AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") is made as
of December 8, 2000 and amends and restates in its entirety the Employment
Agreement made and entered into as of January 2, 1998, as amended and restated
as of February 11, 1998 and as of December 17, 1998, by and between Xxxxxxx X.
Xxxxxxx, Xx. ("Employee") and Brandywine Realty Trust, a Maryland real estate
investment trust (the "Company").
BACKGROUND
The Company desires to employ Employee, and Employee desires to enter into
the employ of the Company, on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, for the period and upon the terms and
conditions contained in this Agreement.
2. Office and Duties.
(1) Employee shall be employed by the Company as its Chairman of the Board
and will serve as a member of the Board of Trustees of the Company (the "Board")
and as Chairman of the Executive Committee of the Board, and shall perform such
duties and shall have such authority as may from time to time be specified by
the Board. Employee shall report directly to the Board.
(2) Without further consideration, Employee shall, as directed by the
Board, serve as a director or officer of, or perform such other duties and
services as may be requested for and with respect to, any of the Company's
Subsidiaries, including, without limitation, Brandywine Realty Services
Corporation. As used in this Agreement, the terms "Subsidiary" and
"Subsidiaries" shall mean, with respect to any entity, any corporation,
partnership, limited liability company or other business entity in which the
subject entity has the power (whether by contract, through securities ownership,
or otherwise and whether directly or indirectly through control of one or more
intermediate Subsidiaries) to elect a majority of board of directors or other
governing body, including, in the case of a partnership, a majority of the board
of directors or other governing body of the general partner.
(3) Employee shall devote his full working time, energy, skill and best
efforts to the performance of his duties hereunder, in a manner which will
faithfully and diligently further the business interests of the Company and its
Subsidiaries.
3. Term. Unless sooner terminated as hereinafter provided, the term of
Employee's employment shall extend through December 31, 2003 (the "Term"). The
Term shall automatically renew for additional one-year periods at the expiration
of the then current Term unless either party shall give notice of his or its
election to terminate Employee's employment at least one year prior to the end
of the then-current Term, unless earlier terminated as hereinafter provided.
4. Base Salary. For all of the services rendered by Employee to the Company
and its Subsidiaries, Employee shall receive an aggregate base salary of
$270,000 per annum during the term of his employment hereunder. Such salary may
be paid, at the election of the Company, either by the Company or by one or more
of its Subsidiaries, in such relative proportions as the Company may determine,
as earned in periodic installments in accordance with the Company's normal
payment policies for executive officers. In the event that the Employee is also
employed during any period by a Subsidiary of the Company, the amount of the
base salary payable by the Company during such period shall be reduced by the
amount of salary received by Employee during such period from such Subsidiary.
Employee's base salary shall be subject to review by the Board not less
frequently than annually, and Employee shall receive such salary increases as
the Board may from time to time approve.
5. Bonus. Employee shall receive, during the term of his employment
hereunder, such annual bonus as the Board, in its sole discretion, may determine
from time to time. Any such bonus may be based on Employee's annual performance
goals as established by the Board from time to time.
6. Participation in Incentive Plans. In addition to Employee's eligibility
to receive annual bonuses pursuant to Section 5, Employee shall be entitled to
participate in short-term and long-term incentive plans as shall be maintained
by the Company from time to time on such terms and conditions as shall be
established by the Board.
7. Prior Warrants. Nothing in this Agreement shall affect the terms and
conditions of warrants granted by the Company to Employee before the date of
this Agreement. Such warrants shall continue in force as in effect immediately
before the date of this Agreement.
8. Fringe Benefits. Throughout the term of his employment and as long as
they are kept in force by the Company, Employee shall be entitled to participate
in and receive the benefits of any profit sharing plan, retirement plan, health
or other employee benefit plan made available to other executive officers of the
Company, but in no event shall such benefits be less favorable to Employee than
the benefits listed on Schedule A hereto.
9. Automobile Allowance. Employee shall receive, during the term of his
employment hereunder, an automobile allowance of $833 per month.
-2-
10. Expenses. The Company shall reimburse Employee for all reasonable,
ordinary and necessary business expenses incurred by Employee in connection with
the performance of Employee's duties hereunder upon receipt of vouchers therefor
and in accordance with the Company's regular reimbursement procedures and
practices in effect from time to time.
11. Vacation. Employee shall be entitled to a vacation of four (4) weeks
during each twelve (12) month period of his employment hereunder, during which
time Employee's compensation hereunder shall be paid in full. Employee shall be
permitted to carry over unused vacation during each twelve (12) month period
during the term and use such unused vacation in any subsequent twelve (12) month
period during the term.
12. Disability. If the Board determines in good faith by a vote of a
majority of its members (other than Employee) that Employee is unable to perform
his duties hereunder due to partial or total disability or incapacity resulting
from a mental or physical illness or injury or any similar cause for a period of
one hundred and twenty (120) consecutive days or for a cumulative period of one
hundred and eighty (180) days during any twelve (12) month period, the Company
shall have the right to terminate Employee's employment at any time thereafter.
13. Death. Employee's employment shall terminate at the time of his death.
14. Termination of Employment for Cause. The Company may discharge Employee
at any time for Cause. Cause shall mean: (i) habitual intoxication; (ii) drug
addiction; (iii) intentional and willful violation of any express direction of
the Board; (iv) theft, misappropriation or embezzlement of the Company's funds;
(v) conviction of a felony; or (vi) repeated and consistent failure of Employee
to be present at work during regular hours without valid reason therefor.
15. Termination of Employment Without Cause. The Board, in its sole
discretion, may terminate Employee's employment hereunder without Cause upon 30
days' prior written notice to Employee at any time.
16. Resignation For Good Reason. Employee's resignation shall be treated as
a "Resignation for Good Reason" if Employee resigns within six (6) months after
any of the following circumstances, unless in the case of the circumstances set
forth in paragraphs (b), (c) or (d) below, such circumstances are fully
corrected within 30 days of Employee's delivery of notice to the Company:
(1) A reduction in Employee's annual rate of base salary;
(2) A failure of the Company to make the payments required by Section
4 hereof;
-3-
(3) A significant adverse alteration in the nature or status of
Employee's responsibilities;
(4) Any other material breach by the Company of this Agreement;
(5) Relocation (without the written consent of Employee) of the
Company's executive offices to a location more than 30 miles from its
current location; or
(6) Upon a Change of Control (as defined in Section 17).
17. Change of Control. For purpose of this Agreement, a "Change of Control"
means:
(1) A "Change of Control" within the meaning of Section 1(d) of the
Brandywine Realty Trust 1997 Long-Term Incentive Plan, as currently in
effect; or
(2) The purchase of any common shares of beneficial interest of the
Company pursuant to a tender or exchange offer other than an offer by the
Company.
18. Payments Upon or After Termination of Employment.
(1) Voluntary Resignation Other than for Good Reason; Termination for
Cause; Non-Renewal of Employment Agreement. If Employee's employment
hereunder is terminated before the expiration of the Term because of
Employee's voluntary resignation (other than a Resignation for Good Reason)
or because of the Company's termination of Employee's employment for Cause,
or if Employee's employment is terminated at the expiration of the Term
following an election by either the Company or Employee not to renew the
Term pursuant to Section 3, the Company, or at its direction, its
Subsidiaries shall pay to Employee or, as appropriate, his legal
representatives, heirs or estate all amounts payable under Sections 4 and 8
accrued through the applicable date of termination (the "Accrued Amount")
within 30 days after such date of termination. If Employee's employment is
terminated by the Company for Cause or by the Employee voluntarily (unless
such termination of employment is a Resignation for Good Reason), or if
Employee's employment is terminated at the expiration of the Term following
an election by either the Company or Employee not to renew the Term
pursuant to Section 3, the Company shall have no obligation or liability
hereunder after the date of discharge or termination to pay or provide base
salary, bonus compensation, fringe benefits, or any other form of
compensation hereunder other than to pay the Accrued Amount.
(2) Termination of Employment Because of Death. If Employee's
employment is terminated as a result of the Employee's death before the
expiration of the Term, the Company shall pay Employee's legal
representatives the Accrued Amount as of the date of Employee's death, and,
in addition, the product of three (3) times the greater of (1) the sum of
the amounts paid or payable to Employee pursuant to Sections 4 and 5
hereunder (and the short-term
-4-
portion of any bonus amounts paid or payable pursuant to Section 6
hereunder) for the calendar year preceding the calendar year in which the
death occurs or (2) the sum of the amounts paid or payable to Employee
pursuant to Sections 4 and 5 hereunder (and the short-term portion of any
bonus amounts paid or payable pursuant to Section 6 hereunder) during the
one-year period ending on the date of such death, provided that if such
date of death occurs before the first anniversary of the date hereof, the
cash lump sum payment shall be equal to the product of three (3) times the
sum of (x) Employee's annualized base salary pay rate in effect as of such
date of death and (y) the maximum bonus that would have been payable for
the year that includes such date of death if all of the conditions for the
payment of such maximum bonus had been satisfied, less the proceeds
receivable by Employee's heirs and legal representatives from any life
insurance policy provided by the Company.
(3) Termination of Employment Because of Disability. If Employee's
employment is terminated by the Company for disability before the
expiration of the Term, the Company shall pay Employee the Accrued Amount
as of the such date of termination, and, in addition, the consideration
described in Sections 4 and 8 hereof, at the rate in effect at the date of
termination, until one year after Employee becomes eligible to receive
benefits pursuant to the disability insurance policy provided by the
Company, at the rate in effect at such date of termination, less the amount
of disability insurance proceeds receivable by Employee, provided that such
period shall not exceed two years in the aggregate. In addition, Employee
shall be entitled to receive an amount equal to the product that results
from multiplying the amount of the bonus paid to him pursuant to Section 5
hereof for the calendar year prior to the year in which Employee's
employment is terminated for disability multiplied by a fraction, the
numerator of which is the number of days that elapsed prior to the
termination during the year in which the termination occurs and the
denominator of which is 365.
(4) Termination of Employment by Company Without Cause; Resignation
for Good Reason. If Employee's employment is terminated by the Company
without Cause, or Employee Resigns for Good Reason, within 30 days
following the date of such termination of employment, the Company shall pay
Employee the Accrued Amount as of the date of such termination, and in
addition, the Company shall make a cash lump sum payment to Employee equal
to the sum of (x) the greater of the amount described in (i) or (ii) below,
plus (y) the "Gross-Up Payment," as defined and more fully provided for in
Section 18(g).
(1) the product of three (3) times the greater of (1) the sum of
the amounts paid or payable to Employee pursuant to Sections 4 and 5
hereunder (and the short-term portion of any bonus amounts paid or
payable pursuant to Section 6 hereunder) for the calendar year
preceding the calendar year in which such termination of employment
occurs or (2) the sum of the amounts paid or payable to Employee
pursuant to Sections 4 and 5 hereunder (and the short-term portion of
any bonus amounts paid or payable pursuant to Section 6 hereunder)
during the one-year period ending on the date of such termination; or
-5-
(2) The amount payable pursuant to Section 4 hereunder for the
remainder of the Term at a rate equal to his base salary in effect at
the time of the date of such termination.
(5) In the event that Employee is employed by a Subsidiary of the
Company at the time of termination of employment, any amounts payable to
the Employee pursuant to this Section 18 shall be reduced by the amounts
paid to Employee by any such Subsidiary.
(6) Upon the payment of the amounts payable under this Section 18,
neither the Company nor any of its Subsidiaries shall have any further
obligations hereunder to Employee (or to his estate, heirs, beneficiaries,
or legal representatives, as appropriate, or otherwise) to pay or provide
any base salary, bonus compensation, or fringe benefits, provided that if
Employee Resigns for Good Reason or the Company terminates Employee's
employment without Cause, Company shall, at its own expense, for a
thirty-six (36) month period after the date of termination of employment,
arrange to provide Employee with life, disability, accident and health
insurance benefits substantially similar to those which Employee was
entitled to receive immediately prior to such date of termination.
(7) "Gross-Up Payment."
(1) For purposes of this Agreement, the term "Gross-Up Payment" means
an amount such that the net amount retained by Employee, after deduction of
the excise tax imposed under section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") or any successor provision of law ("Excise
Tax"), on the "Total Payments" (as hereinafter defined) and any federal,
state and local income tax, employment tax and Excise Tax upon the payment
provided for by this Section 18(g), shall be equal to the excess of the
Total Payments (including the payment provided for in clause (y) of Section
18(d) and in this Section 18(g)) over the payment provided for by this
Section 18(g).
(2) For purposes of determining whether any of the Total Payments will
be subject to Excise Tax and the amount of such Excise Tax,
(1) any payments or benefits received or to be received by
Employee in connection with a Change of Control or Employee's
termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company
or a Subsidiary, any person whose actions result in a Change of
Control or any person affiliated with the Company or such person (the
"Total Payments")) shall be treated as "parachute payments" (within
the meaning of section 280G(b)(2) of the Code) unless, in the opinion
of a tax advisor selected by the Company's independent auditors and
reasonably acceptable to Employee, such payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason
of section 280G(b)(4)(A) of the Code, and all "excess parachute
payments" (within the meaning of section 280G(b)(1) of the Code) shall
be treated as
-6-
subject to Excise Tax unless, in the opinion of such tax counsel,
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code), or are otherwise not
subject to Excise Tax; and
(2) the value of any noncash benefits or deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,
Employee shall be deemed to pay federal income tax at the highest
marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of
Employee's residence on the date of Employee's termination of
employment (or such other time as is hereinafter described), net of
the maximum reduction in federal income taxes which could be obtained
from the deduction of such state and local taxes.
(3) Notwithstanding the foregoing, if the Excise Tax is
subsequently determined to be less than the amount taken into account
hereunder at the time of termination of Employee's employment,
Employee shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of
the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment being repaid by
Employee to the extent that such repayment results in a reduction in
Excise Tax or a federal, state or local income tax deduction), plus
interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. If the Excise Tax is subsequently
determined to exceed the amount taken into account hereunder at the
time of termination of Employee's employment (including by reason of
any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by Employee with respect to
such excess) at the time that the amount of such excess is finally
determined. Employee and the Company shall each reasonably cooperate
with the other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments. Such additional payment shall
be made within 30 days following the date Employee notifies the
Company that he is subject to the Excise Tax.
(4) The Company shall promptly pay in advance or reimburse
Employee for all reasonable legal fees and expenses incurred in good
faith by Employee in connection with any tax audit or proceeding to
the extent attributable to the application of section 4999 of the Code
to any payment or benefit provided hereunder.
19. Prior Agreement. This Agreement is the successor to the Employment
Agreement between Employee and the Company dated as of July 31, 1996 (which
Agreement was assigned to the Company as of October 31, 1996). Employee
represents to the Company that (a) there are no other agreements or
understandings with the Company to which Employee is a
-7-
party relating to employment, benefits or retirement, (b) there are no
restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder, (c) his execution of this Agreement and his employment
hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which he is bound,
and (d) he is free and able to execute this Agreement and to continue in the
employment of the Company.
20. Key Man Insurance. The Company shall have the right at its expense to
purchase insurance on the life of Employee in such amounts as it shall from time
to time determine, of which the Company shall be the beneficiary. Employee shall
submit to such physical examinations as may be required, and shall otherwise
cooperate with the Company, in connection with the Company obtaining such
insurance.
21. Miscellaneous.
(1) Controlling Law. This Agreement, and all questions relating
to its validity, interpretation, performance and enforcement, shall be
governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
(2) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given, made and received
when delivered in person against receipt, or when sent by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed as set forth below:
(1) If to Employee:
Xxxxxxx X. Xxxxxxx, Xx.
0000 Xxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
(2) If to the Company:
Brandywine Realty Trust
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: General Counsel
In addition, notice by mail shall be by air mail if posted outside of the
continental United States.
-8-
Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(3) Binding Nature of Agreement. This Agreement shall be binding
upon and inure to the benefit of the Company and its successors and
assigns and shall be binding upon Employee, his heirs and legal
representatives.
(4) Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original as against any party who executes the same, and all of which
shall constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or
taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
(5) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall
be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.
(6) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
inducements or conditions, express or implied, oral or written, except
as herein contained. The express terms hereof control and supersede
any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing.
(7) Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for convenience only; they form no part
of this Agreement and shall not affect its interpretation.
(8) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context requires.
(9) Number of Days. In computing the number of days for purposes
of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any
time period falls on a Saturday, Sunday or holiday, then the final day
shall be deemed to be the next day which is not a Saturday, Sunday or
holiday.
(10) Survival. The provisions of Sections 7, 12, 13, 14, 15, 16,
17, 18 and 19 shall survive the expiration or termination of the term
of Employee's employment hereunder.
-9-
(11) Assignability. This Agreement is not assignable by Employee.
It is assignable by the Company only (i) to any subsidiary of the
Company so long as the Company agrees to guarantee such subsidiary's
obligations hereunder, or (ii) subject to Sections 16 and 18 and only
upon Employee's prior written consent, to a person which is a
successor in interest to the Company in the business operated by it or
which acquires all or substantially all of its assets.
(12) Liability of Trustees, etc. No recourse shall be had for any
obligation of the Company hereunder, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future
trustee, shareholder, officer or employee of the Company, whether by
virtue of any statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being expressly
waived and released by each party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered on the date first above-written.
BRANDYWINE REALTY TRUST
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
-10-
GUARANTEE
In the event that the Company fails to perform its obligations under the
foregoing Employment Agreement, Brandywine Operating Partnership, L.P. shall
promptly perform the obligations of the Company arising thereunder which have
not been performed in strict accordance with the terms and conditions thereof.
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: BRANDYWINE REALTY TRUST, its
general partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
-11-
