Exhibit 10.5
BRANDYWINE REALTY TRUST
AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
(As amended effective May 2,
2005)
SECTION 1. Purpose; Definitions . The
purpose of the Brandywine Realty Trust 1997 Long-Term Incentive
Plan (the “Plan”) is to offer to certain employees and
trustees of Brandywine Realty Trust (the “Company”),
organized as a Maryland real estate investment trust, and its
subsidiaries, equity interests in the Company, options to acquire
equity interests in the Company, and other performance-based
incentive awards, thereby attracting, retaining and motivating such
persons, and strengthening the mutuality of interests between such
persons and the Company’s shareholders. The Plan was
originally adopted effective May 12, 1997 and has been amended with
shareholder approval effective May 15, 1998 and May 2,
2005.
For
purposes of the Plan, the following initially capitalized words and
phrases shall be defined as set forth below, unless the context
clearly requires a different meaning:
a. “Affiliate”
means, with respect to a person or entity, a person that directly
or indirectly controls, or is controlled by, or is under common
control with such person or entity.
b. “Board”
means the Board of Trustees of the Company, as constituted from
time to time.
c. “Cause”
occurs when the Participant, as determined by the Board:
(i) has
engaged in any type of disloyalty to the Company, including without
limitation, fraud, embezzlement, theft, or dishonesty in the course
of his employment or engagement, or has otherwise breached any
fiduciary duty owed to the Company;
(ii) has
been convicted of a felony;
(iii) has
disclosed trade secrets or confidential information of the Company;
or
(iv) has
breached any agreement with or duty to the Company in respect of
confidentiality, non-disclosure, non-competition or
otherwise.
d. “Change
of Control” means:
(i) the
acquisition in one or more transactions by any “Person”
(as the term person is used for purposes of Sections 13(d) or 14(d)
of the Exchange Act) of “Beneficial ownership” (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding voting securities (the
“Voting Securities”), provided that for purposes of
this clause (i) Voting Securities acquired directly from the
Company by any Person shall be excluded from the determination of
such Person’s Beneficial ownership of Voting Securities (but
such Voting Securities shall be included in the calculation of the
total number of Voting Securities then outstanding); or
(ii) approval
by shareholders of the Company of:
(A) a
merger, reorganization or consolidation involving the Company if
the shareholders of the Company immediately before such merger,
reorganization or consolidation do not or will not own directly or
indirectly immediately following such merger, reorganization or
consolidation, more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the company resulting
from or surviving such merger, reorganization or consolidation in
substantially the same proportion as their ownership of the Voting
Securities outstanding immediately before such merger,
reorganization or consolidation; or
(B) a
complete liquidation or dissolution of the Company; or
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(C) an
agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) acceptance
by shareholders of the Company of shares in a share exchange if the
shareholders of the Company immediately before such share exchange
do not or will not own directly or indirectly immediately following
such share exchange more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the entity
resulting from or surviving such share exchange in substantially
the same proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange; or
(iv) a
change in the composition of the Board over a period of twenty four
(24) months or less such that a majority of the Board members
ceases to be comprised of individuals who either: (i) have been
board members continuously since the beginning of such period; or
(ii) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.
e. “Code”
means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
f. “Committee”
shall mean the Committee appointed by the Board in accordance with
Section 2 of the Plan, if one is appointed, in which event in
connection with this Plan, the Committee shall possess all of the
power and authority of, and shall be authorized to take any and all
actions required to be taken hereunder by, and make any and all
determinations required to be taken hereunder by, the
Board.
g. “Disability”
shall mean a disability of an employee or a trustee which renders
such employee or trustee unable to perform the full extent of his
duties and responsibilities by reason of his illness or incapacity
which would entitle that employee or trustee to receive Social
Security Disability Income under the Social Security Act, as
amended, and the regulations promulgated thereunder.
“Disabled” shall mean having a Disability. The
determination of whether a Participant is Disabled shall be made by
the Board, whose determination shall be conclusive; provided
that,
(i) if
a Participant is bound by the terms of an employment agreement
between the Participant and the Company, whether the Participant is
“Disabled” for purposes of the Plan shall be determined
in accordance with the procedures set forth in said employment
agreement, if such procedures are therein provided; and
(ii) a
Participant bound by such an employment agreement shall not be
determined to be Disabled under the Plan any earlier than he would
be determined to be disabled under his employment
agreement.
h. “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
i. “Fair
Market Value” means, as of any date: (i) the closing price of
the Shares as reported on the principal nationally recognized stock
exchange on which the Shares are traded on such date, or if no
Share prices are reported on such date, the closing price of the
Shares on the next preceding date on which there were reported
Share prices; or (ii) if the Shares are not listed or admitted to
unlisted trading privileges on a nationally recognized stock
exchange, the closing price of the Shares as reported by The NASDAQ
Market on such date, or if no Share prices are reported on such
date, the closing price of the Shares on the next preceding date on
which there were reported Share prices; or (3) if the Shares are
not listed or admitted to unlisted trading privileges on a
nationally recognized stock exchange or traded on The NASDAQ
Market, then the Fair Market Value shall be determined by the Board
acting in its discretion, which determination shall be
conclusive.
j. “Incentive
Stock Option” means any Option intended to be and designated
as an “Incentive Stock Option” within the meaning of
Section 422 of the Code.
k. “Long-Term
Performance Award” or “Long-Term Award” means an
award made pursuant to Section 8 hereof that is payable in cash
and/or Shares (including Restricted Shares, Performance Shares and
Performance Units) in accordance with the terms of the grant, based
on Company, business unit and/or individual performance, in each
case as determined by the Committee and as set forth in the grant
letter.
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l. “Non-Employee
Trustee” shall have the meaning set forth in Rule 16b-3(b)(3)
promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor definition adopted by the Securities
and Exchange Commission (substituting the word
“trustee” for “director”); provided,
however, that the Board or the Committee may, in its sole
discretion, substitute the definition of “outside
director” provided in the regulations under Section 162(m) of
the Code in place of the definition of Non-Employee Director
contained in the Exchange Act.
m. “Non-Qualified
Stock Option” means any Option that is not an Incentive Stock
Option.
n. “Participant”
means an employee or trustee of the Company or a Subsidiary to whom
an award is granted pursuant to the Plan.
o. “Performance
Share” means an award made pursuant to Section 9 hereof of
the right to receive Shares at the end of a specified performance
period.
p. “Performance
Unit” means an award made pursuant to Section 10 hereof of
the right to receive cash at the end of a specified performance
period.
q. “Restricted
Shares” means an award of Shares that is subject to
restrictions pursuant to Section 7 hereof.
r. “Retirement”
means termination of the employment of a Participant with the
Company, an Affiliate (including parent) or a Subsidiary other than
(i) a termination effected at the direction of the Company or
parent (whether or not the Company effects such termination for
Cause), (ii) termination on account of Disability, or (iii)
termination on account of death. With respect to a trustee
who is not also an employee of the Company, Retirement shall occur
at such time as the individual ceases to be a trustee.
s. “Rules”
means Section 16 of the Exchange Act and the regulations
promulgated thereunder.
t. “SAR”
means a share appreciation right granted under the Plan and
described in Section 6 hereof.
u. “Securities
Broker” means a registered securities broker acceptable to
the Company who agrees to effect the cashless exercise of an Option
pursuant to Section 5(k) hereof.
v. “Share”
means a common share of beneficial interest, $.01 par value per
share, of the Company, subject to substitution or adjustment as
provided in Section 3(c) hereof.
w. “Stock
Option” or “Option” means any option to purchase
Shares (including Restricted Shares, if the Committee so
determines) granted pursuant to Section 5 hereof.
x. “Subsidiary”
means, in respect of the Company or parent, a subsidiary company,
whether now or hereafter existing, as defined in Sections 424(f)
and (g) of the Code, and any other entity 50% or more of the
economic interests in which are owned, directly or indirectly, by
the Company.
y. “Trustee”
means a member of the Board.
SECTION 2. Administration . The Plan
shall be administered by the Board. The Board may at any time
by a unanimous vote, with each member voting, appoint a Committee
consisting of not less than two Trustees to administer the Plan on
behalf of the Board, subject to such terms and conditions as the
Board may prescribe, provided that each Committee member shall be a
Non-Employee Trustee. Members of the Committee shall serve
for such period of time as the Board may determine. Members
of the Board or the Committee who are eligible for awards or have
been granted awards may vote on any matters affecting the
administration of the Plan or any awards pursuant to the
Plan.
If
a Committee is appointed, all references to actions to be taken by
the Board in the administration of the Plan shall be construed as
references to the Committee.
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From
time to time the Board may increase the size of the Committee and
appoint additional members thereto (provided such new members are
Non-Employee Trustees), remove members (with or without Cause) and
appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
The
Board shall have full authority to grant to eligible persons under
Section 4: (i) Options, (ii) SARs, (iii) Restricted
Shares, (iv) Long-Term Performance Awards,
(v) Performance Shares and/or (vi) Performance
Units. In particular, the Board shall have the
authority:
a. to
select the persons to whom Options, SARs, Restricted Shares,
Long-Term Performance Awards, Performance Shares and Performance
Units may from time to time be granted hereunder;
b. to
determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, SARs, Restricted Shares, Long-Term
Performance Awards, Performance Shares and Performance Units, or
any combination thereof, are to be granted hereunder;
c. to
determine the number of Shares, if any, to be covered by each such
award granted hereunder;
d. to
determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder, including, but not
limited to, the Share price and any restriction or limitation, any
vesting provisions, or any vesting acceleration or forfeiture
waiver regarding any Option or other award and/or the Shares
relating thereto, or the length of the period following termination
of employment of any Participant during which any Option or SAR may
be exercised (which, in the case of an Incentive Stock Option,
shall be no longer than one year in the case of the termination of
employment of a Participant by reason of death or Disability, or
three months in the case of the termination of employment of a
Participant for any reason other than death or Disability), based
on such factors as the Board shall determine, in its sole
discretion;
e. to
determine whether and under what circumstances an Option may be
exercised without a payment of cash under Section 5(k);
and
f. to
determine whether, to what extent and under what circumstances
Shares and other amounts payable with respect to an award under the
Plan may be deferred either automatically or at the election of the
Participant; and
g. to
make such arrangements with a Subsidiary for awards to be made to a
Participant by such Subsidiary and for the transfer of Shares to
such Subsidiary for the purpose of delivery to such Participant, as
the Board may deem necessary or appropriate to further the purposes
of the Plan.
The
Board shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan
as it shall, from time to time, deem advisable; to interpret the
terms and provisions of the Plan and any award issued under the
Plan (and any agreements relating thereto); to amend the terms of
any agreement relating to any award issued under the Plan, provided
that the Participant consents to such amendment; and to otherwise
supervise the administration of the Plan. The Board may
correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any award granted in the manner and
to the extent it shall deem necessary to carry out the intent of
the Plan.
All
decisions made by the Board pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company
and Participants. No member of the Board shall be liable for
any good faith determination, act or failure to act in connection
with the Plan or any award made under the Plan.
SECTION 3. Shares Subject to the Plan
.
a.
Shares Subject to the Plan . The Shares to be subject
or related to awards under the Plan shall be authorized and
unissued Shares of the Company or Shares previously issued and
subsequently acquired by or on behalf of the Company. The
maximum number of Shares available for awards under the Plan is
6,600,000. Of such Shares, (1) 6,100,000 shall be available
for Non-Qualified Stock Options, Incentive Stock Options,
Restricted Shares, SARS, Long-Term Performance Awards and/or
Performance Shares; and (2) 500,000 shall be available
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solely for
Non-Qualified Stock Options, Incentive Stock Options and SARS that
meet the Specified Limitation described below in this Section 3(a)
(such 500,000 Shares referred to in this clause (2) being
hereinafter referred to as the “Restricted
Pool”). The Company may reserve for the purposes of the
Plan 6,600,000 Shares. If and to the extent that an SAR,
Long-Term Performance Award or Performance Unit is settled in cash
or payable solely in cash, such award shall not reduce the number
of Shares subject to the Plan. No individual shall be
granted, over the term of the Plan, Options or SARs exercisable for
more than an aggregate of 4,500,000 Shares. In order for a
Non-Qualified Stock Option or Incentive Stock Option to meet the
Specified Limitation, it must have an exercise price per Share
purchasable under the Option of not less than 100% of the Fair
Market Value of the Share on the date of the grant, and in order
for an SAR to meet the Specified Limitation, it must entitle the
recipient to receive, upon exercise thereof, the excess of the Fair
Market Value of the Share covered by the SAR on the date of
exercise over the Fair Market Value of a Share on the date of the
grant.
b.
Effect of the Expiration or Termination of Awards . If
and to the extent that an award made under the Plan expires,
terminates or is canceled or forfeited for any reason, the number
of Shares associated with the expired, terminated, canceled or
forfeited portion of the award shall again become available for
award under the Plan.
c.
Other Adjustment . In the event of any merger,
reorganization, consolidation, recapitalization, Share distribution
or dividend, Share split or combination, or other change in entity
structure affecting the Shares, such substitution or adjustment
shall be made in the aggregate number, type and issuer of the
securities reserved for issuance under the Plan, in the number and
Option price of securities subject to outstanding Options granted
under the Plan and in the number and price of securities subject to
other awards made under the Plan, as may be determined to be
appropriate by the Board in its sole discretion, provided that the
number of securities subject to any award shall always be a whole
number. The Board, in its sole discretion, shall make appropriate
equitable anti-dilution adjustments to the number of
then-outstanding SARs, and to the Fair Market Value upon which the
value of such SARs is based.
SECTION 4. Eligibility . Trustees and
other employees of the Company or its Subsidiaries are eligible to
be granted awards under the Plan. Trustees and other
employees who are not employees of the Company or of a Subsidiary
that is a subsidiary as defined in Section 424(f) and (g) of the
Code, are eligible to be granted awards under the Plan, but are not
eligible to be granted Incentive Stock Options.
SECTION 5. Options . Options granted
under the Plan may be of two types: (i) Incentive Stock Options or
(ii) Non-Qualified Stock Options. Options may be granted
alone, in addition to or in tandem with other awards granted under
the Plan. Any Option granted under the Plan shall be in such
form as the Board may from time to time approve.
The
Board shall have the authority to grant any Participant eligible
under Section 4 Incentive Stock Options, Non-Qualified Stock
Options, or both types of Options (in each case with or without
SARs). To the extent that any Option does not qualify as an
Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
Options
granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Board shall
deem appropriate; provided, however, that the provisions of Option
awards need not be the same with respect to each
Participant:
a.
Option Price . The exercise price per Share
purchasable under a Non-Qualified Stock Option shall be determined
by the Board; provided that the exercise price per Share of an
Option awarded under the Restricted Pool shall meet the Specified
Limitation; and the exercise price per Share purchasable under an
Incentive Stock Option shall be 100% of the Fair Market Value of
the Share on the date of the grant. However, any Incentive
Stock Option granted to any Participant who, at the time the Option
is granted, owns more than 10% of the voting power of all classes
of shares of the Company or of a Subsidiary that is a subsidiary
company as defined in Section 424(f) and (g) of the Code, shall
have an exercise price per Share of not less than 110% of Fair
Market Value per Share on the date of the grant.
b.
Option Term . The term of each Option shall be fixed
by the Board, but no Option shall be exercisable more than ten
years after the date the Option is granted. However, any
Incentive Stock Option granted to any Participant who, at the time
such Option is granted, owns more than 10% of the voting power of
all classes of shares of the Company or of a Subsidiary that is a
subsidiary company as defined in Section 424(f) and (g)
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of the Code,
may not have a term of more than five years. No Option may be
exercised by any person after expiration of the term of the
Option.
c.
Exercisability . Options shall vest and be exercisable
at such time or times and subject to such terms and conditions as
shall be determined by the Board at the time of grant. If the
Board provides, in its discretion, that any Option is exercisable
only in installments, the Board may waive such installment exercise
provisions at any time at or after grant, in whole or in part,
based on such factors as the Board shall determine, in its sole
discretion.
d.
Method of Exercise . Subject to the exercise
provisions under Section 5(c) and the termination provisions set
forth in Sections 5(f) through (i), Options may be exercised in
whole or in part at any time and from time to time during the term
of the Option, by giving written notice of exercise to the Company
specifying the number of Shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price,
either by certified or bank check, or such other instrument as the
Board may accept. As determined by the Board, in its sole
discretion, at or after grant, payment in full or in part of the
exercise price of an Option may be made in the form of Shares that
are not unvested Restricted Shares based on the Fair Market Value
of the Shares on the date the Option is exercised; provided,
however, that, in the case of an Incentive Stock Option, the right
to make a payment in the form of already owned Shares may be
authorized only at the time the Option is granted.
No
Shares shall be issued upon exercise of an Option until full
payment therefor has been made. A Participant shall not have
the right to distributions or dividends or any other rights of a
shareholder with respect to Shares subject to the Option until the
Participant has given written notice of exercise, has paid in full
for such Shares, and, if requested, has given the representation
described in Section 13(a) hereof.
e.
Non-transferability of Options . Unless otherwise
determined by the Board, no Option shall be transferable by the
Participant otherwise than by will or by the laws of descent and
distribution and all Options shall be exercisable, during the
Participant’s lifetime, only by the Participant
or,
