EXHIBIT 10.3
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of
January 4, 2005, by and between Trizec Properties, Inc., a
Delaware corporation (the “ Company ”), and
William Tresham, an individual residing in Evanston, Illinois (the
“ Executive ”).
WHEREAS, the Company has determined
that it is in the best interests of the Company and its
shareholders to enter into an employment agreement with the
Executive and the Executive is willing to serve as an employee of
the Company, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
1. Employment and Duties
.
(a) General . The
Executive shall serve as the Executive Vice President and Chief
Operating Officer of the Company, reporting to the Chief Executive
Officer. The Executive shall have such duties and responsibilities,
commensurate with the Executive’s position, as may be
assigned to the Executive from time to time by the Board of
Directors (the “ Board ”) of the Company. The
Executive’s principal place of employment shall be the
principal offices of the Company in Chicago; provided ,
however , that the Executive understands and agrees that he
will be required to travel from time to time for business
reasons.
(b) Exclusive Services .
For so long as the Executive is employed by the Company, the
Executive shall devote his full working time to his duties
hereunder, shall faithfully serve the Company, shall in all
respects conform to and comply with the lawful and good faith
directions and instructions given to him by the Board, and shall
use his best efforts to promote and serve the interests of the
Company. Further, the Executive shall not, directly or indirectly,
render services to any other person or organization without the
consent of the Board or otherwise engage in activities that would
interfere significantly with his faithful performance of his duties
hereunder. Notwithstanding the foregoing, the Executive may
(i) serve on civic or charitable boards or engage in
charitable activities without remuneration therefor and
(ii) manage personal investments, provided that such
activity does not contravene the previous sentence or the
provisions of Sections 6, 7, 8, 10 and 11 hereof.
2. Term of Employment .
The Executive’s employment under this Agreement shall
commence as of January 4, 2005 (the “
Effective Date ”) and shall terminate on the earlier
of (i) December 31, 2005 and (ii) the termination
of the Executive’s employment under this Agreement;
provided , however , that the term of the
Executive’s employment shall be automatically extended
without further action of either party for additional one-year
periods, unless written notice of either party’s intention
not to extend has been given to the other party at least
60 days prior to the expiration of the then-effective term.
The period from the Effective Date until the termination of the
Executive’s employment under this Agreement is referred to as
the “ Term ”.
3. Compensation and Other
Benefits . Subject to the provisions of this Agreement, the
Company shall pay and provide the following compensation and other
benefits to the Executive during the Term as compensation for
services rendered hereunder:
(a) Base Salary . The
Company shall pay to the Executive an annual salary (the “
Base Salary ”) at the rate of $325,000, payable in
substantially equal installments at such intervals as may be
determined by the Company in accordance with its ordinary payroll
practices as established from time to time. The Base Salary shall
be reviewed by the Compensation Committee of the Board in good
faith, based upon the Executive’s performance, not less often
than annually, and such Base Salary may be increased (but not
decreased from the then applicable Base Salary) upon the basis of
such review during the remainder of the Term.
(b) Target Annual Bonus
. For each fiscal year during the Term, the Executive shall be
eligible to receive an incentive bonus (the “ Target
Annual Bonus ”). The target amount of the
Executive’s annual incentive bonus shall be 100% of his Base
Salary and shall be determined in accordance with a Company
incentive compensation program as applicable to senior executives
(including bonus ranges) as in effect from time to time.
(c) Long-Term Incentive
Compensation . During the Term, the Executive shall be eligible
to participate in the Company’s long-term incentive
compensation programs generally applicable to senior executives of
the Company as in effect from time to time. The target amount of
the Executive’s annual long-term incentive compensation shall
be 150% of his Base Salary and shall be determined by the Board in
its sole discretion.
(d) 2004 Outperformance
Compensation Program . The Executive shall be eligible to
participate in the Company’s 2004 Outperformance Program (the
“ OPP ”) under the LTIP in accordance with the
terms of the OPP program document. The Executive’s Award
Percentage (as defined in the OPP) shall be 14%. The Executive
shall receive separate documentation regarding the OPP.
(e) Employee Benefits .
The Executive shall be entitled to participate in all employee
welfare, pension and fringe benefit plans, programs and
arrangements of the Company in accordance with their respective
terms, as may be amended from time to time, and on a basis no less
favorable than that made available to other senior executives of
the Company.
(f) Expenses . The
Company shall reimburse the Executive for reasonable travel and
other business-related expenses incurred by the Executive in the
fulfillment of his duties hereunder upon presentation of written
documentation thereof, in accordance with the applicable expense
reimbursement policies and procedures of the Company as in effect
from time to time.
(g) Automobile . During
the Term the Executive shall receive a monthly automobile allowance
of $1,000, payable in accordance with the Company’s policy as
in effect from time to time.
(h) Vacation . The
Executive shall be entitled to 20 vacation days each year during
the Term in accordance with the Company’s policy as in effect
from time to time.
4. Termination of
Employment .
(a) Termination for Cause;
Resignation Without Good Reason . (i) If the
Executive’s employment is terminated by the Company for
Cause, as defined in Section 4(a)(ii) hereof, or if the
Executive resigns from his employment hereunder other than for Good
Reason, as defined in Section 4(a)(iii) hereof, the Executive shall
only be entitled to payment of unpaid Base
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Salary through and
including his date of termination or resignation and any other
amounts or benefits required to be paid or provided by law or under
any plan, program, policy or practice of the Company (the “
Other Benefits ”). The Executive shall have no further
right to receive any other compensation or benefits after such
termination or resignation of employment.
(ii) Termination for “
Cause ” shall mean termination of the
Executive’s employment because of:
(A) any act or omission that constitutes a material
breach by the Executive of any of his obligations under this
Agreement;
(B) the willful and continued failure or refusal of the
Executive to perform the duties reasonably required of him as an
employee of the Company;
(C) the Executive’s conviction of, or plea of
nolo contendere to, a felony;
(D) the Executive’s engaging in any willful
misconduct, act of dishonesty, violence or threat of violence
(including any violation of federal securities laws) that is
materially injurious to the Company or any of its subsidiaries or
affiliates;
(E) the Executive’s material breach of a written
policy of the Company;
(F) the Executive’s refusal to follow the
directions of the Board or the Chief Executive Officer; or
(G) any other willful misconduct or gross negligence by
the Executive which is materially injurious to the financial
condition or business reputation of the Company or any of its
subsidiaries or affiliates;
provided ,
however , that no event or condition described in clauses
(A) though (G) shall constitute Cause unless (x) the
Company first gives the Executive written notice of its intention
to terminate his employment for Cause and the grounds for such
termination and (y) such grounds for termination (if
susceptible to correction) are not corrected by the Executive
within 20 days of his receipt of such notice (or, in the event that
such grounds cannot be corrected within such 20-day period, the
Executive has not taken all reasonable steps within such 20-day
period to correct such grounds as promptly as practicable
thereafter).
(iii) Resignation for “
Good Reason ” shall mean termination of employment by
the Executive because of the occurrence of any of the following
events without the Executive’s prior written consent:
(A) a decrease in the Executive’s Base Salary or
a failure by the Company to make any of the awards required under
Section 3 above, or pay any of the compensation provided for
under Section 3 above to the Executive in connection with his
employment;
(B) a material diminution of the responsibilities,
positions or titles of the Executive from those set forth in this
Agreement or a change in reporting responsibility such that the
Executive reports to a person other than the Chief Executive
Officer; or
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(C) the Company requiring the Executive to be based at
any office or location more than 50 miles from Chicago,
Illinois;
provided ,
however , that no event or condition described in clauses
(A) through (C) shall constitute Good Reason unless
(x) the Executive gives the Company written notice of his
intention to terminate his employment for Good Reason and the
grounds for such termination and (y) such grounds for termination
(if susceptible to correction) are not corrected by the Company
within 20 days of its receipt of such notice (or, in the event
that such grounds cannot be corrected within such 20-day period,
the Company has not taken all reasonable steps within such 20-day
period to correct such grounds as promptly as practicable
thereafter).
(b) Termination Without
Cause; Resignation for Good Reason . (i) Except as set
forth in Section 4(d), if the Company gives notice of
non-renewal under Section 2 or if, prior to the expiration of
the Term, the Executive’s employment is terminated by the
Company without Cause or if the Executive resigns from his
employment hereunder for Good Reason, the Company shall pay to the
Executive the Other Benefits plus any earned but unpaid bonus for a
previously completed fiscal year of the Company and a pro-rata
Target Annual Bonus for the fiscal year in which the termination
occurs. The Executive shall also receive his Base Salary and Target
Annual Bonus (at the rates in effect on the date the
Executive’s employment is terminated) for a one-year period
commencing on the date of the Executive’s termination of
employment. The payments shall be made in accordance with the
Company’s ordinary payroll practices. The Executive shall
have no further rights under this Agreement or otherwise to receive
any other compensation or benefits after such termination or
resignation of employment.
(ii) The Company shall not be
required to make the payments and provide the benefits provided for
under Section 4(b) (excluding the Other Benefits), unless the
Executive executes and delivers to the Company, a waiver and a
release substantially in a form approved by the Company.
(iii) If, following a
termination of employment without Cause, the Executive breaches the
provisions of Sections 6, 7, 8, 10 and 11 hereof, the
Executive shall no longer be eligible, as of the date of such
breach, for the payments and benefits described in
Section 4(b), and any and all obligations and agreements of
the Company with respect to such payments shall thereupon
cease.
(c) Termination Due to Death
or Disability . The Executive’s employment with the
Company shall terminate automatically on the Executive’s
death. In the event of the Executive’s disability, as defined
below, the Company shall be entitled to terminate his employment in
accordance with the terms of Section 4(e). In the event of
termination of the Executive’s employment by reason of
Executive’s death or disability, the Company shall pay to the
Executive (or his estate, as applicable), the Executive’s
Base Salary through and including the date of termination and the
Other Benefits. For purposes of this Agreement, “
disability ” shall have the meaning ascribed in the
Company’s long-term disability plan applicable to the
Executive as in effect from time to time.
(d) Termination Following a
Change in Control . In lieu of the payments set forth in
Section 4(b), if the Executive’s employment is
terminated by the Company without Cause or the
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Executive resigns his
employment for Good Reason, in either case within two years
following a Change in Control (as defined in the LTIP):
(i) the Executive shall be
entitled to receive a lump-sum severance payment in an amount equal
to the sum of the Other Benefits, an amount equal to one year of
the Base Salary and an amount equal to one year of the Target
Annual Bonus (at the rates in effect on the Executive’s
termination of employment). The payments shall be made as soon as
reasonably practicable following the Executive’s termination
of employment and in any event no later than 15 business days;
and
(ii) notwithstanding any
provision in the applicable equity award plan or agreement, all
nonvested equity awards held by the Executive as of his date of
termination shall vest immediately. Stock options (and equivalent
awards) shall remain exercisable until the applicable expiration
dates provided in the applicable plan and award agreement, and all
other equity awards will settle and be paid as soon as reasonably
practicable following the Executive’s termination of
employment and in any event no later than 15 business days.
(e) Notice of
Termination . Any termination of employment by the Company or
the Executive shall be communicated by a written “ Notice
of Termination ” to the other party hereto given in
accordance with Section 24 of this Agreement which shall state
the effective date of termination.
(f) Resignation from
Directorships and Officerships . The termination of the
Executive’s employment for any reason will constitute the
Executive’s resignation from (i) any director, officer
or employee position the Executive has with the Company and its
subsidiaries and affiliates and (ii) all fiduciary positions
(including as a trustee) the Executive holds with respect to any
employee benefit plans or trusts established by the Company. The
Executive agrees that this Agreement shall serve as written notice
of resignation in this circumstance.
5. Gross-Up Payment .
(i) If, during the term of the Executive’s employment,
there is a change in ownership or control of the Company that
causes any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under
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