AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
This is an AMENDMENT dated as of December 19, 2008 to an Employment Agreement entered into as
of October 8, 2003 (the “Employment Agreement”), by and between First Potomac Realty Investment
Limited Partnership, a Delaware limited partnership, (the “Company”) and Xxxxxxx X. Xxxxxxxxx
(“Executive”).
WHEREAS, First Potomac Realty Trust, a Maryland real estate investment trust, (the “Trust”) is
the Company’s general partner; and
WHEREAS, the Company and the Executive desire to continue to the Executive’s employment in the
Trust’s business on the terms and conditions set forth in the Employment Agreement as amended
hereby.
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein as well
as in the Employment Agreement, the Parties agree as follows:
1. The Employment Agreement (including the Exhibits thereto) between the Company and Executive
is incorporated by reference herein. To the extent any term or condition set forth in the
Employment Agreement conflicts with this Amendment, the Amendment shall control and be binding on
the parties.
2. Section 1.4 of the Employment Agreement is amended to read in its entirety as follows:
1.4. Base Salary. For all the services rendered by Executive hereunder, the Company shall
pay Executive a base salary (“Base Salary”) at the annual rate of $340,000, payable in
installments at such times as the Company customarily pays its other senior level executives.
Executive’s Base Salary shall be reviewed annually by the Board of Trustees of the Trust (the
“Board”) (or the compensation committee of the Board) pursuant to the Board’s normal performance
review policies for senior level executives.
3. Section 1.5 of the Employment Agreement is amended to read in its entirety as follows:
| 1.5. | Annual Incentive Award. Executive shall be entitled to receive an annual cash incentive bonus for each fiscal year during the Employment Term consistent with the Short-Term Incentive Plan or other bonus policy adopted by the Board (or the compensation committee of the Board) (the “Bonus Policy”). If the Executive or the Company, as the case may be, satisfies the performance criteria contained in such Bonus Policy for a fiscal year, Executive shall receive an annual incentive bonus in an amount determined by the Board (or the compensation committee of the Board). If the Executive or the Company, as the case may be, fails to satisfy the performance criteria contained in such Bonus Policy for a fiscal year, the Board (or the compensation committee of the Board) may determine whether any incentive bonus shall be payable to Executive for that year. For purposes of this Agreement, the term “Incentive Bonus” shall mean the amount established pursuant to this Section 1.5. |
4. Section 1.8(b) of the Employment Agreement is amended to read in its entirety as follows:
1.8. Incentive Compensation.
(b) Executive shall be entitled to participate in any short-term and long-term incentive
programs (including without limitation the 2003 Equity Compensation Plan and any subsequently
implemented stock award plans) established by the Company or the Trust for the Company’s senior
level executives generally, at levels commensurate with the benefits provided to other senior
executives and with adjustments appropriate for his position as specified in Section 1.2.
5. Section 2.1(c) and (c)(1) of the Employment Agreement are amended to read in their entirety
as follows:
2.1. Termination Without Cause; Resignation for Good Reason.
(c) Notwithstanding the provisions of Section 2.1(b), in the event that Executive executes and
does not revoke a written release within ninety (90) days of such removal or resignation,
substantially in the form attached hereto as Exhibit A (the “Release”), of any and all claims
against the Company and all related parties with respect to all matters arising out of Executive’s
employment by the Company, or the termination thereof (other than claims for any entitlements under
the terms of this Agreement or under any plans or programs of the Company under which Executive has
accrued a benefit), Executive shall be entitled to receive, in lieu of the payment described in
Section 2.1(b), the following:
(i) Two (2) times Executive’s Base Salary, at the rate in effect immediately before
Executive’s termination of employment, payable in equal installments, consistent with the Company’s
past payroll practices, over the twenty-four (24) month period after the Executive’s Date of
Termination, commencing with the first payroll period that occurs after the period during which
Executive’s right to revoke his acceptance of the terms of the Release has expired.
6. Section 2.7 of the Employment Agreement is amended to read in its entirety as follows:
2.7. Definitions.
(a) “Cause” shall mean any of the following grounds for termination of Executive’s employment:
(i) Executive shall have been indicted for or convicted of, or entered a plea of
guilty or nolo contendre to, a felony,
(ii) Executive continually fails substantially to perform his reasonably assigned material
duties to the Company (other than a failure resulting from Executive’s incapacity due to physical
or mental illness), which failure has been materially and demonstrably detrimental to the Company
and has continued for a period of at least thirty (30) days after a written notice of demand for
substantial performance, signed by a duly authorized officer of the Trust, has been delivered to
Executive specifying the manner in which Executive has failed substantially to perform,
(iii) Executive engages in willful misconduct in the performance of his duties, or
(iv) Executive breaches any non-competition, non-disclosure or non-solicitation agreement in
effect with the Company.
(b) “Date of Termination” shall mean the date that the termination of Executive’s employment
with the Company is effective on account of the Executive’s death, Executive’s Disability,
termination by the Company for Cause or without Cause or by the Executive for Good Reason or
without Good Reason, as the case may be. The Employment Term shall end on the Date of Termination.
(c) “Good Reason” shall mean the occurrence of any of the following events or conditions,
provided (x) the Executive has notified the Company in writing of the existence of an event or
condition described in this section within ninety (90) days of the initial existence of the event
or condition and (y) the Company has not remedied the event or condition within thirty (30) days of
its receipt of Executive’s notice:
(i) a substantial reduction in Executive’s Base Salary;
(ii) a demotion of Executive;
(iii) a material reduction of Executive’s duties hereunder;
(iv) the Company’s requiring Executive to be based at a location other than in the Washington,
D.C. metropolitan area;
(v) the non-renewal of the Agreement by the Company in accordance with Section 1.1; or
(vi) any material breach of this Agreement by the Company.
(d) “Incentive Pay” shall mean the greater of (i) Executive’s maximum Incentive Bonus for
which Executive was eligible during the period that includes the Date of Termination or (ii) the
highest aggregate bonus or incentive payment paid to Executive during any of the three (3) full
calendar years prior to his Date of Termination. For purposes of this definition, “Incentive Pay”
does not include any stock option, stock appreciation, stock purchase, restricted stock or similar
plan, program, arrangement or grant, one time bonus or payment (including, but not limited to, any
sign-on bonus), any amounts contributed by the Company for the benefit of Executive to any
qualified or nonqualified deferred compensation plan, or any amounts designated by the parties as
amounts other than Incentive Pay.
7. Section 9 of the Employment Agreement is amended to read in its entirety as follows:
9. Arbitration; Expenses. In the event of any dispute under the provisions of this
Agreement, other than a dispute in which the primary relief sought is an equitable remedy such as
an injunction, the parties shall be required to have the dispute, controversy or claim settled by
arbitration in Bethesda, Maryland in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association, before a single
arbitrator. The arbitrator shall be as mutually agreed upon by the Company as the Executive or if
there is no such agreement, shall be selected by the American Arbitration Association. Any award
entered by the arbitrator shall be final, binding and nonappealable and judgment may be entered
thereon by either party in accordance with applicable law in any court of competent jurisdiction.
This arbitration provision shall be specifically enforceable. The arbitrator shall have no
authority to modify any provision of this Agreement or to award a remedy for a dispute involving
this Agreement other than a benefit specifically provided under or by virtue of the Agreement. If
Executive prevails on any material issue which is the subject of such arbitration or lawsuit, the
Company shall be responsible for all of the fees of the American Arbitration Association and the
arbitrator and any expenses relating to the conduct of the arbitration (including the Company’s and
Executive’s reasonable attorneys’ fees and expenses). Otherwise, each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’
fees and expenses) and shall share the fees of the American Arbitration Association
8. Section 10 of the Employment Agreement is amended to read in its entirety as follows:
10. Notices. All notices and other communications required or permitted under this
Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed
to have been given when hand delivered, mailed by registered or certified mail, or sent by
nationally recognized overnight courier service, as follows (provided that notice of address shall
be deemed given only when received):
If to the Company, to:
First Potomac Realty Trust
0000 Xxxxxxxxx Xxxxxx; 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
0000 Xxxxxxxxx Xxxxxx; 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
With a required copy to:
Hunton & Xxxxxxxx LLP
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Attn: Xxxxx X. Xxxxxx, Esq.
If to Executive, to:
Xxxxxxx X. Xxxxxxxxx
First Potomac Realty Trust
0000 Xxxxxxxxx Xxxxxx; 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
First Potomac Realty Trust
0000 Xxxxxxxxx Xxxxxx; 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
or to such other names or addresses as the Company or Executive, as the case may be, shall
designate by notice to each other person entitled to receive notices in the manner specified in
this Section.
9. The Employment Agreement is amended by adding the following Section 18:
18. Section 409A. These provisions of this Plan are intended and shall be interpreted and
administered so as to not result in the imposition of additional tax or interest under Section 409A
of the Internal Revenue Code where applicable. Without limiting the preceding sentence and
notwithstanding any other provision of this Agreement, if at termination of employment the
Executive is considered a Specified Employee within the meaning of Section 409A of the Code,
benefits that are to be paid upon termination of employment may not commence earlier than six (6)
months after the date of such termination of employment, and any benefits which would otherwise be
paid to the Participant within the first six months following the termination of employment shall
be accumulated and paid to the Participant in a lump sum on the first day of the seventh month
following the termination of employment.
10. Section 3(a) of Exhibit B to the Employment Agreement is amended to read in its entirety
as follows:
Non-Competition.
(a) During my employment by the Company and for a period of one (1) year after my termination
of employment for any reason, I will not, except with the prior written consent of the Board of
Trustees of First Potomac Realty Trust (the “Board”), directly or indirectly, own, manage, operate,
join, control, finance or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit my name to be used in connection with, any business
or enterprise which is engaged in any business or enterprise that acquires, operates and develops
properties in the industrial and flex property markets, within the Company’s “Service Area,” as
defined below. For the purposes of this Section, “Service Area” shall mean (i) the States of
Maryland and West Virginia, (ii) the Commonwealth of Virginia, (iii) Washington, D.C. and any other
state or commonwealth in which the Company is doing business or has determined to do business at
the date of my termination.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year
first above written.
| EXECUTIVE | ||||||||
| /s/ Xxxxxxx X. Xxxxxxxxx | ||||||||
Witness |
||||||||
| FIRST POTOMAC REALTY | ||||||||
| Attest | INVESTMENT LIMITED PARTNERSHIP | |||||||
| By: | First Potomac Realty Trust | |||||||
| Its general partner | ||||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||||
| Name: | Xxxx X. Xxxxxx |
|||||||
| Title: | Executive Vice President and General Counsel |
| GUARANTOR | ||||||||
| FIRST POTOMAC REALTY TRUST | ||||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||||
| Name: | Xxxx X. Xxxxxx |
|||||||
| Title: | Executive Vice President and General Counsel |
