing sentence shall not in any manner relieve the Company of any
of its obligations under this Employment Agreement.
(g) Definitions. The following terms shall have the following
meanings for purposes of this Section 8:
(i) "Excise Tax" shall mean the excise tax imposed by Section
4999 of the Code, together with any interest or penalties imposed with
respect to such excise tax.
(ii) "Parachute Value" of a Payment shall mean the present
value as of the date of the change of control for purposes of Section 280G
of the Code of the portion of such Payment that constitutes a "parachute
payment" under Section 280G(b)(2), as determined by the Accounting Firm
for purposes of determining whether and to what extent the Excise Tax will
apply to such Payment.
(iii) A "Payment" shall mean any payment or distribution in
the nature of compensation (within the meaning of Section 280G(b)(2) of
the Code) to or for the benefit of the Executive, whether paid or payable
pursuant to this Agreement or otherwise.
(iv) The "Safe Harbor Amount" shall mean 2.99 times the
Executive's "base amount," within the meaning of Section 280G(b)(3) of the
Code.
(v) "Value" of a Payment shall mean the economic present value
of a Payment as of the date of the change of control for purposes of
Section 280G of the
-13-
Code, as determined by the Accounting Firm using the discount rate
required by Section 280G(d)(4) of the Code.
9. Confidential Information and Non-Solicitation.
(a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company all secret or confidential information, knowledge or data
relating to the REIT, the Operating Partnership and their respective
subsidiaries and affiliates (collectively, the "REIT Group"), and each of their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or become
public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it; provided, that if the Executive
receives actual notice that the Executive is or may be required by law or legal
process to communicate or divulge any such information, knowledge or data, the
Executive shall promptly so notify the Company.
(b) While employed by the Company and, during any period following
the Date of Termination during which the Executive is receiving payments from
the Company, the Executive shall not directly or indirectly solicit, induce, or
encourage any employee, consultant, agent, customer, vendor, or other parties
doing business with any member of the REIT Group to terminate their employment,
agency, or other relationship with the REIT Group or such member or to render
services for or transfer their business from the REIT Group or such member and
the Executive shall not initiate discussion with any such person for any such
purpose or authorize or knowingly cooperate with the taking of any such actions
by any other individual or entity.
(c) In no event shall an asserted violation of the provisions of
this Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement. However, in recognition
of the facts that irreparable injury will result to the Company in the event of
a breach by the Executive of his obligations under Sections 9(a) and (b) of this
Agreement, that monetary damages for such breach would not be readily
calculable, and that the Company would not have an adequate remedy at law
therefor, the Executive acknowledges, consents and agrees that in the event of
such breach, or the threat thereof, the Company shall be entitled, in addition
to any other legal remedies and damages available, to specific performance
thereof and to temporary and permanent injunctive relief (without the necessity
of posting a bond) to restrain the violation or threatened violation of such
obligations by the Executive.
(d) This Section 9 shall survive termination of the Employment
Period or any expiration or termination of this Agreement.
10. Successors.
(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the
-14-
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Payment of Financial Obligations. The payment or provision to
the Executive by the Company of any remuneration, benefits or other financial
obligations pursuant to this Agreement shall be allocated to the Operating
Partnership, the REIT and, if applicable, any subsidiary and/or affiliate
thereof in accordance with any agreements to such effect by and between the REIT
and the Operating Partnership, as in effect from time to time.
12. Indemnification. The Company and the Executive have entered into
an Indemnification Agreement substantially in the form filed as Exhibit 10.4 to
the Company's Registration Statement on Form S-11.
-15-
13. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) Arbitration. Except as set forth in Section 9(c) above, any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement or the interpretation of this Agreement or any arrangements relating
to this Agreement or contemplated in this Agreement or the breach, termination
or invalidity thereof shall be settled by final and binding arbitration
administered by JAMS/Endispute in San Diego, California in accordance with the
then existing JAMS/Endispute Arbitration Rules and Procedures for Employment
Disputes. In the event of such an arbitration proceeding, the Executive and the
Company shall select a mutually acceptable neutral arbitrator from among the
JAMS/Endispute panel of arbitrators. In the event the Executive and the Company
cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint
an arbitrator. Neither the Executive nor the Company nor the arbitrator shall
disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of all parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or federal law, or both, as
applicable, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure. The
arbitrator shall render an award and a written, reasoned opinion in support
thereof. Judgment upon the award may be entered in any court having jurisdiction
thereof. The Company will pay the direct costs and expenses of the arbitration.
The Executive and the Company shall be responsible for their respective
attorneys' fees incurred in connection with enforcing this Agreement; provided,
however, the Executive and the Company agree that, except as may be prohibited
by law, the arbitrator may, in his or her discretion, award reasonable
attorneys' fees to the prevailing party. This Section 13(b) shall not apply to
the Company's right to enforce the Executive's obligations under Section 9 to
the extent the Company is entitled to seek specific performance thereunder.
(c) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the Executive's most recent address on the
records of the Company,
-16-
If to the REIT or the Operating Partnership:
BioMed Realty Trust, Inc.
BioMed Realty, L.P.
00000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(d) Xxxxxxxx-Xxxxx Act of 2002. Notwithstanding anything herein to
the contrary, if the Company determines, in its good faith judgment, that any
transfer or deemed transfer of funds hereunder is likely to be construed as a
personal loan prohibited by Section 13(k) of the Exchange Act and the rules and
regulations promulgated thereunder, then such transfer or deemed transfer shall
not be made to the extent necessary or appropriate so as not to violate the
Exchange Act and the rules and regulations promulgated thereunder.
(e) 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.
(f) Withholding. The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation. In
addition, notwithstanding any other provision of this Agreement, the Company
may, in its sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Excise Tax Gross-Up Payment, and the
Executive hereby consents to such withholding.
(g) No Waiver. The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 3(c) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(h) Survival. Provisions of this Agreement shall survive any
termination of the Employment Period if so provided herein or if necessary or
desirable to fully accomplish the
-17-
purposes of such provision, including, without limitation, the Executive's
obligations under Section 9 hereof. The obligation of the Company to make
payments to or on behalf of the Executive under Section 4 or 5 hereof is
expressly conditioned upon the Executive's continued full performance of his
obligations under Section 9 hereof. The Executive recognizes that, except as
expressly provided in Section 4 or 5, no compensation is earned after
termination of the Employment Period.
(i) Entire Agreement. As of the Effective Date, this Agreement,
together with any restricted stock agreements between the parties, constitutes
the final, complete and exclusive agreement between the Executive and the
Company with respect to the subject matter hereof and replaces and supersedes
any and all other agreements, offers or promises, whether oral or written, made
to you by any member of the REIT Group or any entity (a "Predecessor Employer"),
or representative thereof, whose business or assets any member of the REIT Group
succeeded to in connection with the initial public offering of the common stock
of the REIT or the transactions related thereto. The Executive agrees that any
such agreement, offer or promise between the Executive and a Predecessor
Employer (or any representative thereof) is hereby terminated and will be of no
further force or effect, and the Executive acknowledges and agrees that upon his
execution of this Agreement, he will have no right or interest in or with
respect to any such agreement, offer or promise. In the event that the Effective
Date does not occur, this Agreement (including, without limitation, the
immediately preceding sentence) shall have no force or effect.
(j) Counterparts. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
-18-
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from the REIT's Board of Directors, the
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
BIOMED REALTY TRUST, INC.
By: /s/ XXXX X. GOLD
-----------------------------------
Name: Xxxx X. Gold
Title: Chief Executive Officer
BIOMED REALTY, L.P.
By: BioMed Realty Trust, Inc.,
its general partner
By: /s/ XXXX X. GOLD
-----------------------------------
Name: Xxxx X. Gold
Title: Chief Executive Officer
EXECUTIVE
/s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx X. XxXxxxxx
EXHIBIT A
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the undersigned does hereby release and forever discharge
the "Releasees" hereunder, consisting of BioMed Realty Trust, Inc., BioMed
Realty, L.P., and each of their partners, subsidiaries, associates,
affiliates, successors, heirs, assigns, agents, directors, officers, employees,
representatives, lawyers, insurers, and all persons acting by, through, under or
in concert with them, or any of them, of and from any and all manner of action
or actions, cause or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs, attorneys' fees or expenses, of any nature whatsoever, known or unknown,
fixed or contingent (hereinafter called "Claims"), which the undersigned now has
or may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
hereof. The Claims released herein include, without limiting the generality of
the foregoing, any Claims in any way arising out of, based upon, or related to
the employment or termination of employment of the undersigned by the Releasees,
or any of them; any alleged breach of any express or implied contract of
employment; any alleged torts or other alleged legal restrictions on Releasee's
right to terminate the employment of the undersigned; and any alleged violation
of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination In
Employment Act, the Americans With Disabilities Act, and the California Fair
Employment and Housing Act.
THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL
COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990,
THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(A) HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
RELEASE;
(B) HE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE
SIGNING IT; AND
(C) HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS
RELEASE, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF
THAT REVOCATION PERIOD.
The undersigned represents and warrants that there has been no
assignment or other transfer of any interest in any Claim which he may have
against Releasees, or any of them, and the undersigned agrees to indemnify and
hold Releasees, and each of them, harmless from any liability, Claims, demands,
damages, costs, expenses and attorneys' fees incurred by Releasees, or any of
them, as the result of any such assignment or transfer or any rights or Claims
under any such assignment or transfer. It is the intention of the parties that
this indemnity does not require payment as a condition precedent to recovery by
the Releasees against the undersigned under this indemnity.
The undersigned agrees that if he hereafter commences any suit
arising out of, based upon, or relating to any of the Claims released hereunder
or in any manner asserts against Releasees, or any of them, any of the Claims
released hereunder, then the undersigned agrees to pay to Releasees, and each of
them, in addition to any other damages caused to Releasees thereby, all
attorneys' fees incurred by Releasees in defending or otherwise responding to
said suit or Claim.
The undersigned further understands and agrees that neither the
payment of any sum of money nor the execution of this Release shall constitute
or be construed as an admission of any liability whatsoever by the Releasees, or
any of them, who have consistently taken the position that they have no
liability whatsoever to the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Release this
____ day of ___________, ____.
______________________________________
Xxxxxxx X. XxXxxxxx
