Exhibit 10.65
EMPLOYMENT
AGREEMENT
(As Amended and Restated
Effective as of the Date Below Executed)
This amended and restated EMPLOYMENT
AGREEMENT (this “Agreement”), effective as of the date
it is executed below (the “Effective Date”), is between
PREIT Services, LLC, a Delaware limited liability company
(“Company”), and Timothy R. Rubin
(“Executive”).
BACKGROUND
Executive is currently the Executive
Vice President-Leasing of Company. Company desires to continue to
employ Executive, and Executive desires to continue to be employed,
on the terms and conditions contained in this Agreement. Executive
will be substantially involved with Company’s operations and
will have trade secrets and other confidential information relating
to Company and its customers; accordingly, the noncompetition
agreement and other restrictive covenants contained in
Section 5 hereof constitute essential elements
hereof.
Company and Executive desire to
amend and restate Executive’s current Agreement so that,
among other things, its terms and conditions comply with (or are
exempt from) the deferred compensation rules set forth in section
409A of the Internal Revenue Code of 1986, as amended (the
“IRC”), and the final regulations issued
thereunder.
NOW, THEREFORE,
in consideration of the premises and
the mutual agreements contained herein and intending to be legally
bound hereby, the parties hereto agree as follows:
1.1 Employment; Acceptance of Employment
. Company hereby employs Executive and Executive hereby agrees
to continue to be employed by Company for the period and upon the
terms and conditions hereinafter set forth.
1.2 Capacity and
Duties
(a) Executive shall continue to
serve as Executive Vice President-Leasing of Company and, subject
to the supervision and control of the President of Company (the
“President”), shall have the duties and authority
generally consistent with such office. Executive shall perform such
other duties and shall have such authority as may from time to time
be specified by the President of Company and as shall be consistent
with the status and authority of his office.
(b) Except as permitted by
subsection (c) below, Executive (i) shall devote his full
working time, energy, skill and best efforts to the performance of
his duties hereunder, in a manner that will comply with
Company’s published rules and policies in effect from time to
time, and (ii) shall not be employed by or participate
or
engage in or in any manner be a part
of the management or operation of any business enterprise other
than Company and its Affiliates without the prior written consent
of Company, which consent may be granted or withheld in the sole
discretion of Company. “Affiliate” as used in this
Agreement means any person or entity controlling, controlled by, or
under common control with, Company. “Control,” as used
in the definition of Affiliate, means the power to direct the
management and policies of a person or entity, directly or
indirectly, whether through the ownership of voting securities, by
contract, or otherwise; the terms “controlling” and
“controlled” shall have correlative meanings. Further,
any person or entity that owns beneficially, either directly or
through one or more intermediaries, more than 20 percent of the
ownership interests in a specified entity shall be presumed to
control such entity for purposes of the definition of Affiliate.
“Trust,” as used in this Agreement, shall mean
Pennsylvania Real Estate Investment Trust, a Pennsylvania Business
Trust.
(c) Notwithstanding the provisions
of subsection (b) above, Executive may, subject to
Section 5.2 hereof, serve on the board of directors or similar
body of other organizations, including philanthropic organizations
and organizations in which the Executive has made an investment,
provided that Executive’s activities with respect to all of
the foregoing do not, individually or in the aggregate, interfere
with, detract from, or affect the performance of his duties for
Company under this Agreement.
2.1 Term . The initial term of
Executive’s employment hereunder shall begin on the Effective
Date and last until December 31, 2009 (the “Expiration
Date”), unless sooner terminated in accordance with the other
provisions hereof. Except as hereinafter provided, on the
Expiration Date and on each subsequent anniversary thereof, the
Term (as hereinafter defined) shall be automatically extended for
one year unless either party shall have given to the other party
notice of non-renewal of this Agreement at least 120 calendar days
prior to the expiration of the Term. The initial term of employment
hereunder and each term as extended is a “Term.” If a
non-renewal notice is given as provided above, Executive’s
employment under this Agreement shall terminate (within the meaning
of Section 4.8 hereof) on the last calendar day of the Term.
If the non-renewal notice is given by Company, such termination of
employment shall be a termination by Company without Cause, within
the meaning of Section 4.4 hereof.
3.1 Base Compensation . As
compensation for Executive’s services, Company shall pay to
Executive a salary at the initial annual rate of $264,992 payable
in periodic installments in accordance with Company’s regular
payroll practices in effect from time to time. Effective as of
January 1, 2009 and as of any later date, Executive’s
salary may be increased pursuant to action taken or authorized by
the Executive Compensation and Human Resources Committee (the
“Committee”) of the Board of Trustees of the Trust (the
“Board”). Executive’s annual salary cannot be
decreased without the written consent of Executive.
Executive’s annual salary, as determined in accordance with
this Section, is hereinafter referred to as the “Base
Salary.”
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3.2 Bonuses . Executive is eligible
for and shall participate in Company’s and the Trust’s
Annual Incentive Opportunity Awards and shall participate in the
other bonus plans of Company in place from time to time for the
executive officers of Company to the extent determined by the
Committee. No later than April 10 during any fiscal year
during the Term, Company shall provide Executive with written
notice of his Base Salary, bonus plan eligibility, and equity
incentive awards, if any, for the current fiscal year. Such notice
shall provide sufficient information regarding Executive’s
bonus plan eligibility so that Executive’s maximum potential
bonus is readily ascertainable. Failure to provide such notice on a
timely basis (such failure, a “Compensation Notice
Delinquency”) shall not be deemed a breach by Company;
however, Executive shall then be permitted to exercise his
termination right under Section 4.7 hereof.
3.3 Employee Benefits . In addition to
the compensation provided for in Sections 3.1 and 3.2 hereof,
Executive shall be entitled, during the Term, to participate in
such of Company’s employee benefit plans and benefit
programs, including medical benefit programs, as may from time to
time be provided by Company for its executive officers. Company
shall use its commercially reasonable efforts to provide Executive
with health insurance through a preferred provider, traditional
indemnity or equivalent plan.
3.4 Vacation . During the Term,
Executive shall be entitled to a paid vacation of 25 business days
during each calendar year or to such additional number of days as
is provided in the Employee Handbook published from time to time by
the Trust (the “Employee Handbook”). Executive’s
right to carry forward unused vacation days for a calendar year to
any future calendar year shall be governed by the Employee Handbook
as in effect from time to time.
3.5 Expense Reimbursement . Company
shall reimburse Executive for all reasonable expenses incurred by
him in connection with the performance of his duties hereunder in
accordance with its regular reimbursement policies as in effect
from time to time and upon receipt of itemized vouchers and such
other supporting information therefor as Company may reasonably
require.
3.6 Equity Plans . Executive shall be
entitled, during his employment hereunder, to participate in such
of Company’s equity incentive plans and programs as may from
time to time be provided by Company for its executive officers at
such level as shall be determined by the Committee or the Board, as
appropriate.
3.7 Nonqualified Retirement Plan .
Company has previously entered into a nonqualified supplemental
executive retirement plan with Executive whereby Company has
credited a bookkeeping account maintained by Company for Executive
with a deemed contribution of $25,000 per fiscal year. Such deemed
contribution shall be credited during the Term as of the first day
of each fiscal year of Company and shall earn interest at the rate
of 10 percent compounded annually. Company acknowledges that
Executive is entitled to continue receiving benefits under and in
accordance with the terms of such plan. Executive shall at all
times be fully vested in such account, and such account shall be
paid to Executive in the manner and at the time(s) specified in
such plan.
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4.
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TERMINATION
OF EMPLOYMENT
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4.1 Death of Executive . If Executive
dies during the Term, Company shall thereafter be obligated to
continue to pay the Base Salary to Executive’s estate for the
remainder of the Term or, if the remainder of the Term is less than
one year, for a period of 12 months, periodically in accordance
with the Company’s regular payroll practices and, within 30
calendar days of the death of Executive, shall pay any other
amounts (including salary, bonuses, vacation pay, expense
reimbursement, etc.) that have been fully earned by, but not yet
paid to, Executive under this Agreement as of the date of
Executive’s death. If, for the year in which Executive dies,
Company achieves the performance goals established in accordance
with any cash bonus plan in which Executive participates, Company
shall pay Executive’s estate, within the period in the
following year that begins January 1 and ends March 15,
an amount equal to the bonus that Executive would have received had
he been employed by Company for the full year, multiplied by a
fraction, the numerator of which is the number of calendar days
Executive was employed in such year and the denominator of which is
365. Upon Executive’s death, (i) each outstanding option
granted to Executive before, on or after the date hereof shall
become vested and shall be immediately exercisable in accordance
with the terms thereof, (ii) each outstanding nonqualified
stock option (“NQSO”) granted to Executive before, on
or after the date hereof shall be exercisable until the earlier of
(A) the later of 180 calendar days after the death of
Executive or the period following the death of Executive that is
set forth in the relevant stock option agreement, or (B) the
scheduled expiration date of such option, (iii) the exercise
period of each incentive stock option (“ISO”) granted
to Executive before, on or after the date hereof shall be governed
by the terms of the relevant ISO agreement, (iv) anything to
the contrary in any other existing agreement or plan
notwithstanding, all outstanding restricted shares granted to
Executive that (A) are subject to vesting solely based on the
passage of time and Executive’s continued employment shall
become immediately vested, and (B) are subject to vesting
based upon the performance of the Company (however measured) shall
remain restricted shares under the terms of the applicable
restricted share award agreement (the “Award”) and
shall vest or be forfeited in whole or in part under the terms of
such Award as if Executive’s employment had not terminated,
and (v) Executive’s spouse and dependents (if any) shall
be entitled for the balance of the Term or, if the balance of the
Term is less than one year, for a period of 12 months, to continue
to receive medical benefits insurance coverage at Company’s
expense if and to the extent Company was paying for such benefits
for Executive’s spouse and dependents at the time of
Executive’s death. Executive’s spouse and dependents
shall be entitled to such rights as they may have to continue
coverage at their sole expense as are then accorded under Part 6 of
Subtitle B of Title I of the Employee Retirement Income Security
Act of 1974, as amended (“COBRA”), for the COBRA
coverage period following the expiration of the period, if any,
during which Company paid such expense.
4.2 Disability of Executive . If
Executive is or has been materially unable for any reason to
perform his duties hereunder for 120 calendar days during any
period of 150 consecutive calendar days, Company shall have the
right to terminate (within the meaning of Section 4.8 hereof)
Executive’s employment upon 30 calendar days’
prior written notice to Executive at any time during the
continuation of such inability, in which
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event Company shall thereafter be obligated to
pay to Executive, within the 30-calendar-day period following his
termination of employment, a lump sum equal to (i) the greater
of the amount of his Base Salary computed through the remainder of
the Term or his Base Salary, in either case minus (ii) any
disability payments reasonably projected to be received by
Executive from disability insurance policies paid for by Company
during the longer of the remainder of the Term or 12 months
following his termination of employment. Both the portion of the
calculation in (i) of the preceding sentence and the portion
of the calculation in (ii) of the preceding sentence shall be
discounted from the dates that the Base Salary or disability
payments (as applicable) would have been payable during the
relevant period following termination in accordance with
Company’s regular payroll practices or in accordance with
such disability insurance policies (as applicable) to present value
on the date of payment. The discount rate shall be equal to 200
basis points plus the London Interbank Offered Rate for a one-month
period set forth in The Wall Street Journal (the
“WSJ”) on the date of termination of employment or, if
the WSJ is not published on such date, the first day following such
termination on which the WSJ is published. Company shall also,
within 30 calendar days of such termination, pay any other amounts
(including salary, bonuses, vacation pay, expense reimbursement,
etc.) that have been fully earned by, but not yet paid to,
Executive under this Agreement as of the date of such termination.
If, for the year in which Executive’s employment is
terminated pursuant to this Section, Company achieves the
performance goals established in accordance with any cash incentive
plan in which Executive participates, Company shall pay Executive,
within the period in the following year that begins January 1
and ends March 15, an amount equal to the bonus that Executive
would have received had he been employed by Company for the full
year, multiplied by a fraction, the numerator of which is the
number of calendar days Executive was employed in the year in which
his employment is terminated and the denominator of which is 365.
Upon termination of Executive’s employment pursuant to this
Section, (i) each outstanding option granted to Executive
before, on or after the date hereof shall become vested and shall
be immediately exercisable in accordance with the terms thereof,
(ii) each outstanding NQSO granted to Executive before, on or
after the date hereof shall be exercisable until the earlier of
(A) the later of 180 calendar days after the termination of
Executive’s employment pursuant to this Section or the period
following the termination of Executive’s employment for the
reason set forth in this Section that is set forth in the relevant
stock option agreement, or (B) the scheduled expiration date
of such option, (iii) the exercise period of each ISO granted
to Executive before, on or after the date hereof shall be governed
by the terms of the relevant ISO agreement, (iv) anything to
the contrary in any other existing agreement or plan
notwithstanding, all outstanding restricted shares granted to
Executive that (A) are subject to vesting solely based on the
passage of time and Executive’s continued employment shall
become immediately vested, and (B) are subject to vesting
based upon the performance of Company (however measured) shall
remain restricted shares under the terms of the applicable Award
and shall vest or be forfeited in whole or in part under the terms
of such Award as if Executive’s employment had not
terminated, and (v) Executive shall be entitled for the
balance of the scheduled Term or, if the balance of the Term is
less than one year, for a period of 12 months, to continue to
receive at the Company’s expense medical benefits coverage
for Executive and his spouse and dependents (if any) if and to the
extent
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Company was paying for such benefits to
Executive and Executive’s spouse and dependents at the time
of such termination. Executive and his spouse and dependents shall
be entitled to such rights as they may have to continue coverage at
his or their sole expense as are then accorded under COBRA for the
COBRA coverage period following the expiration of the period, if
any, during which Company paid such expense.
4.3 Termination for Cause .
Executive’s employment hereunder shall terminate (within the
meaning of Section 4.8 hereof) immediately upon notice that
Company is terminating Executive for Cause, in which event Company
shall not thereafter be obligated to make any further payments
hereunder other than amounts (including salary, bonus, vacation
pay, expense reimbursement, etc.) that have been fully earned by,
but not yet paid to, Executive under this Agreement as of the date
of such termination and which shall be paid within 30 calendar days
of such termination. Upon termination of Executive’s
employment pursuant to this Section, (i) each outstanding NQSO
granted to Executive before, on or after the date hereof that is
vested and currently exercisable as of the date Executive’s
employment is terminated pursuant to this Section shall remain
exercisable until the earlier of (A) the later of 30 days
after the termination of Executive’s employment pursuant to
this Section or the period following the termination of
Executive’s employment for the reason set forth in this
Section that is set forth in the relevant stock option agreement,
or (B) the scheduled expiration date of such option,
(ii) the exercise period of each ISO granted to Executive
before, on or after the date hereof shall be governed by the terms
of the relevant ISO agreement, (iii) all vested restricted
shares granted to Executive shall be delivered to Executive free
and clear of any restrictions, other than pursuant to applicable
securities laws, and (iv) Executive and his spouse and
dependents shall have such rights (if any) to continue medical
benefits coverage at his or their sole expense following
termination for Cause as are then accorded under COBRA for the
COBRA coverage period. “Cause” shall mean the
following:
(a) (i) fraud in connection with
Executive’s employment, (ii) theft, misappropriation or
embezzlement of funds of Company or its Affiliates, or
(iii) an act resulting in termination pursuant to the
provisions of the “Code of Conduct” (as defined in
Section 6.15 hereof);
(b) indictment of Executive for a
crime involving moral turpitude;
(c) breach of Executive’s
obligations under Section 5.1 hereof or Section 5.2
hereof;
(d) failure of Executive to perform
his duties to Company (other than on account of illness, accident,
vacation or leave of absence) that persists for more than 30
calendar days after written demand for substantial performance
which specifically identifies the manner in which Executive has
failed to perform; or
(e) Executive’s repeated abuse
of alcohol or drugs.
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4.4 Termination Without Cause or for Good
Reason
(a) If at any time during the Term
(i) Executive’s employment is terminated (within the
meaning of Section 4.8 hereof) by Company for any reason other
than Cause or the death or disability of Executive or
(ii) Executive’s employment is terminated (within the
meaning of Section 4.8 hereof) by Executive for “Good
Reason” (as hereinafter defined):
(1) Company shall, on or before
Executive’s last day of full-time employment hereunder, pay
Executive all amounts (including salary, bonuses, vacation pay,
expense reimbursement, etc.) that have been fully earned by, but
not yet paid to, Executive under this Agreement as of the date of
such termination. In addition, subject to subsection
(c) below, Company shall pay Executive a lump- sum cash
payment equal to the greater of (x) (A) Executive’s
then current Base Salary through the end of the Term plus
(B) an amount equal to the average of the percentages of Base
Salary that were paid to Executive as cash bonuses in each of the
last three full calendar years multiplied by Executive’s then
current Base Salary (the “Average Bonus”) and further
multiplied by a fraction, the denominator of which is 365 and the
numerator of which is the number of days in the calendar year that
expired prior to termination of employment and (y) two times
(A) Executive’s then current annual Base Salary plus
(B) an amount equal to the Average Bonus. The portion of the
lump-sum cash payment contemplated by the preceding sentence that
represents Executive’s Base Salary shall be discounted from
the dates that the Base Salary would have been payable – at
the time of termination during the relevant period following
termination in accordance with Company’s regular payroll
practices – to present value on the date of payment at a
discount rate equal to 200 basis points plus the London Interbank
Offered Rate f
