EXHIBIT 10.5
CONSULTING AGREEMENT
THIS AGREEMENT is entered into as of January 5, 2006 (the "EXECUTION
DATE") between Brandywine Realty Trust, a Maryland real estate investment trust
(the "COMPANY"), and Michael V. Prentiss (the "CONSULTANT").
WITNESSETH:
THAT WHEREAS, the Company desires to engage the Consultant as a
consultant to provide to the Company the services described in Schedule A
attached hereto; and
WHEREAS, the Consultant is willing to be retained to assist in such
matters.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises of the parties, the Company and the Consultant agree as follows:
SECTION ONE
ENGAGEMENT OF CONSULTANT
The Company hereby engages the Consultant to provide the consulting
services hereinafter described in Schedule A, and the Consultant agrees to
perform such consulting services for the fees and reimbursement of expenses
specified in Section Four, on the terms hereinafter stated.
SECTION TWO
TERM OF 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 the Company, 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, Prentiss Properties Trust, a Maryland real estate investment
trust ("PRENTISS"), and Prentiss Properties Acquisition Partners, L.P., a
Delaware limited partnership. This Agreement shall continue in effect until the
third anniversary (the "TERMINATION DATE") of the Effective Date (such time, the
"TERM").
SECTION THREE
SERVICES TO BE PERFORMED
A. SCOPE OF SERVICES. During the term of this Agreement, the Consultant
shall provide the consulting services described in Schedule A.
B. LOCATION AND TIME OF SERVICES. The Consultant shall make his
services reasonably available at the offices provided in this Agreement in
Dallas, Texas. The exact times during which the Consultant is to be available
for service hereunder shall be determined by mutual agreement of the parties.
The Consultant shall receive direction as to the consulting services to be
rendered by him from Gerard H. Sweeney or his successor.
C. INDEPENDENT CONTRACTOR. In the performance of such services, the
Consultant shall act solely as an independent contractor, and nothing herein
contained shall at any time be so construed as to create the relationship of
employer and employee, partnership, principal and agent, or joint venture as
between the Company and Consultant. Consultant shall not have any authority to
bind the Company in any relationship with third parties unless specifically
authorized in writing by an officer of the Company.
SECTION FOUR
COMPENSATION
A. FEES. The Company shall pay Consultant $1,000 per year. Such amount
shall be payable on each anniversary of the Effective Date (in arrears) or more
frequently at the option of the Company.
B. EXPENSES. The Company shall reimburse Consultant for travel and
business expenses incurred by Consultant in performing service under this
Agreement on the same basis as the Company reimburses its own employees for
travel and business expenses. However, other than with respect to reasonable de
minimis business expenses, no reimbursable travel or business expense shall be
incurred by the Consultant unless authorized in advance by the Company. The
Consultant shall submit a written statement on the Company's standard expense
statement form, with supporting receipts, in order for the Consultant to receive
reimbursement for his expenses under this Section Four B.
C. OFFICES. The Company shall provide the Consultant with a similar
office to his office with Prentiss during the Term. Such similar office will be
an office of the Consultant's choosing located in a grade A office building in
Dallas, Texas or the surrounding area that is exterior office space and is not
more than 3,300 square feet. Such offices will accommodate all of the office
equipment that the Consultant determines to be necessary for such offices and
contain at least the same level of amenities as the Consultant's current office,
including but not limited to a conference room of a similar size to his current
conference room, secretarial furniture and other furniture, fish tanks and a
bathroom. Such offices will also have staff offices that are contiguous with the
Consultant's offices. The Consultant 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
Consultant shall be entitled to at least three parking places free of charge
adjacent to his office. The Company acknowledges that the office referenced in
the lease proposal attached hereto as Exhibit I shall constitute a "similar
office," and, during the term of such lease, the Company agrees to reimburse the
Consultant for all rent and other payments required to be paid by the Consultant
pursuant to the lease in the ordinary course of business.
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D. STAFF. The Consultant shall be entitled to the exclusive use of the
services of a secretary to be named by the Consultant in his sole discretion
from time to time during the Term. During the Term, the secretary shall, at sole
option of the Consultant, be employed by the Company and shall be compensated
and provided benefits by the Company at least at the rates and terms provided to
Company Executive Assistants to the Company's executive officers, including
participation in the 401(k) plan and cafeteria plan, as of the date of this
Agreement as set forth on Schedule B with raises and annual bonuses consistent
with Company Executive Assistants to the Company's executive officers. Any
replacements of the secretary during the Term may, in Consultant's sole
discretion, be compensated by the Company up to the same rate as their
predecessors during the remainder of the Term and be provided bonuses and raises
up to the amounts provided to past secretaries of the Consultant. The Company
acknowledges that the Consultant's initial secretary named pursuant to this
agreement may be Shannon Halloway.
SECTION FIVE
CONSULTANT'S SEVERANCE AND OTHER BENEFITS
As an independent contactor, the Consultant shall not be eligible for
or accrue any benefits in any of the benefit plans of the Company or any of its
subsidiaries; provided, however, that nothing contained in this Agreement, nor
any payments made to the Consultant hereunder shall be construed to reduce any
severance or other benefits to which the Consultant may be entitled as a result
of the Consultant's former employment by the Company (including Prentiss and any
other predecessor entities) or any of its subsidiaries pursuant to the Third
Amended and Restated Employment Agreement between the Consultant and Prentiss
dated as of January 1, 2004, as amended by the First Amendment to the Third
Amended and Restated Employment Agreement, the Second Amendment to the Third
Amended and Restated Employment Agreement and as further amended (the "PRENTISS
AGREEMENT").
SECTION SIX
INSURANCE
Inasmuch as the Consultant is an independent contractor and not an
employee of the Company, the Consultant shall maintain his own health insurance
and life insurance, as he may deem appropriate, provided, however, that nothing
in this Agreement shall modify any right the Consultant may have to receive
health insurance from the Company as a result of his prior employment
relationship with the Company (including Prentiss and any other predecessor
entities) and its subsidiaries pursuant to the Prentiss Agreement. The Company
shall indemnify the Consultant and hold him harmless to the full extent
permitted by law against loss and expense (including attorney's fees) from any
action, suit, proceeding or claim made or threatened (whether civil, criminal,
administrative or investigative) against Consultant directly or indirectly
arising out of the performance of the Consultant's duties under this Agreement,
except to the extent arising out of Consultant's gross negligence or willful
misconduct.
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SECTION SEVEN
NON-COMPETITION AND NON-SOLICITATION
A. OTHER CONSULTING SERVICES. Except as provided in Section Seven B
below, during the term of this Agreement, the Consultant may perform employment
or consulting services for entities other than the Company, provided that the
Consultant makes himself available to the Company on a reasonable basis, and any
employment or consulting services provided to an entity other than the Company
are performed at times when Consultant is not performing work for the Company.
B. NON-COMPETITION. Notwithstanding Section Seven A above, the
Consultant shall not, for a period of twelve months following the Effective
Date, (i) without the prior written approval of the Board of Trustees or the
Chief Executive Officer of the Company, which will not be unreasonably withheld,
commence construction or development on or acquire or manage an office building,
or participate in the ownership, management, operation or control of any entity
engaged in the business of constructing, developing, acquiring, managing or
owning office buildings, in any Major Metropolitan Area in which the Company
operates at the time of this Agreement or (ii) hire any person who is employed
by the Company or any of its subsidiaries (other than as provided in the
Prentiss Agreement or persons in a clerical position) in any of the Major
Metropolitan Areas who is not scheduled, as of the date of this Agreement, to be
terminated or solicit, entice or persuade any person or entity doing business
with or employed by the Company to terminate their relationship with the
Company. In addition, during the second twelve month period following the
Effective Date, the Consultant shall not, without the prior written approval of
the Board of Trustees or Chief Executive Officer of the Company, engage in any
construction, development or acquisition activities that are restricted in this
Section Seven B during the initial twelve month period following the Effective
Date if the budgeted cost of the construction activities, computed in aggregate
for any activities that are part of a related project, equal or exceed $100
million. For the purposes of this Agreement, "MAJOR METROPOLITAN AREAS" shall
include the following metropolitan areas: Washington, DC, Dallas/Fort Worth,
Austin, Denver, Oakland, Silicon Valley, San Diego, Los Angeles, Philadelphia
and Richmond, Virginia and the State of New Jersey. For the purposes of clarity,
Chicago, Illinois shall not be a Major Metropolitan Area. Notwithstanding the
foregoing, the Consultant shall not be prohibited from owning a non-controlling
interest in any publicly traded company or from owning any passive equity
interests in any investment vehicle that is not controlled by the Consultant nor
managed by any entity controlled by the Consultant.
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SECTION EIGHT
PROTECTION OF INFORMATION
All information and material acquired or developed by the Consultant
while performing services pursuant to this Agreement shall become the exclusive
property of the Company. Such information and material shall remain confidential
and shall not be disclosed to anyone nor used for another's benefit, without the
Company's prior written consent; provided, however, such the Consultant shall
not be deemed to be prohibited from disclosing any information to the extent
such information (i) becomes generally available to the public other than as a
result of a disclosure by the Consultant or any of his representatives in
violation of this Agreement, (ii) was in the Consultant's possession prior to
his receipt of the confidential information pursuant to this Agreement, provided
that the source of such information was not known by the Consultant to be
subject to an obligation not to disclose such information and/or (iii) becomes
available to the Consultant or his representatives on a non-confidential basis
from a source other than the Company or any representative of the Company,
provided that such source was not known by the Consultant to be subject to an
obligation not to disclose such information. Upon termination of this Agreement
for any reason, the Consultant agrees to deliver to the Company all copies of
any and all reports, tabulations, formulations, maps, diagrams, plans,
processes, or any other data or documents of any kind, nature or description
prepared hereunder immediately, whether completed or not, and without regard to
whether any or all the foregoing matters would be deemed confidential, material
or important.
SECTION NINE
ENTIRE AGREEMENT
This written Agreement contains the sole and entire agreement between
the parties with respect to consulting services. The parties acknowledge and
agree that neither of them has made any representation with respect to the
subject matter of this Agreement or any other representations except as are
specifically set forth herein, and each party acknowledges that he or it has
relied on his or its own judgment in entering into this Agreement. The parties
further acknowledge that any statements or representations that may have
heretofore been made by either of them or to the other are void and of no effect
and that neither of them has relied thereon in connection with his or its
dealing with the other. Any provision of this Agreement prohibited by law or
otherwise ruled ineffective shall only be ineffective to the extent of such
prohibition or ruling, with invalidating the remaining portions hereof.
SECTION TEN
WAIVER
No waiver or modification of this Agreement or any covenant, condition,
or limitation herein contained is valid unless in writing and duly executed by
the party to be charged therewith. Furthermore, no evidence of any waiver or
modification shall be offered or received in evidence in any proceeding,
arbitration, or litigation between the parties arising out of or affecting this
Agreement, or the rights or obligations of any party hereunder, unless such
waiver or modification is in writing, and duly executed. The provisions of this
paragraph may not be waived except as herein set forth.
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SECTION ELEVEN
NOTICES
All notices and written statements required pursuant to this Agreement
shall be deemed to have been given upon the mailing (hereof postage prepaid, to
the party entitled, at the address listed below or at such other address as may,
from time to time, be designated in writing to the other party.
CONSULTANT: Michael V. Prentiss
5006 Seneca Drive
Dallas, Texas 75209
COMPANY: Brandywine Realty Trust
401 Plymouth Road
Plymouth Meeting, PA 19462
Attn: Brad A. Molotsky, Senior Vice President and General
Counsel
SECTION TWELVE
GOVERNING LAW
This Agreement shall be governed as to its formation, interpretation
and performance by the laws of the State of Texas without regard to provisions
regarding choice of law of other states.
SECTION THIRTEEN
SECTION HEADINGS
The section headings in this Agreement are for convenience of reference
only and shall not be deemed to alter or affect any provision hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date stated at the beginning of this Agreement.
CONSULTANT
/s/ Michael V. Prentiss
---------------------------------------------
Michael V. Prentiss
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
------------------------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
SCHEDULE A
DESCRIPTION OF CONSULTING SERVICES
The Consultant shall perform such services as may be reasonably
requested by the Company consistent with the Consultant's experience with
Prentiss Properties Trust and his expertise in the office property investment
industry, including but not limited to (i) providing for the orderly transition
and integration with respect to the merger of Prentiss Properties Trust into a
wholly-owned indirect subsidiary of Brandywine Realty Trust; (ii) assisting with
strategic acquisitions; (iii) advising with respect to property acquisitions,
new developments and dispositions; and (iv) assisting with the planning of
company business strategy.
SCHEDULE B
ASSISTANTS TO MICHAEL V. PRENTISS
Welfare Benefits according to the current Company Plan or its successor Plan
for:
Medical Insurance
Dental Insurance
Vision Plan
Group Term Life Insurance
Accidental Death & Dismemberment Insurance
Travel Accident Insurance
Long and Short Term Disability Insurance
Section 125 Flexible Spending Accounts
Retirement Benefits according to the current Company Defined Contribution Plan
or its successor Plan
Other Company Benefits that are made available to similarly situated Employees