EXHIBIT 10.23
FIRST AMENDMENT
TO THE
THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This First Amendment to the Third Amended and Restated Employment
Agreement (this "AMENDMENT"), dated October 3, 2005, is entered into by and
between Prentiss Properties Trust, a Maryland real estate investment trust (the
"COMPANY"), and Michael V. Prentiss (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, including but not limited to health
insurance benefits, office space, secretary usage, airplane usage and clubs and
physicals.
B. In order to more clearly specify the rights of the Executive under
the Employment Agreement, the Company and the Executive hereby amend the
Employment Agreement. Capitalized terms not otherwise defined herein shall have
the meaning ascribed to such terms in the Employment Agreement.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants, promises and
obligations of the parties provided for in this 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 Employment Agreement:
1. Benefits. The medical, vision, dental, health (including but not
limited to annual physicals) and prescription drugs benefits to be provided to
the Executive and his Dependents for three years after the date of the
Executive's death, disability or Termination Without Cause, termination of
employment by the Executive or the resignation of the Executive after a Change
of Control (such three-year period, the "CONTINUATION PERIOD") at the Company's
expense in accordance with Paragraphs 8 and 9 of Section B of the Employment
Agreement are hereby agreed to refer to medical, vision, dental, health and
prescription drugs benefits, long-term disability coverage and life insurance
and other death benefit coverage that are no worse than the level of such
benefits and policies provided to the Executive by the Company as of the date of
this Amendment and the current terms thereof, including but not limited to
similar deductibles, co-payments and solvency and rating of the insurance
company providing coverage, all as set forth on Schedule A attached hereto. The
Executive shall be able to participate in the Company's benefit plans or the
benefit plans of any successor or assign, including but not limited to any
deferred compensation plans, after any Change in Control if he is retained as
trustee, consultant or otherwise. The Executive will also be entitled to
maintain any deferrals made in the Company's deferred compensation plan or any
successor plans (with any balance in the current plans being rolled over into
such successor plan) without payment of any taxes or penalties.
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2. Post Continuation Period Benefits. The Executive shall have the
right, in his sole discretion, to extend the medical, vision, dental, health and
prescription drugs insurance benefits provided under the Employment Agreement
after the expiration of the Continuation Period for an indefinite period of
time; provided, however, the Company will not bear the premiums related to such
insurance after the expiration of the Continuation Period, but the Company shall
use its best efforts to obtain the group rate or otherwise to negotiate a low
rate for participation in such insurance for the Executive.
3. Offices. Paragraph 8 and 9 of Section B of the Employment Agreement
provide that the Executive shall be entitled to retain his current or a similar
office during the Continuation Period. The Executive's current office,
conference room and staff offices have the dimensions specified in Schedule B
attached hereto. For the purposes of clarification of what constitutes the above
"similar office," the office to be provided to the Executive for the
Continuation Period at the Company's expense is hereby agreed to refer to an
office of the Executive's choosing located in a grade A office building in
Dallas, Texas or the surrounding area that is exterior office space and is not
less than the square footage specified in Schedule B. Such offices shall contain
at least the same level of amenities as the Executive's current office, have
staff offices that are contiguous with the Executive's offices and accommodate
all of the office equipment that the Executive determines to be necessary for
such offices. The offices provided during the Continuation Period shall not be
located in the office building in which they are currently located. The
Executive shall have such rights as are traditionally afforded to other tenants
in the building in which such office shall be provided, including tenant
improvements of at least $40.00 per square foot. The Executive shall be entitled
to at least three parking places free of charge adjacent to his office.
4. Staff. The secretary to be provided in accordance with Paragraphs 8
and 9 of Section B of the Employment Agreement shall be Executive's current
secretary or any such replacement secretary as the Executive may name in his
sole discretion from time to time during the Continuation Period, and the
accountant referred to in Paragraphs 4(c), 8 and 9 of Section B of the
Employment Agreement is the Executive's current accountant or any such
replacement accountant as the Executive may name in his sole discretion from
time to time during the Continuation Period. During the Continuation Period,
both the secretary and the accountant shall, at sole option of the Executive, be
employed by the Company and shall be compensated and provided benefits by the
Company at least at the rates and terms that each of them currently receives,
including participation in the 401(k) plan and cafeteria plan, as of the date of
this Amendment as set forth on Schedule C with raises and annual bonuses
consistent with past practices. Any replacements of the secretary or accountant
during the Continuation Period may, in Executive's sole discretion, be
compensated by the Company up to the same rate as their predecessors during the
remainder of the Continuation Period and provided bonuses and raises up to the
amounts provided to past secretaries and accountants of the Executive.
5. Tax and Estate Planning. The tax and estate planning services to be
provided during the Continuation Period in accordance with Paragraphs 4(c), 8
and 9 of Section B of the Employment Agreement shall be provided by a third
party not affiliated with the Company selected by the Executive in his sole
discretion. It is understood and acknowledged by both parties that the initial
costs for providing such tax and estate planning services may be significant and
all such costs during the Continuation Period shall be paid by the Company.
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6. Dues. In accordance with Paragraphs 4(d), 8 and 9 of Section B of
the Employment Agreement, the Company will continue to reimburse the Executive
during the Continuation Period for all of the country club fees and dues set
forth on Schedule D, with such increases as are required from such clubs to
maintain the level of rights and privileges as the Executive enjoys as of the
date of this Amendment.
7. Aircraft. The Executive shall have the right to use up to 100 hours
of flight time per year during the Continuation Period on a Challenger 300 (the
"COMPANY AIRCRAFT") through Bombardier Aerospace Corporation dba FlexJet
("FLEXJET") or any successor or replacement fractional ownership service or
otherwise (collectively, the "FRACTIONAL SERVICE"), at the Company's expense
pursuant to the Management Agreement, dated as of March 15, 2005 between FlexJet
and Prentiss Properties Continental LLC or any successor agreement with
materially similar terms. The Executive may use the Company Aircraft for any
purpose whatsoever during the Continuation Period, including any personal,
business or other uses, including but not limited to vacations and business
meetings unrelated to the Company; provided, however, that the Executive shall
reimburse the Company for his use of the Company Aircraft at the per flight hour
rate equal to $2,435.00, as adjusted each January 1 of the greater of (i) 3.75%
or (ii) the "Consumer Price Index for all Urban Consumers--U.S City average," as
published by the Bureau of Labor Statistics. The Executive shall have the right
to purchase the Company's right to use the Company Aircraft upon the expiration
of the Continuation Period upon the payment of $100,000. The Company shall enter
into an option agreement memorializing the Executive's purchase option in the
form of Exhibit A.
8. Employment Agreement. This Amendment is intended to clarify and
specify certain rights and privileges of Executive set forth in the Employment
Agreement. The Employment Agreement shall continue in full effect after giving
effect to this Amendment.
9. Entire Agreement; Amendment; Assignment. This Amendment, along with
the Employment Agreement, constitute the entire understanding between the
parties hereto with respect to the subject matter hereof. This 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 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.
10. Applicable Law. This Amendment will be governed and construed in
accordance with the laws of the State of Texas.
11. Titles and Headings. Titles and headings to sections and paragraphs
in this Amendment are inserted for reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Amendment.
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12. No Third-Party Beneficiaries. This Amendment is solely for the
benefit of the parties to this 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 Amendment.
13. Counterparts. This 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.
14. Severability. Any provision of this 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 Amendment, each party hereto acknowledges that
the obligations of the parties hereto shall be specifically enforceable.
15. 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 Amendment may reasonably
request in order to effectuate the purpose of this Amendment and the Employment
Agreement and to carry out the terms thereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first written above.
THE EXECUTIVE
/s/ Michael V. Prentiss
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Michael V. Prentiss
THE COMPANY
PRENTISS PROPERTIES TRUST
By: /s/ Thomas F. August
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Name: Thomas F. August
Title: President and
Chief Executive Officer