DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                          Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

Brandywine Realty Trust

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 


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Notice of Annual Meeting of Shareholders

To our Shareholders:

We cordially invite you to attend the 2022 Annual Meeting of Shareholders of Brandywine Realty Trust, a Maryland real estate investment trust (the “Company”). This year we have adopted a hybrid format for the annual meeting which will include an in-person meeting that will simultaneously be transmitted via a virtual meeting platform to provide a consistent and convenient experience to all shareholders regardless of location. The in-person meeting will be held at The Logan Hotel, One Logan Square, Philadelphia, Pennsylvania 19103. If you cannot or do not wish to attend the meeting in person, the annual meeting can be accessed via a live webcast at www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting. You may also submit questions in advance of the annual meeting by visiting www.proxyvote.com. We will respond to as many inquiries at the annual meeting as time allows. Prior to the annual meeting you will be able to authorize a proxy to vote your shares at www.proxyvote.com on the matters submitted for shareholder approval at the annual meeting, and we encourage you to do so.

If you plan to attend the annual meeting online, you will need the 16-digit control number included in your Notice of Internet Availability, on your proxy card or on the instructions that accompany your proxy materials. The annual meeting will begin promptly at 10:00 a.m. (Eastern Time). Online check-in will begin at 9:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.

 

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Because of concerns and developments relating to the COVID-19 pandemic, we are planning for the possibility that the annual meeting may be held solely virtually. If we cancel the in-person option for attendance at the annual meeting, we will announce the decision in advance of the meeting, and any additional details on how to access, participate in and vote at the meeting online will be set forth in a press release issued by us and available at brandywinerealty.com. We encourage you to check this website prior to the meeting.

At the annual meeting, shareholders as of the close of business on the record date will be asked to consider and vote upon the following matters, as more fully described in the Proxy Statement:

 

1.

To consider and vote upon the election of seven persons to the Board of Trustees of the Company, each to serve for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified.

 

2.

To consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for calendar year 2022.

 

3.

To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation.

 

4.

To transact such other business as may properly come before the meeting and at any postponement or adjournment of the meeting.


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YOUR VOTE IS IMPORTANT TO US. Whether or not you plan to attend the 2022 annual meeting in person or virtually, please authorize a proxy to vote your shares as soon as possible to ensure that your shares will be represented at the annual meeting.

By Order of the Board of Trustees

 

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Shawn Neuman, Senior Vice President, General Counsel and Secretary

March 31, 2022

2929 Arch Street, Suite 1800 | Philadelphia, Pennsylvania 19104 | (610) 325-5600


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Proxy Statement for the

Annual Meeting of Shareholders

To be held on May 18, 2022

The Annual Meeting of Shareholders of Brandywine Realty Trust (“Brandywine,” “we,” “us,” “our” or the “Company”) will be held on Wednesday, May 18, 2022 at 10:00 a.m., Eastern Time. This year we have adopted a hybrid format for the annual meeting which will include an in-person meeting that will simultaneously be transmitted via a virtual meeting platform to provide a consistent and convenient experience to all shareholders regardless of location. The in-person meeting will be held at The Logan Hotel, One Logan Square, Philadelphia, Pennsylvania 19103. If you cannot or do not wish to attend the meeting in person, the annual meeting can be accessed via a live webcast at www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.

At our annual meeting, we will ask you:

 

1.

To consider and vote upon the election of seven persons to our Board of Trustees, each to serve for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified.

 

2.

To consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022.

 

3.

To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation.

 

4.

To transact such other business as may properly come before the meeting and at any postponement or adjournment of the meeting.

Only holders of record of our common shares of beneficial interest, par value $0.01 per share, as of the close of business on March 22, 2022 are entitled to notice of and to vote at the annual meeting or at any postponement or adjournment of the meeting.

Our Board of Trustees knows of no other business that will be presented for consideration at the annual meeting. If any other matter should be properly presented at the annual meeting or any postponement or adjournment of the annual meeting for action by the shareholders, the persons named in the proxy card will vote the proxy in accordance with their discretion on such matter.

On or about March 31, 2022, we mailed a Notice of Internet Availability of Proxy Materials to shareholders. This proxy statement and the form of proxy are first being furnished to shareholders on or about March 31, 2022.


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Important Notice Regarding Internet Availability of Proxy Materials

 

We are pleased to take advantage of the Securities and Exchange Commission rules allowing companies to furnish proxy materials to their shareholders over the Internet. We believe that this e-proxy process will expedite shareholders’ receipt of proxy materials, lower the costs and reduce the environmental impact of our 2022 annual meeting of shareholders. We will send a full set of proxy materials or a “Notice of Internet Availability” of Proxy Materials on or about March 31, 2022 and provide access to our proxy materials over the Internet, beginning on March 31, 2022, for the holders of record and beneficial owners of our common shares as of the close of business on the record date. The Notice of Internet Availability instructs you on how to access and review the Proxy Statement and our annual report, and how to authorize a proxy to vote your shares over the Internet.

 

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Instead of receiving paper copies of future annual reports and proxy statements in the mail, you may elect to receive an e-mail that will provide an electronic link to these documents. Choosing to receive your proxy materials online will save us the cost of producing and mailing documents to you. With electronic delivery, we will notify you by e-mail as soon as the annual report and proxy statement are available on the Internet, and you may easily submit your shareholder votes online. If you are a shareholder of record, you may enroll in the electronic delivery service at the time you vote by selecting electronic delivery if you vote on the Internet, or at any time in the future by going directly to www.proxyvote.com, selecting the “request copy” option, and following the enrollment instructions.

 

 

Important Notice Regarding the Availability of Proxy Materials

for the Shareholders Meeting to be Held on May 18, 2022

This proxy statement, the form of proxy and our 2021 annual report to

shareholders are available at www.proxyvote.com.


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Business Highlights

     1  

Environmental, Social and Governance Snapshot

     4  

Corporate Social Responsibility

     6  

Corporate Governance

     7  

Information about the Meeting and Voting

     10  

How Can I Participate in the Annual Meeting?

     10  

What Are the Board’s Recommendations?

     11  

Who Is Entitled to Vote?

     11  

How Do I Vote?

     11  

How May I Revoke or Change My Vote

     13  

What Constitutes a Quorum?

     13  

What Is a Broker Non-Vote?

     13  

What Vote Is Required to Approve Each Proposal?

     13  

Who Counts the Votes?

     14  

What Does it Mean if I Receive More Than One Proxy Card?

     14  

What if I Receive Only One Set of Proxy Materials Although There Are Multiple Shareholders at My Address?

     14  

How Do I Submit a Shareholder Proposal for Next Year’s Annual Meeting?

     15  

Will I Receive a Copy of the Annual Report and Form 10-K?

     15  

How Can I Access the Proxy Materials Electronically?

     16  

Proposal 1: Election of Trustees

     18  

Trustee Criteria, Qualifications, Experience and Tenure

     18  

Annual Board Evaluation Process

     20  

Trustees; Nominees

     20  

Committees of the Board of Trustees

     26  

Trustee Independence; Independence Determination

     29  

Corporate Governance

     30  

Board’s Role in Risk Oversight

     32  

Trustee Nominations

     34  

Executives and Executive Compensation

     39  

Current Executive Officers

     39  

Compensation Discussion and Analysis

     41  

Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm

     74  

Fees to Independent Registered Public Accounting Firm

     75  

Proposal 3: Advisory Vote on Executive Compensation

     78  


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Other Information

     79  

Security Ownership of Certain Beneficial Owners and Management

     79  

Certain Relationships and Related Party Transactions

     80  

Proposals Pursuant to SEC Rule 14a-8

     81  

Proxy Access Trustee Nominees

     81  

Other Proposals and Nominees

     82  

Review of Shareholder Proposals; Other Business

     82  

Expenses of Solicitation

     82  

 


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Business Highlights1

 

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1

Please see “Compensation Discussion - Analysis Discussion” later in this proxy statement and Appendix A to this proxy statement for a discussion of non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures.

 

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Development Highlights

 

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Environmental, Social and

Governance Snapshot

 

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Our portfolio reflects our commitment to sustainability and our focus on certified buildings that prioritize the health and wellbeing of employees, tenants, residents and visitors. From conception, we factor energy performance into each phase of the building’s life cycle, from energy modeling during design and development, to commissioning and smart operations and maintenance practices to ensure that results are achieved. We understand that our developments will have a lasting impact on their surrounding communities, so we focus on sustainable community development by taking advantage of existing transit infrastructure and proximity to vibrant nearby amenities.

Office Building Operations

Our operations team continually evaluates the impact our properties have on the environment by utilizing building data to implement improvements, increase efficiencies, and create new standards to drive economies in system performance. To that end, Brandywine owns and/or manages over 12.4 million square feet of green certified space with more than 42% of its core portfolio as ENERGY STAR certified in 2021.

 

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Green Leasing: As a recognized “Green Lease Leader Gold” by the U.S. Department of Energy and the Institute for Market Transformation, Brandywine incorporates key sustainability language into our leases, covering issues such as chemical use, indoor air quality, energy efficiency, water efficiency, recycling, and other strategies to drive shared cost savings that benefit both tenant and landlord.

 

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Healthy Building Highlights: UL Verified Healthy Building Certifications were achieved for Cira Centre in Philadelphia, and One Rodney, the first and only building in Wilmington, Delaware, to receive this certification to date. Fitwel Certifications have been achieved for 7.5 million square feet, including Cira Square in Philadelphia and 1676 International, the first Fitwel 2 certified Multi-tenant building in the state of Virginia. WELL Building Certification was achieved at our FMC Tower building at Cira Centre South in Philadelphia, earning the first Bronze level certification and the first v2 project certification in the U.S. All new construction is designed to leading healthy building standards including WELL and Fitwel, with an emphasis on indoor air quality, enhanced filtration, optimal humidity levels, and access to ample natural light and dynamic outdoor spaces.

The Power of Partnerships

Our Vendors: Our vendors are our partners in providing best-in-class work environments. The Brandywine team found creative ways to keep our vendors working throughout the pandemic with win-win outcomes. These efforts included, but were not limited to:

 

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Shifting assignments to take advantage of making building improvements during lower occupancy months

 

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Providing online training opportunities for vendors that needed to work from home due to childcare responsibilities or high-risk health vulnerabilities

 

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Through our employee-driven GoFundMe campaign, providing monetary support to our vendors who were laid off or furloughed during the pandemic

 

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Supporting our vendors’ right to collective bargaining and working directly with BOMA’s Building Operators Labor Relations, Inc. (BOLR) to help ensure a successful contract settlement outcome

 

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Corporate Social Responsibility

At Brandywine, we believe the value in what we do, lies in the difference we can make. As such, we are committed to being good neighbors and corporate citizens in the communities in which we live and work.

Inclusive Development

 

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Brandywine has committed to providing 50% of any affordable units required by City of Austin provisions as on-site units for the entire Uptown ATX development. In addition, at One Uptown, we are providing 100% of its affordable housing obligations on-site.

 

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In collaboration with a wide range of partners, Brandywine introduced an unprecedented Neighborhood Engagement Initiative as part of Schuylkill Yards, totaling a $16+ million commitment to the surrounding community. Programs include:

 

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Grow Philadelphia Capital Fund: through a partnership with The Enterprise Center, a non-profit lender and small business technical assistance provider, we created this fund to provide low-cost capital with an interest rate of 1% directly to Philadelphia Minority Enterprises to accelerate growth, enhance employment opportunities, and drive economic development in the community. To date, we have made $786,912 in low-interest loans available to struggling small, local, and minority-owned businesses.

 

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Construction Apprenticeship Preparatory Program: we sponsor the Construction Apprenticeship Preparatory Program (CAPP), a 15-week classroom-based curriculum designed to prepare candidates for the required entrance exams and interview process for the skilled building trade unions. Participants who pass an apprentice exam are provided mentorship and offered employment on our projects. To date, 57 individuals have been placed in Union jobs.

 

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Local Sourcing Initiative: to assist in creating new procurement channels for West Philadelphia businesses, we make introductions between local businesses and our tenants, and fund a 10% discount for all tenants on their first purchase of goods or services from a West Philadelphia vendor.

 

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CDC Co-Development: we are hiring a Community Development Corporation (CDC) for each Schuylkill Yards project, allowing the CDCs to earn revenue and build capacity for their staff, to ultimately better execute projects that enhance their community-serving mission.

 

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Community Fund: we committed to contribute a $9.3 million grant to a Community Fund managed by a consortium of local community groups, which will provide capital for affordable housing and preservation initiatives, additional small business and employment programs, community capacity building, and educational support for local public schools.

Philanthropy

Since our inception, Brandywine has partnered with an array of organizations to provide donations, funding and personnel to support the causes and advocacy that are important to both our company and our employees. Highlights of this focus include:

 

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Brandywine provides each employee with the opportunity to utilize 3 days of paid Volunteer Time Off each year to give back to nonprofit organizations of their choice.

 

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Our annual Day of Caring allows Brandywine employees to support their local communities by sharing their time, talent, and dollars.

 

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Through our Matching Gift Program, Brandywine supports charitable organizations by matching a donation to certain qualifying non-profit organizations to which our employees contribute, including organizations such as the American Heart Association, Alzheimer’s Association, The Leukemia & Lymphoma Society, and Habitat for Humanity.

 

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In our Philadelphia office buildings, our management teams have partnered with eWaste and PAR Recycling-companies that specifically employ formerly-incarcerated individuals as a true “second chance.”

Employee Engagement

Our employees are our greatest assets. Their commitment to excellence in their everyday encounters helps us to foster a collaborative atmosphere where internal partnerships belay creativity and inspiration. As a company, we seek to embody the best practices for team cohesiveness, and do so by promoting diversity and inclusion throughout every level of the organization.

 

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As part of our employee training and professional development program, Brandywine employees are given the tools they need to successfully execute our mission, while simultaneously fostering career growth. In 2021, 100% of employees received professional training, which equates to approximately 2,700 hours, and 75% of employees received ESG-specific training. To facilitate important conversations and connections between employees, we have three Affinity Teams that focus on stewarding opportunities to build leadership, promote employee engagement, and increase career success: GROW (Growth in Relationships & Opportunity for Women), Young Professionals, and Diversity, Inclusion and Belonging.

 

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To encourage a culture of open dialogue and provide employees with the tools to align their career development with their goals, we perform annual performance reviews that give employees an opportunity to garner formal feedback from their managers and set objectives for career growth.

 

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Through our Cristo Rey partnership, Brandywine sponsors high school student internships and summer work programs.

 

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To emphasize the importance of continuous learning, Brandywine offers a tuition reimbursement program to all employees.

Corporate Governance

Strong corporate governance encourages accountability and transparency, as it promotes the long-term interests of shareowners, strengthens Board and Management accountability, and helps build public trust in the company.

Our commitment to good corporate governance has enabled us to maintain our industry-leading ISS Governance Quality Score of 1 again in 2021 - representing the highest governance rating that can be received from ISS. In addition, Brandywine continues to maintain an A Rating from MSCI ESG Research LLC.

 

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The below list of practices highlights our alignment with good corporate governance;

Board Structure

 

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All Trustees are independent other than our President and CEO

 

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Separate Board Chair and Chief Executive Officer

 

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Trustees are elected annually

 

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Robust role for Lead Independent Trustee, who chairs the Board

 

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Open communication and effective working relationships among Trustees with regular access to management

 

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Active year-round shareholder outreach and engagement

 

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Majority voting in uncontested elections

 

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Resignation policy for any Trustee who does not receive majority support

 

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Robust trustee and officer share ownership requirements

 

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Anti-hedging policy and anti-pledging policy by trustees and executive officers

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Regular executive sessions of independent Trustees

 

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Two Audit Committee members are “audit committee financial experts”

 

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Risk oversight by full Board and Committees

 

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Annual Board and Committee self-assessment

 

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Express Board diversity commitment in Corporate Governance Principles

 

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Trustee succession planning and Board refreshment with:

 

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Chair of the Board and Lead Independent Trustee transition effective at the annual meeting

 

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Committee membership and committee chair rotation effective at the annual meeting and

 

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Two of our seven Trustee nominees have tenures of five years or fewer

 

Shareholder Rights

 

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Proxy access provisions in our Bylaws

 

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No poison pill

 

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Shareholders have the right to call a special meeting

 

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As a Maryland REIT, we have opted out of the Maryland Unsolicited Takeover Act (MUTA) and the Maryland Business Combination Act

 

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Simple majority vote requirement for mergers requiring a shareholder vote

 

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Our shareholders have the power to amend our Bylaws

 

 

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Information about the Meeting and Voting

How Can I Participate in the Annual Meeting?

This year we have adopted a hybrid format for the annual meeting which will include an in-person meeting that will simultaneously be transmitted via a virtual meeting platform to provide a consistent and convenient experience to all shareholders regardless of location. If you cannot or do not wish to attend the meeting in person, the annual meeting can be accessed via a live webcast at www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.

If you plan to attend the annual meeting online, you will need the 16-digit control number included in your Notice of Internet Availability, on your proxy card or on the instructions that accompany your proxy materials. The annual meeting will begin promptly at 10:00 a.m. (Eastern Time). Online check-in will begin at 9:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.

What Am I Voting on?

Our Board of Trustees is soliciting your vote for:

 

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The election of seven Trustees, each to serve for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified. Each of the seven individuals nominated for election is currently serving on our Board.

 

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Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022.

 

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Approval of a non-binding, advisory resolution on executive compensation.

If any other matter should be properly presented at the annual meeting or any postponement or adjournment of the meeting for action by the shareholders, the persons named in the proxy card will vote the proxy in accordance with his or her discretion on such matter.

 

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What Are the Board’s Recommendations?

Our Board recommends that you vote:

 

   

 

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FOR the election to the Board of each of the seven nominees identified in this proxy statement, with each to serve as a Trustee for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified.

 

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FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022.

 

   
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FOR the approval of a non-binding, advisory resolution on executive compensation.

Who Is Entitled to Vote?

Holders of common shares of beneficial interest, par value $0.01 per share, or common shares, of record as of the close of business on March 22, 2022 are entitled to notice of and to vote at the annual meeting. Common shares may be voted only if the shares are represented by proxy or in person by the record holder attending the annual meeting either in person or via webcast. As of the record date, 171,383,912 common shares were issued and outstanding and entitled to vote.

How Do I Vote?

Shareholders of Record

If you are a shareholder of record, there are several ways for you to vote your common shares at the annual meeting:

 

 

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Voting by Internet

  

 

You may vote your shares through the Internet by signing on to the website identified on the proxy card and following the procedures described on the website. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote through the Internet, you should not return your proxy card.

 

 

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Voting by Mail

  

 

If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted:

 

1.  FOR the election to our Board of each of the seven nominees identified in this proxy statement, with each to serve as a Trustee for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified;

 

2.  FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022; and

 

3.  FOR the approval of a non-binding, advisory resolution on our executive compensation.

 

 

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Voting by Telephone

  

You may vote your shares by telephone by calling toll-free 1-800-690-6903. Telephone voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return your proxy card.

 

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In Person Attendance

   You may vote your shares in person at the annual meeting. Even if you plan to attend the meeting in person, we recommend that you submit your proxy card or voting instructions, or vote by telephone or the Internet by the deadline so that your vote will be counted even if you later decide not to attend the meeting.
   

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Live Webcast Attendance

  

The annual meeting will be a “hybrid” meeting of shareholders and you may vote virtually at the annual meeting. Even if you plan to attend the meeting via live webcast, we recommend that you submit your proxy card or voting instructions, or vote by telephone or the Internet by the deadline so that your vote will be counted even if you later decide not to attend the meeting via the live webcast.

 

Beneficial Owners

If you are a shareholder whose shares are held in “street name” (i.e., in the name of a broker or other custodian), you may vote the shares at the annual meeting only if you obtain a legal proxy from the broker or other custodian giving you the right to vote the shares. Alternatively, you may have your shares voted at the meeting by following the voting instructions provided to you by your broker or custodian. Although most brokers offer voting by mail, telephone and via the Internet, availability and specific procedures will depend on their voting arrangements. If you do not provide voting instructions to your broker or other custodian, your shares are referred to as “uninstructed shares.” Under rules of the New York Stock Exchange, your broker or other custodian does not have discretion to vote uninstructed shares on non-routine matters, such as Proposals 1 and 3. Your broker or other custodian does have discretion to vote your shares on Proposal 2.

 

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How May I Revoke or Change My Vote

You may revoke your proxy at any time before it is voted at the Meeting by any of the following methods:

 

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Submitting a later-dated proxy by mail, over the telephone by calling toll-free 1-800-690-6903 or through the Internet by signing on to the website identified on the proxy card.

 

Sending a written notice, including by telecopy to 610-832-4919, to our Secretary. You must send any written notice of a revocation of a proxy so as to be delivered before the closing of the vote at the annual meeting to:

 

Brandywine Realty Trust 2929 Arch Street, Suite 1800 Philadelphia, Pennsylvania 19104 Attention: Shawn Neuman, Senior Vice President, General Counsel and Secretary

  Attending the annual meeting in person or via webcast and voting your shares. Your attendance at the meeting will not in and of itself revoke any previously delivered proxy. You must also vote your shares at the meeting.

What Constitutes a Quorum?

The holders of a majority of the outstanding common shares entitled to vote at the annual meeting must be present in person via attendance in person, by live webcast or by proxy to constitute a quorum. Unless a quorum is present at the meeting, no action may be taken at the meeting except the adjournment thereof to a later time. All valid proxies returned will be included in the determination of whether a quorum is present at the meeting. The shares of a shareholder whose ballot on any or all proposals is marked as “abstain” will be treated as present for quorum purposes. “Broker non-votes,” as discussed below, will be considered as present for determining a quorum.

What Is a Broker Non-Vote?

A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner returns a properly-executed proxy but does not cast a vote on a particular proposal because the broker or nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

What Vote Is Required to Approve Each Proposal?

Voting Rights Generally. Each common share is entitled to one vote on each matter to be voted on at the annual meeting. Shareholders have no cumulative voting rights. The advisory vote on Proposal 3 is non-binding, as provided by law. However, our Board will review the results of the vote and, consistent with our record of shareowner engagement, will take it into account in making a determination concerning executive compensation.

Election of Trustees. Our Bylaws provide that, in an uncontested election, a nominee for Trustee is elected only if such nominee receives the affirmative vote of a majority of the total votes cast for and against such nominee. The majority voting standard would not apply in contested elections, and Trustees are elected by a plurality of the votes cast in a contested election.

The majority voting standard will apply to the election of Trustees at the annual meeting. Accordingly, a nominee for election to the Board will be elected if such nominee receives the affirmative vote of a majority of the total votes cast for

 

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and against such nominee. Broker non-votes, if any, and abstentions will not be treated as votes cast for the election of a Trustee and will have no effect on the results of the vote, although they will be considered present for the purpose of determining the presence of a quorum.

Our Bylaws provide that a Trustee nominated for re-election who fails to receive the required number of votes for re-election must tender his or her offer to resign to our Board of Trustees for its consideration. The Corporate Governance Committee will act on an expedited basis to determine whether it is advisable to accept the Trustee’s resignation and will submit the recommendation for prompt consideration by our Board. Our Board will act on the tendered offer of resignation within 90 days following certification of the shareholder vote and will promptly and publicly disclose its decision. The Trustee whose offer of resignation is under consideration will abstain from participating in any decision regarding his or her offer of resignation. If the offer of resignation is not accepted, the Trustee will continue to serve until the next annual meeting of shareholders and until the Trustee’s successor is duly elected and qualified or until the Trustee’s earlier resignation or removal. The Corporate Governance Committee and our Board may consider any factors they deem relevant in deciding whether to accept a Trustee’s offer of resignation.

Ratification of Appointment of Independent Registered Public Accounting Firm. Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022 requires the affirmative vote of a majority of all of the votes cast on this Proposal. Abstentions and broker non-votes will therefore have no effect on the result of such vote.

Non-Binding, Advisory Vote on Executive Compensation. Approval, by non-binding vote, of our executive compensation requires the affirmative vote of a majority of all of the votes cast on this Proposal. Abstentions and broker non-votes will therefore have no effect on the result of such vote.

Who Counts the Votes?

We have engaged Broadridge Financial Solutions, Inc. as our independent agent to receive and tabulate votes. Broadridge will separately tabulate “for” and “against” votes, abstentions and broker non-votes. We have also retained an independent inspector of elections to certify the results, report on the existence of a quorum and the validity of proxies and ballots.

What Does it Mean if I Receive More Than One Proxy Card?

Some of your shares may be registered differently or are in more than one account. You should vote each of your accounts by telephone or the Internet or mail. If you mail proxy cards, please sign, date and return each proxy card to assure that all of your shares are voted. If you hold your shares in registered form and wish to combine your shareholder accounts in the future, you should contact our transfer agent, Computershare, at (888) 985-2061; outside the U.S., (781) 575-2879. Combining accounts reduces excess printing and mailing costs, resulting in savings for us that benefit you as a shareholder.

What if I Receive Only One Set of Proxy Materials Although There Are Multiple Shareholders at My Address?

If you and other residents at your mailing address own common shares you may have received a notice that your household will receive only one annual report, proxy statement and Notice of Internet Availability of Proxy Materials. If you hold common shares in street name, you may have received this notice from your broker or other custodian and the notice may apply to each company in which you hold shares through that broker or custodian. This practice of sending

 

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only one copy of proxy materials is known as “householding.” We do this to conserve natural resources. If you did not respond to a timely notice that you did not want to participate in householding, you were deemed to have consented. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or by calling telephone number (800) 542-1061. The revocation of your consent to householding will be effective 30 days following its receipt. If you did not receive an individual copy of this proxy statement, our annual report and Notice of Internet Availability of Proxy Materials, we will send a copy to you, free of charge, if you address your written request to Brandywine Realty Trust, 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104, Attention: Shawn Neuman or by calling Mr. Neuman at (610) 832-7756. If you are receiving multiple copies of our annual report, proxy statement and Notice of Internet Availability of Proxy Materials, you may request householding by contacting Mr. Neuman in the same manner.

How Do I Submit a Shareholder Proposal for Next Year’s Annual Meeting?

Shareholder proposals may be submitted for inclusion in the proxy statement for our 2023 annual meeting of shareholders in accordance with rules of the Securities and Exchange Commission (“SEC”). See “Other Information - Proposals Pursuant to Rule 14a-8” later in this proxy statement. In addition, eligible shareholders are entitled to nominate and include in our proxy statement for our 2023 annual meeting Trustee nominees, subject to limitations and requirements in our Bylaws. See “Other Information - Proxy Access Trustee Nominees” later in this proxy statement. Any shareholder who wishes to propose any business at the 2023 annual meeting other than for inclusion in our proxy statement pursuant to Rule 14a-8 or nominees for election as Trustees pursuant to the proxy access provisions in our Bylaws, must provide timely notice and satisfy the other requirements in our Bylaws. See “Other Information - Other Proposals and Nominees” later in this proxy statement. Proposals should be sent via registered, certified, or express mail to Shawn Neuman, Senior Vice President, General Counsel and Secretary, Brandywine Realty Trust, 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104.

Will I Receive a Copy of the Annual Report and Form 10-K?

We have furnished our 2021 Annual Report with this proxy statement. The 2021 Annual Report includes our audited financial statements, along with other financial information about us, and is not part of the proxy solicitation materials.

You may obtain a free copy of our Form 10-K, which also includes the audited financial statements of Brandywine Operating Partnership, L.P., our operating partnership subsidiary, by one of the following:

 

LOGO    LOGO    LOGO
 

Accessing our Internet site

at http://www.brandywinerealty.com

and clicking on the “Investor Relations” link

  

Writing to our Senior Vice President, General Counsel and Secretary,

Shawn Neuman, at

2929 Arch Street, Suite 1800 Philadelphia, Pennsylvania 19104

  

Calling Mr. Neuman at:

(610) 832-7756

You may also obtain a copy of our Form 10-K and other periodic filings and current reports from the SEC’s EDGAR database at www.sec.gov.

 

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How Can I Access the Proxy Materials Electronically?

This proxy statement and our 2021 Annual Report are available on our website at www.proxyvote.com. Instead of receiving copies of future annual reports, proxy statements, proxy cards and Notices of Internet Availability of Proxy Materials, by mail, shareholders may elect to receive an email that will provide electronic links to our proxy materials and the proxy voting site. Choosing to receive your future proxy materials or Notices of Internet Availability of Proxy Materials online will save us the cost of producing and mailing documents to you and help conserve natural resources. You may sign up for electronic delivery by visiting www.proxyvote.com.

 

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LOGO

 

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Proposal 1: Election of Trustees

We first ask that you vote to elect to our Board each of the seven persons nominated by our Board of Trustees to serve for a term expiring at the 2023 annual meeting of shareholders and until his or her successor is duly elected and qualified. Each of the seven nominees are currently Trustees. Each nominee has agreed to be named in this Proxy Statement and to serve if elected.

We have no reason to believe that any of the nominees will be unable or unwilling for good cause to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of Trustees.

Trustee Criteria, Qualifications, Experience and Tenure

We are one of the largest publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage principally an urban, town center and transit-oriented portfolio comprising 168 properties and approximately 23.1 million square feet as of December 31, 2021.

Our business and affairs are managed under the direction of our Board of Trustees. Our Corporate Governance Principles contain Board membership qualifications and we strive for a mix of skills, experience and perspectives that will help create a dynamic and effective Board. In selecting nominees, the Board and its Corporate Governance Committee assess the independence, character and acumen of candidates and endeavor to establish areas of core competency of the Board, including, among others, industry knowledge and experience; management, accounting and finance expertise; and demonstrated business judgment, leadership and strategic vision. Our Board values diversity of backgrounds, experience, ethnicity, gender, perspectives and leadership in different fields when identifying nominees.

Our Board and its Corporate Governance Committee consider Trustee tenure in making Board nomination decisions and believe that it is desirable to maintain a mix of longer-tenured, experienced Trustees and newer Trustees with fresh perspectives. We also believe that longer-tenured, experienced Trustees are a significant strength of the Board, given Brandywine’s size and range of activities.

Below, we identify the key experiences, qualifications and skills our Trustee nominees bring to the Board and that the Board considers important in light of our business and industry.

 

LOGO

Industry Knowledge and Experience. We seek Trustees with experience as executives, directors or other leadership positions, including in commercial real estate, finance and accounting, because our success depends on acquiring, developing and leasing attractive real estate for the communities in which we have a presence, and raising and investing capital prudently to grow our portfolio with high-yielding assets. This experience is critical to the Board’s ability to understand our portfolio and business, assess our competitive position within the commercial real estate markets in which we operate, assess the strengths and weaknesses of our competitors, maintain awareness of trends and innovations in commercial real estate and real estate capital markets, and evaluate potential acquisitions and our acquisition and growth strategy.

 

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LOGO

Management, Accounting and Finance Expertise. We believe that an understanding of management practices, finance and financial reporting processes is important for our Trustees. We value management experience as it provides a practical understanding of organizations, processes, strategies, risk management and the methods to drive change and growth that permit the Board to identify and recommend improvements to our operations, leasing and marketing approaches and portfolio strategy. A strong understanding of accounting and finance is important for ensuring the integrity of our financial reporting and critically evaluating our performance. We currently have two Trustees who qualify as audit committee financial experts and expect all of our Trustees to be financially knowledgeable.

 

LOGO

Business Judgment, Leadership and Strategic Vision. We believe that Trustees with experience in significant leadership positions demonstrate excellent business judgment, leadership skills and strategic vision. We seek Trustees with these characteristics as they bring special insights to Board deliberations and processes. We also believe that Trustees who have served as senior executives are in a position to challenge management and contribute practical insight into business strategy and operations. In addition, many of our Trustees have experience as directors or trustees of academic, research, nonprofit, and philanthropic institutions, and bring valuable perspectives from these experiences.

 

LOGO

Governance Expertise. A deep understanding of a corporate board’s duties and responsibilities enhances Board effectiveness and ensures independent oversight that is aligned with shareholder interests.

The Board and its Corporate Governance Committee evaluate the Board’s own composition in the context of the diverse experiences and perspectives that the Trustees collectively bring to the boardroom.

Their backgrounds provide the Board with vital insights in areas such as:

 

LOGO   

Commercial Real Estate

   LOGO   

Accounting and Financial

   LOGO   

Risk Management

LOGO   

Mergers and Acquisition

   LOGO   

Business Administration and Operations

   LOGO   

Governmental and Regulatory Affairs

LOGO   

Marketing and Sales

   LOGO   

Capital Deployment and Capital Markets

   LOGO   

Executive Leadership and Talent Development

LOGO   

Tenant and Customer Perspective

   LOGO   

Sustainability and Corporate Responsibility

   LOGO   

Technology

The experiences, qualifications and skills of each Trustee that the Board considered in his or her nomination are included below the Trustees’ individual biographies on the following pages. The Board concluded that each nominee should serve as a Trustee based on the specific experience and attributes listed below each Trustees’ biography and the Board’s knowledge of each nominee, including the insight and collegiality each nominee is expected to bring to the Board’s functions and deliberations.

 

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Annual Board Evaluation Process

The Board recognizes that a robust and constructive evaluation process is an essential part of good corporate governance and board effectiveness. The evaluation processes utilized by the Board are designed and implemented under the direction of the Corporate Governance Committee and aim to assess Board and Committee effectiveness as well as individual Trustee performance and contribution levels. The Corporate Governance Committee and full Board consider the results of the annual evaluations in connection with their review of Trustee nominees to ensure the Board continues to operate effectively.

Each year, our Trustees complete governance questionnaires and self-assessments. In addition, the Chair of the Corporate Governance Committee coordinates in-depth interviews with each of the Trustees to solicit their feedback. These questionnaires and assessments and feedback from the interviews facilitate a candid assessment of: the Board’s performance in areas such as business strategy, risk oversight, talent development and succession planning and corporate governance; the Board’s structure, composition and culture; and the mix of skills, qualifications and experiences of our Trustees.

Trustees; Nominees

The Board, upon the recommendation of the Corporate Governance Committee, has nominated each of the seven individuals identified below for election at the annual meeting and unanimously recommends that shareholders vote FOR the election of each of the nominees as Trustee. Each nominee is currently a Trustee and each nominee has agreed to serve if elected. The Trustees have no reason to believe that any of the nominees will be unable or unwilling to be a candidate for election at the time of the annual meeting. If any nominee is unable or unwilling for good cause to serve on our Board, the persons named in the proxy will use their discretion in selecting and voting for a substitute candidate or the Board may reduce the number of Trustees. Each individual elected as a Trustee at the meeting will serve for a term expiring at the next annual meeting of shareholders and until his or her successor is elected and qualified.

 

 

  NAME

 

    AGE     Trustee Since   CURRENT POSITION

 

  Michael J. Joyce

 

  80   2004  

Non-Executive Chair of the Board and Trustee

 

  James C. Diggs

 

  73   2011  

Trustee

 

  Gerard H. Sweeney

 

  65   1994  

President, Chief Executive Officer and Trustee

 

  Reginald DesRoches

 

  54   2021  

Trustee

 

  H. Richard Haverstick, Jr.

 

  69   2016  

Trustee

 

  Terri A. Herubin

 

  60   2018  

Trustee

 

  Charles P. Pizzi

 

  71   1996  

Trustee

 

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Experience, Qualifications, Attributes and Skills

 

        LOGO      LOGO      LOGO      LOGO      LOGO      LOGO      LOGO   
    JOYCE     DIGGS     SWEENEY     DESROCHES     HAVERSTICK     HERUBIN     PIZZI  
           
LOGO   Commercial Real Estate   «   «   «   «   «   «   «
           
LOGO   Accounting and Financial   «   «   «       «   «   «
           
LOGO   Risk Management   «   «   «   «   «   «  
           
LOGO   Mergers and Acquisitions   «   «   «       «       «
           
LOGO   Business Administration and Operations   «   «   «   «   «   «   «
           
LOGO   Governmental and Regulatory Affairs       «   «   «   «   «   «
           
LOGO   Marketing and Sales   «   «   «   «       «   «
           
LOGO   Capital Deployment and Capital Markets   «   «   «       «   «   «
           
LOGO  

Executive Leadership and Talent

Development

  «   «   «   «   «   «   «
           
LOGO   Tenant and Customer Perspective   «       «       «   «   «
           
LOGO   Sustainability and Corporate Responsibility   «   «   «   «   «   «   «
           
LOGO   Technology           «   «   «   «  

 

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LOGO

The following are biographical summaries of the individuals nominated for election at the annual meeting.

 

LOGO

    

Michael J. Joyce

Chair of the Board and Trustee

 

Mr. Joyce was first elected a Trustee on June 1, 2004 and was appointed our non-executive Chair of the Board on February 16, 2017 and will continue to serve in such position until the conclusion of the annual meeting. From 1995 until his retirement from Deloitte in May 2004, Mr. Joyce served as New England Managing Partner of Deloitte, an international accounting firm. Prior to that, he was, for ten years, Philadelphia Managing Partner of Deloitte. Mr. Joyce served on the board of Allegheny Technologies Incorporated (NYSE: ATI) until expiration of his term in May 2014. In addition, Mr. Joyce served on the board of A.C. Moore Arts & Crafts, Inc. and was Chair of the board when the company was sold in 2011.

 

Qualifications, Attributes, Skills and Experience: Financial expertise, including in financial reporting, accounting and controls; risk management; finance; executive leadership; and corporate and community experience.

 

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LOGO     

James C. Diggs

Trustee

 

Mr. Diggs was first elected a Trustee on March 21, 2011, and he will become non-executive Chair of the Board at the conclusion of the annual meeting. From 1997 until his retirement in June 2010, Mr. Diggs served as Senior Vice President and General Counsel of PPG Industries, Inc. (NYSE: PPG) (“PPG”), a producer of coatings and glass products. From 2004 to September 2009, Mr. Diggs also served as Corporate Secretary of PPG. Mr. Diggs is a director of Allegheny Technologies Incorporated (NYSE: ATI) and Arboreta Healthcare Inc.

 

Qualifications, Attributes, Skills and Experience: Legal and risk oversight expertise; complex regulatory; environment, health and safety; financial reporting, accounting and controls; executive leadership; and corporate and community experience.

 

LOGO     

Gerard H. Sweeney

President, Chief Executive Officer and Trustee

 

Mr. Sweeney has served as President, Chief Executive Officer and Trustee of Brandywine since the Company’s founding in 1994. Mr. Sweeney has overseen the growth of Brandywine from four properties and a total market capitalization of less than $5 million to over 24 million square feet and a total market capitalization of approximately $5 billion. Prior to 1994, Mr. Sweeney served as Vice President of LCOR, Incorporated (“LCOR”), a real estate development firm. Mr. Sweeney was employed by the Linpro Company (a predecessor of LCOR) from 1983 to 1994 and served in several capacities, including Financial Vice President and General Partner. During this time, Mr. Sweeney was responsible for the marketing, management, construction, asset management and financial oversight of a diversified portfolio consisting of urban high-rise, mid-rise, flex, warehouse and distribution facilities, retail and apartment complexes. Mr. Sweeney holds a B.S. in Economics from West Chester University in West Chester, Pennsylvania.

 

Mr. Sweeney is a member of the Real Estate Roundtable, the National Association of Real Estate Investment Trusts, the Urban Land Institute, Chairman of the Schuylkill River Development Corporation, Chairman of the Center City District Foundation, and Chairman of the board for the Philadelphia Regional Port Authority. Additionally, Mr. Sweeney serves on the boards of several other Philadelphia-based organizations. Mr. Sweeney is also co-founder and co-CEO of Bonomo Turkish Taffy LLC.

 

Qualifications, Attributes, Skills and Experience: Senior executive, with ability to drive and oversee our business strategy; detailed knowledge and unique perspective regarding our strategic and operational opportunities and challenges and our competitive and financial positioning.

 

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LOGO     

Reginald DesRoches

Trustee

 

Dr. DesRoches was first elected a Trustee on May 18, 2021. Dr. DesRoches has served as Rice University’s Provost since 2020 and will assume the role of President on July 1, 2022. In his current role, Dr. DesRoches works to advance the University’s teaching, research, and service mission. He leads academic programs and initiatives across the University’s eight schools, which serve 7,500 students, and numerous centers and institutes. Dr. DesRoches previously served as the William and Stephanie Sick Dean of Engineering at the George R. Brown School of Engineering at Rice University, where he provided leadership to a top-ranked engineering school with nine departments, 140 faculty, and 2,500 students. Prior to that, he was chair of the School of Civil & Environmental Engineering at The Georgia Institute of Technology. Dr. DesRoches serves as chair of the National Construction Safety Team Advisory Committee, chairs the advisory board for the Natural Hazards Engineering Research Infrastructure Simulation Center, is a member of the California Department of Transportation Scientific Advisory Board, and is on the Haliburton Labs Clean Energy Accelerator Advisory Board. He received his B.S. in Mechanical Engineering, and Ph.D. in Civil Engineering, both from the University of California, Berkeley.

 

Qualifications, Attributes, Skills and Experience: Commercial real estate; risk management; business administration and operations; governmental and regulatory affairs; marketing and sales; executive leadership and talent development; sustainability and corporate responsibility; technology.

 

LOGO     

H. Richard Haverstick, Jr.

Trustee

 

Mr. Haverstick was first elected a Trustee on December 6, 2016. Mr. Haverstick spent nearly 40 years with Ernst & Young LLP, where he served in many senior leadership roles including Global Financial Services Partner, Managing Partner of the Philadelphia Office, Philadelphia Partner-In-Charge of Financial Services, Mid-Atlantic and Southeast Region Banking Industry Leader and Mid-Atlantic Region Partner-In-Charge of Human Resources. Presently, Mr. Haverstick is interim president of Thomas Jefferson University and CEO of Jefferson Health and a trustee and audit committee chair of Global Beta ETF, a registered investment fund. Previously, Mr. Haverstick was a trustee of BMT Multi-Cap Fund, sponsored by The Bryn Mawr Trust Company, and Actua Corporation. Mr. Haverstick serves on the Board of Visitors of the Fox School of Business at Temple University. Previously, Mr. Haverstick held board positions with the Chamber of Commerce for Greater Philadelphia, the Philadelphia Bar Foundation, the Southeast Pennsylvania Region of the American Red Cross, and various other civic and cultural organizations.

 

Qualifications, Attributes, Skills and Experience: Financial expertise, including in financial reporting, accounting and controls; risk management; finance; executive leadership; and corporate and community experience.

 

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LOGO     

Terri A. Herubin

Trustee

 

Ms. Herubin was first elected a Trustee on May 23, 2018. Ms. Herubin joined Greystar, a global multifamily-focused firm, in 2019 as Managing Director, Portfolio Management, where she is responsible for overseeing two of the company’s flagship perpetual life funds. She also serves as practice leader for the firm’s other domestic and international open-end investment vehicles. From 2017 until 2019, Ms. Herubin served as Managing Director, Senior Product Specialist for Real Estate, for Angelo Gordon, a private investment advisor. From 2012 until 2017, Ms. Herubin served as a Managing Director at Barings Real Estate (“Barings”), a private investment manager, where she was lead portfolio manager of the firm’s core open-end fund and a member of its investment committee. She joined Barings from the Townsend Group (“Townsend”), where, as a portfolio manager in the firm’s investment management group between 2009 and 2012, she led the underwriting of U.S. commingled fund mandates. Prior to her tenure at Townsend, Ms. Herubin was a co-portfolio manager for the New York State Teachers’ Retirement System’s equity real estate portfolio. She graduated from the University of Illinois at Urbana-Champaign with a B.A. in Urban Planning and holds a J.D. from Brooklyn Law School, where she was an editor of the Brooklyn Law Review. Ms. Herubin is a member of W/X, New York Women Executives in Real Estate, and of the Pension Real Estate Association, for which she has been a speaker at their bi-annual meetings and a past member of the PREA-IPD Advisory Board.

 

Qualifications, Attributes, Skills and Experience: Real estate; finance; capital markets; complex regulatory; risk management technology. Extensive experience in all aspects of commercial real estate investments and finance.

 

LOGO     

Charles P. Pizzi

Trustee

 

Mr. Pizzi was first elected a Trustee on August 22, 1996. Mr. Pizzi served as the President and Chief Executive Officer, as well as a director of Tasty Baking Company from October 7, 2002 until the company’s sale in May 2011. Mr. Pizzi served as President and Chief Executive Officer of the Chamber of Commerce for Greater Philadelphia from 1989 until October 4, 2002. Mr. Pizzi is a director of Pennsylvania Real Estate Investment Trust (NYSE: PEI) and Mistras Group, Inc. (NYSE: MG) and serves on a variety of civic, educational, charitable and other boards, including the boards of Drexel University, Franklin Square Energy Fund, the Philadelphia Belt Line Railroad Company and Independence Blue Cross (for which he serves as Chairman) and its subsidiary, Amerihealth Caritas. Mr. Pizzi served on the Board of Directors of the Federal Reserve Bank of Philadelphia from 2006 through 2011, including as Chairman from 2010 through 2011. He is also on the Advisory Board of (Philadelphia) PNC.

 

Qualifications, Attributes, Skills and Experience: Government and public policy; finance; financial reporting, accounting and controls; capital markets; risk management; extensive financial and risk oversight experience; executive leadership.

 

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Committees of the Board of Trustees

Our Board of Trustees has standing Audit, Compensation, Corporate Governance and Executive Committees.

The table below provides 2021 membership information for each of the Board Committees and 2021 meeting information.

 

    LOGO      LOGO      LOGO      LOGO      LOGO      LOGO      LOGO      2021

Meetings

    JOYCE      DIGGS      SWEENEY     DESROCHES     HAVERSTICK     HERUBIN     PIZZI    
               
Audit   LOGO
  LOGO
          LOGO

(Chair)

  LOGO
      10
               
Compensation   LOGO
  LOGO

(Chair)

                  LOGO
  6
               
Corporate Governance               LOGO
  LOGO
  LOGO
  LOGO

(Chair)

  5
               
Executive   LOGO
      LOGO

(Chair)

              LOGO
  3

The table below provides expected membership information for each of the Board Committees, effective immediately following the annual meeting.

 

    LOGO      LOGO      LOGO      LOGO      LOGO      LOGO      LOGO   
    JOYCE     DIGGS     SWEENEY     DESROCHES     HAVERSTICK     HERUBIN     PIZZI  
               
Audit   LOGO
  LOGO
          LOGO

(Chair)

  LOGO
   
               
Compensation   LOGO
  LOGO
                  LOGO

(Chair)

               
Corporate Governance               LOGO
  LOGO
  LOGO

(Chair)

  LOGO
               
Executive       LOGO
  LOGO

(Chair)

              LOGO

 

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Audit Committee

Our Audit Committee assists our Board in overseeing:

 

LOGO

the quality and integrity of our financial statements;

 

LOGO

our compliance with legal and regulatory requirements;

 

LOGO

our policies and practices for risk assessment and risk management, including risks related to financial statements, financial reporting and disclosure processes, financial and other internal controls, accounting, legal/compliance matters, information technology and cybersecurity, and steps taken by management to control these risks; and

 

LOGO

related party transactions.

Our Audit Committee has sole authority to appoint, compensate, oversee and replace our independent registered public accounting firm. Our Audit Committee reviews its internal quality-control procedures, assesses its independence and reviews all relationships between us and our independent registered public accounting firm.

Our Audit Committee:

 

LOGO

Approves the scope of the annual internal and external audit;

 

LOGO

Pre-approves all audit and non-audit services and the related fees;

 

LOGO

Reviews our consolidated financial statements and disclosures in our reports on Form 10-K and Form 10-Q;

 

LOGO

Monitors our system of internal controls over financial reporting and reviews the integrity of our financial reporting process;

 

LOGO

Establishes and oversees procedures for (a) complaints received by us regarding accounting, internal accounting controls or auditing matters, and (b) the confidential anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

 

LOGO

Reviews disclosures from our independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independence of accountant’s communications with the audit committee; and

 

LOGO

Reviews quarterly reports on cybersecurity matters received from our Chief Technology and Innovation Officer, including reports on documented incidents or violations of our IT and security policies.

Our Audit Committee relies on the expertise and knowledge of management, our internal auditors, and our independent registered public accounting firm in carrying out its oversight responsibilities.

Each member of our Audit Committee is independent within the meaning of the SEC regulations, the listing standards and requirements of the New York Stock Exchange and our Corporate Governance Principles. Each member is financially literate, knowledgeable and qualified to review financial statements. The charter of our Audit Committee requires such independence and financial literacy as a condition to continued membership on the Audit Committee. Mr. Haverstick and Mr. Joyce are qualified as “audit committee financial experts” under SEC regulations.

 

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Compensation Committee

Our Compensation Committee is responsible for:

 

LOGO

reviewing, evaluating and approving compensation plans and programs for our Trustees and senior executives;

 

LOGO

annually reviewing and approving corporate goals and objectives relevant to compensation of our President and CEO and other senior executives and evaluating performance in light of these goals and objectives;

 

LOGO

reviewing and discussing with the full Board, and overseeing risk management related to, our compensation philosophy and programs and whether our compensation programs for employees create incentives for employees to take inappropriate or excessive risk; and

 

LOGO

retaining and terminating any consultant or outside advisor to the Compensation Committee (and the Compensation Committee has sole authority to approve any such consultant’s or advisor’s fees and other terms of engagement).

Our Compensation Committee has retained Pay Governance LLC as its independent consultant. We describe the role of the Compensation Committee’s consultant in the “Compensation Discussion and Analysis” later in this proxy statement.

Each member of our Compensation Committee meets the independence requirements of the New York Stock Exchange and our Corporate Governance Principles. The charter of our Compensation Committee requires such independence as a condition to continued membership on the Compensation Committee.

For information on the process and procedures of our Compensation Committee, please see “Compensation Discussion and Analysis - Decision Making.”

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is or has been an officer or employee of the Company. In addition, none of our executive officers serves as a member of the board of directors or compensation committee of any company that has an executive officer serving as a member of our Board.

Corporate Governance Committee

Our Corporate Governance Committee is responsible for:

 

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identifying and recommending individuals qualified to become members of our Board;

 

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recommending to our Board any changes in our Corporate Governance Principles;

 

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leading our Board in its annual review of Board performance, and making recommendations regarding Board and Board Committee structure, organization, membership, function and effectiveness;

 

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recommending to our Board Trustee nominees for each Board Committee;

 

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assisting our Board in succession planning and talent development, including in identifying and evaluating potential successors to the President and Chief Executive Officer;

 

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reviewing our efforts to promote diversity among Trustees, officers, employees and contractors;

 

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overseeing our environmental, sustainability and corporate social responsibility (“ESG”) practices and initiatives;

 

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arranging for continuing Trustee education; and

 

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arranging for an orientation for all Trustees.

Each member of the Corporate Governance Committee meets the independence requirements of the New York Stock Exchange and our Corporate Governance Principles. The charter of our Corporate Governance Committee requires such independence as a condition to continued membership on the Corporate Governance Committee.

Executive Committee

Our Executive Committee has authority to approve certain significant acquisitions, dispositions and other investments, subject to limitations set by the Board.

Trustee Independence; Independence Determination

No Trustee qualifies as independent unless our Board affirmatively determines that the Trustee has no material relationship with us, directly or as a partner, share owner, or officer of an organization that has a relationship with us.

Our Board has adopted standards that are set forth in our Corporate Governance Principles, which meet the listing standards of the New York Stock Exchange and assist our Board in its evaluation of each Trustee’s independence. A Trustee who has any of the following relationships or arrangements will not qualify as independent:

 

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The Trustee is, or has been within the last three years, an employee of ours, or an immediate family member of the Trustee is, or has been within the last three years, an executive officer of ours.

 

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The Trustee has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us (excluding compensation in the form of Board fees and Board Committee fees and pension or other forms of deferred compensation not contingent on continued service).

 

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(A) The Trustee is a current partner or employee of a firm that is our internal or external auditor; (B) the Trustee has an immediate family member who is a current partner of such a firm; (C) the Trustee has an immediate family member who is a current employee of such a firm and personally works on the audit of our financial statements; or (D) the Trustee or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on our audit within that time.

 

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The Trustee or an immediate family member of the Trustee is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company’s compensation committee.

 

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The Trustee is a current employee, or an immediate family member of the Trustee is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues.

 

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In its assessment of Trustee independence, our Board considers all commercial, charitable and other transactions and relationships (including tenure of Board service) that any Trustee or member of his or her immediate family may have with us, with any of our affiliates, or with any of our consultants or advisers. Our Board applies the same criteria for assessing independence for purposes of each of the Audit Committee, Compensation Committee and Corporate Governance Committee. Furthermore, in its assessment of a Trustee’s independence for service on the Compensation Committee, our Board considers all factors the Board believes specifically relevant to determining whether the Trustee has a relationship which is material to such Trustee’s ability to be independent from management in connection with his or her duties as a member of the Compensation Committee, including but not limited to any compensation payable to such Trustee. In addition, no member of the Audit Committee or Compensation Committee may accept directly or indirectly any consulting, advisory or other compensatory fee from us (other than fees for service as a Trustee and member of a Board Committee) or be an affiliate of us.

Our Board has affirmatively determined that Ms. Herubin, Dr. DesRoches and each of Messrs. Joyce, Diggs, Haverstick and Pizzi is independent under the standards of the New York Stock Exchange and those set forth in our Corporate Governance Principles and that the Audit Committee, Compensation Committee and Corporate Governance Committee are comprised exclusively of independent Trustees.

Our Board did not determine Mr. Sweeney to be independent because of his position as our President and Chief Executive Officer.

Corporate Governance

Governance Compliance

Our policies and practices comply with the listing requirements of the New York Stock Exchange and the requirements of the Sarbanes-Oxley Act of 2002. Our Board and Corporate Governance Committee regularly evaluate our corporate governance policies and practices in light of changing regulatory requirements and evolving best practices.

Board Leadership Structure

Our Board believes that independent Board leadership is a critical component of our corporate governance. Mr. Sweeney is our President and Chief Executive Officer and a Trustee, and Mr. Joyce currently serves as Chair of the Board and our Lead Independent Trustee, a position he has held since 2017. Mr. Joyce will continue to serve in such positions until the conclusion of the annual meeting, at which time Mr. Diggs will become Chair of the Board and Lead Independent Trustee. As Chair and Lead Independent Trustee, Mr. Diggs will preside at Board meetings and at executive sessions of non-management Trustees, oversee the agenda of Board meetings, provide guidance to our President and Chief Executive Officer as to Board views and perspectives, particularly on our strategic direction, and be available to shareholders and other parties interested in communicating with our non-management Trustees.

As President and Chief Executive Officer, Mr. Sweeney is responsible for our day-to-day operations, engaging with shareholders and external constituents, developing our future leaders and executing our strategy. The Board believes that its leadership structure (i) achieves independent oversight and evaluation of our senior management; (ii) assures effective communication between the Board and senior management on corporate strategy; and (iii) fosters effective decision-making and accountability.

 

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Talent Development; Succession Planning; Board Refreshment

Assisted by our Corporate Governance Committee, our Board assesses succession planning and talent development for key executives and company leadership. Assessments focus on succession in the event of the unexpected incapacity of our President and Chief Executive Officer as well as on talent development for key executives. Our Corporate Governance Principles provide that our President and Chief Executive Officer should at all times make available to the Board, on a confidential basis, his recommendations and evaluations of potential successors. Fundamentally, the Board’s executive succession planning is a continuous, interactive process that takes into account the Company’s operating plans and strategic goals and that seeks to attract, develop and retain a talent-rich pool of executives. In addition, we thoughtfully plan for Trustee succession and Board refreshment. By developing and following a long-range succession plan, the Board has an ongoing opportunity to: (i) evaluate the depth and diversity of experience of our Board; (ii) expand and replace key skills, qualifications and experiences that support our strategies; (iii) build on our record of Board diversity; and (iv) maintain a balanced mix of tenures. Two of our seven Trustee nominees will have tenures of five years or fewer upon their election at the annual meeting.

Trustee Continuing Education

Our Corporate Governance Principles formalize our support for Trustee participation in continuing education sessions on business-related topics, corporate governance developments, SEC initiatives and regulatory changes, and other current topics such as cyber security, including issues pertinent to our Board Committees.

Prohibition on Classification of Board without Shareholder Approval-Opt out of Classified Board Provision of Maryland’s Unsolicited Takeovers Act

Our Board has adopted a resolution prohibiting us from electing to be subject to the classified board provision of Title 3, Subtitle 8 of the MGCL without a shareholder vote. Title 3, Subtitle 8 of the MGCL is commonly referred to as the Maryland Unsolicited Takeovers Act, or MUTA. As a result of our opt-out, the Board is prohibited from becoming classified under Section 3-803 of the MGCL unless a proposal to repeal that prohibition is approved by the affirmative vote of at least a majority of the votes cast on the matter by our shareholders entitled to vote generally in the election of trustees.

Proxy Access

We provide for a right of proxy access in our Bylaws. This right enables eligible shareholders to include their nominees for election as trustees in our proxy statement for annual meetings. The proxy access provisions in our Bylaws permit up to 25 shareholders owning at least three percent of our common shares continuously for three years to nominate up to the greater of (i) two and (ii) 25 percent of the number of Trustees then serving. The complete text of our By-laws, as amended, is available on our website ( www.brandywinerealty.com).

Shareholder Outreach and Engagement

We value the views of our shareholders and regularly solicit input from them throughout the year, including through meetings with members of management, on topics such as portfolio strategy, capital allocation, corporate liquidity, the effects the COVID-19 pandemic has had on our business, including tenant collections, leasing activity and rental rates, corporate governance and corporate social responsibility. Our direct shareholder engagement is in addition to our customary participation at industry and investment community conferences, investor road shows, and analyst meetings. We also respond to individual shareholders who provide feedback about our business, and we remain committed to robust engagement as a cornerstone of our corporate governance. In 2021, we met with approximately 161 institutional investors, held seven analyst meetings, conducted several investor meetings and property tours, and attended multiple investor conferences.

 

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Executive and Trustee Share Ownership Requirements

We maintain minimum share ownership requirements for our executives and Trustees. We have summarized these requirements later in this proxy statement under “Compensation Discussion and Analysis - Additional Compensation Information - Share Ownership Requirements.”

Prohibition on Hedging and Pledging of Shares

Our executives and Trustees are prohibited from hedging their ownership or offsetting any decline in the market value of our shares, including by trading in publicly-traded options, puts, calls or other derivative instruments related to our shares. They are also prohibited from pledging our shares as collateral for loans.

Code of Conduct

We maintain a Code of Business Conduct and Ethics, which is available on our website (www.brandywinerealty.com), and is applicable to our Trustees, officers and employees. The Code of Business Conduct and Ethics reflects and reinforces our commitment to integrity in our business. Any amendments to or waivers of the Code for executive officers or Trustees may only be made by the Board or by the Audit Committee (which is composed solely of independent Trustees) and will be disclosed promptly as required by law or stock exchange regulation, and, in addition, amendments to or waivers that apply to our principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions and that relate to any matter enumerated in Item 406(b) of Regulation S-K promulgated by the SEC will be disclosed on our website (www.brandywinerealty.com). We also notify our vendors annually of our commitment to the highest ethical standards and the restrictions in our Code on improper payments and gratuities to our personnel.

Hotline Submissions

Our Audit Committee has established procedures, set forth in our Code of Business Conduct and Ethics, for the submission of complaints about our accounting or auditing matters. There is a hotline for anonymous concerns regarding questionable accounting or auditing matters. Any financial matters reported through the hotline will be reported to the Chair of our Audit Committee. Our current hotline number is (844) 848-6595.

Availability of Committee Charters; Corporate Governance Principles; and Code of Business Conduct and Ethics

Our Board has adopted, and annually reviews, charters for each of the Audit, Compensation, Corporate Governance and Executive Committees. These charters and our Corporate Governance Principles and our Code of Business Conduct and Ethics are available on our website (www.brandywinerealty.com) and we will also make available in print copies of these documents to any shareholder, without charge, upon request.

Board’s Role in Risk Oversight

Our Board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant Board Committees that report on their deliberations to the Board. The oversight responsibility of the Board and its

 

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Committees is enabled by management reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include competitive, economic, operational, financial (accounting, credit, liquidity and tax), legal, regulatory, compliance, cybersecurity, health, safety and reputational risks. The Board and its Committees oversee risks associated with their respective principal areas of focus, as summarized below.

 

     

Primary Areas of Risk Oversight

 

Audit Committee   

Risks and exposures associated with financial matters, particularly financial reporting, accounting, disclosure, internal control over financial reporting, tax (including compliance with REIT rules), cybersecurity, financial policies, investment guidelines, development and leasing, and credit and liquidity matters.

 

Compensation Committee       

Risks and exposures associated with executive compensation programs and arrangements, including risks of inappropriate behavior related to incentive compensation plans. See “Compensation Discussion and Analysis - Additional Compensation Information - Compensation and Risks.”

 

Corporate Governance Committee   

Risks and exposures associated with leadership, succession planning and talent development; ESG policies and practices; and corporate governance policies and procedures.

 

Board Oversight of Cybersecurity

Our Board recognizes that cybersecurity is a critical component of our risk oversight program. The Audit Committee and senior management receive and review quarterly reports on cybersecurity matters from our Chief Technology and Innovation Officer, including reports on documented incidents or violations of our IT and security policies. Documented incidents or violations are discussed, and managers are notified for the appropriate follow-up with our HR department or the employees involved in such incidents or violations, as needed. Depending on the policy incident or violation, one of several actions are considered, including: a verbal discussion between the manager and employee involved, required training or retraining on specific cybersecurity topics, disciplinary action depending on the frequency or severity of the incident or violation and, if a data breach were to have occurred, disclosure to the Audit Committee. Although we have not experienced a data or other cybersecurity breach in the past three years, management regularly reviews with our Audit Committee our existing IT and security policies and controls to address new and novel threats posed to the Company.

Our training program for 2022 encompasses proactive education modules, as well as reactive anti-phishing and testing modules designed to test the end-user’s ability to put what he or she has learned into practice. Trainings are required annually for each employee and are monitored to ensure the most relevant and up to date information is presented to the employee base. Results of these tests are then made available to senior management for further review.

Board Oversight of ESG

Our Board recognizes that ESG is another critical component of our risk oversight program. Oversight of ESG risks is provided by our Corporate Governance Committee, which has tasked management with continuously reviewing ESG risk exposures and presenting risk analyses to the Committee and Board regularly. These efforts are led by our Senior Vice

 

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President of Operations and Sustainability, who, together with our executive leadership, drive our ESG strategy and associated goals, risks and opportunities. ESG risks include, but are not limited to:

 

   

Physical risks to our properties of climate change;

 

   

Transitional risks of climate change, such as increasing energy costs, compliance and building regulations, and loss of tenant relationships as a result of lack of preparation; and

 

   

Social risks, including those pertaining to employee health and wellbeing, employee engagement, employee safety and diversity and inclusion.

Disclosure Committee

We maintain an internal Disclosure Committee consisting of certain members of our executive management and senior employees. Our Disclosure Committee meets at least quarterly to bring together representatives from our core business lines and employees involved in the preparation of our financial statements so that the group may discuss any issues of which the members are aware that should be considered for disclosure in our public SEC filings. Our Disclosure Committee reports to our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer.

Trustee Nominations

In making its recommendations as to nominees for election to our Board, the Corporate Governance Committee may consider, in its sole judgment, recommendations of our President and Chief Executive Officer, other Trustees, shareholders and third parties. The Corporate Governance Committee may also retain third-party search firms to identify candidates. Shareholders desiring to recommend nominees should submit their recommendations in writing to our Board Chair, c/o Brandywine Realty Trust, 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104. Recommendations from shareholders should include pertinent information as specified in our Bylaws concerning the proposed nominee’s background and experience.

Our Board’s Corporate Governance Principles set forth qualifications for Trustee nominees. Qualifications include:

 

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personal ethics, integrity and values;

 

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inquiring and independent mind;

 

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practical wisdom and mature judgment;

 

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broad training and experience at the policy-making level in business, government, education or technology;

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willingness to devote the required amount of time to fulfill the duties and responsibilities of Board membership;

 

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commitment to serve on the Board over a period of years in order to develop knowledge about our operations; and

 

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involvement in activities or interests that do not create a conflict with the nominee’s responsibilities to us and our shareholders.

 

 

 

The Corporate Governance Committee also considers such other factors as it deems appropriate, including the current composition of the Board. The Committee and Board believe that Board membership should reflect diversity in its broadest sense, including persons diverse in skills, background, gender and ethnicity. The Committee has not adopted a formal policy for the consideration of diversity in identifying candidates for the Board. The Committee and Board also

 

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consider the bearing of each Trustee’s tenure, and the tenure of the Board as a whole, on the Board’s mix of skills and experience, independence and access to new and diverse perspectives. The Committee has not adopted different criteria for considering a candidate for nomination to the Board based on whether the party making nomination is a Trustee, shareholder or third party.

If the Committee decides, on the basis of its preliminary review of a candidate, to proceed with further consideration of the candidate, members of the Committee and the Board interview the candidate. After completing its evaluation, the Committee makes a recommendation to the full Board, which makes the final determination whether to nominate or appoint the candidate as a new Trustee. Our President and Chief Executive Officer, as a Trustee, participates in the Board’s determination.

As discussed above under “Corporate Governance - Proxy Access,” our Bylaws provide for proxy access. Proxy access enables eligible shareholders to include their nominees for election as trustees in our proxy materials for annual meetings. The proxy access provisions of our Bylaws permit up to 25 shareholders owning at least three percent of our common shares continuously for three years to nominate up to the greater of (i) two and (ii) 25 percent of the number of Trustees then serving. The complete text of our Bylaws is available on our website (www.brandywinerealty.com).

Communications with the Board

Shareholders and other parties interested in communicating directly with our lead independent Trustee and Chair of the Board, or with our non-management Trustees as a group, may do so by writing to Chair of the Board of Trustees, Brandywine Realty Trust, 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104. In addition, any shareholder or interested party who wishes to communicate with our Board or any specific Trustee, may write to Board of Trustees, c/o Brandywine Realty Trust, at 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104. Depending on the subject matter, management will:

 

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forward the communication to the Trustee or Trustees to whom it is addressed (for example, if the communication received deals with questions or complaints regarding accounting, it will be forwarded by management to the Chair of our Audit Committee for review);

 

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attempt to handle the inquiry directly (for example, where the communication is a request for information about us or our operations that does not appear to require direct attention by the Board or an individual Trustee); or

 

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not forward the communication if it is primarily commercial in nature or relates to an improper or irrelevant topic.

At each meeting of the Board, the Chair of the Board will present a summary of all communications (if any) received since the last meeting of the Board that were not forwarded and will make those communications available to any Trustee upon request.

Meetings of Trustees and Annual Meeting of Shareholders

Our Board of Trustees held 6 meetings in 2021. In 2021, each incumbent Trustee attended at least 75% of the aggregate of the total number of meetings of the Board and meetings held by all committees on which he or she served, except for Mr. Joyce whose attendance fell below 75% due to illness. Excluding his absences due to illness, Mr. Joyce would have attended at least 75% of the total number of meetings that required his attendance. In addition, our Board holds informational sessions with our President and Chief Executive Officer. During 2021, the Board held eight informational sessions. Our non-management Trustees also hold regular meetings without management. During 2021, our non-management Trustees held four such meetings. It is our policy that all Trustees attend annual meetings of shareholders

 

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except where the failure to attend is due to unavoidable circumstances or conflicts. All incumbent Trustees attended our virtual annual meeting of shareholders on May 18, 2021. All of the nominees are expected to attend (either in person or virtually) the 2022 annual meeting.

Trustee Compensation

The following table and footnotes provide information on the 2021 compensation of our Trustees (other than our President and Chief Executive Officer, who is not separately compensated for his service on the Board). In the paragraphs following the table and footnotes, we describe our standard compensation arrangements for service on the Board and Board Committees.

 

Current Trustee Name    Fees Earned or Paid in Cash ($) (1)     Share Awards ($) (2)     All Other Compensation    Total ($)

 

Michael J. Joyce

    $ 151,500     $ 95,000       -       $     246,500       
                 

 

James Diggs

    $ 105,000     $ 95,000       -       $ 200,000
                 

 

Reginald DesRoches

    $ 55,500     $ 95,000       -       $ 150,500
                 

 

H. Richard Haverstick, Jr.

    $ 108,500     $ 95,000       -       $ 203,500
                 

 

Terri A. Herubin

    $ 88,500     $ 95,000       -       $ 183,500
                 

 

Charles P. Pizzi

    $ 102,000     $ 95,000       -       $ 197,000
                 

 

Wyche Fowler (3)

    $ 22,500     $ 0       -       $ 22,500

(1)        Represents the aggregate amount of all fees earned or paid in cash for services as a Trustee (including services on committees of the Board) in 2021 and, in the case of the 2021 annual retainer fee, whether paid in shares or cash. Amounts include the portion of fees that a Trustee elected to defer under our Deferred Compensation Plan, which we describe later in this proxy statement. See “Compensation Discussion and Analysis - Deferred Compensation Plan.”

(2)        Represents fully-vested common shares awarded on May 18, 2021 (with each common share valued at the closing price ($13.69) of the common shares on May 18, 2021, the date of our 2021 annual meeting of shareholders).

(3)        Wyche Fowler retired from the Board at the 2021 annual meeting of shareholders.

In 2021, our Trustees (other than our President and Chief Executive Officer) received the following compensation for their service as Trustees:

 

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$45,000 annual fee payable in cash or common shares, at each Trustee’s election;

 

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$95,000 annual award payable in common shares (valued at the closing price of the common shares on the date of our annual meeting of shareholders);

 

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$1,500 fee payable in cash for participation in each meeting and informational session of the Board;

 

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$1,500 fee payable in cash for participation by a member of a Board Committee in each meeting of the Committee; and

 

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$75,000 annual fee payable in cash for the Chair of the Board; $20,000 annual fee payable in cash for the Chair of the Audit Committee; $15,000 annual fee payable in cash for the Chair of the Compensation Committee; and $15,000 annual fee payable in cash for the Chair of the Corporate Governance Committee.

Our Trustees are also reimbursed for expenses of attending Board and Board Committee meetings. In addition, our Corporate Governance Principles encourage our Trustees to attend continuing education programs for directors and provide for reimbursement of the reasonable costs of attending such programs. Trustees may elect to defer the receipt of all or a portion of their $45,000 annual fee and $1,500 per Board meeting fee into our Deferred Compensation Plan.

Each of our non-employee Trustees is required to hold a number of common shares with a value at least equal to five (5) times the annual cash retainer (currently $45,000 per year) for service on the Board based on the average of the closing price of our common shares as reported on the New York Stock Exchange for the twelve-month period ending on June 30 of the calendar year that precedes the date of computation. Each of our non-employee Trustees is in compliance with these share ownership requirements.

 

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Executives and Executive Compensation

 

Current Executive Officers

The following are biographical summaries of our current executive officers who are not Trustees:

 

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H. Jeffrey DeVuono (age 56)

Executive Vice President, Senior Managing Director, Life Sciences

 

Mr. DeVuono is Executive Vice President of the Life Science division and Regional Managing Director of the Pennsylvania region. He joined Brandywine in January of 1997. Prior to Brandywine, Mr. DeVuono worked for LCOR, a private development company that had a previous association with Brandywine, where he held a variety of positions, all of which related to asset management. Before joining LCOR, Mr. DeVuono was a sales and leasing representative for Cushman & Wakefield of Philadelphia. Mr. DeVuono currently serves on the Board, and is a former Chairman, of the King of Prussia District and is a Board Member of the Center City District. He is also a member of CoreNet Global, NAREIT, the National Association of Industrial and Office Properties (NAIOP), the Sunday Breakfast Club, and the University of Pennsylvania’s Wharton School Samuel Zell and Robert Lurie Real Estate Center. He is a Master Planning Committee Member of Waynesborough Country Club. His past board service includes the Economy League of Greater Philadelphia, University City District, the Westtown School, Bartram’s Garden, and The Center for Emerging Visual Artists. Mr. DeVuono is a graduate of LaSalle University.

 

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George D. Johnstone (age 58)

Executive Vice President, Operations

 

Mr. Johnstone joined us in November 1998. He works in conjunction with our regional managing directors in running our operations. Prior to his appointment in March 2014 as our Executive Vice President, Operations, Mr. Johnstone served as our Senior Vice President, Operations & Asset Management. Prior to his service in that position, Mr. Johnstone served as our Vice President of Operations for our Pennsylvania Region (2004-2005) and for our New Jersey Region (2002-2004) and served as Director of Operations for our New Jersey Region from 1998 until 2002. Prior to joining us, Mr. Johnstone was the Regional Controller for LCOR, where he was responsible for strategic and tactical accounting processes and oversight and leadership of all accounting functions. Mr. Johnstone earned his B.S. in Accounting from Albright College.

 

 

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Shawn Neuman (age 42)

Senior Vice President, General Counsel and Secretary

 

Mr. Neuman joined Brandywine in March 2020 as Senior Vice President, General Counsel and Secretary. Prior to joining Brandywine, Mr. Neuman most recently served as the General Counsel and Secretary of Liberty Property Trust (“Liberty”), a publicly traded REIT, preceding its merger into Prologis, Inc. During his tenure at Liberty, Mr. Neuman was responsible for overseeing, managing and advising on all legal aspects of real estate activities, public company governance matters, general corporate affairs and capital market transactions. He also served on its Investment Committee. Prior to transitioning to an in-house role, Mr. Neuman practiced in the real estate departments of several prominent law firms in New York City and Philadelphia from 2004-2012, most recently as a Member of Cozen O’Connor. In private practice, Mr. Neuman represented developers and institutional owners in complex real estate transactions involving acquisitions, dispositions, leasing, developments, joint ventures and financings. Mr. Neuman is a member of NAIOP and NAREIT. Mr. Neuman earned his J.D. from New York University School of Law and a B.S. in Finance from the University of Florida.

 

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Daniel Palazzo (age 52)

Vice President, Chief Accounting Officer and Treasurer

 

Mr. Palazzo joined Brandywine in 1999 and assumed his position as our Vice President and Chief Accounting Officer effective January 15, 2015. Prior to his appointment as our Vice President and Chief Accounting Officer, Mr. Palazzo served as a Vice President of Asset Management in our Pennsylvania Region (2006-2015), the Director of Operations for our New Jersey Region (2004-2006), and Corporate Controller (1999-2004). Prior to joining Brandywine, Mr. Palazzo received his CPA in Pennsylvania and worked for Arthur Andersen LLP in its commercial audit division, where he concentrated on real estate, construction and financial services. Mr. Palazzo is a member of NAREIT and serves on the World Affairs Council of Philadelphia Board of Directors. Mr. Palazzo received a B.A. in Accounting from the University of Delaware.

 

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William D. Redd (age 66)

Executive Vice President and Senior Managing Director for the Austin and Metro DC Regions

 

Mr. Redd is our Executive Vice President and Senior Managing Director of the Austin and Metro DC regions with responsibility for leasing and marketing, asset management, evaluation of building and land acquisitions and dispositions, third party services and property management of a diversified portfolio consisting of urban and suburban high-rise and mid-rise properties. He joined Brandywine in 1999 as Vice President of our Richmond operations. Formerly, Mr. Redd was a partner from 1988 until 1999 with Childress Klein Properties, a privately-held real estate firm headquartered in Charlotte, North Carolina. From 1985 until 1988, he was with the Trammell Crow Company. In Austin, Mr. Redd serves on the Board of Directors of the Hill Country Conservancy, the Opportunity Austin Economic Development Council, and is a member of the Real Estate Council of Austin and ULI Austin. He is also a member of the Virginia Commonwealth University Real Estate Circle of Excellence, Greater Richmond Association of Commercial Real Estate, and Richmond Real Estate Group. Mr. Redd earned his law degree from the University of Virginia and a B.A. degree from Hampden-Sydney College.

 

 

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Thomas E. Wirth (age 58)

Executive Vice President and Chief Financial Officer

 

Mr. Wirth was named our Executive Vice President and Chief Financial Officer in March 2014. From December 2009 to March 2014, Mr. Wirth served the Company as Executive Vice President, Portfolio Management and Investments where he directed portfolio management, acquisition and disposition activities and assisted in formulating the Company’s capital allocation tactics, including structuring joint ventures and construction financings. From 2004 until 2009, Mr. Wirth served as President (2007-2009) and Chief Financial Officer of Feldman Mall Properties, Inc. From 1997 to 2004, he served first as the Vice President of Finance and later as Chief Financial Officer of SL Green Realty Corp. Mr. Wirth has also served as Vice President of Financial Reporting and Analysis for Greenwich, Connecticut-based United Waste Systems, Inc., and spent ten years with Ernst & Young LLP in various positions, including Senior Manager. Mr. Wirth is a member of NAREIT, ULI and is a board member of The Philadelphia Police Foundation. Mr. Wirth earned his B.A. in Business Management and Accounting from Gettysburg College.

 

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (CD&A) describes our executive compensation programs, including the oversight of such programs by our Compensation Committee and the rationale and processes used to determine the compensation for the company’s named executive officers (“NEOs”) and provides a detailed description of those programs. This CD&A, which may include forward-looking statements, should be read together with the compensation tables and related disclosures that follow this section.

This discussion focuses on the compensation provided to the Company’s NEOs during 2021, who were:

 

   

Name

 

  

Title

 

    

LOGO

 

  Gerard H. Sweeney    President and Chief Executive Officer   

LOGO

 

  Thomas E. Wirth    Executive Vice President and Chief Financial Officer   

LOGO

 

  H. Jeffrey DeVuono    Executive Vice President, Senior Managing Director   

LOGO

 

  George D. Johnstone    Executive Vice President, Operations   
LOGO   William D. Redd    Executive Vice President and Senior Managing Director   

 

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CD&A Table of Contents

 

I.   Executive Summary      42  
II.   Executive Compensation Best Practices      46  
III.   Oversight of Executive Compensation      46  
IV.   2021 Executive Compensation      48  
V.   Key 2022 Executive Compensation Actions      56  
VI.   Additional Executive Compensation Policies and Practices      57  

 

I.

Executive Summary

Compensation Elements

In 2021, the three key elements of our pay program continued to be base salary, annual cash incentive tied to key operational and strategic goals and long-term incentive awards linked to our common shares. This summary discusses compensation highlights from 2021.

2021 Brandywine Performance

 

 

  Austin, Texas            

 

    

 

   LOGO   Substantially completed the development of 405 Colorado Street in Austin, Texas. The approximately 206,000 square foot office tower includes a 520 above-grade parking garage. Total project costs are $122.0 million.

 

   LOGO   Commenced our first phase of ground-up development at Uptown ATX totaling approximately $328 million in Austin, Texas. One Uptown consists of approximately 350,000 square feet of office space, 341 apartment units, approximately 15,000 square feet of retail space and a 1,525-space parking facility. We own 50% of the project through a joint venture.

 

 

  Metro DC

 

    

 

   LOGO   Completed the refinancing of our mixed-use project at 4040 Wilson Boulevard in Arlington, Virginia totaling approximately $150 million. We own 50% of the property through a joint venture.

 

 

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  University City

 

    

 

   LOGO   Commenced Schuylkill Yards West; our first ground-up development at Schuylkill Yards totaling approximately $287 million. The mixed-use project consists of approximately 200,000 square feet of life science/innovation space, 326 apartment units and 9,000 square feet of retail space. We own 55% of the project through a joint venture.

 

   LOGO   Completed the redevelopment/conversion of 3000 Market Street, converting a fully-leased 91,000 square foot property from office to life science.

 

   LOGO   B.Labs at Cira Centre; completed a 50,000 square foot life science incubator in December 2021 that opened for operations in January 2022.

 

             

 

  Operations

 

    

 

   LOGO   We met or exceeded several operating goals including:

    Speculative Revenue

  

    Cash and GAAP rental rate mark-to-market growth

 

             

 

  COVID-19

 

    

 

   LOGO   Collected approximately 99% of total cash-based rent due from tenants during 2021

 

   LOGO   Conducted several community outreach programs

  

 

   LOGO   Continued upgrading our building systems

 

   LOGO   Continued to maintain our doors open/lights on policy throughout our entire portfolio during 2021

 

Key 2021 Executive Compensation Actions

Annual Incentives. Consistent with prior years, the corporate scorecard used for our 2021 annual incentive plan was tied to goals relating to our operations (20%), leasing (30%) and capital investments and balance sheet strength (50%). Performance goals for the 2021 scorecard were established in the first quarter of 2021. Performance against the scorecard was achieved at 132% of target.

Long-Term Incentives. Our long-term incentive plan is designed to align management and shareholder interests, drive long-term value creation, and attract and retain key executive talent. For 2021, one-third of a NEO’s annual long-term incentive opportunity was delivered in the form of restricted share rights that vest in equal proportions over three years. These 2021 restricted shares rights also have an outperformance feature attached that could increase the original award up to 200% based on Brandywine’s achievement of superior results for average funds from operations (FFO) growth and aggregate investment activity, weighted equally, during the three-year period ending December 31, 2023. Two-thirds of a NEO’s annual long-term incentive opportunity was delivered in the form of performance share units (“PSUs”) that may be earned based on our three-year total shareholder return versus the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index.

CEO Compensation. For 2021, the Compensation Committee made no change to Mr. Sweeney’s base salary of $750,000 or target annual incentive of 200% of base salary. To better align Mr. Sweeney’s target total compensation with market levels, the Compensation Committee increased Mr. Sweeney’s target long-term incentive opportunity from 425% of base salary to 450% of base salary. As a result of this adjustment, Mr. Sweeney’s target total compensation increased from $5,437,500 to $5,625,000.

 

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2021 Say on Pay Vote. The Company values shareholder perspectives on our executive compensation program. As part of the Compensation Committee’s annual review of the program, it considers the outcome of the Company’s annual shareholder advisory vote (“say-on-pay”) on the compensation of the Company’s NEOs. Approximately 97% of the advisory votes cast in 2021 were in favor of our executive compensation program. The Compensation Committee believes that this vote is indicative of our shareholders’ support of our executive compensation program. The Compensation Committee will continue to consider shareholder feedback and the outcome of the Company’s say-on-pay votes when making future NEO compensation decisions.

Our Compensation Committee oversees and administers the Company’s executive compensation program. Our executive compensation program is designed to support our performance-based culture and the creation of value for our shareholders. The Compensation Committee is guided by the following key principles when making compensation-related decisions:

 

  LOGO

Encourage the achievement of annual and long-term business and human resource objectives that support the creation of shareholder value;

 

  LOGO

Attract, retain, and motivate top caliber talent;

 

  LOGO

Enhance retention; and

 

  LOGO

Encourage executives to achieve superior performance without excessive risk taking.

The elements of the Company’s compensation program, when considered collectively, are intended to support our executive compensation philosophy and objectives by (i) allowing us to attract and retain executive-level talent, (ii) providing an appropriate level of financial certainty through non-variable compensation, (iii) providing opportunities for above market compensation based upon the achievement of specified financial and other appropriate performance objectives, and rewarding such achievement, and (iv) balancing short-term and long-term incentives. The key elements of our executive compensation program are outlined below, together with a summary of the purposes and considerations underlying each compensation element.

 

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Pay Element    Form    Philosophy    Performance Alignment

Base Salary

  

Cash

  

 

LOGO   Fixed pay to recognize an individual’s role and responsibilities

  

 

LOGO   Reviewed annually and set based on competitiveness versus the external market, individual performance, and internal equity

 

Annual

Incentive

  

Cash

  

LOGO    Achieve annual goals measured in terms of financial, strategic, and individual performance linked to the creation of shareholder value

 

  

 

LOGO    Rewards and recognizes annual accomplishment of key financial objectives

 

LOGO    Payout based primarily on Corporate performance (as measured against objective Operational, Leasing, and Capital goals)

 

LOGO    Regional, divisional and individual performance also taken into account to ensure strong line of sight between executive pay and performance

 

Long-Term Incentives   

 

Performance Share Units  (Two-thirds of Target Award)

 

  

LOGO   Align NEOs’ interests with shareholders

  

LOGO   Shareholder value creation

  

 

Restricted Share Rights with Outperformance Feature (One-third of Target Award)

  

LOGO   Retain executive talent

 

LOGO   Align NEOs’ interests with shareholders

  

 

LOGO   Increase in share price

 

LOGO   Achievement of multi-year strategic business objectives

 

 

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II. Executive Compensation Best Practices

The Compensation Committee regularly reviews best practices in executive compensation and governance and has revised our policies and practices over time. A listing of “what we do” and “what we don’t do” is presented below:

 

 

   LOGO What We Do

 

    

 

LOGO What We Don’t Do

 

    

    

   LOGO   Pay for Performance: Majority of pay is performance based and not guaranteed

 

   LOGO   Multiple Performance Metrics and Time Horizon: Use multiple performance metrics focusing on top line and bottom line growth and multi-year vesting and measurement periods for long term incentives

 

   LOGO   Annual Compensation Risk Review: Annually assess risk in compensation programs

 

   LOGO   Share Ownership Guidelines: NEOs must comply with share ownership requirements

 

   LOGO   Clawback Policy: We maintain a clawback policy that provides for recovery of incentive compensation in the event of a financial restatement due to material non-compliance with federal securities laws and without regard to misconduct

 

   LOGO   Challenging Performance Objectives: Set challenging performance objectives for Annual Incentives

 

   LOGO   Use of Independent Consultant: The Compensation Committee has retained an independent compensation consultant that performs no other consulting services for the Company and has no conflicts of interest

 

    

LOGO    No Excise Tax Gross Ups: We will not enter into any new agreements, or materially amend any existing employment agreements with our executives that provide excise tax gross-ups in the event of a change in control of the Company

 

LOGO    No Repricing or Buyouts of Stock Options: Our equity plan prohibits repricing or buyouts of underwater stock options

 

LOGO    No Perquisites: We do not provide perquisites to our NEOs

 

LOGO    No Hedging or Pledging: NEOs are prohibited from hedging their ownership or pledging Company stock as collateral

III. Oversight of Executive Compensation

Committee Authority

Our Compensation Committee’s responsibilities include:

 

LOGO

Approving the goals and objectives relating to our President and Chief Executive Officer’s compensation, evaluating the performance of our President and Chief Executive Officer in light of such goals and objectives, and setting the compensation of our President and Chief Executive Officer based on this evaluation;

 

LOGO

Approving the salaries and annual incentive awards of our other executive officers either (i) with the title Executive Vice President, (ii) with the title Senior Vice President or Vice President, in either case who hold a position as Managing Director, Chief Financial Officer, General Counsel or Chief Administrative Officer or (iii) who report directly to our President and Chief Executive Officer, taking into account the recommendation of our President and Chief Executive Officer and such other information as the Committee believes appropriate;

 

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LOGO

Administering our equity incentive plans, including granting equity-based awards under these plans and determining the terms of such awards;

 

LOGO

Retaining and terminating, in its sole discretion, third party consultants to assist in the evaluation of Trustee and executive compensation (with sole authority to approve any such consultant’s fees and other terms of engagement); and

 

LOGO

Assessing the appropriate structure and amount of compensation for our Trustees.

Our Compensation Committee’s charter does not authorize the Compensation Committee to delegate any of its responsibilities (including authority to grant equity-based awards) to other persons, and the Compensation Committee has not delegated any of its responsibilities to other persons.

Compensation Consultants

Our Compensation Committee recognizes the importance of objective, independent expertise and advice in carrying out its responsibilities. The Compensation Committee continues to retain Pay Governance LLC as its consultant. Our Compensation Committee selected Pay Governance as its consultant because of its expertise and reputation. Neither we nor our Trustees or executive officers have any affiliation with Pay Governance or its executives and the engagement and direction of Pay Governance have been solely through our Compensation Committee.

During 2021, our compensation consultants advised our Compensation Committee on executive compensation matters, plan design, industry trends and practices, and our pay-for performance alignment, including as measured relative to peers and relative to our total shareholder returns. As directed by the Committee, the consultants prepared analyses for the Committee relating to all aspects of the compensation of our executives. They advised the Committee on market practices regarding executive compensation, including annual incentive awards and long-term incentive pay, and reviewed our peer group and the market positioning of the compensation provided to our current NEOs and other senior executives. The consultants meet privately with the Committee and individual Committee members from time to time to plan for Committee meetings and discuss executive compensation matters. Pay Governance does not provide other services to us.

Our Compensation Committee received a letter from Pay Governance regarding its independence and assessed the independence of Pay Governance under New York Stock Exchange rules and concluded that Pay Governance’s work for the Committee does not raise any conflict of interest. Factors considered by the Committee include: (i) whether other services are provided to us by Pay Governance or its representatives; (ii) the amount of fees received by Pay Governance from us as a percentage of Pay Governance’s total revenue; (iii) policies of Pay Governance designed to prevent conflicts of interest; (iv) the absence of any business or personal relationship of representatives of Pay Governance or its representatives with a member of the Committee; (v) whether Pay Governance or its advisors to the Committee own any of our securities; and (vi) whether Pay Governance or its representatives have any business or personal relationship with any of our executive officers.

Role of Executives

Our Compensation Committee seeks the views of our President and Chief Executive Officer in setting and administering our executive compensation programs. In particular, at the beginning of each year, Mr. Sweeney oversees the development of proposed corporate goals for purposes of annual incentive compensation. These goals are derived from our corporate business plan and are selected to reinforce and enhance achievement of our operating and growth objectives. The Compensation Committee reviews these goals with Mr. Sweeney, adopts revisions it deems appropriate and determines the final goals for compensation.

 

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Following the end of each year, Mr. Sweeney reviews with the Compensation Committee, at several meetings, the achievement of corporate performance goals and the performance of each other current named executive officer and presents his evaluation of such executive officer’s performance to the Committee. Decisions about individual compensation elements and total compensation are made by the Committee, using its judgment, focusing primarily on each current named executive officer’s performance as well as our overall performance. With respect to the non-quantitative performance measures applicable to our executives, the Committee relies heavily on the views of Mr. Sweeney (other than as to himself). As President and Chief Executive Officer, Mr. Sweeney oversees the day-to-day performance of the other current named executive officers. As such, our Compensation Committee believes that he is well positioned to evaluate their performance and make recommendations as to their overall compensation.

In addition to the role played by our President and Chief Executive Officer, our other executive officers furnish such industry data and legal and financial analyses as the Committee requests from time to time.

IV. 2021 Executive Compensation

Use of Peer Group Data

Our Compensation Committee, in consultation with its compensation consultant, developed a peer group as a frame of reference for our executive compensation. Our Compensation Committee selects companies for inclusion in the peer group that primarily acquire, sell, develop, lease and manage sizeable office real estate portfolios. In selecting companies, the Committee also considers their equity and total capitalization and geographic location as well as third party considerations (for example, where members of the financial community treat a particular company as being a Company peer). Our Compensation Committee has not selected or excluded companies from the peer group on account of their compensation practices. Our Compensation Committee believes that peer group data are an indicator of compensation opportunities at companies that might recruit our executives and the data therefore help the Committee set compensation at competitive levels. Our Compensation Committee also believes that peer group data provide perspective on performance measurement practices and linkages between pay and performance. The Committee does not set specific pay targets or otherwise engage in formal “benchmarking” of compensation of our executives against executives at peer group companies. The Committee does, however, attempt to set total compensation for each current named executive near the middle of the peer group data while allowing for the possibility of greater or lesser compensation based upon our corporate and individual performance.

Our Compensation Committee reviews our peer group at least annually. Following the completion of our annual peer group review for 2021, the Compensation Committee made no changes to the peer group for use in competitive pay studies, which included:

 

  Columbia Property Trust Inc.(1)     Hudson Pacific Properties, Inc.

  Corporate Office Properties Trust Inc.     Kilroy Realty Corp.

  Cousins Properties Inc.     Mack-Cali Realty Corporation

  Douglas Emmett, Inc.     Paramount Group, Inc.

  Empire State Realty Trust, Inc.     Piedmont Office Realty Trust Inc.

  Equity Commonwealth     Washington Real Estate Investment Trust

  Highwoods Properties, Inc.    

 

(1)

Columbia Property Trust Inc. ceased to be public in September 2021 and is longer be part of the peer group.

 

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Base Salary

Base salary represents the fixed portion of an executive’s compensation and provides a regular stream of income and financial security. In setting base salaries, our Compensation Committee considers the responsibilities, skills, experience and performance of the executives and relies heavily on the views of our President and Chief Executive Officer as to the impact, contribution and expertise of our executives (except in the case of himself and his compensation). In setting base salaries, our Compensation Committee also considers the linkage of base salaries to the elements of our compensation that are tied to base salaries (such as severance and change in control benefits and annual and long-term incentive targets that are computed as a multiple of base salary). As part of the annual compensation process, the Committee may adjust base salaries to reflect changes in market data or in an executive’s responsibilities, skills, experience and performance.

For 2021, the base salaries of our current NEOs were unchanged, as reflected in the table below:

 

       
Name    2020 Base Salary    2021 Base Salary            % Increase        

Gerard H. Sweeney

   $750,000    $750,000    0%

Thomas E. Wirth

   $455,000    $455,000    0%

H. Jeffrey DeVuono

   $415,000    $415,000    0%

George D. Johnstone

   $375,000    $375,000    0%

William D. Redd

   $380,000    $380,000    0%

Annual Incentive Awards

Annual incentive awards are designed to reward executives for achievement of annual performance goals linked to the achievement of our annual company goals. Each year our Compensation Committee establishes a target amount for annual incentive awards for each executive, with the target amount expressed as a percentage of the executive’s base salary. The targeted amounts take into account all factors that the Committee deems relevant, including the input of Pay Governance as to competitive compensation levels, the recommendation of our President and Chief Executive Officer (except with respect to his own target), responsibilities of the executives and the Committee’s view of market conditions.

2021 target percentages for annual incentive awards for NEOs were as follows (which were unchanged from 2020 target percentages):

 

     
Name    2021 Target Award as a % of Base Salary     

Gerard H. Sweeney

   200%  

Thomas E. Wirth

   100%  

H. Jeffrey DeVuono

   100%  

George D. Johnstone

   100%  

William D. Redd

   100%  

 

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2021 Annual Incentive Performance Goals and Outcomes

Payouts under the 2021 annual incentive are determined primarily with reference to our achievement of corporate performance goals related to operations, leasing and capital management. We refer to this array of performance goals as our “corporate scorecard.” The scorecard is established by the Compensation Committee annually, in the first quarter of year. The 2021 scorecard is shown below, including actual performance outcomes and the resulting payout percentages.

 

Payout Range   85%     100%     175%                              
 

Performance Measure

 

 

Minimum

 

   

Target

 

   

Maximum

 

   

Actual

Performance

 

   

% of Target

Achieved

 

   

% Weighting

(of 100%)

 

   

Weighted

Achievement

 

 
             
OPERATIONS (20% WEIGHTING)                                                        
             
FFO(1)     $1.32       $1.37       $1.42       $1.37       100%       6.67%       6.67%  
             
Cash Available for Distribution, as adjusted (CAD)(2)     $0.93       $0.98       $1.03       $0.99       115%       6.67%       7.67%  
             
Same Store (accrual-based) NOI Growth(3)     0.0%       1.0%       2.0%       0.4%       91%       6.67%       6.07%  
             
                                              20.00%       20.40%  
             
LEASING (30% WEIGHTING)                                                        
             
Spec Revenue Achievement ($MM)     $18.0       $19.0       $20.0       $21.0       175%       10.00%       17.50%  
             
Year-End Leased     92.0%       93.0%       94.0%       93.0%       100%       10.00%       10.00%  
             
Revenue Maintaining Capital (% lease revenue)(4)     12.0%       11.0%       10.0%       11.0%       100%       10.00%       10.00%  
             
                                              30.00%       37.50%  
             
CAPITAL (50% WEIGHTING)                                                        
             
Aggregate Investment Activity ($MM)     $691.0       $741.0       $791.0       $771.0       145%       12.50%       18.13%  
             
Generate two development / redevelopment starts     2 Starts       3 Starts       > 3 Starts       3 Starts       100%       12.50%       12.50%  
             
Net Debt / EBITDA*(5)     6.7x       6.6x       6.5x       6.5x       175%       12.50%       21.88%  
             
Interest Coverage Ratio*     3.9x       4.0x       4.1x       4.2x       175%       12.50%       21.88%  
             
                                              50.00%       74.38%  

* Represents annualized fourth quarter metric.

 

        Formulaic Outcome:       132.28%  
            CEO Recommendation:       130.00%  
          Committee-Approved Payout to NEOs:       130.00%  

(1)        We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. NAREIT defines FFO as net income (loss) before non-controlling interests of unit holders (preferred and common) and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures, extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in

 

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accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

(2)        Cash available for distribution, or CAD, is a non-GAAP financial measure that is not intended as an alternative to cash flow from operating activities as determined under GAAP. CAD is presented in our investor presentations solely as a supplemental disclosure with respect to liquidity because we believe it provides useful information regarding our ability to fund our distributions. Because other companies do not necessarily calculate CAD the same way as we do, our presentation of CAD may not be comparable to similarly titled measures provided by other companies. For purposes of the scorecard, our Compensation Committee adjusts CAD to reflect intra-year capital markets and other transaction activity not taken into account in the initial scorecard metric.

(3)        NOI, or net operating income, is a non-GAAP financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interests and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interests. In some cases, we also present NOI on a cash basis, which is NOI after eliminating the effect of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance, or as an alternative to cash flow from operating activities as a measure of our liquidity or ability to make cash distributions to shareholders. Our same store portfolio generally consists of those properties that we owned for the entirety of each of the periods being compared, but for purposes of the scorecard, our Compensation Committee adjusted the same store portfolio to exclude termination fees, bad debt expense and other income. Refer to Appendix A to this proxy statement for a reconciliation of our 2021 same store NOI to our 2021 net income available to common shareholders.

(4)        Revenue maintaining capital expenditures are a component of our CAD calculation and represent the portion of capital expenditures required to maintain our current level of cash available for distribution. Revenue maintaining capital expenditures include current tenant improvement and allowance expenditures for all tenant spaces that have been owned for at least one year, and that were not vacant during the twelve-month period prior to the date that the tenant improvement or allowance expenditure was incurred. Revenue maintaining capital expenditures also include other expenditures intended to maintain our current revenue base. Accordingly, we exclude capital expenditures related to development and redevelopment projects, as well as certain projects at our core properties that are intended to attract prospective tenants in order to increase revenues and/or occupancy rates.

(5)        Ratio of Net Debt to EBITDA excludes capital market transaction items.

The foregoing include various non-GAAP measures. Please see Appendix A for reconciliation of those measures to our published financial statements.

Our annual incentive program reserves to the Compensation Committee the right to adjust the overall corporate scorecard outcome upward or downward by 25% to reflect the Compensation Committee’s subject evaluation of our performance in matters such as strategic accomplishments or our performance relative to peer companies. The annual incentive program reserves to the Compensation Committee the right to adjust any individual NEO’s annual incentive payout, based on the Compensation Committee’s subjective evaluation of that executive’s individual performance and/or the performance of any business unit, function or region managed by that executive. Mr. Sweeney’s performance is evaluated solely by the Compensation Committee. The Committee also evaluates the individual performance of other NEOs after receiving recommendations from Mr. Sweeney. While the Compensation Committee does not often make significant discretionary adjustments to individual annual incentive payouts, the Compensation Committee views its discretionary authority as a tool to ensure individual accountability.

2021 Annual Incentive Payouts

After reviewing the corporate scorecard results, our performance more generally, the performance of individual executives and the recommendations of our CEO, the Compensation Committee approved 2021 annual incentive payouts to each NEO in the amounts shown in the table below. The approved amounts were paid in cash to each NEO in the first quarter of 2022.

 

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2021 ANNUAL INCENTIVE FINAL PAYOUT

 

  Name

 

  

Cash Amount

 

  

Total Payout % of Target

 

 

Gerard H. Sweeney

 

   $1,950,000        130%

 

Thomas E. Wirth

 

   $591,500        130%

 

H. Jeffrey DeVuono

 

   $540,000        130%

 

George D. Johnstone

 

   $487,500        130%

 

William D. Redd

 

   $494,000        130%

Equity-Based Long-Term Incentive Compensation

Consistent with our compensation objectives, our equity-based long-term incentive program is designed to assist us in attracting and retaining high quality executives, while tying a significant portion of compensation to our financial performance, principally in the case of this program to our total shareholder return. For the awards made in February 2021 and consistent with prior year practice, the Compensation Committee, after consultation with Pay Governance, determined target long-term incentive award values for each executive officer as set forth below:

 

 

Name

 

  

 

2021 TARGET LTI AWARD AS A % OF BASE SALARY

 

     

 

  Gerard H. Sweeney

 

   450%   

 

  Thomas E. Wirth

 

   240%   

 

  H. Jeffrey DeVuono

 

   200%   

 

  George D. Johnstone

 

   200%   

 

  William D. Redd

 

   200%   

2021 Long-Term Incentive Plan Design

Consistent with prior years, equity-based awards for executive officers in 2021 are intended to address both the long-term performance and retention objectives of our equity compensation philosophy, delivered as follows:

 

LOGO

Equity-based long-term incentive awards are delivered as a mix of two-thirds performance share units (“PSUs”) and one-third time-vesting restricted share rights

 

LOGO

PSUs which may be earned based on our three-year total shareholder return relative to the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index. If the Company’s total shareholder return during the measurement period is negative, the maximum number of PSUs that may be earned notwithstanding relative to total shareholder return achievement above the target level is limited to 100% of the target level

 

LOGO

Restricted share rights generally vest in equal proportions over three years subject to continued employment with the Company; which the Committee believes enhances executive officer retention. Dividends are paid on restricted shares over the vesting period.

 

LOGO

The 2021 restricted shares rights also include an outperformance modifier attached that can increase the original award up to 200% based on Brandywine’s achievement of superior results for two performance measures during the three-year period ending December 31, 2023.

 

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LOGO

Awards are subject to accelerated vesting or settlement upon death, disability, involuntary termination or qualifying retirement, as further described below under “Vesting and Forfeiture Provisions”

2021 Restricted Share Rights Outperformance Modifier

The restricted shares right awards include an outperformance modifier that can increase the original award up to 200% based on Brandywine’s achievement of superior results for average funds from operations (FFO) growth and aggregate investment activity, weighted equally, during the three-year period ending December 31, 2023. These goals are intentionally ambitious and their achievement was not considered probable on the date of grant.

Half of any additional shares earned under this outperformance feature will vest based on continued service through each of January 1, 2024 and January 1, 2025, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement. In the case of death, disability or qualifying retirement prior to December 31, 2023, the opportunity to earn additional shares under the outperformance feature will remain in effect, but the number of additional shares earned at the conclusion of the performance period (if any) will be pro-rated to reflect the fraction of the performance period actually worked.

Dividend equivalents on any additional shares earned under the outperformance feature will be credited in cash, but only with respect to dividends paid following the end of the applicable performance period and will be subject to the same vesting and payment terms as the shares to which they relate.

2021-2023 Performance Share Unit Award Terms

Our PSUs may be earned based on the percentile rank of our three-year total shareholder return relative to the other members of the FTSE NAREIT Equity Office Index. The payout scale for the 2021-2023 performance period is presented below and is unchanged from the 2020-2022 program:

 

 

Percentile Rank

 

   PSU Payout %       

 

75th Percentile and above

 

   200%  

 

50th Percentile

 

   100%  

 

25th Percentile

 

   50%  

 

Below 25th Percentile

 

   0%        

For PSUs granted in 2021, dividend equivalents are credited in respect of outstanding PSUs in the form of additional PSUs, based on the fair market value of our shares on the dividend payment date, and such additional PSUs are subject to the same performance vesting criteria as the original PSUs.

Vesting and Forfeiture Provisions

Equity awards that remain unvested upon the holder’s termination of employment with us will vest or be forfeited depending on the reason for the termination. The table below, as supplemented by the notes to the table, summarizes these provisions:

 

 

Reason for Termination

 

 

 

Effect on Awards

 

Voluntary Termination by Executive not
eligible for Qualifying Retirement (1)

 

  Forfeit

 

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Change in Control  

Early measurement for outperformance component of restricted common share awards (“outperformance shares”), with earned outperformance shares remaining subject to time vesting requirements

 

Early measurement and payout for PSUs

 

Restricted common shares (including any earned but unvested outperformance shares) vest and shares are delivered if an involuntary termination occurs within one year

Death or Disability  

Performance period for outperformance shares remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served)

 

Early measurement and payout for PSUs

 

Restricted common shares vest and shares are delivered (including any previously earned but unvested outperformance shares)

Qualifying Retirement (1)  

Performance period for outperformance shares remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served)

 

Early measurement and payout for PSUs (pro-rated based on the portion of the performance period actually served

 

Shares underlying restricted common shares are delivered (including any previously earned but undelivered outperformance shares)

 

(1)

Qualifying Retirement means an executive’s voluntary termination of employment after reaching age 57 and accumulating at least 15 years of service with us. Three of our current named executive officers, Mr. Sweeney, Mr. Johnstone and Mr. Redd, have met conditions to elect a qualifying retirement as of the date of this proxy statement. The remaining named executive officers become retirement eligible as of the following dates: Mr. Wirth in December 2024 and Mr. DeVuono in July 2022.

 

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2019-2021 Performance Share Unit Award Outcomes

For the 2019-2021 period, our 18.9% total shareholder return ranked at the 70th percentile of the FTSE NAREIT Equity Office Index (excluding us), resulting in a payout of 2019-2021 PSUs at 180% of target. This resulted in the named executive officers earning the number of units shown below:

 

Name  

 

Performance Units Earned (#)

 

    

Gerard H. Sweeney

  159,861  

Thomas E. Wirth

 

 

61,976

 

 

H. Jeffrey DeVuono

  40,333  

George D. Johnstone

 

 

32,495

 

 

William D. Redd

  36,892  

2019-2021 Outperformance Modifier Outcomes

The 2019 restricted shares right awards included an outperformance modifier that could have increased the original award up to 200% based on Brandywine’s achievement of superior results for average same store cash NOI growth and development activity, weighted equally, during the three-year period ending December 31, 2021. These goals were intentionally ambitious and their achievement was not considered probable on the date of grant. As of the end of the applicable period, the outperformance goals were not achieved at levels sufficient to activate the outperformance modifier and therefore there was no increase in the shares deliverable under the 2019 restricted share rights awards.

Deferred Compensation Plan

We maintain a deferred compensation plan that enables our executives to defer a portion of their base salaries, annual incentive awards and equity awards. The amounts deferred are not included in the executive’s current taxable income and, therefore, are not currently deductible by us. The executives select from a limited number of mutual funds and investment alternatives which serve as measurement funds, and the deferred amounts are increased or decreased to correspond to the market value of the selected investments. We generally do not provide any matching contribution to any executive officer who participates in this plan, other than a limited amount to make up for any loss of matching contributions under our Section 401(k) plan due to Internal Revenue Code limits. However, an executive who defers more than 25% of his or her annual incentive award into the Company Share Fund under the deferred compensation plan will receive a 15% matching contribution on the excess amount, which matching contribution will itself be invested in the Company Share Fund. We maintain this plan to help ensure that our benefits are competitive. See “Compensation Tables and Related Information - Nonqualified Deferred Compensation.”

Other Benefits

Our executives participate in company-sponsored benefit programs available generally to all our salaried employees, including our shareholder-approved non-qualified employee share purchase plan and our Section 401(k) plan. For 2021, our 401(k) plan provided a company matching contribution of 30% of the first 6% of eligible compensation contributed to the plan, up to a maximum company matching contribution of $5,220. Other benefits, such as health and dental plans, group term life insurance and short- and long-term disability insurance, are also available generally to all our salaried employees.

 

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Perquisites

We do not provide perquisites to our executive officers.

Post-Termination Benefits; Qualifying Retirement

We provide post-employment benefits to our executive officers that vary based on the executive and the circumstances of the executive’s termination. See “Employment and Other Agreements” and “Potential Payments upon Termination of Employment or Change-in-Control.”

We have “change of control” severance agreements with our executive officers which condition (other than with respect to our President and Chief Executive Officer) the executive’s entitlement to severance following a change of control upon a so-called “double trigger.” Under a double-trigger, the executive is entitled to severance only if, within a specified period following the change of control, the terms of his or her employment are adversely changed or he or she is terminated without cause, except for our President and Chief Executive Officer, who would be entitled to severance if he were to resign within six months following the change of control or his employment were terminated without cause. Our Compensation Committee believes that the severance protection that we provide is important in enabling us to attract and retain high quality executives and that it is in our best interest to have agreements with our senior executives that maintain their focus on, and commitment to, us notwithstanding a potential merger or other change of control transaction.

V. Key 2022 Executive Compensation Actions

Key 2022 Executive Compensation Actions

 

LOGO

The number of shares subject to PSU awards (at target) and restricted share rights granted to each NEO as part of our 2022 long-term incentive compensation program are summarized below:

 

Name

 

 

 

PSUs (at target)

(#)

 

 

 

Restricted Share Right Awards

(#)

 

Gerard H. Sweeney

 

 

180,505

 

 

90,253

 

Thomas E. Wirth

 

 

58,790

 

 

29,395

 

H. Jeffrey DeVuono

 

 

47,262

 

 

23,631

 

George D. Johnstone

 

 

42,690

 

 

21,345

 

William D. Redd

 

44,124

 

 

22,062

 

 

LOGO

The restricted shares right awards again include an outperformance modifier that can increase the number of shares payable under the award by up to 200% based on Brandywine’s achievement of superior results for two performance measures during the three-year period ending December 31, 2024. For 2022 awards, half of the outperformance feature is again based on average FFO growth and half is again based on aggregate investment activity. The outperformance goals are intentionally ambitious and their achievement was not considered probable on the date of grant.

 

LOGO

Our PSU award design was modified to remove dividend equivalent rights.

 

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LOGO

The following table reflects the increases in our named executive officers’ base salaries approved by the Compensation Committee for 2022:

 

Name

 

  

 

2021 Base Salary

 

  

 

2022 Base Salary

 

  

 

% Increase

 

Gerard H. Sweeney

 

  

$750,000

 

  

$800,000

 

  

6.7%

 

Thomas E. Wirth

 

  

$455,000

 

  

$469,000

 

  

3.1%

 

H. Jeffrey DeVuono

 

  

$415,000

 

  

$428,450

 

  

3.2%

 

George D. Johnstone

 

  

$375,000

 

  

$387,000

 

  

3.2%

 

William D. Redd

 

  

$380,000

 

  

$400,000

 

  

5.3%

 

 

LOGO

All of our named executive officers’ target bonus opportunities, as a percentage of their base salaries, are unchanged for 2022.

 

LOGO

Each of Mr. Johnstone and Mr. Redd entered into a restated Change of Control agreement with us that increases his severance benefits in the event of an involuntary termination following a change of control from 1.75x to 2.0x the sum of (1) the executive’s base salary, and (2) the greater of (i) the annual bonus most recently paid to the executive prior to the change of control, or (ii)  the executive’s target bonus for the year of the change of control.

VI. Additional Executive Compensation Policies and Practices

Timing of Equity and Other Awards

We do not have any process or practice to time the grant of equity awards in coordination with our release of earnings or other material non-public information. Historically, our Compensation Committee has approved annual incentive awards and equity-based long-term incentive awards after the completion of each fiscal year, following review of pertinent fiscal year information and industry data. The date on which the Committee has met has varied from year to year, primarily based on the schedules of Committee members and the timing of compilation of data requested by the Committee. We do not time the release of material information to affect the value of executive compensation.

Compensation Recovery; Clawback Agreements

We have entered into “clawback” agreements with each of our executive officers that provide that in the event of an accounting restatement due to material non-compliance with federal securities laws, and without regard to misconduct, we have the right to recover incentive-based compensation that was computed on the basis of erroneous data during the three-year period preceding the accounting restatement and that exceeded what should have been paid on the basis of the corrected data.

Share Ownership Requirements

We maintain minimum share ownership requirements for our executives. We include these requirements in our Corporate Governance Principles. Our executive officers are required to own, within five years of their appointment as an executive officer, the lesser of (x) 75% of the number of common shares or share equivalents awarded to such executive officer for no consideration (other than such officer’s services) under an equity compensation program during the sixty-month period that precedes the testing date, less shares withheld for taxes and (y) common shares or share equivalents that have a market value (based on the average of the closing common share prices as reported on the New York Stock

 

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Exchange for the twelve-month period ending on June 30 of the calendar year that precedes the date of computation) at least equal to a multiple of the officers base salary. In the case of our President and Chief Executive Officer, the multiple is six, and in the case of our other executive officers, the multiple is four. Each of our executive officers is in compliance with the share ownership requirements. If an officer were not to meet the requirements, the officer would be restricted from selling any common shares (or share equivalents) that have been or are thereafter awarded to him or her under any of our equity compensation programs until such officer met the requirements, except as required by law or upon the approval of the Board or the Compensation Committee or (except as to himself) the President and Chief Executive Officer.

Hedging Prohibition

Our executives and Trustees are prohibited from hedging their ownership or offsetting any decline in the market value of our shares, including by trading in publicly-traded options, puts, calls or other derivative instruments related to our shares.

Pledges and Transactions in Shares

Our executives and Trustees are prohibited from pledging our shares as collateral for loans.

Compensation and Risks

Our Compensation Committee believes that the risks material to our business are those that derive from broad-based economic trends and specific trends related to the types of real estate we own and operate in our relevant markets. We do not believe that these risks are materially affected by, or materially arise from, our compensation policies and practices. We believe that our compensation policies and practices support achievement of competitive performance without unnecessary and excessive risk taking. Our annual incentive awards and equity-based long-term incentive awards are based on a variety of indicators of performance, thus diversifying the risk associated with any single indicator of performance. In addition, our share ownership requirements encourage our executives to focus on sustained share price appreciation rather than short-term results. Furthermore, compliance and ethical behavior are integral factors considered in all performance assessments.

Accounting Considerations

Prior to implementation of a compensation program and awards under the program, we evaluate the cost of the program and awards in light of our current budget and anticipated budget. We also review the design of compensation programs to assure that the recognition of expense for financial reporting purposes is consistent with our financial modeling.

Tax Considerations

Prior to implementation of a compensation program and awards under the program, we evaluate the federal income tax consequences, both to us and to our executives, of the program and awards. Before approving a program, our Compensation Committee receives an explanation from our outside professionals as to the expected tax treatment of the program and awards under the program.

 

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Consideration of Prior Year Compensation

The primary focus of our Compensation Committee in setting executive compensation is the executive’s current level of compensation, including recent awards of long-term incentives, in the context of current levels of compensation for similarly situated executives at peer companies, taking into account the executive’s performance and our corporate performance. The Committee has not adopted a formulaic approach for considering amounts realized by an executive from prior equity-based awards.

Compensation Committee Report

The Committee has reviewed and discussed the Compensation Discussion and Analysis with our management, which has the responsibility for preparing the Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our proxy statement for our 2022 annual meeting of shareholders.

Submitted by:

James C. Diggs (Chair)

Michael J. Joyce

Charles P. Pizzi

 

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Compensation Tables and Related Information

The following tables and footnotes set forth information, for the three most recent fiscal years, concerning compensation awarded to, earned by or paid to: (i) our President and Chief Executive Officer, (ii) our Executive Vice President and Chief Financial Officer and (iii) each of our three other most highly compensated executive officers in 2021 who were serving as executive officers at December 31, 2021 (our “named executive officers”).

Summary Compensation Table

 

  Current Executive
  Name and
  Principal Position

 

  

Year    

 

    

Salary

(1)

 

    

Share Awards

(2)

 

    

Non-Equity

Incentive Plan

Compensation

(3)

 

    

All Other

Compensation

(4)

 

    

Total

 

 

 

Gerard H. Sweeney
President and Chief
Executive Officer

 

  

 

 

 

 

2021    

 

 

 

 

     $750,000        $3,375,006        $1,950,000        $14,038(5)        $6,089,044  
  

 

 

 

 

2020    

 

 

 

 

     $750,000        $3,187,497        $1,350,000        $13,948        $5,301,445  
  

 

 

 

 

2019    

 

 

 

 

     $750,000        $2,867,485        $1,650,000        $67,701        $5,335,186  

 

Thomas E. Wirth

Executive Vice
President, Chief
Financial Officer

 

  

 

 

 

 

2021    

 

 

 

 

     $455,000        $1,091,998        $591,500        $5,220(6)        $2,143,718  
  

 

 

 

 

2020    

 

 

 

 

     $454,167        $1,023,738        $409,500        $5,130        $1,892,535  
  

 

 

 

 

2019    

 

 

 

 

     $445,833        $1,007,264        $495,000        $5,040        $1,953,137  

 

H. Jeffrey DeVuono
Executive Vice President and Regional Managing Director

 

  

 

 

 

 

2021    

 

 

 

 

     $415,000        $829,993        $540,000        $5,220(6)        $1,790,213  
  

 

 

 

 

2020    

 

 

 

 

     $414,167        $726,251        $373,500        $5,130        $1,519,048  
  

 

 

 

 

2019    

 

 

 

 

     $408,333        $657,994        $451,000        $5,040        $1,522,367  

 

George D. Johnstone
Executive Vice
President, Operations

 

  

 

 

 

 

2021    

 

 

 

 

     $375,000        $750,003        $487,500        $5,220(6)        $1,617,723  
  

 

 

 

 

2020    

 

 

 

 

     $379,167        $664,995        $337,500        $5,130        $1,386,792  
  

 

 

 

 

2019    

 

 

 

 

     $365,625        $530,940        $403,000        $5,040        $1,304,605  

 

William D. Redd
Executive Vice
President and Senior

Managing Director

 

  

 

 

 

 

2021    

 

 

 

 

     $380,000        $760,003        $494,000        $5,220(6)        $1,639,223  
  

 

2020    

 

     $373,667      $562,504      $323,000      $5,130      $1,264,301  
  

 

2019    

 

     $370,167      $606,116      $412,000      $5,040      $1,393,323  

 

(1)

Executives are eligible to defer a portion of their salaries under our Nonqualified Deferred Compensation Plan. The amounts shown in this column have not been reduced by any deferrals under the Nonqualified Deferred Compensation Plan. Amounts deferred in 2021 are shown in the Nonqualified Deferred Compensation table below.

 

(2)

This column represents the grant date fair value of Share Awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. Share Awards consist of (i) restricted common share rights and (ii) awards of performance units. The grant date fair value of each restricted common share right awarded on March 4, 2021 was equal to the closing price on New York Stock Exchange on the award date ($12.66). The grant date fair value for the performance units awarded on March 4, 2021 was $16.77 and was determined using a Monte Carlo simulation probabilistic valuation model. We assumed volatility of 34.4%, which was calculated based on the volatility of our share price over the preceding six years, using weekly share price observations (average peer volatility over the same period was 33.3%).

 

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  Our actual total shareholder return from the beginning of the performance period through the grant date was 10.8%, which was calculated using a 30-day average share price as the beginning share price and the share price on the grant date as the ending share price (average shareholder return for the index for the same period was 6.8%). The amounts listed in this column include the following amounts for performance units awarded in 2021: for Mr. Sweeney, $2,250,115; for Mr. Wirth, $728,036; for Mr. DeVuono, $553,360; for Mr. Johnstone, $500,031; and for Mr. Redd, $506,689. Per SEC rules, the values of these units are reported in this column based on their probable outcomes at the grant date. However, the terms of the units permit additional shares to be earned based on performance. The grant date value of the maximum number of common shares that may be earned under the units was $4,500,230 for Mr. Sweeney, $1,456,072 for Mr. Wirth, $1,106,719 for Mr. DeVuono, $1,000,062 for Mr. Johnstone, and $1,013,378 for Mr. Redd. Similarly, the amounts listed in this column also include the following amounts in respect of restricted common share rights awarded in 2021 that include an outperformance modifier which could increase the number of shares issuable under the award: for Mr. Sweeney, $1,124,892; for Mr. Wirth, $363,962; for Mr. DeVuono, $276,634; for Mr. Johnstone, $249,972; and for Mr. Redd, $253,314. Per SEC rules, the values of these restricted common share rights are reported based on their grant date fair values, which reflect that the achievement of the outperformance goals was not considered probable on the grant date. The grant date value of the maximum number of common shares that may be earned under these awards was $3,374,675 for Mr. Sweeney, $1,091,887 for Mr. Wirth, $829,901 for Mr. DeVuono, $749,915 for Mr. Johnstone, and $759,942 for Mr. Redd.

 

(3)

These amounts reflect annual incentives actually earned in cash. Executives are eligible to defer a portion of the amounts earned into our Deferred Compensation Plan.

 

(4)

Amounts in this column do not include dividends paid on unvested restricted common shares rights because the dollar value of dividends has been factored into the grant date fair value of the rights.

 

(5)

Represents for 2021 (i) $5,220 in employer matching and profit sharing contributions to our 401(k) retirement and profit sharing plan; and (ii) $8,818 from participation in the Employee Share Purchase Plan.

 

(6)

Represents for 2021 $5,220 in employer matching and profit sharing contributions to our 401(k) retirement and profit sharing plan.

 

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Grants of Plan-Based Awards

 

 Current

 Executive

 Name

 

Grant

Type

  

Grant

Date

  

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards ($) (1)

    

Estimated Possible Payouts

Under Equity Incentive

Plan Awards (#) (2)

    

All Other

Share

Awards:

Number of

Shares (#)

    

Grant Date

Fair Value

of Share

and Option

Awards (3)

 
   Threshold      Target      Maximum      Threshold      Target      Maximum  

Gerard H. Sweeney

  Annual Incentive    n/a      $1,275,000        $1,500,000        $2,625,000                                               
  Performance Units    3/4/2021                                 67,088        134,175        268,350                 $2,250,115  
  Restricted Common Share Rights(4)(5)    3/4/2021                                                            88,854        $1,124,892  

Thomas E. Wirth

  Annual Incentive    n/a      $386,750        $455,000        $796,250                                               
  Performance Units    3/4/2021                                 21,707        43,413        86,826                 $728,036  
  Restricted Common Share Rights(4)(5)    3/4/2021                                                            28,749        $363,962  

H. Jeffrey DeVuono

  Annual Incentive    n/a      $352,750        $415,000        $726,250                                               
  Performance Units    3/4/2021                                 16,499        32,997        65,994                 $553,360  
  Restricted Common Share Rights(4)(5)    3/4/2021                                                            21,851        $276,634  

George D. Johnstone

  Annual Incentive    n/a      $318,750        $375,000        $656,250                                               
  Performance Units    3/4/2021                                 14,909        29,817        59,634                 $500,031  
  Restricted Common Share Rights(4)(5)    3/4/2021                                                            19,745        $249,972  

William D. Redd

  Annual Incentive    n/a      $323,000        $380,000        $665,000                                               
  Performance Units    3/4/2021                                 15,107        30,214        60,428                 $506,689  
  Restricted Common Share Rights(4)(5)    3/4/2021                                                            20,009        $253,314  

 

(1)

The “Threshold” column represents the amount payable when threshold performance is met. The “Target” column represents the amount payable if the specified performance targets are reached. The “Maximum” column represents the maximum payment opportunity. See “Compensation Discussion and Analysis - Discussion - Annual Incentive Awards.”

 

(2)

All equity and equity-based awards were made under our Amended and Restated 1997 Long-Term Incentive Plan. The numbers shown under Estimated Future Payouts Under Equity Incentive Plan Awards represent the number of shares potentially issuable under performance unit awards, not including performance units resulting from the deemed reinvestment of amounts equal to future dividends paid on an equivalent number of common shares. See “Compensation Discussion and Analysis - Equity-Based Long-Term Incentive Compensation - Performance Units” for a description of, and a discussion of the objectives of, the performance units.

 

(3)

The amounts shown in this column represent the grant date fair value of awards on the date of grant, computed in accordance with FASB ASC Topic 718.

 

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(4)

Consists of restricted common share rights that vest in three equal installments on each of April 15, 2022, April 15, 2023 and April 15, 2024. Vesting of restricted common share rights would accelerate if the recipient of the award were to die, become disabled or experience a “qualifying employment termination.” A “qualifying employment termination” would occur only if, prior to the first anniversary of the change of control, the executive were terminated without cause or the executive resigned for “good reason” on account of an adverse change in the executive’s compensation, position or responsibilities. Upon eligibility for qualifying retirement (i.e., attainment of age 57 with at least 15 years of service), a grantee is fully vested in these restricted common share rights, but the issuance of shares will not occur until the otherwise applicable vesting date (or, if sooner, the grantee’s separation from service).

 

(5)

These restricted common share rights also include an outperformance modifier attached that could increase the original award up to 200% based on Brandywine’s achievement of superior results for same-store net operating income growth and aggregate investment activity, weighted equally, during the three-year period ending December 31, 2023. See “Compensation Discussion and Analysis - Equity-Based Long-Term Incentive Compensation - 2021 Restricted Share Rights Outperformance Modifier” for description of this outperformance feature.

Outstanding Equity Awards at Fiscal Year-End

The following table summarizes information regarding outstanding equity awards held by our named executive officers as of December 31, 2021. In accordance with SEC rules, the market values shown in the table below are based on the closing price of our common shares on December 31, 2021 ($13.42).

 

    

 

 

 

 

OPTION AWARDS

 

  

 

 

 

 

SHARE AWARDS

 

 

 

 

Current

Executive

Name

  

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

    

Number of    

Securities    

Underlying    

Unexercised    

Options (#)    

Unexercisable    

  

Option

Exercise

Price ($)

    

Option  

Expiration  
Date  

  

Number of

Shares That

Have Not

Vested (#)

(1)(2)

    

Market Value

of Shares

That Have

Not Vested

($)

    

Equity Incentive

Plan Awards:

Number of

Unearned Shares,

Units or Other

Rights That Have

Not Vested (#)(3)

    

Equity Incentive

Plan Awards:

Market or Payout

Value of Unearned

Shares, Units or Other

Rights That Have

Not Vested ($) (3)

 
Gerard H. Sweeney   

 

 

 

 

13,333

 

 

 

 

   0          $6.21      (4)         0 (5)        $0 (5)        601,100        8,066,755  
  

 

 

 

 

33,333

 

 

 

 

   0          $14.31      (4)   
  

 

 

 

 

0

 

 

 

 

   0          $0       
Thomas E. Wirth   

 

 

 

 

0

 

 

 

 

   0          $0                50,926        $683,427        193,802        2,600,823  
H. Jeffrey DeVuono   

 

 

 

 

0

 

 

 

 

   0                           37,193        $499,130        142,612        1,913,846  
George D. Johnstone   

 

 

 

 

0

 

 

 

 

   0          $0             0 (5)        $0 (5)        120,387        1,615,594  
William D. Redd      0      0                        0 (5)        $0 (5)        130,584        1,752,437  

 

(1)

The unvested shares shown in this column vest in the following amounts and on the following dates, based on the continued service of the grantee:

 

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  Current Executive Name    Number of Unvested Shares    Vesting Date

Gerard H. Sweeney

   0     

Thomas E. Wirth

   24,001    4/15/22                        
   17,342    4/15/23                        
     9,583    4/15/24                        

H. Jeffrey DeVuono

   17,122    4/15/22                        
   12,788    4/15/23                        
     7,283    4/15/24                        

George D. Johnstone

   0     

William D. Redd

   0     

 

(2)

The vesting of these awards will accelerate if the grantee dies, becomes disabled or experiences a qualifying employment termination (as defined above in footnote 4 of the Grant of Plan-Based Awards table).

 

(3)

Represents hypothetical payout value, if any, under performance units and the outperformance feature of restricted common share rights awarded on March 4, 2021 and March 5, 2020. For a discussion of the relevant terms of these awards, see “Compensation Discussion and Analysis - Equity-Based Long-Term Incentive Compensation.” In accordance with SEC rules, we have shown the number and value of these awards based on actual performance through December 31, 2021, rounded up to the next performance interval. This results in the following assumptions: for 2021-2023 performance units, maximum performance assumed; for 2020-2022 performance units, maximum performance assumed; for the outperformance feature of 2021 restricted share right awards, threshold performance assumed; and for the outperformance feature of 2020 restricted share rights awards, threshold performance assumed. The actual number and value of common shares, if any, that we will issue in respect of these awards will depend on actual performance through the end of the applicable performance period. The individual award amounts (based on the performance assumptions stated above) and vesting dates are summarized below:

 

Executive Name    Award    Number of Unearned Shares    Vesting Date

Gerard H. Sweeney

   2020-2022 PSU    252,088    12/31/22
   2021-2023 PSU    268,350    12/31/23
   2020 Outperformance    36,235    50% on 1/1/23; 50% on 1/1/24
   2021 Outperformance    44,427    50% on 1/1/24; 50% on 1/1/25

Thomas E. Wirth

   2020-2022 PSU    80,964    12/31/22
   2021-2023 PSU    86,826    12/31/23
   2020 Outperformance    11,638    50% on 1/1/23; 50% on 1/1/24
   2021 Outperformance    14,375    50% on 1/1/24; 50% on 1/1/25

H. Jeffrey DeVuono

   2020-2022 PSU    57,436    12/31/22
   2021-2023 PSU    65,994    12/31/23
   2020 Outperformance    8,256    50% on 1/1/23; 50% on 1/1/24
   2021 Outperformance    10,926    50% on 1/1/24; 50% on 1/1/25

George D. Johnstone

   2020-2022 PSU    44,486    12/31/22
   2021-2023 PSU    59,634    12/31/23
   2020 Outperformance    6,395    50% on 1/1/23; 50% on 1/1/24
   2021 Outperformance    9,873    50% on 1/1/24; 50% on 1/1/25

 

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William D. Redd

   2020-2022 PSU    52,592    12/31/22
   2021-2023 PSU    60,428    12/31/23
   2020 Outperformance    7,560    50% on 1/1/23; 50% on 1/1/24
   2021 Outperformance    10,005    50% on 1/1/24; 50% on 1/1/25

To receive any shares earned under the PSUs, a grantee must generally remain employed by us through the end of the applicable performance period. Similarly, receipt of 50% of any shares earned under the outperformance feature of restricted share right awards is generally conditioned on employment until the day after the end of the applicable performance period, and receipt of the remaining 50% is generally conditioned on employment until one year later. However, see below under the heading “Equity Award Agreements” for certain termination scenarios where these vesting conditions may be waived (such as in connection with a death, disability or qualifying retirement).

 

(4)

These options have an expiration date tied to Mr. Sweeney’s employment with us.

 

(5)

Excludes shares subject to outstanding restricted common share rights that are non-forfeitable because Mr. Sweeney, Mr. Johnstone and Mr. Redd are eligible for qualifying retirement.

Option Exercises and Shares Vested

 

     OPTION AWARDS   SHARE AWARDS
       

Current Executive Name

 

 

Number of Shares    

Acquired on Exercise (#)    

 

 

Value Realized    

on Exercise    

($)    

 

 

Number of Shares    

Acquired on Vesting    

(#)    

 

 

Value Realized on    
Vesting    

($) (1)    

 

Gerard H. Sweeney

 

 

181,291        

 

  $119,652       262,488 (2)       $3,450,790 (2)    

Thomas E. Wirth

 

 

25,745        

 

  $16,992       96,299       $1,281,692    

H. Jeffrey DeVuono

 

 

0        

 

  $0       64,192       $854,060    

George D. Johnstone

 

 

27,665        

 

  $18,259       53,377 (2)       $700,961 (2)    

William D. Redd

 

 

 

0        

 

  $0       58,298 (2)       $766,719 (2)    

 

(1)

Reflects the number of restricted common shares (or share equivalents) that vested in 2021 multiplied by the closing market price of the common shares on the vesting date ($13.11 on April 15, 2021, except as indicated in footnote 2 below for a portion of the shares held by Mr. Sweeney, Mr. Johnstone and Mr. Redd) plus the number of common shares issued in settlement on 2019 Performance Units multiplied by the closing market price of the common shares on December 31, 2021 ($13.42).

 

(2)

In the case of Mr. Sweeney, the number and value of shares acquired upon vesting includes 88,854 restricted common share rights granted to him on March 4, 2021, in the case of Mr. Johnstone, the number and value of shares acquired upon vesting includes 19,745 restricted common share rights granted to him on March 4, 2021, and in the case of Mr. Redd, the number and value of shares acquired upon vesting includes 20,009 restricted common share rights granted to him on March 4, 2021. The closing market price of the common shares on March 4, 2021 was $12.66 per share. The restricted common share rights granted on March 4, 2021 to Mr. Sweeney, Mr. Johnstone and Mr. Redd are included in this table because the awards are non-forfeitable due to these executives’ eligibility for qualifying retirement. However, the shares subject to these awards will generally not be delivered until the earlier of (i) the executive’s separation from service, or (ii) the otherwise applicable vesting dates of April 15, 2022, April 15, 2023 and April 15, 2024.

 

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Nonqualified Deferred Compensation

 

           

  Current Executive Name

 

 

Executive

  Contributions in

Last FY ($) (1)

 

   

Registrant

  Contributions

in Last FY ($)

 

   

Aggregate
Earnings in

  Last FY ($)

 

   

Aggregate

Withdrawals/

  Distributions ($)

 

   

Aggregate
Balance at
  Last FYE ($) (2)

 

 
         

  Gerard H. Sweeney

    -       -       $1,512,735       $(767,023     $12,583,649  
         

  Thomas E. Wirth

    $110,465       -       $190,111       -       $2,127,309  
         

  H. Jeffrey DeVuono

    $159,326       -       $265,671       -       $4,097,535  
         

  George D. Johnstone

    $173,642       -       $177,657       -       $1,715,054  
         

  William D. Redd

    -       -       $122,292       -       $1,038,774  

 

(1)

The amounts shown reflect 2018, 2019 or 2020 equity awards deferred into our Nonqualified Deferred Compensation Plan in 2021. None of these amounts are also reported in the Summary Compensation Table for 2021.

 

(2)

All amounts shown in this column have been reported (either as salary, bonus, share awards or non-equity incentive plan compensation) in the Summary Compensation Table of our proxy statements for the current year or prior years (or would have been reported, had the executive been a named executive officer in the applicable year), other than the portion that represents earnings on the amounts deferred. As noted in the narrative below, earnings are credited on the amounts deferred based on the actual performance of notional investments in specified securities. No above-market or guaranteed rates are credited.

Our Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) affords participating executives and Trustees the ability to defer a portion of their base salary, bonus and annual incentive award (or, in the case of our Trustees, annual retainer and Board fees) on a tax-deferred basis. In addition, participants may elect to defer the receipt of equity grants under our long-term incentive plans. If a participant’s matching contributions under our 401(k) plan are limited due to participation in the Deferred Compensation Plan or due to limitations on matching contributions imposed by the Internal Revenue Code, we make a matching contribution for the participant under the deferred compensation plan to the extent the participant has deferred an amount under the Deferred Compensation Plan at least equal to the amount that would have been required if the matching contribution had been made under our 401(k) plan. We have the right, but not the obligation, to make matching contributions for executives on deferred amounts (and/or to make a discretionary profit sharing contribution for executives) covering compensation in excess of $290,000 (for 2021) because the 401(k) plan rules will not permit such matching contributions due to the IRS annual compensation limitation. Participants elect the timing and form of distribution. Distributions are payable in a lump sum or installments and may commence in-service, after a required minimum deferral period, or upon retirement. Except as otherwise noted in the next paragraph, participants elect the manner in which their accounts are deemed invested during the deferral period.

Because the Deferred Compensation Plan is a “nonqualified” deferred compensation plan, we are not obligated to invest deferred amounts in the selected manner or to set aside any deferred amounts in trust. One of the deemed investment options is a hypothetical investment fund (the “Common Share Fund”) consisting of our common shares. Effective for compensation deferred after 2006, all deferrals that are invested in the Company Share Fund will continue to be invested in the Company Share Fund until distribution and will not be eligible to be transferred into other investment funds. An executive who defers more than 25% of his or her annual bonus or annual incentive award into the Company Share Fund is entitled to 15% matching contribution on the excess amount, which matching contribution will itself be invested in the Company Share Fund. All deferred equity grants will be invested in the Company Share Fund and all distributions of benefits attributable to Company Share Fund credits will be paid in common shares.

With respect to post-2004 deferred compensation deemed invested in the Company Share Fund, dividend equivalents are subject to participants’ elections to receive the dividend equivalents in cash or to continue to defer them under the Deferred Compensation Plan. Any dividend equivalents credited to participants’ accounts in the Deferred Compensation Plan will be invested in investment funds selected by the participants other than the Company Share Fund.

 

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In general, compensation subject to a deferral election, matching contributions and profit sharing contributions are not includible in a participant’s taxable income for federal income tax purposes until the participant receives a distribution from the Deferred Compensation Plan. To the extent amounts under this plan are deductible by us, those deductions will not arise until such amounts are distributed.

Employment and Other Agreements

We have agreements with executives that provide for payments to the executives in connection with their termination of employment or upon a change of control of us. We summarize below, and in the table that follows, circumstances that would trigger payments by us, and the amounts of the payments. We discuss the rationale for these agreements above under “Compensation Discussion and Analysis - Post Termination Benefits; Qualifying Retirement,” including why we have entered into agreements with executive officers that provide for post-employment payments following a change-in-control.

Agreement with our President and Chief Executive Officer

We have a 2007 employment agreement with Gerard H. Sweeney. Mr. Sweeney’s employment agreement provides for an annual base salary of not less than $600,000 ($750,000 for 2021 and $800,000 for 2022). If Mr. Sweeney’s employment with us were not extended upon expiration of the term of his employment agreement, which currently renews annually for successive one-year periods absent advance notice of non-renewal, we would be obligated to provide him with a severance benefit during the one-year period following expiration of the term equal to the sum of his prior year salary and bonus as well as health care benefits. The employment agreement entitles Mr. Sweeney to a payment equal to 2.99 times the sum of his annual salary and annual bonus upon: (i) termination of his employment without cause, (ii) his resignation “for good reason” or (iii) his death. Resignation by Mr. Sweeney within six months following a reduction in his salary, an adverse change in his status or responsibilities, certain changes in the location of our headquarters or a change of control of us would each constitute a resignation “for good reason.” Mr. Sweeney’s employment agreement also includes a tax gross-up for excise tax payments that would be payable upon a change of control and that would put him in the same financial position after-tax that he would have been in if the excise tax did not apply to him. Mr. Sweeney’s severance and change of control benefits were determined by our Compensation Committee and are not conditioned on any non-competition or other post-employment restrictive covenants.

Change of Control Agreements with Executive Officers

In addition to our employment agreement with Mr. Sweeney, we have entered into change of control agreements with our executive officers. These agreements provide that if both (i) a change of control (a “CIC”) occurs at a time when an executive is an employee and (ii) the executive’s employment is terminated other than for cause or the executive resigns for good reason, in either case within a specified number of days (as indicated in the table below under the caption “Coverage Period”) following the CIC, then we (or our successor in the CIC transaction) will pay to the executive the product of: (x) the CIC Multiplier (as indicated in the table below under the caption “CIC Multiplier”) times (y) the sum of (1) the executive’s annual base salary in effect at the time of the CIC plus (2) the greater of (i) the annual bonus most recently paid to the executive prior to the CIC or (ii) the executive’s target bonus for the year in which the CIC occurs. In addition, if the foregoing double trigger (i.e., a CIC and a qualifying employment termination) were to occur, we would provide the applicable executive with continued medical and group term life insurance coverage during the Coverage Period.

The table below shows the Coverage Period and CIC Multiplier for the identified executive officers.

 

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  Name

 

 

Coverage Period

 

 

CIC Multiplier

 

 

  Thomas E. Wirth

 

 

 

730 days

 

 

 

2.00

 

 

  H. Jeffrey DeVuono

 

 

 

730 days

 

 

2.00

 

 

 

  George D. Johnstone

 

 

 

730 days

 

 

 

2.00*

 

 

  William D. Redd

 

 

 

730 days

 

 

 

2.00*

 

 

*

Increased from 1.75 to 2.00, effective as of February 22, 2022

Equity Award Agreements

Under the terms of our restricted common share right awards, if an executive’s employment is terminated without cause or if the executive resigns with good reason within one year following a CIC, or if an executive dies, becomes disabled or has a qualifying retirement, all otherwise unvested restricted common share rights will then vest and shares will be delivered in respect thereof.

Under the terms of our performance unit programs, in the event of a CIC, death, disability or qualifying retirement while a performance unit is outstanding, the applicable measurement period will be truncated and the performance units will then be settled based on actual performance through that time (and subject to pro-ration in the case of qualifying retirement).

Similarly, in the event of CIC during the performance period applicable to an outperformance share, the performance period will be truncated and the number of outperformance shares earned will then be determined (with such adjustments to the performance measures as the Committee then deems appropriate). Any earned outperformance shares will then remain subject to the same time vesting requirements that generally apply to outperformance shares.

In the event of a death, disability or qualifying retirement during the performance period applicable to an outperformance share, a pro-rata portion of those outperformance shares will remain outstanding and be earned (or not) based on actual performance through the end of the applicable performance period. In these cases, any earned shares will be delivered promptly following the performance determination. In the event of a death, disability or qualifying retirement following the performance period applicable to an outperformance share, any then remaining time vesting requirements will be waived.

 

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Potential Payments Upon Termination of Employment or Change-in-Control

The table below was prepared as though the triggering event listed below the name of each named executive officer occurred on December 31, 2021. Assumptions are noted in the footnotes to the table.

 

 

  Current Executive Name

 

  

 

Severance
Amount

 

    

 

Value of Unvested
Equity Awards (2)

 

    

 

Medical and
Life Insurance

 

    

 

Tax Gross-Up

 

    

 

Total

 

 

  Gerard H. Sweeney

                                            

     

  Retirement      $0        $3,029,305        $0        n/a        $3,029,305  

     

  Non-renewal of employment agreement at Company election      $2,100,000        $3,029,305        $15,361        n/a        $5,144,666  

     

  Involuntary or good reason termination
(not in connection with change in control)
     $6,279,000        $3,029,305        $46,082        n/a        $9,354,388  

     

  Death      $6,279,000        $6,645,976        $0        n/a        $12,924,976  

     

  Disability      $750,000 (1)        $6,645,976        $15,361        n/a        $7,411,337  

     

  Involuntary or good reason termination
(in connection with change in control)
     $6,279,000        $6,645,976        $46,082        $0        $12,971,058  

  Thomas E. Wirth

 

                                   

     

  Death      $0        $2,826,515        $0        n/a        $2,826,515  

     

  Disability      $0        $2,826,515        $0        n/a        $2,826,515  

     

  Involuntary or good reason termination
(in connection with change in control)
     $1,820,000        $2,826,515        $46,818        n/a        $4,693,333  

  H. Jeffrey DeVuono

                                            

     

  Death      $0        $2,078,482        $0        n/a        $2,078,482  

     

  Disability      $0        $2,078,482        $0        n/a        $2,078,482  

     

  Involuntary or good reason termination
(in connection with change in control)
     $1,660,000        $2,078,482        $48,610        n/a        $3,787,092  

  George D. Johnstone

                                            

     

  Retirement      $0        $583,045        $0        n/a        $583,045  

     

  Death      $0        $1,337,590        $0        n/a        $1,337,590  

     

  Disability      $0        $1,337,590        $0        n/a        $1,337,590  

     

  Involuntary or good reason termination
(in connection with change in control) 
(3)
     $1,312,500        $1,337,590        $46,818        n/a        $2,696,909  

  William D. Redd

                                            

     

  Retirement      $0        $649,529        $0        n/a        $649,529  

     

  Death      $0        $1,446,150        $0        n/a        $1,446,150  

     

  Disability      $0        $1,446,150    &n