Exhibit 10.57
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
Pennsylvania Real Estate Investment Trust, a Pennsylvania business
trust (“Company”), and Jeffrey A. Linn
(“Executive”).
BACKGROUND
Executive is currently the Executive
Vice President-Acquisitions and Secretary of Company. Company
desires to continue to employ Executive, and Executive desires to
continue to be so employed, on the terms and conditions contained
in this amended and restated Agreement. Executive has been and will
continue to be substantially involved with Company’s
operations and management and has and will continue to 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. CAPACITY AND
DUTIES
1.1 Employment; Acceptance of
Employment . Company
hereby employs Executive and Executive hereby agrees to continue
employment 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-Acquisitions and Secretary of
Company and, subject to the supervision and control of the Chief
Executive Officer, shall have the duties and authority generally
consistent with such offices. Executive shall perform such other
duties and shall have such authority as may from time to time be
specified by the Chief Executive Officer of Company and as shall be
consistent with the status and authority of his current offices.
Executive shall also serve as Executive Vice President-Acquisitions
and Secretary of PREIT Associates, L.P. (“PALP”), of
which Company is the general partner.
(b) Executive understands that
substantially all of the assets of Company consists of its general
partner interest in PALP and that the business operations of PALP
and its direct and indirect subsidiaries constitute all of the
business operations conducted by Company and its
“Affiliates” (as defined in subsection (c) below).
Accordingly, Company and Executive understand that most of
Executive’s time and energy will be expended on behalf of
PALP and its direct and indirect subsidiaries in Executive’s
capacity as an officer of PALP rather than as an officer of
Company.
(c) Except as permitted by
subsection (d) 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.
(d) Notwithstanding the provisions
of subsection (c) above and subject to Section 5.2
hereof, Executive shall be permitted to serve on the board of
directors or similar body of other organizations, including
philanthropic organizations and organizations in which Executive
has made an investment, provided that Executive’s activities
with respect to 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. TERM OF
EMPLOYMENT
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.
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3. COMPENSATION
3.1 Base Compensation
. As compensation for
Executive’s services, Company shall pay to Executive a salary
at the initial annual rate of $266,701, 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 Company (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.” 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.
3.2 Bonuses .
Executive is eligible for and shall
participate in Company’s bonus plans listed on Schedule 3.2
hereto 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.
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. Company shall pay, or reimburse
Executive for, the premiums associated with continuing the
Equitable Life Disability Insurance Policy currently maintained for
Executive’s benefit at the same benefit level as currently in
effect.
3.4 Vacation .
During the Term, Executive shall be
entitled to a paid vacation of 25 business days during each
calendar year or such additional number of days as is provided in
the Employee Handbook published from time to time by Company (the
“Company 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 Company 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 with respect to such expenses as Company may reasonably
require.
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3.6 Nonqualified Retirement
Plan . Company hereby
acknowledges that Executive is entitled to continue receiving
benefits under, and in accordance with, the terms of
Company’s Supplemental Retirement Plan for Jeffrey A. Linn,
as amended and restated effective January 1, 2009.
4. TERMINATION OF
EMPLOYMENT
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 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 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.
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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 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 bonus 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
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shall vest or be forfeited in whole or in part
under the terms of such Award as if Employee’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 Company’s expense medical benefits coverage for
Executive and his spouse and dependents (if any) if and to the
extent Company was paying for such benefits to Executive and his
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 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,
(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 any of its Affiliates, or
(iii) an act resulting in termination pursuant to the
provisions of the “Code of Conduct” (as defined in
Section 6.4 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 after such notice to him; or
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(e) Executive’s repeated abuse
of alcohol or drugs.
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 or a
multiple thereof 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 p
