AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the
"Agreement") is made as of February 9, 2005 and amends and restates in its
entirety the Amended and Restated Employment Agreement made and entered into as
of May 7, 2002, by and between Xxxxxx X. Xxxxxxx ("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.
(a) Employee shall be employed by the Company as its
President and Chief Executive
Officer and will serve as a member of the Board of Trustees of the Company (the
"Board") and member 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.
(b) 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. 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.
(c) 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 May 7, 2008 (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 $350,000 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 or
the Compensation Committee of the Board (the "Compensation Committee") not less
frequently than annually, and Employee shall receive such salary increases as
the Board or Compensation Committee may from time to time approve.
5. Bonus. Employee shall receive, during the term of his
employment hereunder, such annual bonus as the Board or Compensation Committee,
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 or
Compensation Committee 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 or Compensation Committee.
7. Prior Option and Warrants. Nothing in this Agreement shall
affect the terms and conditions of options and warrants granted by the Company
to Employee before the date of this Agreement. Such options and warrants shall
continue in force as in effect immediately before the date of this Agreement.
Without limiting the generality of the foregoing, the options granted to
Employee under his employment agreement executed on August 8, 1994 (the "1994
Agreement") shall remain in effect, and those provisions of the 1994 Agreement
which govern Employee's entitlement to exercise such options shall continue in
effect as if such 1994 Agreement had not been terminated. In furtherance of the
foregoing, references in Section 4.1(b)(v) of the 1994 Agreement to "the
Company" shall hereafter be construed as references to the Company and its
Subsidiaries.
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 $1,000 per month.
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.
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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:
(a) A reduction in Employee's annual rate of base
salary;
(b) A failure of the Company to make the payments
required by Section 4 hereof;
(c) A significant adverse alteration in the nature or
status of Employee's
responsibilities;
(d) Any other material breach by the Company of this
Agreement;
(e) 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
(f) Upon a Change of Control (as defined in Section
17).
17. Change of Control. For purpose of this Agreement, a
"Change of Control" means:
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(a) 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
(b) The purchase of any common shares of beneficial
interest ("Common Shares") 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.
(a) 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, 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), 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. If Employee's employment is terminated at the expiration of
the Term following an election by the Company not to renew the Term pursuant to
Section 3, the Company, or at its direction, its Subsidiaries shall pay to
Employee all amounts payable under Sections 4 and 8 accrued through the
applicable date of expiration (the "Accrued Amount") within 30 days after such
date of expiration and, in addition, the Company, or at its direction, its
Subsidiaries shall (i) pay to Employee, in approximately equal monthly
installments, during the one-year period following such expiration, an amount
equal in the aggregate to the sum of the amounts paid or payable to Employee
pursuant to Sections 4, 5 and 6 hereunder for the calendar year preceding the
calendar year in which such expiration occurs and (ii) during the one-year
period following such expiration continue to provide Employee with health care
benefits at levels no less favorable to him than those in effect immediately
prior to such expiration. Whenever any provision of this Agreement requires the
Company or its Subsidiaries to pay to Employee an amount equal to or based upon
the amounts paid to Employee pursuant to any of Sections 4, 5 and/or 6 hereunder
for a prior calendar year or other prior period, such prior period amount shall
be equal to the cash amount paid or payable for such prior period and the fair
market value of any non-cash amount or award for such prior period. The fair
market value of any non-cash amount or award for a prior period shall be
determined as of the date of the award and, in the case of restricted Common
Shares, shall equal the number of Common Shares subject to the award multiplied
by the closing share price of a Common Share on the date of the award, and in
the case of any other non-cash award, shall be determined by the Board or
Compensation Committee using customary valuation procedures as it may in its
sole discretion select.
(b) 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 2.99 times the greater of (1) the sum of the amounts
paid or payable to Employee pursuant to Sections 4, 5 and 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, 5 and 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 2.99 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.
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(c) 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 date of such 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 sum of the amounts paid
or payable to Employee pursuant to Section 5 and 6 hereunder 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.
(d) 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).
(i) the product of 2.99 times the
greater of (1) the sum of the amounts paid or payable to Employee pursuant to
Sections 4, 5 and 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, 5 and 6 hereunder during the
one-year period ending on the date of such termination; or
(ii) 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.
(e) 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.
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(f) 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.
(g) "Gross-Up Payment."
(i) 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).
(ii) For purposes of determining whether any
of the Total Payments will be subject to Excise Tax and the amount of such
Excise Tax,
(A) 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 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
(B) 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.
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(iii) 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.
(iv) 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
Amended and Restated Employment Agreement between Employee and the Company dated
as of May 7, 2002. Employee represents to the Company that (a) there are no
other agreements or understandings with the Company to which Employee is a 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.
(a) 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.
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(b) 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:
(i) If to Employee:
Xxxxxx X. Xxxxxxx
0 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
(ii) If to the Company:
Brandywine Realty Trust
000 Xxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: General Counsel
In addition, notice by mail shall be by air mail if posted
outside of the continental United States.
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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
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(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) 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:
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Title:
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EMPLOYEE
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Xxxxxx X. Xxxxxxx
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SCHEDULE A
Aggregate annual payments of $70,000 for Financial/Tax Planning and
Community/Civic Allowance
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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:
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