Ex-10.1



EXHIBIT 10.1 
 
CHANGE IN CONTROL EMPLOYMENT AGREEMENT 
 
AGREEMENT by and between CarrAmerica Realty Corporation, a Maryland corporation (the “Company”) and
Linda A. Madrid (the “Executive”), effective as of the 29th day of January 2003. 
 
The Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened Change in Control and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control, and
to provide the Executive with compensation and benefits arrangements upon a Change in Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. 
 
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 
 
1. Certain Definitions. 
 
(a) The “Effective Date” shall mean the first date during the Change in Control Period (as defined in Section
1(b)) on which a Change in Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and if the Executive’s employment with the Company is terminated prior to the date on
which the Change in Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii)
otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination of employment. 
 
(b) The “Change in Control Period”
shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date three years after the date hereof, and on each annual anniversary of such date (such
date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless at least 12 months prior to the Renewal Date the Company shall give notice to the Executive that the Change in Control Period shall
not be so extended, the Change in Control Period shall be automatically extended so as to terminate one year from such Renewal Date. 
 
2. Change in Control. For the purpose of this Agreement, a “Change in Control” shall mean: 
 
(a) Individuals who, as of the date hereof,
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 director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then 









comprising the Incumbent Board 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; or 
 
(b) Consummation of a reorganization, merger or consolidation involving the Company (a “Business Combination”) unless, following such Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) and the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) immediately prior to such Business Combination beneficially own, directly or indirectly, at least 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, and (ii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; 
 
(c) the sale or other disposition of more
than 50% of the operating assets of the Company; or 
 
(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 
 
3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the “Employment Period”). 
 
4. Terms of Employment. 
 
(a) Position and Duties. 
 
(i) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be performed for the senior surviving company following a Change in Control as described in Section 2(b) of this
Agreement, and such position shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location. 
 

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(ii) During the Employment Period, and excluding any periods of vacation and personal leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business
and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During
the Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company. 
 
(b) Compensation. 
 
(i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded
to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any company controlled by,
controlling or under common control with the Company. 
 
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in cash at least equal to
the greater of (x) Executive’s highest actual bonus under the Company’s annual bonus plan, or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years prior to the Effective Date (annualized in the
event that the Executive was not employed by the Company for the whole of such fiscal year) (the “Recent Annual Bonus”) or (y) the target annual bonus for the fiscal year which includes the Effective Date. Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus. 
 
(iii) Incentive, Savings and Retirement
Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction
is 

 

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applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. 
 
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, vision, disability, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies,
but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at
any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

 
(v) Expenses. During the
Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated
companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies. 
 
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies
in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and
its affiliated companies. 
 
(vii)
Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally
at any time thereafter with respect to other peer executives of the Company and its affiliated companies. 
 
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with
the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. 
 

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5.
Termination of Employment. 
 
(a) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Company determines in good faith that the Disability of the Executive
has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 14(b) of this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days after
such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative. 
 
(b) Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean: 
 
(i) the willful and continued failure of the
Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the
Executive’s duties, or 
 
(ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. 
 
For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered
“willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive
a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail. 
 
(c) Good Reason. The Executive’s employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall mean: 
 
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), 
 

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authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in
a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive; 
 
(ii)
any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive; 
 
(iii) the Company’s requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date; 
 
(iv) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or 
 
(v) any failure by the Company to comply with
and satisfy Section 14(c) of this Agreement. 
 
For purposes of this Section 5(c), any good faith determination of “Good Reason” made by the Executive shall be conclusive. 
 
(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in accordance with Section 14(b) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder. 
 
(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated
by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive’s employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination
shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 
 

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6.
Obligations of the Company upon Termination. 
 
(a) Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause or Disability or the Executive shall
terminate employment for Good Reason: 
 
(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: 
 
A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to
the extent not theretofore paid, (2) the product of (x) the greater of (i) the Recent Annual Bonus or (ii) the target annual bonus for the fiscal year which includes the Date of Termination and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay,
in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”); and 
 
B. the amount equal to the product of (1)
two and (2) the sum of (x) the Executive’s Annual Base Salary and (y) the greater of (i) the Recent Annual Bonus or (ii) the target annual bonus for the fiscal year which includes the Date of Termination; and 
 
C. the amount equal to the company’s
contributions to all incentive, savings and retirement plans, practices, policies and programs applicable generally to the Executive as in effect at any time during the 120-day period immediately preceding the Effective Date, which would have been
made on behalf of the Executive if the Executive’s employment continued for two years after the Date of Termination assuming for this purpose that all benefits are fully vested, and, assuming that the Executive’s compensation in each of
the two years is that required by Section 4(b)(i) and Section 4 (b)(ii); 
 
(ii) for two years after the Executive’s Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue
benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the
Executive’s employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have remained employed until two years after the Date of Termination and to have retired on the last day of such period; 
 

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(iii) for a period of six months after the Executive’s Date of Termination, the Company shall, at its sole expense as incurred, provide the Executive with temporary office space or reasonable outplacement services, the scope and
provider of which shall be selected by the Executive in his sole discretion; and 
 
(iv) for two years after the Executive’s Date of Termination, to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”). 
 
(b) Death. If the Executive’s employment is terminated by reason of the Executive’s death during the
Employment Period, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in
this Section 6(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the
estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of the Executive’s death with
respect to other peer executives of the Company and its affiliated companies and their beneficiaries. 
 
(c) Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability
during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families. 
 
(d) Cause; Other than for Good Reason.
If the Executive’s employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary
through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued 

 

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Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 
 
7. Effect on Option, Restricted Stock and Stock Value
Units. Immediately prior to a Change in Control, all stock options, restricted stock grants, restricted stock unit grants or other equity awards made to the Executive by Company or any affiliate thereof which are outstanding at the time of such
event shall be accelerated and vest. Accordingly, all stock options, restricted stock grants, restricted stock unit grants or other equity awards shall be exercisable at such time in accordance with their terms. This Agreement is intended to amend
all stock options, restricted stock grants, restricted stock unit grants, or other equity awards previously awarded to the Executive to accelerate vesting as described above to the extent vesting would not otherwise be accelerated under the terms of
such stock options, restricted stock grants, restricted stock unit grants, or other equity awards. This Agreement is also intended to expressly exclude application of Section 13 of the CarrAmerica Realty Corporation 1997 Stock Option and Incentive
Plan and any similar provision of any stock options, restricted stock grants, restricted stock unit grants or other equity award of the Company or any affiliate thereof and to amend all stock options, restricted stock grants, restricted stock unit
grants or other equity awards previously awarded to the Executive to provide the Executive with certain additional payments in accordance with the terms of Section 10 of this Agreement to the extent the Executive would not otherwise receive a
Gross-Up Payment (as defined in Section 10 of this Agreement). 
 
8. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section 14(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to
the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 
 
9. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f) (2) (A) of the Internal Revenue Code of 1986, as amended (the “Code”). 
 
10. Certain Additional Payments by the Company.

 
(a) Anything in this Agreement
to the contrary notwithstanding and except as set forth below, in the event it shall be determined that 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 

 

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of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the
Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $25,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the
Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. 
 
(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s outside accounting firm or such other certified public
accounting firm as may be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive. 
 
(c) The 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 the 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. The Executive shall not pay such claim prior to the expiration of the 30-day period following the
date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall: 
 

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(i) give the Company any information reasonably requested by the Company relating to such claim, 
 
(ii) 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, 
 
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and 
 
(iv) permit the Company to participate in any
proceedings relating to such claim; 
 
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 and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this
Section 10(c), 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 the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the 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 the Executive to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from 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; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the 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 the 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. 
 
(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 10(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 10(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 10(c), a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 
 
11. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to the 

 

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Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the
Executive’s employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 11 constitute a basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement. 
 
12. Pooling
of Interests Accounting Treatment. Notwithstanding anything to the contrary contained herein, to the extent that any payment or other benefit under this Agreement would prevent a Change in Control transaction involving the Company which would
otherwise qualify for pooling of interests accounting treatment from so qualifying, then the provision setting forth such payment or benefit shall be deemed amended or revoked to the extent required to preserve such pooling of interests treatment.
The Board will use good faith efforts to provide the Executive with a substitute benefit that is as comparable as possible under the circumstances and which will not limit or otherwise restrict the use of pooling of interests accounting treatment.
The Executive will, upon advice from the Company, take (or refrain from taking, as appropriate) all actions necessary or desirable to ensure that pooling of interests accounting is available for such transaction. 
 
13. Successors. 
 
(a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives. 
 
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 
 
(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or
otherwise. 
 
14. Miscellaneous.

 
(a) This Agreement shall be
governed by and construed in accordance with the laws of the District of Columbia, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 
 
 

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(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 
If to the Executive:

 
Linda A. Madrid 
4505 N. 19th St. 
Arlington, VA 22207 
 
If to the Company: 
 
CarrAmerica Realty Corporation 
1850 K Street, NW 
Washington, DC 20006 
Attention: Thomas A. Carr, Chairman of
the Board & Chief Executive Officer 
 
with a copy (which shall not constitute notice) to: 
 
Hogan & Hartson L.L.P. 
555 13th Street, NW 
Washington, DC 20004 
Attention: J. Warren Gorrell, Jr. 
 
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

 
(c) The invalidity or
unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 
 
(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation. 
 
(e) The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement. 
 
(f) The
Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is “at will” and, subject to Section
1(a) hereof, prior to the Effective Date, the Executive’s employment and/or this Agreement may be terminated by either the Executive or the 

 

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Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. From and
after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof. 
 

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IN WITNESS
WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above
written. 
 

	
	 /s/    LINDA A. MADRID


	 Linda A. Madrid

	
	 CARRAMERICA REALTY CORPORATION

	
	 By:
	 	 /s/    THOMAS A.
CARR        


	 Name: Thomas A. Carr

	 Title: Chairman of the Board & Chief Executive Officer



 
 

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