<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------------------------
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number: 0-25323
BEACON CAPITAL PARTNERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 04-3403281
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE FEDERAL STREET, 26TH FLOOR, BOSTON, MASSACHUSETTS 02110
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
Registrant's telephone number, including area code: (617) 457-0400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X ]
<PAGE>
The Registrant's Common Stock trades only in the PORTAL Market. There
is no established public trading market for the Registrant's Common Stock.
Because there is no public trading market for the Common Stock, it is not
possible to accurately estimate the aggregate market value of the Common Stock.
As of March 19, 1999, there were 20,973,932 shares of the Registrant's
Common Stock outstanding.
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Part III, Items 10, 11, 12 and 13 of the Company's Form 10-K filed with
the Securities and Exchange Commission on March 29, 1999 is hereby amended and
restated in full as follows:
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
INFORMATION REGARDING THE EXECUTIVE OFFICERS
The following table and biographical descriptions set forth certain
information with respect to our directors, as well as our executive officers who
are not directors, based on information furnished to us by the directors and the
executive officers. There is no family relationship between any director or
executive officer of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
<S> <C> <C>
Alan M. Leventhal..................... 46 Chairman of the Board of Directors and Chief Executive
Officer
Lionel P. Fortin...................... 55 President, Chief Operating Officer and Director
William A. Bonn....................... 47 Senior Vice President and General Counsel
Jeremy B. Fletcher.................... 49 Senior Vice President of BCP and Chief Executive
Beacon Capital Partners West, a division of BCP
John Halsted.......................... 34 Senior Vice President of BCP and Chief Investment
Officer of Beacon Venture Partners, Inc.
Douglas S. Mitchell................... 56 Senior Vice President--Development
Erin R. O'Boyle....................... 39 Senior Vice President and Chief Investment Officer
Randy J. Parker....................... 40 Senior Vice President and Chief Financial Officer
Thomas Ragno.......................... 37 Senior Vice President--Management and Leasing
E. Valjean Wheeler.................... 54 Senior Vice President of BCP and Chief Executive
Beacon Capital Partners Central, a division of BCP
Stephen T. Clark...................... 43 Director
Steven Shulman........................ 58 Director
Scott M. Sperling..................... 41 Director
</TABLE>
The principal occupation for the last five years of each of the
Directors and Executive Officers, as well as other related information, is set
forth below.
Class I - Term expires in 1999.
ALAN M. LEVENTHAL. Mr. Leventhal is co-founder of BCP and serves as
Chairman, a Class I Director with a term expiring in 1999, and Chief Executive
Officer. Prior to founding BCP, Mr. Leventhal served as President and Chief
Executive Officer of Beacon Properties Corporation ("Beacon Properties"), one of
the largest REITs in the United States. Beacon Properties' portfolio included
124 office properties nationwide, comprising approximately 18.8 million square
feet. Beacon Properties was merged with Equity Office Properties Trust in
December 1997. Mr. Leventhal received his Bachelor's degree in Economics from
Northwestern University in 1974 and a Master of Business Administration from the
Amos Tuck School of Business Administration at Dartmouth College in 1976. Mr.
Leventhal is a Trustee of Boston University and the New England Aquarium
Corporation and recently served as First Vice Chair of the National Association
of Real Estate Investment Trusts ("NAREIT"). He is also a member of the Visiting
Committee of Northwestern University and the Board of Overseers of WGBH, Beth
Israel Deaconess
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Medical Center, and the Museum of Science in Boston. Mr. Leventhal has
lectured at the Amos Tuck School of Business Administration at Dartmouth
College and the Massachusetts Institute of Technology Center for Real Estate.
Mr. Leventhal has been awarded the Realty Stock Review's "Outstanding CEO
Award" for 1996, 1997 and 1998 and the Commercial Property News' "Office
Property Executive of the Year" for 1996.
Class II Directors - Term to expire in 2000.
LIONEL P. FORTIN. Mr. Fortin is co-founder of BCP and serves as
President, Chief Operating Officer, and a Class II Director with a term expiring
in 2000. He served as Executive Vice President, Chief Operating Officer and a
Director of Beacon Properties. From May 1994 through February 1995, Mr. Fortin
served as Chief Financial Officer of Beacon Properties. Mr. Fortin has lectured
at the Massachusetts Institute of Technology Center for Real Estate. Mr. Fortin
graduated from Bentley College in 1968 and is a member of the American Institute
of Certified Public Accountants and the Massachusetts Society of Certified
Public Accountants.
STEPHEN T. CLARK. Mr. Clark serves as a Class II Director with a term
expiring in 2000. Since 1995, Mr. Clark has been President of Cypress Realty,
Inc., a real estate investor and developer based in Houston, Texas. Previously,
Mr. Clark served as Managing Director of Harvard Private Capital Group where he
directed the group responsible for real estate investment and management
activities. Prior to joining Harvard, Mr. Clark was a partner in Clark-Pilgrim
Limited Partnership and in Trammell Crow Company where he was in charge of
office and industrial activities in Philadelphia and Delaware. Mr. Clark has
extensive investment experience in developmental and distressed real estate
assets. He received a Masters in Business Administration degree from Harvard
Business School and received his undergraduate degree from Duke University.
Mr. Clark serves as Chairman of the Board of Abacoa Development Company.
Class III Directors - Term to expire in 2001.
STEVEN SHULMAN. Mr. Shulman serves as a Class III Director with a term
expiring in 2001. He served as a Director of Beacon Properties from 1995 to
1997. Since 1984, Mr. Shulman has been active in investment banking through his
wholly owned company, The Hampton Group, and Latona Associates, Inc. where he
serves as a Managing Director. Currently, Mr. Shulman is a shareholder and
director in a diversified group of companies, including Ermanco Incorporated,
Corinthian Directory, Terrace Holdings, Inc. and WPI Group, Inc. In addition, he
serves as Non-executive Chairman of Terrace Holdings, Inc. Mr. Shulman is a
graduate of Stevens Institute of Technology where he received a Bachelor's
degree in Mechanical Engineering and a Master's degree in Industrial Management.
Mr. Shulman serves as Vice Chairman of the Board of Stevens Institute of
Technology.
SCOTT M. SPERLING. Mr. Sperling serves as a Class III Director with a
term expiring in 2001. He served as a Director of Beacon Properties from 1994 to
1997. Mr. Sperling joined Thomas H. Lee Co., a Boston-based investment firm, as
a general partner in September 1994. Previously, Mr. Sperling served as Managing
Partner and Vice Chairman of the Aeneas Group, Inc./Harvard Management Company
from 1984 through 1994. Mr. Sperling has been the founder and/or lead investor
of numerous companies and has led the acquisition or turnaround of companies in
a wide variety of industries. He is currently a director of Livent, PriCellular
Corporation, Softkey, The Learning Company, General Chemical Group, Object
Design, Inc. and several private firms. He received a Master of Business
Administration degree from the Harvard Business School and received his
undergraduate degree from Purdue University. Mr. Sperling is a member of the
Corporation of the Brigham and Women's Hospital and a director of the American
Technion Society.
4
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EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
WILLIAM A. BONN. Mr. Bonn serves as Senior Vice President of, and
General Counsel to, the Company. Mr. Bonn served as General Counsel to Beacon
Properties prior to joining the Company. From 1987 to 1997, Mr. Bonn served as
General Counsel and Senior Vice President for Property Capital Trust, a
Boston-based REIT. From 1978 to 1987, Mr. Bonn held various positions as an
attorney with The Prudential Insurance Company of America. From 1976 to 1978,
Mr. Bonn was involved in the private practice of law in Los Angeles. Mr. Bonn
currently serves as Co-Chairman of the Government Relations Committee of NAREIT.
Mr. Bonn holds as Bachelor of Science degree from the University of California
at San Diego and a Juris Doctor degree from the University of San Diego. He is
admitted to practice law in Massachusetts, New York and California, and is a
member of the American, California and Boston Bar Associations.
JEREMY B. FLETCHER. Mr. Fletcher serves as Senior Vice President and
Chief Executive of Beacon Capital Partners West, a division of BCP. Mr. Fletcher
served as Senior Vice President and Chief Executive of Beacon Properties West
prior to joining the Company. Before joining the Company, Mr. Fletcher was a
Director of Insignia Commercial Group, Inc., Los Angeles. From 1993 to 1996, Mr.
Fletcher was with the Paragon Group, where he served as Senior Vice
President/General Partner of the Southern California/Arizona Region. Mr.
Fletcher received his Bachelor's degree in Geology from Albion College. He is a
member of the Urban Land Institute (ULI), Real Estate Investment Advisory
Council ("REIAC"), and National Association of Industrial and Office Properties
(NAIOP) and is a licensed real estate broker in the State of California.
JOHN HALSTED. Mr. Halsted serves as Senior Vice President and, upon
formation of the BCP Sister Corp., will serve as Chief Investment Officer of
Beacon Venture Partners, Inc. Prior to joining the Company, Mr. Halsted was Vice
President at Harvard Private Capital Group ("Harvard"). He joined Harvard in
1993 and was responsible for the origination and management of investments in
specialty, finance, retail and energy companies. From 1991 to 1993, Mr. Halsted
was an Associate with Simmons & Company, an investment banking firm based in
Houston, Texas. Mr. Halsted earned his Master of Business Administration from
The Harvard Business School and a degree in economics from The University of
California at Berkeley.
DOUGLAS S. MITCHELL. Mr. Mitchell serves as Senior Vice President --
Development. Mr. Mitchell served as the Senior Vice President --
Leasing/Management and Development of Beacon Properties and as President of the
Beacon Properties Management Company from 1994 until 1997. He joined the Beacon
Properties organization in 1964 and has extensive experience in leasing,
management and development. He graduated from the Wentworth Institute in 1962
and is a member of the Greater Boston Real Estate Board. Mr. Mitchell is also a
licensed real estate broker in Massachusetts and New York.
ERIN R. O'BOYLE. Ms. O'Boyle serves as Senior Vice President and Chief
Investment Officer. Prior to joining the Company, Ms. O'Boyle served as Vice
President, Acquisitions for Beacon Properties, where she was responsible for
negotiating over $1.8 billion of investment opportunities. Ms. O'Boyle joined
Beacon Properties in 1986 and has held positions in asset management and
development. Ms. O'Boyle received her Bachelor of Science in structural
engineering from the University of Delaware and her Master of Science in real
estate development from the Massachusetts Institute of Technology. Ms. O'Boyle
is the past chair of the Alumni Association for the Massachusetts Institute of
Technology Center for Real Estate, is past president of the New England Women in
Real Estate ("NEWIRE"), and currently is on the board of the Northeast chapter
of REIAC.
RANDY J. PARKER. Mr. Parker serves as Senior Vice President and Chief
Financial Officer. Before joining the Company, Mr. Parker was Vice President,
Investor Relations for Beacon Properties, where he
5
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was responsible for managing the relationships with institutional stockholders
and analysts. Prior to joining Beacon Properties, Mr. Parker was Senior Vice
President and Portfolio Manager at Aldrich Eastman & Waltch ("AEW"), where he
was responsible for the management of over $400 million of investment portfolios
on behalf of institutional clients. During his eight year tenure at AEW, Mr.
Parker also held positions in asset management and investment origination. Mr.
Parker was also previously associated with JMB/Federated Realty, where he served
as Project Manager for various retail development projects. Mr. Parker holds a
Master of Business Administration degree from the Wharton School, University of
Pennsylvania and a Bachelor of Architecture degree from the University of
Kentucky.
THOMAS RAGNO. Mr. Ragno serves as Senior Vice President--Management and
Leasing. Prior to joining the Company, Mr. Ragno served as Vice President,
Property Management of Beacon Properties where he directly supervised property
management operations in the metro-Boston region consisting of approximately 8.0
million square feet and 170 employees. Prior to that he was responsible for the
leasing of Beacon Properties' downtown office portfolio of 5 million square
feet. Mr. Ragno joined Beacon Properties in 1986 and has held various positions
in leasing and project management. Mr. Ragno holds a Master of Science degree in
Civil Engineering from the Massachusetts Institute of Technology and a Bachelor
of Science degree in Civil Engineering and Engineering & Public Policy from
Carnegie-Mellon University. He is a member of the Board of Directors of the
Greater Boston Building Owners and Managers Association (BOMA). He is a licensed
real estate salesperson in Massachusetts.
E. VALJEAN WHEELER. Mr. Wheeler serves as Senior Vice President and
Chief Executive of Beacon Capital Partners Central, a division of BCP. Mr.
Wheeler served as Senior Vice President and Chief Executive of Beacon Properties
Midwest prior to joining the Company. Before joining Beacon Properties, Mr.
Wheeler held various senior management positions with Equity Office Holdings,
L.L.C. beginning in 1989, and served as President and Chief Operating Officer
from 1995 to 1997. He also held various senior management positions with the
Broe Companies and Williams Realty Corporation. Mr. Wheeler graduated from
Oklahoma State University with a Bachelor of Science in Education. He is a
member of the Urban Land Institute (ULI) and has served on the National Advisory
Council of the Building Owners and Managers Association (BOMA).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities (collectively, "Insiders"), to file reports
of ownership and changes in ownership with the SEC. Insiders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on a review of copies of such
reports and written representations that no other reports were required during
the fiscal year ended December 31, 1998, all transactions in the Company's
securities that were engaged in by Insiders, and therefore required to be
disclosed pursuant to Section 16(a) of the Exchange Act, were timely reported.
6
<PAGE>
Item 11. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION
The following table sets forth, for the last fiscal year, the annual
compensation awarded to our Chief Executive Officer and the four most highly
compensated executive officers at the end of Fiscal 1998 who earned in excess of
$100,000 during 1998 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL SECURITIES
COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(SHARES) COMPENSATION($)
<S> <C> <C> <C> <C> <C>
Alan M. Leventhal..................... 1998 193,173 300,000 500,000 3,109(1)
Chairman of the Board,
and Chief Executive Officer
Lionel P. Fortin ..................... 1998 193,173 300,000 500,000 4,640(1)
President and Chief Operating
Officer
Erin R. O'Boyle....................... 1998 120,733 175,000 175,000 2,271(1)
Senior Vice President and Chief
Investment Officer
William A. Bonn....................... 1998 120,733 175,000 150,000 2,737(1)
Senior Vice President and
General Counsel
Randy J. Parker....................... 1998 120,733 175,000 150,000 2,900(1)
Senior Vice President and
Chief Financial Officer
</TABLE>
- ---------------------------
(1) Includes $2,000 contributed to a 401(k) plan on behalf of Messrs. Leventhal,
Fortin and Bonn and Ms. O'Boyle, and $2,468 contributed to a 401(k) plan on
behalf of Mr. Parker. The remainder of each amount represents premiums paid for
life insurance on behalf of the Named Executive Officer.
7
<PAGE>
OPTION GRANTS WITH RESPECT TO FISCAL YEAR 1998
The following table sets forth the options granted with respect to the
fiscal year ended December 31, 1998 to the Company's Named Executive Officers.
<TABLE>
<CAPTION> POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE
UNDERLYING GRANTED TO EXERCISE OR APPRECIATION
OPTIONS EMPLOYEES BASE PRICE FOR OPTION TERM (1)
GRANTED FOR FISCAL PER EXPIRATION ---------------------------
NAME (#) YEAR 1998 ($/SH) DATE 5% ($) 10%($)
- ---- ----- ------------- -------------- ------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alan M. Leventhal............... 60,000 2.5% $20 3/19/08 754,800 1,912,200
440,000 18.7% $20 4/14/08 5,535,200 14,022,800
Lionel P. Fortin............... 60,000 2.5% $20 3/19/08 754,800 1,912,200
440,000 18.7% $20 4/14/08 5,535,200 14,022,800
Erin R. O'Boyle................. 50,000 2.1% $20 3/19/08 629,000 1,593,500
125,000 5.3% $20 4/14/08 1,572,500 3,983,750
William A. Bonn................. 50,000 2.1% $20 3/19/08 629,000 1,593,500
100,000 4.2% $20 4/14/08 1,258,000 3,187,000
Randy J. Parker................. 50,000 2.1% $20 3/19/08 629,000 1,593,500
100,000 4.2% $20 4/14/08 1,258,000 3,187,000
</TABLE>
- -----------------------
(1) This column shows the hypothetical gain or option spreads of the options
granted based on assumed annual compound stock appreciation rates of 5% and 10%
over the full 10-year term of the options. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the Securities and Exchange Commission
and do not represent the Company's estimate or projection of future Common Stock
prices. The gains shown are net of the option exercise price, but do not include
deductions for taxes or other expenses associated with the exercise of the
option or the sale of the underlying shares or reflect non-transferability,
vesting or termination provisions. The actual gains, if any, on the exercises of
stock options will depend on the future performance of the Common Stock.
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OPTION EXERCISES AND YEAR-END HOLDINGS
The following table sets forth information concerning the number and
value of unexercised options to purchase Common Stock of the Company held by the
Named Executive Officers who held such options at December 31, 1998. No Named
Executive Officer exercised any options to purchase Common Stock during 1998.
AGGREGATED FISCAL YEAR-END 1998 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1998 (#) DECEMBER 31, 1998 ($)(1)
------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Alan M. Leventhal.............................. --- 500,000 --- ---
Lionel P. Fortin............................... --- 500,000 --- ---
Erin R. O'Boyle................................ --- 175,000 --- ---
William A. Bonn................................ --- 150,000 --- ---
Randy J. Parker................................ --- 150,000 --- ---
</TABLE>
- --------------------
(1) There is no public trading market for our common stock, therefore it is not
possible to accurately estimate the value of outstanding options. Nonetheless,
management believes that the value of all outstanding options held by the Named
Executive Officers was not above the original exercise price as of December 31,
1998.
LONG-TERM INCENTIVE PLAN
Our Long-Term Incentive Plan is designed to reward certain members of
management for growth of our Funds from Operations in excess of a specified
benchmark as described below. If our Funds from Operations exceed this
benchmark, management will be entitled to receive an Incentive Return determined
in the manner described below (the "Incentive Return"). This Incentive Return
shall be calculated at the end of the three year period following the completion
of the first calendar year following March, 1998 (the "Determination Date").
The Incentive Return shall equal the product of:
(A) 12% of the dollar amount by which:
(i) the Actual Return exceeds
(ii) the Base Return; multiplied by
(B) the weighted average of shares of Common Stock and Operating
Partnership Units outstanding for the 12 months immediately
preceding the Determination Date; multiplied by
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(C) the Company's Multiple as defined below.
For the purposes of calculating the Incentive Return:
"Actual Return" means our Funds from Operations (before the
Incentive Return) per share of Common Stock and per Operating
Partnership Unit for the 12 months immediately preceding the
Determination Date;
"Base Return" means an amount equal to what our Funds from
Operations would have been for the twelve month period immediately
preceding the Determination Date assuming a benchmark cumulative rate of
return on the price at which our Common Stock was sold in connection
with our March, 1998 offering equal to 10% per annum, compounding
quarterly, calculated since the beginning of the calendar quarter
following the date of such closing.
"Funds from Operations" as defined by NAREIT, means net income
(computed in accordance with GAAP), excluding gains (or losses) from
debt restructuring and sales of property, plus depreciation and
amortization (in each case, only real estate-related assets), and after
adjustments for unconsolidated partnerships and joint ventures; and
"Multiple" means the price of our Common Stock divided by our
Funds from Operations per share for the fiscal quarter ending on the
Determination Date on an annualized basis.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF ESTIMATED FUTURE PAYOUTS
SHARES, NON-STOCK PRICE-BASED PLANS
UNITS OR ----------------------------------------
OTHER PERFORMANCE OR OTHER PERIOD THRESHOLD TARGET MAXIMUM
NAME RIGHTS UNTIL MATURATION OF PAYOUT ($ OR #0) ($ OR #) ($ OR #)
- ---- ---------- --------------------------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C>
Alan M. Leventhal..................... 38% December 31, 2001 (1) (1) (1)
Lionel P. Fortin...................... 38% December 31, 2001 (1) (1) (1)
Erin R. O'Boyle....................... 3% December 31, 2001 (1) (1) (1)
William A. Bonn....................... 3% December 31, 2001 (1) (1) (1)
Randy J. Parker....................... 3% December 31, 2001 (1) (1) (1)
</TABLE>
- ----------------------------
(1) We have established a Long-Term Incentive Plan with awards based upon growth
of Funds from Operations above a specified benchmark over a three year period.
Participants in this plan will receive their specified percentage of the total
award, which will vest in accordance with the terms of the Long-Term Incentive
Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Current members of the Compensation Committee are Messrs. Clark,
Shulman and Sperling. None of these individuals is an executive officer of the
Company. Mr. Leventhal, the Chairman and Chief Executive Officer of the Company,
serves as an EX-OFFICIO member of the Compensation Committee.
EMPLOYMENT AGREEMENTS
On March 20, 1998, we entered into Employment Agreements with each of
Mr. Fortin and Mr. Leventhal. These agreements are for a term of three years and
provide for a minimum Base Salary of $200,000 per
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annum. Such agreements are terminable by us or by the executive at will upon 30
days' notice. Notice by the Company must be given by a majority vote of all of
the members of the Board of Directors. In the event the executive is terminated
for other than Cause (as defined) or if the executive terminates his employment
for Good Reason (as defined), we are required to pay a lump sum amount to the
executive equal to three times the sum of the executive's base salary and the
highest potential bonus that could be earned by the executive in the year of
termination. In addition, all stock options shall fully vest and the executive
will also be entitled to participate in our Long-Term Incentive Plan as if the
termination had not occurred. If the executive is terminated for Cause or leaves
other than for Good Reason, we will be obligated to pay on the base salary
through the Termination Date set forth in the notice of termination. In the
event any payments (severance or otherwise) under these Agreements would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended, the executive shall be made whole after payment of any taxes
or penalties. During the term of employment and for an additional one year
period following employment if the executive is terminated for Cause or other
than Good Reason, the executives have each agreed not to engage in certain
competitive activities with the Company.
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<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of our Common
Stock as to (i) each person or entity who is known by us to have beneficially
owned more than five percent of our Common Stock as of April 15, 1999, (ii)
each of our directors, (iii) each of the Named Executive Officers, and (iv)
all directors and executive officers as a group, based on filings as of
February, 1999 received by us on Schedules 13G under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). All such information
12
<PAGE>
reflects only beneficial ownership known by us. All percentages have
been calculated as of April 15, 1999.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP (2)
----------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1) NUMBER PERCENT
- ---------------------------------------- ------ -------
<S> <C> <C>
Wellington Management Company .................................. 2,300,000 10.9%(3)
75 State Street
Boston, MA 02109
Southeastern Asset Management................................... 2,075,000 9.8%
6410 Poplar Drive
Memphis, TN 38119
RREEF Venture Capital Fund LP................................... 1,650,000 7.8%
875 N. Michigan Avenue
Chicago, IL 60611
ABKB/La Salle................................................... 1,337,500 6.4%
100 East Pratt Street
Baltimore, MD 21202
Alan M. Leventhal............................................... 757,962 3.6%(4)
Lionel P. Fortin................................................ 437,690 2.1%(5)
Stephen T. Clark................................................ 8,225 *(6)
Steven Shulman.................................................. 13,786 *(7)
Scott M. Sperling............................................... 8,225 *(8)
Erin O'Boyle.................................................... 60,328 *(9)
Randy J. Parker................................................. 51,335 *(10)
William A. Bonn................................................. 50,995 *(10)
All Directors and Executive Officers
as a Group
(8 Persons).................................................. 1,388,545 6.5%(4)(5)
(6)(7)(8)(9)(10)
</TABLE>
- ------------------------
* Less than one percent
(1) All information has been determined as of April 15, 1999. For the
purposes of this table, a person is deemed to have "beneficial
ownership" of the number of shares of Common Stock that person has the
right to acquire within 60 days of April 15, 1999 pursuant to the
exercise of stock options or redemption of Operating Partnership Units
(assuming the Company elects to issue Common Stock
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<PAGE>
rather than pay cash upon such redemption) held by such person or an
affiliate of such person. Unless otherwise noted the address of each
Beneficial Owner is: c/o Beacon Capital Partners, Inc., One Federal
Street, 26th Floor, Boston, MA 02110. As of April 15, 1999, 20,973,932
shares of Common Stock were issued and outstanding.
(2) For the purpose of computing the percentage of outstanding shares of
Common Stock held by each person, any shares of Common Stock which such
person has the right to acquire within 60 days of April 15, 1999
pursuant to the exercise of a stock option or upon the redemption of
Operating Partnership Units is deemed to be outstanding, but is not
deemed to be outstanding for the purpose of computing the percent
ownership of any other person.
(3) Includes shares held by 2 separate stockholders which the company
believes to be controlled by Wellington Management Company.
(4) Includes Operating Partnership Units held indirectly by a trust, of
which Mr. Leventhal is a beneficiary and currently exercisable options
to purchase 166,650 shares of Common Stock. Excludes options to purchase
333,350 shares of Common Stock granted to Mr. Leventhal and subsequently
transferred to a trust, of which Mr. Leventhal is a beneficiary, which
options are not presently exercisable.
(5) Includes Operating Partnership Units held indirectly by a trust, of
which Mr. Fortin's wife is a trustee and currently exercisable options
to purchase 166,650 shares of Common Stock. Excludes options to purchase
333,350 shares of Common Stock granted to Mr. Fortin and subsequently
transferred to a trust, of which Mr. Fortin's wife is a beneficiary,
which options are not presently exercisable.
(6) Includes currently exercisable options to purchase 8,225 shares of
Common Stock.
(7) Includes currently exercisable options to purchase 8,425 shares of
Common Stock.
(8) Includes currently exercisable options to purchase 8,225 shares of
Common Stock.
(9) Includes currently exercisable options to purchase 58,328 shares of
Common Stock and excludes options to purchase 116,672 shares of Common
Stock, which options are not presently exercisable.
(10) Includes currently exercisable options to purchase 49,995 shares of
Common Stock and excludes options to purchase 100,005 shares of Common
Stock, which options are not presently exercisable.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We were incorporated on January 21, 1998 as a Massachusetts corporation
and were initially capitalized through loans from our founders, Messrs.
Leventhal and Fortin, in the amount of $3.6 million. On May 1, 1998, the loans
were repaid.
As of April 15, 1999, Messrs. Bonn, Fletcher, Halsted, Mitchell, Parker
and Wheeler, as well as Ms. O'Boyle, each held a 3% interest in the Incentive
Return and Ms. Broderick and Mr. Ragno each held a 1% interest in the Incentive
Return. The balance of the Incentive Return is split equally between the family
trusts of Messrs. Leventhal and Fortin. See "Long-Term Incentive Plan."
We have entered into Indemnification Agreements with each of our
Directors and executive officers, and we maintain Directors and Officers
liability insurance for such parties.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
BEACON CAPITAL PARTNERS, INC.
By: /s/ Randy J. Parker
---------------------------------------------------
Randy J. Parker
Senior Vice President and Chief Financial Officer
Dated: April 29, 1999
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