Exhibit 10.12

February 13, 2003

Mr. Ted R. Jadwin
2739 North Pine Grove Avenue
Chicago, Illinois 60614

Dear Ted:

I am pleased to offer you the position of Senior Vice President, General Counsel
with Trizec Properties, Inc. The position will be based in our Chicago Corporate
office and will report directly to the President & Chief Executive Officer.
Further details of this offer of employment are as follows:

Ø   Compensation       Your starting salary will be $275,000 per annum, payable
biweekly.       You will also be eligible for a bonus award at a target of
50%-70% of your eligible earnings. Eligible earnings are wages that you earn
from your start date to December 31st of this year, and thereafter, total wages
earned for the year. This award is contingent upon meeting various Company, Team
and Individual performance measures. During the coming year, any bonus award
will be paid on or about March 1, 2004.   Ø   Performance Appraisal       You
will receive a performance and salary review after the completion of 2003.   Ø  
Stock Options       A recommendation will be made to the Compensation Committee
of the Board whereby you will be granted options to acquire 25,000 common shares
of the Corporation in accordance with the Company’s Stock Option Plan at the
price on your start date.

As with any company policy, Trizec Properties, Inc.
reserves the right to change, modify or eliminate policies and procedures as
necessary.

 

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Mr. Ted R. Jadwin
February 13, 2003
Page 2

Ø   Long Term Incentive Plan       As a member of Senior Management, you will be
eligible for consideration in Trizec’s long term incentive program. This program
is currently under review and not yet final. Specific details of this program
will be communicated to you at a later date and subject to Board approval.   Ø  
Start Date       Your start date for all purposes will be determined, but
preferably not later than March 3, 2003.       On your first day, you should
arrive at our office located in Sears Tower, 233 S. Wacker Drive, Suite 4600.
Please review the attached list of acceptable documents that you will need to
bring for proof of your U.S. work status (this is a requirement for employment).
We also request that you complete the attached Employee Questionnaire and bring
this with you as well.   Ø   Benefits       You will be eligible for coverage
under our benefits plan effective the first of the month following your date of
employment (see attached). Details of the benefits coverage available will be
provided to you together with the necessary forms to be completed to enroll you
in the benefits program.

Important Note: Your previous employer is required by law to provide you with a
“Certification of Creditable Coverage” (please contact them immediately if you
did not yet receive this). A copy of this certificate must be provided to
Trizec’s Human Resources department before we can submit your medical enrollment
for new coverage. Doing so will prevent claims processing delays and denial of
claims for any pre-existing conditions.

Ø   401(k)       You will be eligible to join Trizec’s plan once you have
completed the necessary service of six (6) months. Details of the plan will be
mailed to you upon eligibility.   Ø   Vacation       As an Officer of the
Company, your vacation entitlement will be in accordance with Trizec’s current
vacation policy — twenty (20) days per calendar year, which begins accruing on
your start date.

As with any company policy, Trizec Properties, Inc.
reserves the right to change, modify or eliminate policies and procedures as
necessary.

 

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Mr. Ted R. Jadwin
February 13, 2003
Page 3

Ø   Deferred Compensation       You are entitled to participate in the Trizec
Deferred Compensation plan. Details will be discussed with you upon employment.
  Ø   Parking       You will be provided a parking space in the Sears Tower.  
Ø   Club Dues       You will be reimbursed for club dues, it being agreed that
such reimbursement will cover your current monthly dues in the amount of $289
per month at the Standard Club.   Ø   Severance Pay       In the event that
Trizec should terminate your employment (other than for cause) during the first
twelve (12) months of employment, you will receive a severance payment in an
amount equivalent to three months of salary, subject to Trizec’s normal
requirements that you execute a release in favor of the Company and that you
conclude your duties in a manner acceptable to the Company. After twelve
(12) months of employment, any severance payment provided upon termination of
employment, if any, shall be in accordance with Company policy.   Ø   Change of
Control       The Company agrees to provide “Change in Control Provisions,” as
set forth in “Appendix A,” which are incorporated herein.   Ø   Arbitration  
    Finally, it is agreed that any disputes or claims based on this Agreement or
any other term or condition of employment, which cannot amicably be resolved
between the parties, shall be resolved through binding arbitration in accordance
with the rules of the American Arbitration Association.

This offer is contingent upon the Company’s approval of the final reference
checks. You agree to respect and abide by all corporate policies and procedures
during your employment and to be bound by and comply with the Trizec Principles
of Business Conduct.

As with any company policy, Trizec Properties, Inc.
reserves the right to change, modify or eliminate policies and procedures as
necessary.

 

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Mr. Ted R. Jadwin
February 13, 2003
Page 4

Please excuse the formality; however, please recognize that neither this letter
nor anything said to you during the interview process should be interpreted to
represent either explicitly or implicitly, an employment contract. Either you or
Trizec may terminate this employment agreement at any time.

We look forward to working with you Ted, and are confident of the personal
challenges and rewards that Trizec has to offer. Please countersign this letter
and return it to Beth Hayden, Vice President, Human Resources in the envelope
provided no later than February 14, 2003.

Sincerely,

/s/ Timothy H. Callahan

Timothy H. Callahan
President & Chief Executive Officer

I, Ted r. jadwin:

  •   Accept this offer of employment.     •   Have read, understand and agree
to the terms and conditions contained in this letter.     •   Declare that all
career and employment information provided by me to Trizec is true.

      /s/ Ted R. Jadwin

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  February 13, 2003

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Signature
   Date

As with any company policy, Trizec Properties, Inc.
reserves the right to change, modify or eliminate policies and procedures as
necessary.

 

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Appendix A

CHANGE IN CONTROL PROVISIONS

      1. Eligibility for Severance Compensation. Ted R. Jadwin (the “Executive”)
shall be eligible to receive severance compensation, in the amounts and at the
times described in Paragraph 3, in the event that his employment with Trizec
Properties, Inc. (the “Corporation”) is terminated as of or after a “change in
control of the Corporation” (as hereinafter defined), as follows:

      Within twelve (12) months after the change in control of the Corporation,
and the Executive’s termination of employment is not on account of:

     (a) Executive’s disability;

     (b) Executive’s death;

     (c) Executive’s conduct involving gross neglect, dishonesty, willful gross
misconduct or moral turpitude which, in any case, is injurious to the business
of the Corporation; or

     (d) Executive’s voluntary resignation; provided that a resignation shall
not be considered to be voluntary for the purposes of this Appendix if it occurs
because, within twelve (12) months subsequent to the change in control, there
has been: (i) a reduction (other than across-the-board reductions which are made
for all similarly-situated executives) in the Executive’s base salary, benefits
and/or opportunities for incentive compensation; (ii) a reassignment of the
Executive, without the Executive’s consent, to a position which is, in light of
the Executive’s particular professional background, demonstrated abilities and
career path, not reasonably suitable for the Executive; or (iii) a relocation of
the Executive’s primary work location, without the Executive’s consent, to a
geographic location which is more than 50 miles from the Executive’s primary
work location as contemplated by the offer letter to which this Appendix is
attached.

      2. Change in Control. For the purpose of this Appendix, a “Change in
Control of the Corporation” shall be deemed to have occurred if:

     (a) any person (as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), as such term is modified in
Sections 13(d) and 14(d) of the Exchange Act), other than (i) any employee plan
established by the Company or any Subsidiary, (ii) the Company or any of the
Company’s affiliates (as defined in Rule 12b-2 promulgated under the Exchange
Act), including any PM Affiliate (as hereinafter defined), (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by stockholders of the Company
in substantially the same proportions as their ownership of the Company, is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such

 

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person any securities acquired directly from the Company or its affiliates other
than in connection with the acquisition by the Company or its affiliates of a
business) representing 20% or more of either the then outstanding Shares or the
combined voting power of the Company’s then outstanding voting securities;
provided, however, that, notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any person becomes a beneficial
owner of more than 20% of the then outstanding Shares or combined voting power
of the Company’s then outstanding voting securities as the result of the
acquisition of Shares by the Company (a “Company Share Repurchase”); however if
such person acquires any additional Shares following such Company Share
Repurchase, such acquisition of additional Shares shall constitute a Change in
Control unless, after giving effect to such acquisition, such person will not
beneficially own 20% or more of the then outstanding Shares or combined voting
power of the Company’s then outstanding voting securities; and provided,
further, that no Change in Control shall be deemed to occur hereunder so long as
the Company remains a PM Affiliate;

     (b) a change in the composition of the Board of the Company (the “Board”)
such that individuals who, as of May 29, 2003, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a member of the Board
subsequent to the May 29, 2003 whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (including by prior application of
this proviso) shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board;

     (c) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation or approve the issuance of voting
securities in connection with a merger or consolidation of the Company (or any
direct or indirect subsidiary of the Company) pursuant to applicable stock
exchange requirements, other than (i) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof),
in combination with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any Subsidiary, at
least 50.1% of the combined voting power of the voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately after
such merger or consolidation, (ii) a merger or consolidation with or into a PM
Affiliate or (iii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
(determined pursuant to clause (a) above) is or becomes the beneficial owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates other than in connection with the acquisition

 

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by the Company or its affiliates of a business) representing 20% or more of
either the then outstanding shares of Stock or the combined voting power of the
Company’s then outstanding voting securities; provided, however that if, at any
time on or prior to approval by stockholders of a merger or consolidation, the
Committee determines that the consummation of such merger or consolidation is
subject (whether for regulatory reasons or otherwise) to significant
uncertainty, the Committee may provide that a Change in Control that would
otherwise be deemed to occur hereunder upon such stockholder approval shall
instead occur only upon consummation of the relevant merger or consolidation
(within a specified time period following stockholder approval, if appropriate)
or upon the occurrence of any other event or events occurring prior to such
consummation specified by the Committee; or

     (d) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets, other than a sale or disposition
by the Company of all or substantially all of the Company’s assets to (i) a PM
Affiliate, or (ii) an entity, at least 50.1% of the combined voting power of the
voting securities of which are owned by persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no “Change in Control” shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of Stock immediately
prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns
substantially all of the assets of the Company immediately prior to such
transaction or series of transactions.

As used in this Paragraph 2, the term “PM Affiliates” means Peter Munk, the
Company and any entity or person affiliated with Peter Munk; provided, however,
that Peter Munk and such affiliates shall cease to be deemed PM Affiliates if,
at any time following May 29, 2003, they cease to have continually possessed
control (within the meaning of Rule 405 under Regulation C promulgated under the
Securities Act of 1933, as amended) over the Company or any successor thereto.
In the event that Peter Munk and his affiliates cease to continuously possess
control over the Company (and thereby cease to constitute “PM Affiliates”
hereunder), including, without limitation, by reason of Mr. Munk’s death (such
cessation of continuous control being hereinafter referred to as a “PM Event”),
(x) such PM Event shall not result automatically in a Change in Control
hereunder, even if any person (including, without limitation, Peter Munk or his
affiliates or any transferee of or successor to any of them) beneficially owns
20% of the then outstanding Shares or combined voting power of the Company’s
then outstanding securities, and (y) the Committee (A) promptly shall make a
determination whether to accelerate Awards upon or in connection with such PM
Event, taking into consideration, among other things, whether any person
beneficially owns more than 20% of the then outstanding Shares or combined
voting power of the Company’s then outstanding securities or otherwise possesses
actual or potential control over the Company, and (B) if it determines not to
accelerate Awards upon or in connection with such PM Event, shall establish
rules and guidelines to determine the circumstances following a PM Event when a
Change in Control will be deemed to occur.

 

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      3. Amount and Payment of Transitional Compensation. In the event the
Executive is eligible for severance compensation pursuant to the provisions of
Paragraph 1 hereof, he shall, upon execution (and non-revocation during the
applicable revocation period) of a standard release of all employment-related
claims against the Corporation, be entitled to the following:

     (a) a lump sum payment, payable upon termination of employment, equal to
six (6) months of his then-current total compensation (base salary plus bonus);
and

     (b) continuation of medical benefits for himself and his eligible
dependents for the six (6)-month period following termination of employment
(with any COBRA continuation rights commencing upon the end of this period),
upon the same terms in effect for executives of the Corporation generally during
such six (6)-month period.

     (c) all outstanding stock options and grants would immediately vest as of
the termination date. In the case of stock options, Executive would have up to
twelve (12) months from the termination date to exercise them.

      4. No Funding of Severance Compensation. Nothing herein contained shall
require or be deemed to require the Corporation to segregate, earmark or
otherwise set aside any funds or assets to provide for any payments required to
be made hereunder, and the Executive’s right to transitional compensation
hereunder shall be solely that of a general, unsecured creditor of the
Corporation.

      5. Deduction and Withholding. All benefits payable to the Executive
pursuant to this Agreement shall be subject to ordinary payroll taxes and
withholding as required by applicable law.