This excerpt taken from the BDN DEF 14A filed Apr 4, 2007.
Nonqualified Deferred Compensation
Our Executive Deferred Compensation Plan (the Deferred Compensation Plan) affords our participating executives and Trustees the ability to defer a portion of their base salary and bonus (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 participants matching contributions under our 401(k) plan are limited due to participation in the Deferred Compensation Plan or as a result of limitations on matching contributions imposed by the Internal Revenue Code, we make a matching contribution only to the extent the participant defers 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 reserve the right to make matching contributions for executives on deferred amounts and to make a discretionary profit sharing contribution for executives on compensation in excess of $225,000. 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. Participants elect the manner in which their accounts are deemed invested during the deferral period.
One of the deemed investment options is a hypothetical investment fund (the Common Share Fund) consisting of our common shares. 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. Effective for compensation deferred after 2006, all deferrals that are deemed invested in the Company Share Fund will continue to be deemed invested in the Company Share Fund until distribution and will not be eligible to be diversified into (i.e., transferred into) other investment funds. All deferred equity grants will be deemed invested in the Company Share Fund and all distributions of benefits attributable to Company Share Fund credits will be paid in the form of Brandywine common shares.
With respect to participants post-2004 deferred compensation credits that are deemed invested in the Company Share Fund, dividends declared and paid with respect to Brandywine common shares after 2006 will be subject to participants elections to receive them in cash or to continue to defer them under the Deferred
Compensation Plan. To the extent dividends remain credited to participants accounts in the Deferred Compensation Plan, they will be deemed invested in investment funds selected by the participant other than the Company Share Fund.
In general, compensation subject to a deferral election, matching contributions and profit sharing contributions are not includible in a participants taxable income for federal income tax purposes until the participant receives a distribution from the Deferred Compensation Plan. We are not entitled to a deduction until such amounts are distributed.