ACKNOWLEDGMENT AND WAIVER
AGREEMENT
This Agreement
(“ Agreement ”), dated December ___,
2005, is entered into by and between Prentiss Properties Trust, a
Maryland real estate investment trust (the “
Company ”) and ___(“ Key
Employee ”).
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1.
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Acknowledgement
. Pursuant to the terms
of the Prentiss Properties Trust Change in Control Severance
Protection Plan for Key Employees (the “ Plan
”), Key Employee is eligible to receive benefits set forth in
Section 4.2 of the Plan upon a Qualifying Termination (as it
is defined in the Plan) of employment.
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2.
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Waiver of Benefits
. Key Employee hereby
waives any and all rights which Key Employee has pursuant to the
Plan in consideration for the payment of, prior to January 1,
2006, (i) a lump sum amount equal to the amount which Key
Employee would have been eligible to receive under
Section 4.2(b) of the Plan, plus (ii) a lump sum amount
equal to the aggregate sum of all the premiums (both employer and
employee portion of such premiums) that would be payable by the
Company to provide for the benefits set forth in Section 4.2(c) of
the Plan. The total payment amount is listed on Exhibit A of
this Agreement.
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3.
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Acceleration of Certain Equity
Grants .
Notwithstanding the foregoing, if the Qualifying Termination takes
place within three years of the date of grant of any award of
restricted stock or any option in Brandywine Realty Trust (
“Brandywine” ) which was granted in
connection with the merger of the Company with Brandywine (the
“ Merger ”), then the restrictions with
respect to any such grant of restricted stock shall immediately
lapse, and any such option granted shall become immediately vested
and exercisable.
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4.
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Section 4999 Tax
Gross-Up .
Article VI of the Plan, relating to Sections 280G and
4999 of the Internal Revenue Code of 1986, as amended (the “
Code ”), shall continue to apply in full force
and effect as set forth in the Plan.
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5.
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Section 409A Tax
Gross-Up .
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(a) In the event
it shall be determined that the payment of the amounts listed on
Exhibit A to this Agreement in 2005 (the “2005
Payments”) is or will be subject to the excise tax imposed by
Section 409A of the Code or any interest or penalties with
respect to such payment or excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to
as the “Excise Tax”), then Key Employee shall be
entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by Key
Employee of all taxes (including any interest or penalties imposed
with respect to such taxes), including but not limited to, any
income tax, employment tax or Excise tax, imposed upon the Gross Up
Payment, Key Employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Total Payments. For
purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income tax and employment
taxes at the highest marginal rate of federal income and employment
taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal
rate of
taxation in the
state and locality of Executive’s residence (or, if greater,
the state and locality in which Executive is required to file a
nonresident income tax return with respect to the Payment) on the
date of termination, net of the maximum reduction in federal income
taxes that may be obtained from the deduction of such state and
local taxes.
(b) If it is
finally determined that any of the Total Payments are subject to
Excise Tax any de
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