TRIZEC PROPERTIES INC
EXHIBIT 10.1 EMPLOYMENT AGREEMENT
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<DESCRIPTION>EXHIBIT 10.1 EMPLOYMENT AGREEMENT
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<p align=right>Exhibit 10.1</p>

<p align=right>August 14, 2002</p>

<p>Mr. Timothy H. Callahan</p>

<p>&nbsp;</p>

<p>Dear Tim:</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It has been a pleasure becoming acquainted with you, and
I am very happy to offer you the position of President and Chief Executive
Officer of Trizec Properties, Inc. (the &quot;<i>Company</i>&quot;), subject to the terms described below, and effective
as of the approval of this letter agreement (this &quot;<i>Agreement</i>&quot;) by the board of directors of the Company (the
&quot;<i>Board</i>&quot;).&nbsp; </p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Term</u></b>.&nbsp; The term of
your employment will commence on August 14, 2002 (the &quot;<i>Effective Date</i>&quot;) (although you will
not become President and Chief Executive Officer until 12:01 AM on August 15,
2002) and will terminate on the third anniversary of the Effective Date.&nbsp; The initial three-year term, however, shall
be extended automatically without further action by the Company or you for
additional one year periods, unless written notification of non-renewal is
given by either party to the other by the second anniversary of the Effective
Date, or each successive anniversary of the Effective Date, as the case may
be.&nbsp; As used herein, the
&quot;Term&quot; means the original three-year term and any extension in effect
pursuant to the immediately preceding sentence.</p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Board
of Directors</u></b>.&nbsp; On the Effective Date you shall be appointed
as a member of the Board.</p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Compensation
and Benefits</u></b>.&nbsp; During the Term you shall receive an annual
base salary of no less than$850,000
and a discretionary bonus as determined by the Board from time to time.&nbsp; All amounts shall be payable in accordance
with the Company's regular payroll practices for its senior executives as in
effect from time to time and shall be subject to all applicable, federal, state
and local withholding taxes.&nbsp; You shall
also be eligible to participate in all incentive, retirement, welfare and other
benefit plans, programs and arrangements generally available to other senior
executive officers of the Company from time to time.&nbsp; </p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Stock
Options</u></b>.&nbsp; Effective as of the Effective Date, you will
be awarded options to purchase one million shares of the Company's common stock
pursuant to the Company's 2002 Stock Option Plan.&nbsp; Your stock options will be fully vested and exercisable on the
Effective Date and will have an exercise price equal to the fair market value
of a share of the common stock on the Effective Date, as determined in
accordance with such plan.&nbsp; The
remaining terms applicable to your stock options will be as set forth in your
stock option agreement and the 2002 Stock Option Plan.&nbsp; </p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Vacation</u></b>.&nbsp; During the
Term you shall be entitled to six weeks vacation, subject to appropriate
scheduling thereof in accordance with the Company's policy as in effect from
time to time.</p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Termination</u></b>.&nbsp; The Company
may terminate your employment at any time with or without Cause (as defined
below).&nbsp; If your employment is terminated
during the Term without Cause you shall be entitled to receive (a) any earned
but unpaid bonus for a previously completed fiscal year of the Company, (b) a
pro rata bonus for the year of termination, determined using the Reference
Bonus (as hereinafter defined) and (c) continuation of your Total Compensation
(as hereinafter defined) for a period equal to the lesser of (i) the remainder
of the Term and (ii) two years following the date of termination (the &quot;<i>Severance Period</i>&quot;).&nbsp; As used herein:&nbsp; (a) &quot;<i>Reference Bonus</i>&quot;
means, as of your date of termination (i) the average of your two then most
recently paid annual bonuses from the Company, or (ii) if only one annual bonus
has then been paid to you, such annual bonus, or (iii) if no annual bonus has
then been paid to you, the target bonus established by the Board for the year
of termination; and (b) &quot;<i>Total
Compensation</i>&quot; means an annual rate of compensation equal to the sum of
your base salary and Reference Bonus as in effect on your date of
termination.&nbsp; In addition, during the
Severance Period you shall continue to participate, on the same terms and
conditions that would have applied had your remained employed by the Company,
in all health, medical, dental and other welfare plans generally made available
to senior executives of the Company; <i>provided,
however</i>, that your benefits continuation shall cease on the date that you
become eligible to participate in the welfare programs of a subsequent
employer.&nbsp; Payment of the salary and
benefits continuation is contingent upon your executing a waiver and release of
all claims in favor of the Company and its subsidiaries and its affiliates.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event your employment is terminated for any reason
by you or the Company within one year following a Change of Control (as hereinafter
defined), you will be deemed to have been terminated by the Company without
Cause and will receive the payments and benefits described in the immediately
preceding paragraph.&nbsp; For this purpose,
&quot;Change of Control&quot; means a &quot;change in ownership or effective
control&quot; of the Company within the meaning of Section 280G of the Internal
Revenue Code, provided that no Change of Control shall be deemed to have
occurred if Peter Munk has or shares effective control over the Company.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except as set forth in this Agreement, you shall not be
entitled to any other payments or benefits upon a termination of your
employment for any reason, including, without limitation, pursuant to any other
plan, program, policy or arrangement maintained by the Company.&nbsp; In addition, if at any time you breach of
any of the provisions of this Agreement, you shall not be entitled to
continuation of your salary and welfare benefits.&nbsp; </p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For purposes of this Agreement, &quot;<i>Cause</i>&quot; shall be determined by the
Board in its sole discretion and shall based upon its good faith determination
that your conduct or circumstances of employment provide the Company with cause
for your termination.&nbsp; You will be
provided notice in writing outlining in reasonable detail the conduct or
circumstances the Board believes provides it with cause for your
termination.&nbsp; You will be provided with
an opportunity to meet with the Board or a Committee thereof not more than ten
days after the date of notice.&nbsp; Your
employment will not be terminated until you have had an opportunity to be heard
by the Board or a Committee thereof. </p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b><u>Confidentiality</u></b>.&nbsp; You
recognize that in connection with your employment, you will acquire secret and
confidential information concerning the operations of the Company and its
subsidiaries and affiliates, the use or disclosure of which could cause the
Company substantial loss and damages which could not be readily calculated, and
for which no remedy at law would be adequate.&nbsp;
Accordingly, you agree with the Company that you will not, at any time,
directly or indirectly, reveal to any person or entity any of the trade secrets
or proprietary or confidential information that you learned by reason of your
association with the Company; <i>provided,
however</i>, that this restriction shall not apply to any information that is
in the public domain through no fault by you, that is disclosed in connection
with the performance of your obligations pursuant to this Agreement or that is
approved for release by written authorization of the Board.&nbsp; </p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Nonsolicitaton</u></b>. &nbsp;For so long
as you are employed by the Company and for a period ending on the later of (i)
the last date of the Severance Period and (ii) one year following your
termination of employment for any reason, you shall not directly or indirectly
solicit business from, entice away from or otherwise interfere with the
relationship of the Company and its subsidiaries and affiliates with their
respective employees, clients and providers of material services and
products.&nbsp; You also agree that you will
not encourage any other person in carrying out any such prohibited activity.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This agreement shall be governed by the laws of the State
of New York.&nbsp; You expressly agree that
if any term or provision of this agreement is determined to be invalid or
unenforceable in a final court or arbitration proceeding, (i) the remaining
terms and provisions shall be unimpaired and (ii) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provisions that is
valid and enforceable to maximum extent permitted by law.&nbsp; </p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You may not assign any rights or benefits pursuant to
this Agreement.&nbsp; This Agreement may only
be amended by written consent of you and the Company. </p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The effectiveness of this Agreement is contingent upon
its approval by the Board.&nbsp; If you agree
with the terms set forth in this Agreement, kindly sign where indicated below
and return the letter to me.&nbsp; If you
have any further questions regarding the foregoing, please do not hesitate to
contact me.&nbsp;&nbsp;&nbsp; </p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We are very excited to have you on our team.</p>

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  <p>Sincerely,</p>
  <p><u>/s/ Peter Munk&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
  </u>Peter Munk<br>
  Chairman</p>
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&nbsp;

<p><b><u>Acknowledgement</u></b></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I agree and accept the terms and conditions of this
Agreement and I declare that all career and employment information provided by
me to the Company is true, accurate and complete.&nbsp; By signing this Agreement, I hereby acknowledge that I am not
subject to any restrictive covenants or other agreement, which would interfere
with or preclude my acceptance of this Agreement or my ability to perform my
duties to the Company.&nbsp; </p>

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  <p><u>/s/ Timothy H.
  Callahan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
  </u>Timothy H. Callahan</p>
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  <p>Date:&nbsp; August 14, 2002</p>
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