EXHIBIT 10.47

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of June 2,
1999, by and between ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited
partnership (the “Company”) and RICK DAVIS (“Executive”).

 

1.                                 EMPLOYMENT

 

The Company hereby employs Executive and Executive hereby accepts employment
upon the terms and conditions set forth below.

 

2.                                 TERM AND RENEWAL

 

2.1.                             TERM.  THE TERM OF THIS AGREEMENT SHALL
COMMENCE ON JUNE 2, 1999 (THE “EFFECTIVE DATE”), AND SHALL CONTINUE TO DECEMBER
31, 2000 (THE “ORIGINAL EMPLOYMENT TERM”), ON THE TERMS AND CONDITIONS SET FORTH
BELOW, UNLESS SOONER TERMINATED AS PROVIDED IN SECTION 5.

 

2.2.                             EXTENSION.  FOLLOWING THE EXPIRATION OF THE
ORIGINAL EMPLOYMENT TERM AND PROVIDED THAT THIS AGREEMENT HAS NOT BEEN
TERMINATED PURSUANT TO SECTION 5, AND EVERY YEAR THEREAFTER, THE AGREEMENT SHALL
BE AUTOMATICALLY RENEWED FOR AN ADDITIONAL 12-MONTH PERIOD, EFFECTIVE ON JANUARY
1, 2001 AND EACH ANNIVERSARY THEREOF; PROVIDED, THAT IF A CHANGE IN CONTROL (AS
DEFINED IN SECTION 5.6), OCCURS DURING THE ORIGINAL OR EXTENDED TERM OF THIS
AGREEMENT, THIS AGREEMENT SHALL CONTINUE IN EFFECT FOR A PERIOD NOT LESS THAN
TWELVE (12) MONTHS BEYOND THE MONTH IN WHICH SUCH CHANGE IN CONTROL OCCURRED.

 

3.                                 COMPENSATION

 

3.1.                              BASE COMPENSATION.  FOR THE SERVICES TO BE
RENDERED BY EXECUTIVE UNDER THIS AGREEMENT, EXECUTIVE SHALL BE ENTITLED TO
RECEIVE, COMMENCING AS OF THE EFFECTIVE DATE, AN ANNUAL BASE COMPENSATION (“BASE
COMPENSATION”) OF $160,000 PAYABLE IN SUBSTANTIALLY EQUAL SEMI-MONTHLY
INSTALLMENTS.  THE BASE COMPENSATION SHALL BE REVIEWED AND ADJUSTED ANNUALLY AS
DETERMINED BY THE COMPENSATION COMMITTEE (THE “COMPENSATION COMMITTEE”) OF THE
BOARD OF DIRECTORS (THE “BOARD”) OF THE COMPANY.

 

3.2.                             BONUS COMPENSATION.  THE COMPENSATION COMMITTEE
SHALL REVIEW EXECUTIVE’S PERFORMANCE AT LEAST ANNUALLY DURING EACH YEAR OF THE
ORIGINAL EMPLOYMENT TERM AND CAUSE THE COMPANY TO AWARD EXECUTIVE A CASH BONUS
WHICH THE COMPENSATION COMMITTEE DETERMINES IN ITS SOLE AND ABSOLUTE DISCRETION.

 

3.3.                             “GROSS-UP” OF COMPENSATION.

 

(A)                                  280G “GROSS-UP”.

 

 

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(i)            Anything in this Agreement to the contrary notwithstanding, if it
shall be determined that any payment or distribution to Executive or for his
benefit (whether paid or payable or distributed or distributable) pursuant to
the terms of this Agreement or otherwise (the “Payment”) would be subject to the
excise tax imposed by section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”) (the “Excise Tax”), then Executive shall be entitled to
receive from the Company an additional payment (the “Gross-Up Payment”) in an
amount such that the net amount of the Payment and the Gross-Up Payment retained
by Executive after the calculation and deduction of all Excise Taxes (including
any interest or penalties imposed with respect to such taxes) on the Payment and
all federal, state and local income tax, employment tax and Excise Tax
(including any interest or penalties imposed with respect to such taxes) on the
Gross-Up Payment provided for in this Section 3.3(a) and taking into account any
lost or reduced tax deductions on account of the Gross-Up Payment, shall be
equal to the Payment;

 

(ii)           All determinations required to be made under this Section 3.3(a),
including whether and when the Gross-Up Payment is required and the amount of
such Gross-Up Payment, and the assumptions to be used in arriving at such
determinations shall be made by the Accountants (as defined below) which shall
provide Executive and the Company with detailed supporting calculations with
respect to such Gross-Up Payment within fifteen (15) business days of the
receipt of notice from Executive or the Company that Executive has received or
will receive a Payment.  For the purposes of this Section 3.3(a), the
“Accountants” shall mean the Company’s independent certified public accountants
serving immediately prior to the Change in Control (as defined in Section 5.6). 
In the event that the Accountants are also serving as accountant or auditor for
the individual, entity or group effecting the Change in Control, Executive shall
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accountants hereunder).  All fees and expenses of the Accountants
shall be borne solely by the Company.  For the purposes of determining whether
any of the Payments will be subject to the Excise Tax and the amount of such
Excise Tax, such Payments will be treated as “parachute payments” within the
meaning of section 280G of the Code, and all “parachute payments” in excess of
the “base amount” (as defined under section 280G(b)(3) of the Code) shall be
treated as subject to the Excise Tax, unless and except to the extent that in
the opinion of the Accountants such Payments (in whole or in part) either do not
constitute “parachute payments” or represent reasonable compensation for
services actually rendered (within the meaning of section 280G(b)(4) of the
Code) in excess of the “base amount,” or such “parachute payments” are otherwise
not subject to such Excise Tax.  For purposes of determining the amount of the
Gross-Up Payment, Executive shall be deemed to pay Federal income taxes at the
highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made and to pay any applicable state
and local income taxes at the highest applicable marginal rate of taxation for
the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from the
deduction of such state or local taxes if paid in such year (determined without
regard to limitations on deductions based upon the amount of Executive’s
adjusted gross income), and to have otherwise allowable deductions for federal,
state and local income tax purposes at least equal to those disallowed because
of the inclusion of the Gross-Up Payment in Executive’s adjusted gross income. 
To the extent practicable, any Gross-Up Payment with respect to any Payment
shall be paid by the Company at the time Executive is entitled to receive the
Payment and in no event will any Gross-Up Payment be paid later than five days
after the receipt by Executive of the Accountant’s determination.  Any
determination by the Accountants shall be binding upon the Company and
Executive.  As a result of uncertainty in the application of section 4999 of the
Code at the time of the initial determination by the Accountants hereunder, it
is possible that the Gross-Up Payment made will have been an amount less than
the Company should have paid pursuant to this Section 3.3(a) (the
“Underpayment”).  In the event that the Company exhausts its remedies pursuant
to Section 3.3(a)(ii) and Executive is required to make a payment of any Excise
Tax, the Underpayment shall be promptly paid by the Company to or for
Executive’s benefit; and

 

(iii)          Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment.  Such notification shall be given as soon as
practicable after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid.  Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on

 

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the date that any payment of taxes, interest and/or penalties with respect to
such claim is due).  If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:

 

(A)      GIVE THE COMPANY ANY INFORMATION REASONABLY REQUESTED BY THE COMPANY
RELATING TO SUCH CLAIM;

 

(B)        TAKE SUCH ACTION IN CONNECTION WITH CONTESTING SUCH CLAIM AS THE
COMPANY SHALL REASONABLY REQUEST IN WRITING FROM TIME TO TIME, INCLUDING,
WITHOUT LIMITATION, ACCEPTING LEGAL REPRESENTATION WITH RESPECT TO SUCH CLAIM BY
AN ATTORNEY REASONABLY SELECTED BY THE COMPANY;

 

(C)        COOPERATE WITH THE COMPANY IN GOOD FAITH IN ORDER TO EFFECTIVELY
CONTEST SUCH CLAIM; AND

 

(D)       PERMIT THE COMPANY TO PARTICIPATE IN ANY PROCEEDINGS RELATING TO SUCH
CLAIMS;

 

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify Executive for and hold Executive harmless
from, on an after-tax basis, any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of all related costs and expenses.  Without limiting the foregoing
provisions of this Section 3.3(a), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify Executive for and
hold Executive harmless from, on an after-tax basis, any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance (including as a result of any forgiveness by the Company of such
advance); provided, further, that any extension of the statute of limitations
relating to the payment of taxes for the taxable year of Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount.  Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

 

3.4.                              BENEFITS.

 

(A)                                  MEDICAL INSURANCE.  THE COMPANY SHALL
PROVIDE TO EXECUTIVE, EXECUTIVE’S SPOUSE AND CHILDREN, SUCH HEALTH, DENTAL AND
OPTICAL INSURANCE AS THE COMPANY MAY FROM TIME TO TIME MAKE AVAILABLE TO ITS
OTHER EXECUTIVE EMPLOYEES.

 

(B)                                 LIFE AND DISABILITY INSURANCE.  THE COMPANY
SHALL PROVIDE EXECUTIVE SUCH DISABILITY AND/OR LIFE INSURANCE AS THE COMPANY IN
ITS SOLE DISCRETION MAY FROM TIME TO TIME MAKE AVAILABLE TO ITS OTHER EXECUTIVE
EMPLOYEES.

 

(C)                                  PENSION PLANS, ETC.  THE EXECUTIVE SHALL BE
ENTITLED TO PARTICIPATE IN ALL PENSION, 401(K) AND OTHER EMPLOYEE PLANS AND
BENEFITS ESTABLISHED BY THE COMPANY ON AT LEAST THE SAME TERMS AS THE COMPANY’S
OTHER EXECUTIVE EMPLOYEES.

 

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3.5.                              METHOD OF PAYMENT.  THE MONETARY COMPENSATION
PAYABLE AND ANY BENEFITS DUE TO EXECUTIVE HEREUNDER MAY BE PAID OR PROVIDED IN
WHOLE OR IN PART, FROM TIME TO TIME, BY THE COMPANY AND/OR ITS RESPECTIVE
SUBSIDIARIES AND AFFILIATES, BUT SHALL AT ALL TIMES REMAIN THE RESPONSIBILITY OF
THE COMPANY.

 

4.                                 POSITION AND DUTIES

 

4.1                                 POSITION.  EXECUTIVE SHALL SERVE AS SENIOR
VICE PRESIDENT & CHIEF ACCOUNTING OFFICER OR SUCH OTHER POSITION OR POSITIONS TO
WHICH THE COMPANY, IN ITS SOLE AND ABSOLUTE DISCRETION, ASSIGNS EXECUTIVE.

 

4.2                                 DEVOTION OF TIME AND EFFORT.  EXECUTIVE
SHALL USE EXECUTIVE’S GOOD FAITH BEST EFFORTS AND JUDGMENT IN PERFORMING
EXECUTIVE’S DUTIES AS REQUIRED HEREUNDER AND TO ACT IN THE BEST INTERESTS OF THE
COMPANY.  EXECUTIVE SHALL DEVOTE SUCH TIME, ATTENTION AND ENERGIES TO THE
BUSINESS OF THE COMPANY AS ARE REASONABLY NECESSARY TO SATISFY EXECUTIVE’S
REQUIRED RESPONSIBILITIES AND DUTIES HEREUNDER.

 

4.3                                 OTHER ACTIVITIES.  EXECUTIVE MAY ENGAGE IN
OTHER ACTIVITIES FOR EXECUTIVE’S OWN ACCOUNT WHILE EMPLOYED HEREUNDER, INCLUDING
WITHOUT LIMITATION CHARITABLE, COMMUNITY AND OTHER BUSINESS ACTIVITIES, PROVIDED
THAT SUCH OTHER ACTIVITIES DO NOT MATERIALLY INTERFERE WITH THE PERFORMANCE OF
EXECUTIVE’S DUTIES HEREUNDER.

 

4.4                                 VACATION.  IT IS UNDERSTOOD AND AGREED THAT
EXECUTIVE SHALL BE ENTITLED TO THREE (3) WEEKS VACATION PER YEAR.  DURING SUCH
VACATION PERIODS, EXECUTIVE SHALL NOT BE RELIEVED OF EXECUTIVE’S DUTIES UNDER
THIS AGREEMENT AND THERE WILL BE NO ABATEMENT OR REDUCTION OF EXECUTIVE’S
COMPENSATION HEREUNDER.

 

4.5                                 BUSINESS EXPENSES.  THE COMPANY SHALL
PROMPTLY, BUT IN NO EVENT LATER THAN THIRTY DAYS AFTER SUBMISSION OF A CLAIM OF
EXPENDITURE, REIMBURSE EXECUTIVE FOR ALL REASONABLE BUSINESS EXPENSES INCLUDING,
WITHOUT LIMITATION, BUSINESS SEMINAR FEES, PROFESSIONAL ASSOCIATION DUES, BAR
DUES AND OTHER REASONABLE ENTERTAINMENT EXPENSES WHICH HAVE BEEN GIVEN APPROVAL
IN ADVANCE AND ARE INCURRED BY EXECUTIVE IN CONNECTION WITH THE BUSINESS OF THE
COMPANY AND/OR ITS RESPECTIVE SUBSIDIARIES AND AFFILIATES, UPON PRESENTATION TO
THE COMPANY OF WRITTEN RECEIPTS FOR SUCH EXPENSES.  SUCH REIMBURSEMENT SHALL
ALSO INCLUDE, BUT NOT BE LIMITED TO, REIMBURSEMENT FOR ALL REASONABLE TRAVEL
EXPENSES, INCLUDING ALL AIRFARE, HOTEL AND RENTAL CAR EXPENSES, INCURRED BY
EXECUTIVE IN TRAVELING IN CONNECTION WITH THE BUSINESS OF THE COMPANY.

 

4.6                                 COMPANY’S OBLIGATIONS.  THE COMPANY SHALL
PROVIDE EXECUTIVE WITH ANY AND ALL NECESSARY OR APPROPRIATE CURRENT FINANCIAL
INFORMATION AND ACCESS TO CURRENT INFORMATION AND RECORDS REGARDING ALL MATERIAL
TRANSACTIONS INVOLVING THE COMPANY AND/OR ITS REPRESENTATIVE SUBSIDIARIES AND
AFFILIATES, INCLUDING BUT NOT LIMITED TO ACQUISITION OF ASSETS, PERSONNEL
CONTRACTS, DISPOSITIONS OF ASSETS, SERVICE AGREEMENTS AND REGISTRATION
STATEMENTS OR OTHER STATE OR FEDERAL FILINGS OR DISCLOSURES, REASONABLY
NECESSARY FOR EXECUTIVE TO CARRY OUT EXECUTIVE’S DUTIES AND RESPONSIBILITIES
HEREUNDER.  IN ADDITION, THE COMPANY AGREES TO PROVIDE EXECUTIVE, AS A CONDITION
TO EXECUTIVE’S SERVICES HEREUNDER, SUCH STAFF, EQUIPMENT AND OFFICE SPACE AS IS
REASONABLY NECESSARY FOR EXECUTIVE TO PERFORM EXECUTIVE’S DUTIES HEREUNDER.

 

5.                                      TERMINATION

 

5.1.                         BY THE COMPANY WITHOUT CAUSE.  THE COMPANY MAY
TERMINATE THIS AGREEMENT WITHOUT “CAUSE” (AS HEREINAFTER DEFINED) AT ANY TIME
FOLLOWING THE EFFECTIVE DATE, PROVIDED THAT THE COMPANY FIRST DELIVERS TO
EXECUTIVE THE COMPANY’S WRITTEN ELECTION TO TERMINATE THIS AGREEMENT AT LEAST 90
DAYS PRIOR TO THE EFFECTIVE DATE OF TERMINATION.

 

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5.2.                              SEVERANCE PAYMENT

 

(A)                                  AMOUNT.  IN THE EVENT THE COMPANY
TERMINATES EXECUTIVE’S SERVICES HEREUNDER PURSUANT TO SECTION 5.1, OR EXECUTIVE
TERMINATES HIS EMPLOYMENT HEREUNDER PURSUANT TO SECTION 5.4 OR 5.6, EXECUTIVE
SHALL CONTINUE TO RENDER SERVICES TO THE COMPANY PURSUANT TO THIS AGREEMENT
UNTIL THE DATE OF TERMINATION AND SHALL CONTINUE TO RECEIVE COMPENSATION, AS
PROVIDED HEREUNDER, THROUGH THE TERMINATION DATE.  IN ADDITION TO OTHER
COMPENSATION PAYABLE TO EXECUTIVE FOR SERVICES RENDERED THROUGH THE TERMINATION
DATE, THE COMPANY SHALL PAY EXECUTIVE NO LATER THAN THE DATE OF SUCH
TERMINATION, AS A SINGLE SEVERANCE PAYMENT, AN AMOUNT EQUAL TO THE SUM OF: (I)
THREE TIMES EXECUTIVE’S AVERAGE ANNUAL BASE COMPENSATION, PAID HEREUNDER FOR THE
PRECEDING TWENTY-FOUR MONTH PERIOD (OR, IF EXECUTIVE HAS BEEN EMPLOYED LESS THAN
TWENTY-FOUR MONTHS, THE AVERAGE ANNUAL BASE COMPENSATION FOR THE PERIOD
EMPLOYED) PLUS (II) AN AMOUNT EQUAL TO THREE TIMES EXECUTIVE’S MOST RECENT
ANNUAL BONUS FROM THE COMPANY (COLLECTIVELY, THE “SEVERANCE AMOUNT”).  IN
ADDITION TO PAYMENT OF THE SEVERANCE AMOUNT, ANY UNVESTED STOCK OPTIONS OR
RESTRICTED STOCK HELD BY EXECUTIVE SHALL BECOME FULLY VESTED AS OF THE DATE OF
TERMINATION.

 

(B)                                 BENEFITS.  IN THE EVENT EXECUTIVE’S
EMPLOYMENT HEREUNDER IS TERMINATED BY THE COMPANY WITHOUT CAUSE PURSUANT TO
SECTION 5.1 OR BY EXECUTIVE PURSUANT TO SECTION 5.4 OR 5.6, THEN IN ADDITION TO
PAYING EXECUTIVE THE SEVERANCE AMOUNT AND PROVIDING FOR THE FULL VESTING OF
UNVESTED STOCK OPTIONS OR RESTRICTED STOCK HELD BY EXECUTIVE, THE COMPANY SHALL
PAY THE COBRA PREMIUM FOR HEALTH CARE COVERAGE FOR EXECUTIVE AND EXECUTIVE’S
SPOUSE AND CHILDREN, AS APPLICABLE AND TO THE EXTENT ELIGIBLE, FOR THE LESSER OF
18 MONTHS COMMENCING ON THE DATE OF SUCH TERMINATION (THE “SEVERANCE BENEFITS”)
OR THE DATE ON WHICH EXECUTIVE BECOMES ELIGIBLE FOR HEALTH CARE COVERAGE UNDER
THE PLAN OF ANY OTHER EMPLOYER.

 

(C)                                  TO BE ELIGIBLE TO RECEIVE ANY PAYMENTS
UNDER THIS SECTION 5.2, EXECUTIVE MUST EXECUTE AND DELIVER (AND NOT REVOKE, IF
REVOCATION PERIOD IS REQUIRED BY LAW) A RELEASE OF CLAIMS IN A FORM ACCEPTABLE
TO THE COMPANY.

 

5.3.                              BY THE COMPANY FOR CAUSE.  THE COMPANY MAY
TERMINATE EXECUTIVE FOR CAUSE AT ANY TIME, UPON WRITTEN NOTICE TO EXECUTIVE. 
FOR PURPOSES OF THIS AGREEMENT, “CAUSE” SHALL MEAN:

 

(A)                                  EXECUTIVE’S CONVICTION FOR COMMISSION OF A
FELONY OR A CRIME INVOLVING MORAL TURPITUDE;

 

(B)                                 EXECUTIVE’S WILLFUL COMMISSION OF ANY ACT OF
THEFT, EMBEZZLEMENT OR MISAPPROPRIATION AGAINST THE COMPANY WHICH, IN ANY SUCH
CASE, IS MATERIALLY AND DEMONSTRABLY INJURIOUS TO THE COMPANY;

 

(C)                                  EXECUTIVE’S WILLFUL AND CONTINUED FAILURE
TO SUBSTANTIALLY PERFORM EXECUTIVE’S DUTIES HEREUNDER (OTHER THAN SUCH FAILURE
RESULTING FROM EXECUTIVE’S INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS), WHICH
FAILURE IS NOT REMEDIED WITHIN A REASONABLE TIME AFTER WRITTEN DEMAND FOR
SUBSTANTIAL PERFORMANCE IS DELIVERED BY THE COMPANY WHICH SPECIFICALLY
IDENTIFIES THE MANNER IN WHICH THE COMPANY BELIEVES THAT EXECUTIVE HAS NOT
SUBSTANTIALLY PERFORMED EXECUTIVE’S DUTIES; OR

 

(D)                                 EXECUTIVE’S DEATH OR DISABILITY (AS
HEREINAFTER DEFINED).

 

For purposes of this Section 5.3, no act, or failure to act, on Executive’s part
shall be deemed “willful” unless done, or omitted to be done, by Executive not
in good faith.  In the event Executive is terminated for cause pursuant to this
Section 5.3, Executive shall

 

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have the right to receive Executive’s compensation as otherwise provided under
this Agreement through the effective date of termination.  Executive shall have
no further right to receive compensation or other consideration from the
Company, or have any other remedy whatsoever against the Company, as a result of
this Agreement or the termination of Executive pursuant to this Section 5.3,
except as set forth below with respect to a termination due to Executive’s
Disability.

In the event Executive is terminated by reason of Executive’s death or
Disability, the Company shall immediately pay Executive (or his estate) the
Severance Amount and shall pay the COBRA premium for health care coverage for
Executive’s spouse and children, as applicable and to the extent eligible, for a
period of 18 months commencing on the date of such termination.  Said payments
shall be in addition to any disability insurance payments to which Executive is
otherwise entitled and any other compensation earned by Executive hereunder.  In
addition, any unvested stock options or restricted stock held by Executive shall
become fully vested as of the date of termination.  For purposes of this
Agreement, the term “Disability” shall mean a physical or mental incapacity as a
result of which Executive becomes unable to continue the proper performance of
Executive’s duties hereunder for six consecutive calendar months or for shorter
periods aggregating 180 business days in any 12 month period, but only to the
extent that such definition does not violate the Americans with Disabilities
Act.

 

5.4.                              BY EXECUTIVE FOR GOOD REASON.  EXECUTIVE MAY
TERMINATE THIS AGREEMENT FOR GOOD REASON UPON AT LEAST 10 DAYS PRIOR WRITTEN
NOTICE TO THE COMPANY.  FOR PURPOSES OF THIS AGREEMENT, “GOOD REASON” SHALL
MEAN:

 

(A)                                  THE COMPANY’S MATERIAL BREACH OF ANY OF ITS
RESPECTIVE OBLIGATIONS HEREUNDER AND EITHER SUCH BREACH IS INCURABLE OR, IF
CURABLE, HAS NOT BEEN CURED WITHIN FIFTEEN (15) DAYS FOLLOWING RECEIPT OF
WRITTEN NOTICE BY EXECUTIVE TO THE COMPANY OF SUCH BREACH BY THE COMPANY;

 

In the event that Executive terminates this Agreement for good reason pursuant
to this Section 5.4, Executive shall have the right to receive Executive’s
compensation as provided hereunder through the effective date of termination and
shall also have the same rights and remedies against the Company as Executive
would have had if the Company had terminated Executive’s employment without
cause pursuant to Section 5.1 (including the right to receive the Severance
Amount payable and the Severance Benefits to be provided under Section 5.2).

 

5.5.                              EXECUTIVE’S VOLUNTARY TERMINATION.  EXECUTIVE
MAY, AT ANY TIME, TERMINATE THIS AGREEMENT WITHOUT GOOD REASON UPON WRITTEN
NOTICE DELIVERED TO THE COMPANY AT LEAST NINETY (90) DAYS PRIOR TO THE EFFECTIVE
DATE OF TERMINATION.  IN THE EVENT OF SUCH VOLUNTARY TERMINATION OF THIS
AGREEMENT BY EXECUTIVE:  (I) EXECUTIVE SHALL HAVE THE RIGHT TO RECEIVE
EXECUTIVE’S COMPENSATION AS PROVIDED HEREUNDER THROUGH THE EFFECTIVE DATE OF
TERMINATION, AND (II) THE COMPANY, ON THE ONE HAND, AND EXECUTIVE, ON THE OTHER
HAND, SHALL NOT HAVE ANY FURTHER RIGHT OR REMEDY AGAINST ONE ANOTHER EXCEPT AS
PROVIDED IN SECTIONS 6 AND 7 HEREOF WHICH SHALL REMAIN IN FULL FORCE AND EFFECT.

 

5.6.                              CHANGE IN CONTROL.  EXECUTIVE MAY TERMINATE
THIS AGREEMENT, UPON AT LEAST TEN (10) DAYS’ PRIOR WRITTEN NOTICE TO THE
COMPANY, AT ANY TIME WITHIN TWELVE (12) MONTHS AFTER A “CHANGE IN CONTROL” (AS
HEREINAFTER DEFINED) OF THE COMPANY.  IN THE EVENT EXECUTIVE TERMINATES THIS
AGREEMENT WITHIN TWELVE (12) MONTHS AFTER A CHANGE IN CONTROL PURSUANT TO THIS
SECTION 5.6, (I) EXECUTIVE SHALL CONTINUE TO RENDER SERVICES PURSUANT HERETO AND
SHALL CONTINUE TO RECEIVE COMPENSATION, AS PROVIDED HEREUNDER, THROUGH THE
TERMINATION DATE, (II) THE COMPANY SHALL PAY EXECUTIVE NO LATER THAN THE DATE OF
SUCH TERMINATION, AS A SINGLE SEVERANCE PAYMENT, AN AMOUNT EQUAL TO THE
SEVERANCE AMOUNT, AND (III) FOLLOWING SUCH TERMINATION, THE COMPANY SHALL
PROVIDE THE SEVERANCE BENEFITS AS REQUIRED BY

 

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SECTION 5.2.  FOR PURPOSES OF THIS AGREEMENT, A “CHANGE IN CONTROL” SHALL MEAN
THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS:

 

(A)                            THE INDIVIDUALS CONSTITUTING THE BOARD AS OF THE
EFFECTIVE DATE (THE “INCUMBENT BOARD”) CEASE FOR ANY REASON TO CONSTITUTE AT
LEAST TWO-THIRDS (2/3RDS) OF THE BOARD; PROVIDED, HOWEVER, THAT IF THE ELECTION,
OR NOMINATION FOR ELECTION BY THE COMPANY’S STOCKHOLDERS, OF ANY NEW DIRECTOR
WAS APPROVED BY A VOTE OF AT LEAST TWO-THIRDS (2/3RDS) OF THE INCUMBENT BOARD,
SUCH NEW DIRECTOR SHALL BE CONSIDERED A MEMBER OF THE INCUMBENT BOARD;

 

(B)                           AN ACQUISITION OF ANY VOTING SECURITIES OF THE
COMPANY (THE “VOTING SECURITIES”) BY ANY “PERSON” (AS THE TERM “PERSON” IS USED
FOR PURPOSES OF SECTION 13(D) OR SECTION 14(D) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE “1934 ACT”)) IMMEDIATELY AFTER WHICH SUCH PERSON HAS
“BENEFICIAL OWNERSHIP” (WITHIN THE MEANING OF RULE 13D–3 PROMULGATED UNDER THE
1934 ACT) (“BENEFICIAL OWNERSHIP”) OF 20% OR MORE OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING VOTING SECURITIES; OR

 

(C)                            APPROVAL BY THE STOCKHOLDERS OF THE COMPANY OF:

 

(i)                                          a merger, consolidation, share
exchange or reorganization involving the Company, unless

 

(A)                THE STOCKHOLDERS OF THE COMPANY, IMMEDIATELY BEFORE SUCH
MERGER, CONSOLIDATION, SHARE EXCHANGE OR REORGANIZATION, OWN, DIRECTLY OR
INDIRECTLY IMMEDIATELY FOLLOWING SUCH MERGER, CONSOLIDATION, SHARE EXCHANGE OR
REORGANIZATION, AT LEAST 80% OF THE COMBINED VOTING POWER OF THE OUTSTANDING
VOTING SECURITIES OF THE CORPORATION THAT IS THE SUCCESSOR IN SUCH MERGER,
CONSOLIDATION, SHARE EXCHANGE OR REORGANIZATION (THE “SURVIVING COMPANY”) IN
SUBSTANTIALLY THE SAME PROPORTION AS THEIR OWNERSHIP OF THE VOTING SECURITIES
IMMEDIATELY BEFORE SUCH MERGER, CONSOLIDATION, SHARE EXCHANGE OR REORGANIZATION;
AND

 

(B)                  THE INDIVIDUALS WHO WERE MEMBERS OF THE INCUMBENT BOARD
IMMEDIATELY PRIOR TO THE EXECUTION OF THE AGREEMENT PROVIDING FOR SUCH MERGER,
CONSOLIDATION, SHARE EXCHANGE OR REORGANIZATION CONSTITUTE AT LEAST TWO-THIRDS
(2/3RDS) OF THE MEMBERS OF THE BOARD OF DIRECTORS OF THE SURVIVING COMPANY;

 

(ii)                                         a complete liquidation or
dissolution of the Company; or

 

(iii)                                       an agreement for the sale or other
disposition of all or substantially all of the assets of the Company.

 

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(D)                                 ANY PERSON IS OR BECOMES THE BENEFICIAL
OWNER OF SECURITIES OF THE COMPANY REPRESENTING TEN PERCENT (10%) OR MORE OF THE
COMBINED VOTING POWER OF THE
COMPANY’S THEN OUTSTANDING SECURITIES AND (A) THE IDENTITY OF THE CHIEF
EXECUTIVE OFFICER OF THE COMPANY  IS CHANGED DURING THE PERIOD BEGINNING SIXTY
(60) DAYS BEFORE THE ATTAINMENT OF THE TEN PERCENT (10%) BENEFICIAL OWNERSHIP
AND ENDING TWO (2) YEARS THEREAFTER, OR (B) INDIVIDUALS CONSTITUTING AT LEAST
ONE-THIRD (1/3) OF THE MEMBERS OF THE BOARD AT THE BEGINNING OF SUCH PERIOD
SHALL LEAVE THE BOARD DURING THE PERIOD BEGINNING SIXTY (60) DAYS BEFORE THE
ATTAINMENT OF THE TEN PERCENT (10%) BENEFICIAL OWNERSHIP AND ENDING TWO (2)
YEARS THEREAFTER.

 

6.                                      CONFIDENTIALITY

 

During the term of Executive’s employment under this Agreement, Executive will
have access to and become acquainted with various information relating to the
Company’s business operations, marketing data, business plans, strategies,
employees, contracts, financial records and accounts, projections and budgets,
and similar information.  Executive agrees that to the extent such information
is not generally available to the public and gives the Company an advantage over
competitors who do not know of or use such information, such information and
documents constitute “trade secrets” of the Company.  Executive further agrees
that all such information and documents relating to the business of the Company,
whether they are prepared by Executive or come into Executive’s possession in
any other way, are owned by the Company and shall remain the exclusive property
of the Company.   Executive shall not misuse, misappropriate or disclose any
trade secrets of the Company, directly or indirectly, or use them for
Executive’s own benefit, either during the term of this Agreement or at any time
thereafter, except as may be necessary or appropriate in the course of
Executive’s employment with the Company, unless such action is either previously
agreed to in writing by the Company or required by law.

 

7.                                      NON-SOLICITATION

 

For a period of one (1) year following the date Executive’s employment hereunder
is terminated, Executive shall not solicit or induce any of the Company’s
employees, agents or independent contractors to end their relationship with the
Company, or recruit, hire or otherwise induce any such person to perform
services for Executive, or any other person, firm or company.

 

8.             ARBITRATION AGREEMENT

 

8.1.                        In the event of any issue or dispute arising between
Executive and the Company, its officers, directors, managers, supervisors and/or
employees (except for claims for workers’ compensation, unemployment insurance,
and any matter within the jurisdiction of the California Labor Commissioner),
the matter shall be submitted to and resolved by final and binding arbitration
as provided for by the California Arbitration Act, California Code of Civil
Procedure, Section 1280, et. seq.  Mandatory arbitration will not preclude
Executive from filing an administrative charge or complaint of discrimination or
harassment with either the Equal Employment Opportunity Commission or the
California Department of Fair Employment and Housing.  Except as provided in
this section, arbitration shall be the exclusive method for resolving any
employment related dispute, and both the Company, and the Executive are giving
up any right that they might otherwise have to have a judge or jury decide any
such employment related dispute; provided, however, that either the Executive or
the Company, may request equitable relief, including but not limited to
injunctive relief, from a court of competent jurisdiction.

 

8.2.                       The claims which are to be arbitrated under this
Agreement include, but are not limited to, tort claims, bad faith claims,
contract claims, wage claims, benefit claims, demands, liabilities, debts,
accounts, obligations, damages, compensatory damages, punitive

 

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damages, liquidated damages, costs, expenses, actions and causes of action
arising out of or in connection with the employment relationship with the
Company, the termination of that relationship, and/or post-employment
retaliation and defamation (including but not limited to any claims for wrongful
discharge or breach of the covenant of good faith and fair dealing), any and all
federal and state civil rights laws, ordinances, regulations or orders, based on
charges of discrimination or harassment on account of race, color, religion,
sex, sexual orientation, age, citizenship, national origin, mental or physical
disability, medical condition, marital status, pregnancy or any other
discrimination prohibited by such laws, ordinances, regulations or orders
(including but not limited to Title VII of the Civil Rights Act of 1964, as
amended, 42 USC Section 2000, et seq.; Americans with Disabilities Act; Civil
Rights Act of 1866, and Civil Rights Act of 1991; 42 USC Section 1981, et seq.;
Age Discrimination in Employment Act, as amended, 29 USC Section 621, et seq.;
Equal Pay Act, as amended, 29 USC Section 206(d); regulations of the Office of
Federal Contract Compliance, 41 CFR Section 60, et seq.; and the California Fair
Employment and Housing Act, California Government Code Section 12940, et seq.).

 

8.3.                              If the Executive or the Company does not make
a written request for arbitration within the limitations period applicable to a
claim under applicable federal or state law, that party will have waived its
right to raise that claim, in any forum, arising out of that issue or dispute.

 

8.4.                              The Executive and the Company will select an
arbitrator by mutual agreement.  If the Executive and the Company are unable to
agree on a neutral arbitrator, either party may elect to obtain a list of
arbitrators from the Alternative Dispute Resolution Service.  The Executive and
the Company will alternately strike names from the list, with the Executive
striking the first name, until only one name remains.  The remaining person
shall be the arbitrator.

 

8.5.                              Arbitration proceedings will be held in
California at a location mutually convenient to the Executive and the Company.

 

8.6.                              The parties retain the rights to conduct all
discovery as provided for in the California Code of Civil Procedure, and the
arbitrator shall have the power to decide any discovery disputes between the
parties.

 

8.7.                              The arbitrator shall entertain motions by
either party for summary disposition as provided for by applicable state law.

 

8.8.                              The arbitrator shall conduct a hearing in a
manner to be mutually agreed upon by the Executive and the Company, or by the
arbitrator if the parties cannot agree, provided, however, that the parties
shall have the opportunity to call witnesses under oath, and to examine and
cross examine all witnesses who appear at the hearing.

 

8.9.                              Within thirty (30) days following the hearing
and the submission of the matter to the arbitrator, the arbitrator shall issue a
written opinion and award which shall be signed and dated.  The arbitrator’s
award shall decide all issues submitted by the parties, and the arbitrator may
not decide any issue not submitted.  The arbitrator shall be permitted to award
only those remedies in law or equity which are requested by the parties and
allowed by law.

 

8.10                           The cost of the arbitrator and other incidental
costs of arbitration, including the cost of a court reporter, shall be equally
shared between the Executive and the Company, unless the arbitrator determines
that this would cause an undue hardship to the Executive, in which case the
entire cost shall be borne by the Company.  The Executive and the Company shall
each bear their own costs for legal representation in any arbitration

 

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proceeding, provided however, that the arbitrator shall have the authority to
require either party to pay the fee for the other party’s representation during
the arbitration, as is otherwise permitted under federal or state law, as a part
of any remedy that may be ordered.

 

9.                                      INDEMNIFICATION

 

To the fullest extent permitted under applicable law, the Company shall
indemnify, defend and hold Executive harmless from and against any and all
causes of action, claims, demands, liabilities, damages, costs and expenses of
any nature whatsoever (collectively, “Damages”) directly or indirectly arising
out of or relating to Executive discharging Executive’s duties hereunder on
behalf of the Company and/or its respective subsidiaries and affiliates, so long
as Executive acted in good faith within the course and scope of Executive’s
duties with respect to the matter giving rise to the claim or Damages for which
Executive seeks indemnification.

 

10.                               GENERAL PROVISIONS

 

10.1.                        ASSIGNMENT; BINDING EFFECT.  NEITHER THE COMPANY OR
EXECUTIVE MAY ASSIGN, DELEGATE OR OTHERWISE TRANSFER THIS AGREEMENT OR ANY OF
THEIR RESPECTIVE RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN
CONSENT OF THE OTHER PARTY.  ANY ATTEMPTED PROHIBITED ASSIGNMENT OR DELEGATION
SHALL BE VOID.  THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF
ANY PERMITTED SUCCESSORS OR ASSIGNS OF THE PARTIES AND THE HEIRS, EXECUTORS,
ADMINISTRATORS AND/OR PERSONAL REPRESENTATIVES OF EXECUTIVE.

 

10.2.                        NOTICES.  ALL NOTICES, REQUESTS, DEMANDS AND OTHER
COMMUNICATIONS THAT ARE REQUIRED OR MAY BE GIVEN UNDER THIS AGREEMENT SHALL BE
IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN RECEIVED IF
PERSONALLY DELIVERED; WHEN TRANSMITTED IF TRANSMITTED BY TELECOPY, ELECTRONIC OR
DIGITAL TRANSMISSION METHOD WITH ELECTRONIC CONFIRMATION OF RECEIPT; THE DAY
AFTER IT IS SENT, IF SENT FOR NEXT-DAY DELIVERY TO A DOMESTIC ADDRESS BY
RECOGNIZED OVERNIGHT DELIVERY SERVICE (E.G.,  FEDEX); AND UPON RECEIPT, IF SENT
BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.  IN EACH CASE NOTICE
SHALL BE SENT TO:

 

If to the Company:

 

Arden Realty Limited Partnership
c/o Arden Realty, Inc.
11601 Wilshire Boulevard
Fourth Floor
Los Angeles, CA 90025-1740
Attention:  President
Facsimile:(310) 966-2699

 

 

 

If to Executive:

 

Rick Davis
c/o Arden Realty, Inc.
11601 Wilshire Boulevard
Fourth Floor
Los Angeles,
CA 90025-1740
Facsimile:(310) 966-2699

 

Any party may change its address for the purpose of this Section 10.2 by giving
the other party written notice of its new address in the manner set forth above.

 

10.3.                        ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE
ENTIRE AGREEMENT OF THE PARTIES, AND SUPERSEDES ALL PRIOR AGREEMENTS.

 

10.4.                        AMENDMENTS; WAIVERS.  THIS AGREEMENT MAY BE AMENDED
OR MODIFIED, AND ANY OF THE TERMS AND COVENANTS MAY BE WAIVED, ONLY BY A WRITTEN
INSTRUMENT EXECUTED BY THE PARTIES HERETO, OR, IN THE CASE OF A WAIVER, BY THE
PARTY WAIVING COMPLIANCE.  ANY WAIVER BY ANY

 

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PARTY IN ANY ONE OR MORE INSTANCES OF ANY TERM OR COVENANT CONTAINED IN THIS
AGREEMENT SHALL NEITHER BE DEEMED TO BE NOR CONSTRUED AS A FURTHER OR CONTINUING
WAIVER OF ANY SUCH TERM OR COVENANT OF THIS AGREEMENT.

 

10.5.                        PROVISIONS SEVERABLE.  IN CASE ANY ONE OR MORE
PROVISIONS OF THIS AGREEMENT SHALL BE INVALID, ILLEGAL OR UNENFORCEABLE, IN ANY
RESPECT, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS
CONTAINED HEREIN SHALL NOT, IN ANY WAY, BE AFFECTED OR IMPAIRED THEREBY.  IF ANY
PROVISION HEREOF IS DETERMINED BY ANY COURT OF COMPETENT JURISDICTION TO BE
INVALID OR UNENFORCEABLE BY REASON OF SUCH PROVISION EXTENDING THE COVENANTS AND
AGREEMENTS CONTAINED HEREIN FOR TOO GREAT A PERIOD OF TIME OR OVER TOO GREAT A
GEOGRAPHICAL AREA, OR BEING TOO EXTENSIVE IN ANY OTHER RESPECT, SUCH PROVISION
SHALL BE INTERPRETED TO EXTEND ONLY OVER THE MAXIMUM PERIOD OF TIME AND
GEOGRAPHICAL AREA, AND TO THE MAXIMUM EXTENT IN ALL OTHER RESPECTS, AS TO WHICH
IT IS VALID AND ENFORCEABLE, ALL AS DETERMINED BY SUCH COURT IN SUCH ACTION.

 

10.6.                        ATTORNEY’S FEES.  IF ANY LEGAL ACTION, ARBITRATION
OR OTHER PROCEEDING, IS BROUGHT FOR THE ENFORCEMENT OF THIS AGREEMENT, OR
BECAUSE OF AN ALLEGED DISPUTE, BREACH OR DEFAULT IN CONNECTION WITH ANY OF THE
PROVISIONS OF THIS AGREEMENT, EACH OF THE PARTIES HERETO SHALL BE RESPONSIBLE
FOR PAYMENT OF ANY ATTORNEYS’ FEES AND OTHER COSTS INCURRED BY THEM IN THAT
ACTION OR PROCEEDING, WITHOUT REGARD TO WHOMEVER IS THE PREVAILING PARTY IN SUCH
ACTION OR PROCEEDING.

 

10.7.                        GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED,
PERFORMED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE
OF CALIFORNIA WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS
THEREOF.

 

10.8.                        COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN
ONE OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF
WHICH SHALL CONSTITUTE THE SAME INSTRUMENT.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first written above.

 

THE COMPANY:

 

 

 

ARDEN REALTY LIMITED PARTNERSHIP,

 

a Maryland Limited Partnership

 

 

 

By:  ARDEN REALTY, INC.,

 

a Maryland corporation

 

Its:  Sole General Partner

 

 

By:

/s/ Victor J. Colema

 

 

 

Victor J. Coleman

June 2, 1999

 

 

Its:  President and COO

Date

 

 

 

 

EXECUTIVE:

 

/s/ Richard S. Davis

 

 

Richard S. Davis

June 2, 1999

 

 

Date

 

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