EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 5th day of
January, 2006 (the "Execution Date") by and between Brandywine Operating
Partnership, L.P., a Delaware limited partnership (the "Company") and Xxxx
Xxxxxx (the "Employee").
WHEREAS, the Company desires to employ the Employee, and the
Employee desires to be employed by the Company, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:
1. Effectiveness of this Agreement. Notwithstanding anything
herein to the contrary, including, without limitation, the execution and
delivery of this Agreement as of the Execution Date, this Agreement shall not
become effective for any purpose unless and until the REIT Merger has been
consummated. Upon the consummation of the REIT Merger, this Agreement shall
become fully effective as if executed and delivered on the date of such
consummation (the "Effective Date"). The term "REIT Merger" has the meaning
given to it in the Agreement and Plan of Merger dated as of October 3, 2005 (the
"Merger Agreement") by and among Brandywine Realty Trust, a Maryland real estate
investment trust, the Company, Brandywine Cognac I LLC, a Maryland limited
liability company, Brandywine Cognac II LLC, a Delaware limited liability
company, Xxxxxxxx Properties Trust, a Maryland real estate investment trust
("PPT"), and Xxxxxxxx Properties Acquisition Partners, L.P., a Delaware limited
partnership (together with PPT and their respective direct and indirect
subsidiaries, "Xxxxxxxx").
2. Employment and Term. The Company hereby employs the
Employee and the Employee hereby accepts employment with the Company for the
period commencing on the Effective Date and, unless such employment is sooner
terminated as provided herein, terminating at 5:00 p.m. on the first (1st)
anniversary of the Effective Date. Such one-year period of employment as the
same may be reduced as provided herein upon an earlier termination of the
Employee's employment, is referred to herein as the "Term." At the end of the
Term, the Employee's employment with the Company shall automatically continue
thereafter on an "at will" basis and, accordingly, Sections 5.1-5.3 of this
Agreement shall have no further force or effect and the Company may terminate
the employment of Employee at any time and for any reason, or for no reason.
3. Duties. During the Term, the Employee shall serve the
Company as its Senior Vice President and Chief Administrative Officer (the
"Position"). Employee shall report to Xxxxxx Xxxxxxx, the Company's President
and Chief Executive Officer. The Employee shall serve the Company faithfully and
to the best of his ability and shall devote his full work time, attention,
skill, and efforts to the performance of the duties required by and appropriate
for the Position. The Employee shall perform such specific duties and
responsibilities within the scope of the Position as may be reasonably assigned
to him from time to time by the Company, with the understanding that the
Employee's duties and responsibilities shall remain substantially similar to the
duties and responsibilities in his current position at Xxxxxxxx. The Employee
agrees to comply with all Company policies in effect from time to time and to
comply with all laws, rules, and regulations, including, without limitation,
those applicable to the Company.
4. Compensation. The Company shall pay the Employee, and the
Employee hereby agrees to accept, as compensation for all services to be
rendered to the Company the compensation set forth in Section 4 of this
Agreement.
4.1 Salary. The Company shall pay the Employee an
annual salary of Two Hundred Thousand Dollars ($200,000.00).
4.2 2006 and Future Years Incentive Compensation. The
Company is developing a new incentive compensation plan for 2006 and future
years. This new plan will include a cash bonus component and an equity stock
component. This new plan will provide the Employee with the opportunity to earn
total compensation not less than the amount the Employee currently has the
opportunity to earn at Xxxxxxxx. Exact levels of compensation will be dependent
upon Company, and individual performance in accordance with the terms of the
plan. However, the Employee acknowledges that he will not be eligible for any
payment made by the Company to other Company employees under the Company's 2005
incentive compensation plan, which will be payable in 2006.
4.3 Benefits. During the Term, the Employee shall be
eligible for medical and dental benefits, short and long term disability
coverage and life insurance benefits that the Company provides generally for its
executive officers in accordance with the terms of the respective plans;
provided, however, that nothing herein shall be deemed to require the Company to
adopt or maintain any particular plan or policy. If the Company terminates the
Employee's employment without Cause (as defined in Section 5.3 of this
Agreement) or the Employee terminates the Employee's employment for Good Reason
(as defined in Section 5.3 of this Agreement), the Employee shall receive the
benefits defined in the Xxxxxxxx Properties Trust Change in Control Severance
Protection Plan for Key Employees dated as of October 3, 2005 (unless already
paid).
4.4 Vacation. During the Term, the Employee shall
receive four weeks paid vacation during each calendar year.
4.5 Reimbursement of Expenses. The Company shall
reimburse Employee for all reasonable, ordinary and necessary business expenses
incurred by the Employee during the term in connection with the performance of
the Employee's duties hereunder in accordance with the Company's regular
reimbursement procedures and practices in effect from time to time. The Company
agrees that the types and amounts of reimbursements will not be less than the
types and amounts of reimbursements permitted under current Xxxxxxxx
reimbursement practices.
4.6 Payment. Payment of all compensation to Employee
hereunder shall be made in accordance with the terms of this Agreement and
applicable Company policies in effect from time to time, including normal
payroll practices, and shall be subject to all applicable withholdings and taxes
(collectively, "Taxes").
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4.7 Benefits Based On Tenure of Employment. The
Company agrees that to the extent that any benefit provided pursuant to this
Agreement is based in whole or in part on tenure of employment, then the
Employee will be credited with his prior years of employment with Xxxxxxxx when
calculating tenure of employment.
5. Termination.
5.1 During the Term, if the Company terminates the
Employee's employment for Cause (as defined in Section 5.3 of this Agreement) or
the Employee terminates the Employee's employment for a reason other than Good
Reason (as defined in Section 5.3 of this Agreement), the Employee shall be
entitled to salary accrued but unpaid as of the date of such termination, and
the Employee shall no longer be entitled to receive any other payments, rights
or benefits under this Agreement, and the Company shall not have any further
obligation to the Employee pursuant to this Agreement, except (x) as provided to
the contrary under the terms of any benefit plan in which he participates and
pursuant to any federal or state law regarding the continuation of coverage
under the Company's group health plan, and (y) as provided in Section 5.2 of
this Agreement.
5.2 During the Term, if the Company terminates the
Employee's employment for a reason other than Cause (as defined in Section 5.3
of this Agreement), including death or disability, or the Employee terminates
the Employee's employment for Good Reason (as defined in Section 5.3 of this
Agreement), then (x) the Company shall pay to the Employee salary accrued but
unpaid as of the date of such termination and (y) the Company shall pay to the
Employee the payments and benefits defined under the Xxxxxxxx Properties Trust
Change in Control Severance Protection Plan for Key Employees dated as of
October 3, 2005, (unless already paid).
5.3 The term "Cause" shall mean: (i) any material
breach by the Employee of any of the terms or provisions of this Agreement which
the Employee fails to cure within fifteen (15) days after written notice thereof
has been provided to the Employee by the Company; or (ii) the Employee's
conviction on a felony or a crime involving moral turpitude or substance abuse;
or (iii) the Employee's misappropriation of funds. The term "Good Reason" shall
mean: (i) the Company requiring the Employee's relocation more than fifty (50)
miles from the Employee's primary office subsequent to the Effective Date,
without such Employee's consent; or (ii) a material adverse alteration in the
nature of the Employee's position, provided that (x) a change of title, or (y) a
change of reporting and, in either case, a concomitant change of duties, shall
not be considered a material adverse alteration unless the duties are materially
inconsistent with the Employee's duties at the time of the Effective Date; or
(iii) the Employee is excluded from the Company's (or upon a Change in Control,
its successor's) long term incentive plan or reduction by the Company of the
Employee's annual base salary or target bonus; or (iv) an assignment of duties
to the Employee that is materially inconsistent with the Employee's job
description at the time of the Effective Date; or (v) a "Change in Control" of
the Company after the Effective Date (provided the Employee elects to resign
within thirty (30) days of the Change in Control). The term "Change in Control"
has the meaning provided to it in the Company's Amended and Restated 1997
Long-Term Incentive Plan.
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5.4 The Company and the Employee agree that the REIT
Merger constitutes a "Change in Control" for purposes of and as defined in
Section 2.7 of the Xxxxxxxx Properties Trust Change in Control Severance
Protection Plan for Key Employees dated as of October 3, 2005, that this
Agreement is not meant to any way reduce or eliminate any right or benefit to
which the Employee is entitled under that Plan, and that any ambiguity or
conflict between that Plan and this Agreement shall be resolved in favor of the
Employee.
5.5 The benefits as defined in Section 4.2 of the
Xxxxxxxx Properties Trust Change in Control Severance Protection Plan for Key
Employees dated as of October 3, 2005 shall be payable by the Company to the
Employee according to the terms of that Plan if the Employee's employment is
terminated for any reason during the period of time between the last day of the
Term and two years after the Effective Date (unless already paid).
5.6 If the Company terminates the Employee's
employment after the Term, then the Employee will be entitled to severance
payments consistent with the Company's past practices for comparable employees,
at the Company's sole discretion. To the extent that any severance benefit is
based in whole or in part on tenure of employment, then the Employee will be
credited with his prior years of employment with Xxxxxxxx when calculating
tenure of employment.
6. Confidential Information. The Company shall provide the
Employee with the confidential and proprietary information concerning the
Company. Both during the Term and at all times thereafter, the Employee shall
not disclose such information to any other person or entity.
7. Restrictive Covenants.
7.1 After the Employee's employment ends for any
reason, the Employee may work for any person, business, or entity, whether in
competition with the Company or not.
7.2 During the Term, if the Company terminates the
Employee's employment for Cause (as defined in Section 5.3 of this Agreement) or
the Employee terminates the Employee's employment for a reason other than Good
Reason (as defined in Section 5.3 of this Agreement), then the Employee will
not, during the three-year period immediately following the Effective Date of
this Agreement, directly or indirectly (i) solicit, induce, or attempt to
influence, any employee of the Company or any of its affiliates to terminate
employment; or (ii) interfere with the relationship between the Company and its
existing or prospective tenants, including without limitation encouraging a
tenant to terminate, or elect not to renew, its lease with the Company; or (iii)
interfere with the relationship between the Company and any service providers to
the Company.
7.3 Notwithstanding anything to the contrary
contained herein, the restrictions contained in Section 7 of this Agreement
shall not be applicable if the Company terminates the Employee's employment for
a reason other than Cause (as defined in Section 5.3 of this Agreement) or the
Employee terminates the Employee's employment for Good Reason (as defined in
Section 5.3 of this Agreement).
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7.4 The Employee acknowledges that the restrictions
contained herein, in view of the nature of the business in which Employee has
been engaged, are reasonable and necessary to protect the legitimate interest of
the Company, and that any violation of these restrictions would result in
irreparable injury to the Company. The Employee acknowledges that, in the event
of a violation of any such restrictions, the Company shall be entitled to
preliminary and permanent injunctive relief as well as an equitable accounting
of all earnings, profits and other benefits arising from such violation which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled. In the event that the Employee shall violate the
foregoing restrictions, the relevant period referred to above shall be extended
by a period of time equal to that period beginning when such violation
commenced, and ending when the activities constituting such a violation shall
have finally been terminated in good faith.
8. Representations, Warranties and Covenants of the Employee.
8.1 The Employee represents and warrants to the
Company that there are no restrictions, agreements or understandings to which
the Employee is a party which would prevent or make unlawful the Employee's
execution of this Agreement or the Employee's employment hereunder, or which is
or would limit the performance by the Employee of the obligations hereunder.
8.2 The Employee covenants that in connection with
his provision of services to the Company, he shall not breach any obligation
(legal, statutory, contractual or otherwise) to any former employer or other
person, including, but not limited to obligations relating to confidentiality
and proprietary rights.
9. Survival of Provisions. The provisions of this Agreement
set forth in Sections 5.5, 6, 7, and 11 hereof shall survive the termination of
the Employee's employment hereunder for the purposes provided for therein.
10. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and/or assigns; provided that the
Employee shall not make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the
Company. The Company agrees that its obligations under this Agreement are
binding upon any successors or assigns.
11. Assistance in Litigation. Employee shall reasonably
cooperate with the Company in the defense or prosecution of any claims or
actions now in existence or that may be brought in the future against or on
behalf of the Company that relate to events or occurrences that transpired while
Employee was employed by the Company. Employee's cooperation in connection with
such claims or actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a witness on
behalf of the Company at mutually convenient times. Employee also shall
cooperate fully with the Company in connection with any investigation or review
by any federal, state, or local regulatory authority as any such investigation
or review relates to events or occurrences that transpired while Employee was
employed by the Company. The Company will pay Employee a reasonable hourly rate
for Employee's cooperation pursuant to this Section. The Company will reimburse
the Employee for reasonable attorney's fees and costs incurred as a result of
his compliance with this Section. Nothing in this Agreement limits the
Employee's rights under the Indemnification Agreement dated November 5, 2004 or
any other applicable agreement or insurance policy.
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12. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, mailed by certified mail (return
receipt requested) or sent by overnight delivery service, or facsimile
transmission (with electronic confirmation of successful transmission) to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice, in order of preference of the
recipient:
If to the Company: Brandywine Realty Trust
000 Xxxxxxxx Xxxx Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
President and CEO
Fax: (000) 000-0000
If to Employee: Xxxx Xxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Notice so given shall, in the case of mail, be deemed to be given and received
on the fifth calendar day after posting, in the case of overnight delivery
service, on the date of actual delivery and, in the case of facsimile
transmission, telex or personal delivery, on the date of actual transmission or,
as the case may be, personal delivery.
13. Entire Agreement; Amendments. This Agreement contains the
entire agreement and understanding of the parties hereto relating to the subject
matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature between the parties
hereto relating to the employment of the Employee with the Company. This
Agreement may not be changed or modified, except by an agreement in writing
signed by each of the parties hereto.
14. Waiver. The waiver of the breach of any term or provision
of this Agreement shall not operate as or be construed to be a waiver of any
other or subsequent breach of this Agreement.
15. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Texas, without regard to
the principles of conflicts of laws of any jurisdiction.
16. Invalidity. If any provision of this Agreement shall be
determined to be void, invalid, unenforceable or illegal for any reason, the
validity and enforceability of all of the remaining provisions hereof shall not
be affected thereby.
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17. Section Headings. The section headings in this Agreement
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
18. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Employment Agreement
to be executed the day and year first written above.
BRANDYWINE OPERATING PARTNERSHIP,
L.P.,
By: Brandywine Realty Trust, its general partner
/s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx
Its: President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
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