EXHIBIT 10.40
AMENDED AND RESTATED
BRANDYWINE REALTY TRUST
NON-QUALIFIED OPTION
This is an amendment and restatement of the Non-Qualified
Stock Option Award dated January 2, 1998 (the "Award") from Brandywine Realty
Trust, a Maryland real estate investment trust (the "Company") to John M.
Adderly, Jr. ("Optionee"). Terms used herein as defined terms and not defined
herein have the meanings assigned to them in the Brandywine Realty Trust 1997
Long-Term Incentive Plan, as amended from time to time (the "Plan"). This
amendment and restatement is dated as of January 6, 1999 and restates in its
entirety the Award.
1. Definitions. As used herein:
(a) "Board" means the Board of Trustees of the
Company, as constituted from time to time.
(b) "Cause" means "Cause" as defined in the Plan.
(c) "Change of Control" means "Change of Control" as
defined in the Plan.
(d) "Closing" means the closing of the acquisition
and sale of the Shares as described in, and subject to the provisions of,
Paragraph 9 hereof.
(e) "Closing Date" means the date of the Closing.
(f) "Code" means the Internal Revenue Code of 1986,
as amended from time to time, and any successor thereto.
(g) "Common Share" means a common share of beneficial
interest, $.01 par value per share, of the Company.
(h) "Committee" means the Committee appointed by the
Board in accordance with Section 2 of the Plan, if one is appointed and in
existence at the time of reference. If no committee has been appointed pursuant
to Section 2, or if such a committee is not in existence at the time of
reference, "Committee" means the Board.
(i) "Date of Exercise" means the date on which the
notice required by Paragraph 6 hereof is hand-delivered, placed in the United
States mail postage prepaid, or delivered to a telegraph or telex facility.
(j) "Date of Grant" means January 2, 1998, the date
on which the Company awarded the Option.
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(k) "Disability" means "Disability" as defined in the
Plan.
(l) "Expiration Date" means the earliest of the
following:
(i) If the Optionee terminates
employment with the Company for any
reason other than death, Disability
or for Cause, 5:00 p.m. on the date
90 days following such termination
of employment;
(ii) If the Optionee terminates
employment with the Company because
of death, 5:00 p.m. on the first
anniversary of the date the Optionee
terminates employment because of
such death;
(iii) If the Optionee terminates
employment with the Company because
of Disability, 5:00 p.m. on the date
six months following such
termination of employment, provided
that if the Optionee dies during
such period, any Option otherwise
exercisable shall be exercisable
until the first anniversary of the
Optionee's death;
(iv) If the Optionee terminates
employment with the Company for
Cause, 5:00 p.m. on the date of such
termination of employment;
(v) 5:00 p.m. on the day before the
tenth anniversary of the Date of
Grant;
(vi) The time provided for in Section 4
hereof.
(m) "Fair Market Value" means the Fair Market Value
of a Share, as determined pursuant to the Plan.
(n) "100% Shares" means the 26,409 Shares subject to
the Option and described in Paragraph 1(s)(i).
(o) "110% Shares" means the 30,902 Shares subject to
the Option and described in Paragraph 1(s)(ii).
(p) "115% Shares" means the 33,333 Shares subject to
the Option and described in Paragraph 1(s)(iii).
(q) "Option" means the option to purchase Shares
hereby granted.
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(r) "Option Price" means:
(i) with respect to 26,409 Shares
subject to the Option, $25.25; and
(ii) with respect to 30,902 Shares
subject to the Option, $27.78; and
(iii) with respect to 33,333 Shares
subject to the Option, $29.04.
In the event of any recapitalization, Share distribution or dividend, Share
split or combination, the Option Price shall be equitably and proportionally
adjusted. The Option Price shall also be subject to adjustment pursuant to
Section 3(c) of the Plan.
(s) "Shares" means the 90,644 Common Shares which are
the subject of the Option hereby granted. In the event of any recapitalization,
Share distribution or dividend, Share split or combination, the number of Shares
that remain subject to the Option shall be equitably and proportionally
adjusted. The number of Shares that remain subject to the Option shall also be
subject to adjustment pursuant to Section 3(c) of the Plan.
(t) "Subsidiary" means, with respect to the Company,
a subsidiary company, whether now or hereafter existing, as defined in section
424(f) of the Code, and any other entity 50% or more of the economic interests
in which are owned, directly or indirectly, by the Company.
2. Grant of Option. Subject to the terms and conditions set
forth herein and in the Plan, the Company hereby grants to the Optionee the
Option to purchase any or all of the Shares.
3. Time of Exercise of Options.
(a) Subject to Paragraph 3(b), the Option may be
exercised after such time or times as set forth below, and shall remain
exercisable until the Expiration Date, when the right to exercise shall
terminate absolutely:
(i) The Option may be exercised for
twenty percent (20%) of each of (A)
the 100% Shares, (B) the 110%
shares, and (C) the 115% Shares
subject to the Option following
December 31, 1998.
(ii) The Option may be exercised for an
additional twenty percent (20%) of
each of (A) the 100% Shares, (B) the
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110% Shares, and (C) the 115% Shares
subject to the Option following
December 31, 1999.
(iii) The Option may be exercised for an
additional twenty percent (20%) of
each of (A) the 100% Shares, (B) the
110% Shares, and (C) the 115% Shares
subject to the Option following
December 31, 2000.
(iv) The Option may be exercised for an
additional twenty percent (20%) of
each of (A) the 100% Shares, (B) the
110% Shares, and (C) the 115% Shares
subject to the Option following
December 31, 2001.
(v) The Option may be exercised for an
additional twenty percent (20%) of
each of (A) the 100% Shares, (B) the
110% Shares, and (C) the 115% Shares
subject to the Option following
December 31, 2002.
Notwithstanding the foregoing, the number of Shares available for exercise as
determined under this Paragraph 3(a) shall be rounded down to the nearest whole
Share. No Shares subject to the Option shall first become exercisable following
the Optionee's termination of employment, except as provided in Paragraph 3(b).
(b) Notwithstanding Paragraph 3(a), the Option shall
become fully exercisable upon the occurrence of a Change of Control.
4. Conversion of Option. In the event that the Option remains
Outstanding upon the occurrence of a Change of Control and Optionee does not
exercise the Option within one business day of the occurrence of the Change of
Control, then the Option shall automatically terminate and Optionee's right to
acquire Common Shares hereunder shall terminate absolutely and, upon such
termination, the Company shall provide for the issuance or delivery to Optionee,
for no consideration, of 10,575 Common Shares, which number shall be subject to
equitable and proportionate adjustment in the event of (i) any prior partial
exercise of the Option or (ii) any split or combination of the Common Shares or
any dividend payable on the Common Shares in the form of Common Shares.
5. Payment for Shares. Full payment for Shares purchased upon
the exercise of an Option shall be made in cash or, at the election of the
Optionee and as the Committee may, in its sole discretion, approve, by
surrendering Common Shares with an aggregate Fair Market Value equal to the
aggregate Option Price, or by delivering such combination of Common Shares and
cash as the Committee may, in its sole discretion, approve.
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6. Manner of Exercise. The Option shall be exercised by giving
written notice of exercise to:
Brandywine Realty Trust
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attention: Chief Financial Officer
All notices under this agreement shall be deemed to have been given when
hand-delivered, telecopied or mailed, first class postage prepaid, and shall be
irrevocable once given.
7. Nontransferability of Option. The Option may not be
transferred or assigned by the Optionee otherwise than as and to the extent
permitted by Section 5(e) of the Plan; and any attempt at assignment or transfer
contrary to the provisions of the Plan or the levy of any execution, attachment
or similar process upon the Option shall be null and void and without effect.
Any exercise of the Option by a person other than the Optionee shall be
accompanied by appropriate proofs of the right of such person to exercise the
Option.
8. Securities Laws. The Committee may from time to time impose
any conditions on the exercise of the Option as it deems necessary or
appropriate to comply with the then-existing requirements of the Securities Act
of 1933, as amended, or of the Securities Exchange Act of 1934, as amended,
including Rule 16b-3 (or any similar rule) of the Securities and Exchange
Commission. If the listing, registration or qualification of Shares issuable on
the exercise of the Option upon any securities exchange or under any federal or
state law, or the consent or approval of any governmental regulatory body is
necessary as a condition of or in connection with the purchase of such Shares,
the Company shall not be obligated to issue or deliver the certificates
representing the Shares otherwise issuable on the exercise of the Option unless
and until such listing, registration, qualification, consent or approval shall
have been effected or obtained. If registration is considered unnecessary by the
Company or its counsel, the Company may cause a legend to be placed on such
Shares calling attention to the fact that they have been acquired for investment
and have not been registered.
9. Issuance of Certificate at Closing; Payment of Cash.
Subject to the provisions of this Paragraph 9, the Closing Date shall occur as
promptly as is feasible after the exercise of the Option. Subject to the
provisions of Paragraphs 8 and 10 hereof, a certificate for the Shares issuable
on the exercise of the Option shall be delivered to the Optionee or to his
personal representative, heir or legatee at the Closing, provided that no
certificates for Shares will be delivered to the Optionee or to his personal
representative, heir or legatee unless the Option Price has been paid in full.
10. Rights Prior to Exercise. The Optionee shall not have any
right as a shareholder with respect to any Shares subject to his Options until
the Option shall have been exercised in accordance with the terms of the Plan
and this Award and the Optionee shall have
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paid the full purchase price for the number of Shares in respect of which the
Option was exercised, provided that in the event that the Optionee's employment
with the Company is terminated for Cause, upon a determination by the Committee,
the Optionee shall automatically forfeit all Shares otherwise subject to
delivery upon exercise of an Option but for which the Company has not yet
delivered the Share certificates, upon refund by the Company of the Option
Price.
11. Status of Option; Interpretation. The Option is intended
to be a non-qualified stock option. Accordingly, it is intended that the
transfer of property pursuant to the exercise of the Option shall be subject to
federal income tax in accordance with section 83 of the Code. The Option is not
intended to qualify as an incentive stock option within the meaning of section
422 of the Code. The interpretation and construction of any provision of this
Option or the Plan made by the Committee shall be final and conclusive and,
insofar as possible, shall be consistent with the intention expressed in this
Paragraph 11.
12. Option Not to Affect Employment. The Option granted
hereunder shall not confer upon the Optionee any right to continue in the
employment of the Company or any Subsidiary.
13. Miscellaneous.
(a) The address for the Optionee to which notice,
demands and other communications to be given or delivered under or by reason of
the provisions hereof shall be the address contained in the Company's personnel
records.
(b) This Award 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.
14. Withholding of Taxes. Whenever the Company proposes or is
required to deliver or transfer Shares in connection with the exercise of the
Option, or in connection with the conversion of the Option, the Company shall
have the right to (a) require the Optionee to remit to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Shares or (b) take whatever action it deems necessary to
protect its interests with respect to tax liabilities.
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IN WITNESS WHEREOF, the Company has granted this Award on the
day and year first above written.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
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Title: President and Chief Executive Officer
Accepted:
/s/ John M. Adderly, Jr.
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John M. Adderly, Jr.
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