EXHIBIT 10.24
SECOND AMENDMENT
TO THE
THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amendment to the Third Amended and Restated Employment
Agreement (this "SECOND AMENDMENT"), dated effective as of December 21, 2005, is
entered into by and between Xxxxxxxx Properties Trust, a Maryland real estate
investment trust (the "COMPANY"), and Xxxxxxx X. Xxxxxxxx (the "EXECUTIVE").
RECITALS
A. The Company and the Executive entered into that certain Third
Amended and Restated Employment Agreement dated as of January 1, 2004 (the
"EMPLOYMENT AGREEMENT"), which provides for, among other things, the provision
of certain continuing benefits in the event of the termination of the Executive
without cause or a Change in Control (as defined in the Employment Agreement),
including but not limited to health insurance benefits, office space, secretary
usage, airplane usage and clubs and physicals.
B. The Company and the Executive entered into that certain First
Amendment to the Employment Agreement dated as of October 3, 2005 (the "FIRST
AMENDMENT") to more clearly specify the rights of the Executive under the
Employment Agreement.
C. In order to accelerate the payment of amounts due under the
Employment Agreement, as clarified by the First Amendment (the "AMENDED
EMPLOYMENT AGREEMENT"), the Company and the Executive hereby enter into this
Second Amendment.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants, promises and
obligations of the parties provided for in this Second Amendment, and the
benefits to be received by the Executive, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto adopt the following as an amendment to the terms of the Amended
Employment Agreement:
1. The Company shall pay the amount payable under Paragraph 9 of Section B
of the Amended Employment Agreement to the Executive no later than December 31,
2005.
2. The Company and the Executive have determined the monetary value of the
benefits described in Paragraphs 4 (to the extent such paragraph relates to the
Executive's accountant), 5 and 6 of the First Amendment (respectively, staff,
tax and estate planning and dues) to be the amounts set forth on Schedule A. The
Company shall pay the amounts on Schedule A to the Executive no later than
December 31, 2005. Upon receipt by Executive of such payments, the Company shall
have no further obligation to Executive under (i) Paragraphs 8 and 9 of Section
B of the Employment Agreement (to the extent such relates to the Executive's
accountant) and Paragraph 4 of the First Amendment (to the extent such relates
to the Executive's accountant), (ii) Paragraphs 4(c), 8 and 9 of Section B of
the Employment Agreement (to the extent such relates to tax and estate planning)
and Paragraph 5 of the First Amendment and (iii) Paragraphs 4(d), 8 and 9 of
Section B of the Employment Agreement (to the extent such relates to country
club fees) and Paragraph 6 of the First Amendment.
3. Employment Agreement. This Second Amendment is intended to clarify and
specify certain rights and privileges of Executive set forth in the Amended
Employment Agreement. The Amended Employment Agreement shall continue in full
effect after giving effect to this Second Amendment. Executive shall be deemed
to have resigned effective upon the consummation of the REIT Merger (as defined
in the Agreement and Plan of Merger, dated as of October 3, 2005, by and among
the Company, Brandywine Realty Trust, a Maryland real estate investment trust,
Brandywine Operating Partnership, L.P., a Delaware limited partnership,
Brandywine Cognac I LLC, a Maryland limited liability company, Brandywine Cognac
II LLC, a Delaware limited liability company, and Xxxxxxxx Properties
Acquisition Partners, L.P., a Delaware limited partnership).
4. Entire Agreement; Amendment; Assignment. This Second Amendment, along
with the Amended Employment Agreement, constitute the entire understanding
between the parties hereto with respect to the subject matter hereof. This
Second Amendment shall not be modified in any manner other than pursuant to a
writing signed by or on behalf of both of the parties hereto. This Second
Amendment shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The Executive may not assign his
rights except his rights to benefits hereunder may be transferred by will or
operation of law.
5. Applicable Law. This Second Amendment will be governed and construed in
accordance with the laws of the State of Texas.
6. Titles and Headings. Titles and headings to sections and paragraphs in
this Second Amendment are inserted for reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Second Amendment
7. No Third-Party Beneficiaries. This Second Amendment is solely for the
benefit of the parties to this Second Amendment and, except to the extent the
Company is affected hereby, should not be deemed to confer upon third parties
any remedy, claim, liability, reimbursement, claims or actions or other right in
excess of those existing without reference to this Second Amendment.
8. Counterparts. This Second Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together constitute one and the same instrument.
9. Severability. Any provision of this Second Amendment that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party to this Second Amendment,
each party hereto acknowledges that the obligations of the parties hereto shall
be specifically enforceable.
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10. Further Assurances. The parties hereto will execute and deliver or
cause to be executed and delivered such further instruments and documents and
will take such other actions as any other party to this Second Amendment may
reasonably request in order to effectuate the purpose of this Second Amendment
and the Amended Employment Agreement and to carry out the terms thereof.
11. Section 409A Tax Gross-Up.
(a) In the event it shall be determined that the payment of the
amounts referred to in Section 1 and Section 2 herein in 2005 (the
"2005 PAYMENTS") is or will be subject to the excise tax imposed by
Section 409A of the Internal Revenue Code of 1986, as amended, or any
interest or penalties with respect to such payment or excise tax (such
excise tax, together with any such interest and penalties, are
collectively referred to as the "EXCISE TAX"), then the Executive shall
be entitled to receive an additional payment (a "GROSS-UP PAYMENT") in
an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including but not limited to, any income tax, employment tax or
Excise Tax, imposed upon the Gross Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
2005 Payments. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income tax and
employment taxes at the highest marginal rate of federal income and
employment 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 the Executive's residence
(or, if greater, the state and locality in which the Executive is
required to file a nonresident income tax return with respect to the
2005 Payment) on the date of termination, net of the maximum reduction
in federal income taxes that may be obtained from the deduction of such
state and local taxes.
(b) If it is finally determined that any of the 2005 Payments are
subject to Excise Tax any determinations as to the amount of the
Gross-Up Payment shall be made by an independent accounting firm
selected by the Company (the "ACCOUNTING FIRM"), which shall provide
its determination (the "DETERMINATION"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment
and any other relevant matter, both to the Company and the Executive by
no later than ten (10) days following such final determination, or such
earlier time as is requested by the Company or the Executive (if the
Executive reasonably believes that any of the 2005 Payments may be
subject to the Excise Tax). If a Gross-Up Payment is determined to be
payable, it shall be paid to the Executive within twenty (20) days
after the Determination (and all accompanying calculations and other
material supporting the Determination) is delivered to the Company by
the Accounting Firm. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive, absent manifest error.
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(c) If a claim by a federal, state or local taxing authority is
made against the Executive, and if the Executive intends to seek a
Gross-Up Payment with respect thereto under this Section, the Executive
shall promptly notify (i) the Company in writing of such claims,
setting forth such claims in reasonable detail and providing copies of
any written documentation provided by the taxing authority in
connection with its claims. The Company shall have fifteen (15) days
after receipt of such notice to undertake, conduct and control, through
counsel of its own choosing and at its own expense, the settlement or
defense thereof, and the Executive shall cooperate with it in
connection therewith; provided, that the Executive may participate in
such settlement or defense through counsel chosen by the Executive and
paid at his own expense. So long as the Company is reasonably
contesting any such claim in good faith, the Executive shall not pay or
settle any such claim without the consent of the Company, which consent
shall not be unreasonably withheld. If the Company does not notify the
Executive in writing within fifteen (15) days after receipt of the
Company's written notice of a claim to a Gross-Up Payment hereunder
that it elects to undertake the defense thereof, the Executive shall
have the right to undertake, at the Company's cost, risk and expense,
the defense, compromise or settlement of the claim, but shall not
thereby waive any right to a Gross-Up Payment therefore pursuant to
this Agreement. The Company shall pay the Executive's expenses as and
when incurred.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the day and year first written above.
THE EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
THE COMPANY
XXXXXXXX PROPERTIES TRUST
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President,
General Counsel and
Secretary
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