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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 19, 1999
BURNHAM PACIFIC PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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MARYLAND 1-9524 33-0204126
- ---------------------------- ------------------------ ------------------
<S> <C> <C>
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
</TABLE>
610 WEST ASH STREET, SUITE 1600, SAN DIEGO, CALIFORNIA 92101
------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 652-4700
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
---
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT )
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ITEM 5. OTHER EVENTS.
On June 19, 1999, Burnham Pacific Properties, Inc. (the "Company") adopted
an Executive Severance Plan, a Management Severance Plan and a Rank and File
Severance Plan. These plans, as subsequently amended as of July 23, 1999
(collectively, the "Plans"), are intended to reinforce and encourage the
continued attention and dedication of the Company's employees to their assigned
duties, as well as assist the Company in recruiting new employees,
notwithstanding the possibility, threat or occurrence of a change in control of
the Company. The Company believes that the possibility or threat of a change in
control inevitably creates distractions, risks and uncertainties for its
executives and other employees. Since the Company considers it essential to the
best interests of its stockholders to foster the continuous employment of key
management and other personnel, and since the Company did not have any
employment or other severance agreements with any of its executives or employees
that could have served such function, the Company believes that the adoption of
the Plans was an adequate mechanism by which to promote an environment in which
its executives and employees may continue performing their duties without
distraction.
For the same reasons cited above, on June 30, 1999, the Company entered
into Senior Executive Severance Agreements (the "Severance Agreements") with
certain of its most senior executives not otherwise entitled to participate in
the aforementioned Plans (i.e., J. David Martin, Joseph William Byrne, James W.
Gaube, Daniel B. Platt and Scott C. Verges (the "Senior Executives")), whose
leadership and management expertise is vital to the continued operation of the
Company's business. In general, the Severance Agreements provide that in the
event certain Terminating Events (as defined in the Severance Agreements) occur
with respect to a Senior Executive following a Change in Control (as defined in
the Severance Agreements), then the Company shall pay the Senior Executive an
aggregate of three times such Senior Executive's then current annual base salary
plus three times such Senior Executive's then current target annual bonus. In
addition, the Severance Agreements provide for the continuation of certain
health, dental and life insurance and other welfare benefits for thirty-six (36)
months, provided that any such benefits are offset against any amounts payable
under any other Company plan. The Severance Agreements also provide for the
reimbursement of certain excise tax liabilities that may arise in connection
with the benefits provided pursuant thereto.
Finally, effective as of August 1, 1999, the Company entered into Phantom
Shares Agreements (the "Phantom Agreements") with the Senior Executives. The
phantom share awards (the "Phantom Awards") granted pursuant to the Phantom
Agreements are used solely as a device for the measurement and determination of
certain amounts to be paid to the executive in lieu of granting additional
equity interests. In general, the Phantom Awards vest ratably over ten years
from the date of grant, subject to acceleration upon a Change of Control (as
defined in the Phantom Agreements), at which time the Company must redeem the
Phantom Awards at a price per award equal to the fair market value of one share
of the Company's common stock as of the vesting date.
The above descriptions of the Plans, the Severance Agreements and the
Phantom Agreements are not complete and are qualified in their entirety by
reference to such documents, all of which are being filed herewith as exhibits
to this Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
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EXHIBIT NO. DESCRIPTION
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10.1 Burnham Pacific Properties, Inc. Executive Severance Plan, dated
as of June 19, 1999 (the "Executive Severance Plan").
10.2 First Amendment to the Executive Severance Plan, dated as of July
23, 1999.
10.3 Burnham Pacific Properties, Inc. Management Severance Plan, dated
as of June 19, 1999 (the "Management Severance Plan").
10.4 First Amendment to the Management Severance Plan, dated as of July
23, 1999.
10.5 Burnham Pacific Properties, Inc. Rank and File Severance Plan,
dated as of June 19, 1999 (the "Rank and File Severance Plan").
10.6 First Amendment to the Rank and File Severance Plan, dated as of
July 23, 1999.
10.7 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and J. David Martin.
10.8 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Joseph William Byrne.
10.9 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and James W. Gaube.
10.10 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Daniel B. Platt.
10.11 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Scott C. Verges.
10.12 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.13 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.14 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.15 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Joseph William Byrne.
10.16 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and James W. Gaube.
10.17 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Daniel B. Platt.
10.18 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Scott C. Verges.
</TABLE>
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, as amended, the Company has duly caused this report to be filed on its
behalf by the undersigned, thereunto duly authorized.
BURNHAM PACIFIC PROPERTIES, INC.
Dated: August 6, 1999 By: /s/ DANIEL B. PLATT
-------------------
Name: Daniel B. Platt
Title: Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.1 Burnham Pacific Properties, Inc. Executive Severance Plan, dated
as of June 19, 1999 (the "Executive Severance Plan").
10.2 First Amendment to the Executive Severance Plan, dated as of July
23, 1999.
10.3 Burnham Pacific Properties, Inc. Management Severance Plan, dated
as of June 19, 1999 (the "Management Severance Plan").
10.4 First Amendment to the Management Severance Plan, dated as of July
23, 1999.
10.5 Burnham Pacific Properties, Inc. Rank and File Severance Plan,
dated as of June 19, 1999 (the "Rank and File Severance Plan").
10.6 First Amendment to the Rank and File Severance Plan, dated as of
July 23, 1999.
10.7 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and J. David Martin.
10.8 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Joseph William Byrne.
10.9 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and James W. Gaube.
10.10 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Daniel B. Platt.
10.11 Senior Executive Severance Agreement, dated as of June 30, 1999,
between Burnham Pacific Properties, Inc. and Scott C. Verges.
10.12 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.13 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.14 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and J. David Martin.
10.15 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Joseph William Byrne.
10.16 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and James W. Gaube.
10.17 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Daniel B. Platt.
10.18 Phantom Shares Agreement, dated as of August 1, 1999, between
Burnham Pacific Properties, Inc. and Scott C. Verges.
</TABLE>
5
<PAGE>
EXHIBIT 10.1
BURNHAM PACIFIC PROPERTIES, INC.
EXECUTIVE SEVERANCE PLAN
1. PURPOSE. Burnham Pacific Properties, Inc. (the "Corporation")
considers it essential to the best interests of its stockholders to foster the
continuous employment of key management personnel. The Board of Directors of the
Corporation (the "Board") recognizes, however, that, as is the case with many
publicly held corporations, the possibility of a Change in Control (as defined
in Section 2 hereof) exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Corporation and its
stockholders. Therefore, the Board has determined that the Burnham Pacific
Properties, Inc. Executive Severance Plan (the "Plan") should be adopted to
reinforce and encourage the continued attention and dedication of the
individuals listed on SCHEDULE A hereto, as such Schedule may be amended from
time to time by the Chief Executive Officer of the Corporation (each, a "Covered
Individuals;" collectively, the "Covered Individuals"), to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control. Nothing in this Plan shall be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Covered Individual and the
Corporation or any of its subsidiaries or affiliates (together with the
Corporation, the "Employers"), the Covered Individual shall not have any right
to be retained in the employ of the Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in
Control" shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Corporation or any of its subsidiaries),
together with all "affiliates" and "associates" (as such terms are
defined in Rule 12b-2 under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Corporation representing
thirty percent (30%) or more of either (A) the combined voting power of
the Corporation's then outstanding securities having the right to vote in
an election of the Corporation's Board of Directors ("Voting Securities")
or (B) the then outstanding shares of the Corporation's no par common
stock ("Common Stock") (in either case other than as a result of an
acquisition of securities directly from the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at
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least a majority of the Board, provided that any person becoming a
director of the Corporation subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's election was approved
by or such person was nominated for election by a vote of at least a
majority of the Incumbent Directors; but provided further, that any such
person whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of members of the
Board of Directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a PERSON other than the Board, including
by reason of agreement intended to avoid or settle any such actual or
threatened contest or solicitation, shall not be considered an Incumbent
Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of the
Corporation, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent (50%) or more of the
voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Corporation or (C)
any plan or proposal for the liquidation or dissolution of the
Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed
to have occurred for purposes of the foregoing clause (a) solely as the result
of an acquisition of securities by the Corporation which, by reducing the number
of shares of Common Stock or other Voting Securities outstanding, increases the
proportionate number of shares beneficially owned by any person to thirty
percent (30%) or more of the combined voting power of all then outstanding
Voting Securities; PROVIDED, HOWEVER, that if any person referred to in this
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Corporation), then a "CHANGE OF CONTROL" shall be deemed to have occurred
for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean the
termination of employment of a Covered Individual or, with respect to a Covered
Individual who is providing services to the Employers as an independent
contractor or in some other capacity (a "Contract Employee"), the termination of
the Covered Individual's contractual relationship with the Employers, in
connection with any of the events provided in this Section 3 occurring within
twenty-four (24) months following a Change in Control:
(a) termination by the Employers of the employment of the
Covered Individual or, with respect to a Contract Employee, termination
by the Employers of the contractual relationship in effect with respect
to the Contract Employee, with the Employers for any reason other than
for Cause or the death or disability (as determined under the Employers'
then existing long-term disability coverage) of such Covered
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Individual. "Cause" shall mean, and shall be limited to, the occurrence
of any one or more of the following events:
(i) a willful act of dishonesty by the Covered
Individual with respect to any matter involving any of the
Employers; or
(ii) conviction of the Covered Individual of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the Covered
Individual (other than by reason of the Covered Individual's
physical or mental illness, incapacity or disability) to
substantially perform the Covered Individual's duties with the
Employers and the continuation of such failure for a period of 30
days after delivery by the Employers to the Covered Individual of
written notice specifying the scope and nature of such failure and
their intention to terminate the Covered Individual for Cause.
A Terminating Event shall not be deemed to have occurred pursuant
to this Section 3(a) solely as a result of the Covered Individual being
an employee of, or a Contract Employee with, any direct or indirect
successor to the business or assets of any of the Employers, rather than
continuing as an employee of, or Contract Employee with, the Employers
following a Change in Control. For purposes of clauses (i) and (iii) of
this Section 3(a), no act, or failure to act, on the Covered Individual's
part shall be deemed "willful" unless done, or omitted to be done, by the
Covered Individual without reasonable belief that the Covered
Individual's act, or failure to act, was in the best interest of the
Employers; or
(b) termination by the Covered Individual of the Covered
Individual's employment or, with respect to a Contract Employee, the
termination of the contractual relationship in effect with respect to the
Contract Employee, with the Employers for Good Reason. "Good Reason"
shall mean the occurrence of any of the following events:
(i) a material diminution in the nature or scope of the
Covered Individual's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Covered Individual
immediately prior to the Change in Control; or
(ii) a change in reporting relationship of the Covered
Individual such that the Covered Individual is required to report
to a person below the level of the person to whom the Covered
Individual reported immediately prior to the Change in Control.
(iii) a reduction in the Covered Individual's annual base
salary or commission schedule as in effect on June 19, 1999 or as
the same may be increased from time to time; or
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(iv) the relocation of the Employers' offices at which
the Covered Individual is principally employed immediately prior
to the date of a Change in Control to a location more than fifty
(50) miles from such offices, or the requirement by the Employers
for the Covered Individual to be based anywhere other than the
Employers' offices at such location, except for required travel on
the Employers' business to an extent substantially consistent with
the Covered Individual's business travel obligations immediately
prior to the Change in Control; or
(v) the failure by the Employers to obtain an effective
agreement from any successor to assume and agree to perform this
Agreement.
4. SPECIAL TERMINATION BENEFITS. In the event a Terminating Event
occurs within twenty-four (24) months after a Change in Control with respect to
a Covered Individual,
(a) the Employers shall pay to the Covered Individual an amount
equal to the sum of the following:
(i) two (2) times the amount of the current annual base
salary of the Covered Individual, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) two (2) times the amount of the average annual bonus
earned by the Covered Individual with respect to the three (3)
calendar years ending immediately prior to the Change in Control.
Said amount shall be paid in one lump sum payment no later than
thirty-one (31) days following the Date of Termination (as such term is
defined in Section 7(b)); and
(b) if the Covered Individual is an employee of any of the
Employers, the Employers shall continue to provide health, dental and
life insurance to the Covered Individual, on the same terms and
conditions as though the Covered Individual had remained an active
employee, for twenty-four (24) months after the Terminating Event; and if
the Covered Individual is not an employee of any of the Employers, the
Employers shall reimburse the Covered Individual for the full cost of
continuing the health, dental and/or life insurance coverage in effect
for the Covered Individual (if any) immediately prior to the Change in
Control or any similar coverage obtained by the Covered Individual (not
to exceed the cost of such coverages to the Covered Individual
immediately prior to the Change in Control), for up to twenty-four (24)
months after the Terminating Event; and
(c) if the Covered Individual is an employee of any of the
Employers, the Employers shall make available COBRA coverage to the
Covered Individual following the end of the period referred to in Section
4(b) above, such benefits to be determined as though the Covered
Individual's employment had terminated at the end of such period; and
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(d) the Employers shall pay to the Covered Individual all
reasonable legal and mediation fees and expenses incurred by the Covered
Individual in obtaining or enforcing any right or benefit provided by
this Plan, except in cases involving frivolous or bad faith litigation
initiated by the Covered Individual.
For purposes of this Plan, the terms "base salary" and "bonus" shall
include comparable amounts paid to a Contract Employee.
Notwithstanding the foregoing, the special termination benefits required
by Section 4(a) shall be offset by any amount paid or payable to the Covered
Individual by the Employers under the terms of any employment agreement or other
plan.
5. ADDITIONAL LIMITATION.
(a) Anything in this Plan to the contrary notwithstanding, in
the event that any compensation, payment or distribution by the Employers
to or for the benefit of the Covered Individual, whether paid or payable
or distributed or distributable pursuant to the terms of this Plan or
otherwise, (the "Severance Payments"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), the following provisions shall apply:
(i) If the Severance Payments, reduced by the sum of (1)
the Excise Tax and (2) the total of the Federal, state, and local
income and employment taxes payable by the Covered Individual on
the amount of the Severance Payments which are in excess of the
Threshold Amount, are greater than or equal to the Threshold
Amount, the Covered Individual shall be entitled to the full
benefits payable under this Plan.
(ii) If the Threshold Amount is less than (x) the
Severance Payments, but greater than (y) the Severance Payments
reduced by the sum of (1) the Excise Tax and (2) the total of the
Federal, state, and local income and employment taxes on the
amount of the Severance Payments which are in excess of the
Threshold Amount, then the benefits payable under this Plan shall
be reduced (but not below zero) to the extent necessary so that
the maximum Severance Payments shall not exceed the Threshold
Amount. To the extent that there is more than one method of
reducing the payments to bring them within the Threshold Amount,
the Covered Individual shall determine which method shall be
followed; provided that if the Covered Individual fails to make
such determination within 45 days after the Employers have sent
the Covered Individual written notice of the need for such
reduction, the Employers may determine the amount of such
reduction in its sole discretion.
For the purposes of this Section 5, "Threshold Amount" shall mean three
times the Covered Individual's "base amount" within the meaning of
Section 280G(b)(3) of the Code and the regulations promulgated thereunder
less one dollar ($1.00); and "Excise
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Tax" shall mean the excise tax imposed by Section 4999 of the Code, or
any interest or penalties incurred by the Covered Individual with respect
to such excise tax.
(b) The determination as to which of the alternative provisions
of Section 5(a) shall apply to the Covered Individual shall be made by
Deloitte & Touche LLP or any other nationally recognized accounting firm
selected by the Employers (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Employers and the Covered
Individual within 15 business days of the Date of Termination, if
applicable, or at such earlier time as is reasonably requested by the
Employers or the Covered Individual. For purposes of determining which of
the alternative provisions of Section 5(a) shall apply, the Covered
Individual shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for
the calendar year in which the determination is to be made, and state and
local income taxes at the highest marginal rates of individual taxation
in the state and locality of the Covered Individual's residence on the
Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Employers
and the Covered Individual.
6. WITHHOLDING. All payments made by the Employers under this Plan
shall be net of any tax or other amounts required to be withheld by the
Employers under applicable law.
7. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. Within twenty-four (24) months after
a Change in Control, any purported termination of a Covered Individual's
employment or, with respect to a Contract Employee, the termination of
the contractual relationship in effect, with respect to the Contract
Employee (other than by reason of death) shall be communicated by written
Notice of Termination from the Employers to the Covered Individual or
vice versa in accordance with this Section 7. For purposes of this Plan,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Plan relied upon and the Date of
Termination. Further, a Notice of Termination for Cause is required to
include a copy of a resolution duly adopted by the affirmative vote of
not less than two-thirds (2/3) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to the Covered Individual
and an opportunity for the Covered Individual, accompanied by the Covered
Individual's counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, the termination met the criteria for
Cause set forth in Section 3(a) hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect to
any purported termination of a Covered Individual's employment or, with
respect to a Contract Employee, the termination of the contractual
relationship in effect with respect to the Covered Employee, within
twenty-four (24) months after a Change in Control, shall mean the date
specified in the Notice of Termination. In the case of a termination by
the Employers other than a termination for Cause (which may be effective
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immediately), the Date of Termination shall not be less than 30 days
after the Notice of Termination is given. In the case of a termination by
a Covered Individual, the Date of Termination shall not be less than 15
days from the date such Notice of Termination is given. Notwithstanding
Section 3(a) of this Plan, in the event that a Covered Individual gives a
Notice of Termination to the Employers, the Employers may unilaterally
accelerate the Date of Termination and such acceleration shall not result
in a second Terminating Event for purposes of Section 3(a) of this Plan.
(c) NO MITIGATION. The Covered Individual is not required to
seek other employment or to attempt in any way to reduce any amounts
payable to the Covered Individual by the Employers under this Plan.
Further, the amount of any payment provided for in this Plan shall not be
reduced by any compensation earned by the Covered Individual as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Covered Individual to
the Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of or
relating to this Plan or the breach thereof through mediation with JAMS,
Endispute or similar organizations. If the controversy or claim is not
resolved within 90 days, the parties shall be free to pursue other legal
remedies in law or equity.
8. BENEFITS AND BURDENS. This Plan shall inure to the benefit of and
be binding upon the Employers and the Covered Individuals, their respective
successors, executors, administrators, heirs and permitted assigns. In the event
of a Covered Individual's death after a Terminating Event but prior to the
completion by the Employers of all payments due him under this Plan, the
Employers shall continue such payments to the Covered Individual's beneficiary
designated in writing to the Employers prior to his death (or to his estate, if
the Covered Individual fails to make such designation).
9. ENFORCEABILITY. If any portion or provision of this Plan shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Plan, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Plan shall be valid and enforceable to the fullest
extent permitted by law.
10. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Plan, or the waiver
by any party of any breach of this Plan, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
11. NOTICES. Any notices, requests, demands, and other communications
provided for by this Plan shall be sufficient if in writing and delivered in
person or sent by registered or certified mail, postage prepaid, to a Covered
Individual at the last address the Covered
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Individual has filed in writing with the Employers, or to the Employers at their
main office, attention of the Board of Directors.
12. EFFECT ON OTHER PLANS. Nothing in this Plan shall be construed to
limit the rights of the Covered Individuals under the Employers' benefit plans,
programs or policies.
13. AMENDMENT OR TERMINATION OF PLAN. The Corporation may amend or
terminate this Plan at any time or from time to time; provided, however, that no
such amendment shall, without the consent of the Covered Individuals, in any
material adverse way affect the rights of the Covered Individuals, and no
termination shall be made without the written consent of the Covered
Individuals.
14. GOVERNING LAW. This Plan shall be construed under and be governed
in all respects by the laws of the State of Maryland.
15. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to perform this Plan in
the same manner and to the same extent that the Employers would be required to
perform if no such succession had taken place.
Adopted: As of June 19, 1999
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BURNHAM PACIFIC PROPERTIES, INC.
EXECUTIVE SEVERANCE PLAN
SCHEDULE A
COVERED INDIVIDUALS
1. Lindsey K. Adams
2. Marc T. Artino
3. Dean Isaacs
4. James Kilcoyne
5. John Reinholt
6. Susan Rorison
7. Terrence P. Tallen
8. John A. Waters, III
9
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EXHIBIT 10.2
BURNHAM PACIFIC PROPERTIES, INC.
EXECUTIVE SEVERANCE PLAN
First Amendment
A. Pursuant to the powers reserved to it in Section 13 of the Burnham
Pacific Properties, Inc. Executive Severance Plan (the "Plan"), Burnham Pacific
Properties, Inc. hereby amends the Plan, effective as of July 23, 1999, as
follows:
1. Section 4(a)(ii) is hereby amended by deleting such subsection in
its entirety and inserting the following in lieu thereof:
"(ii) two (2) times the sum of (a) the amount of the average
annual bonus earned by the Covered Individual with respect to the
three (3) calendar years ending immediately prior to the Change in
Control, plus (b) fifty percent (50%) of the sum of the commission
payments made to the Covered Individual during the four
consecutive full calendar quarters ending immediately prior to the
Change in Control."
B. Except as so amended, the Plan in all other respects is hereby confirmed.
IN WITNESS WHEREOF, Burnham Pacific Properties, Inc. has caused this
First Amendment to the Plan to be duly executed on this 1st day of
August, 1999.
BURNHAM PACIFIC PROPERTIES, INC
By: /S/ JOSEPH WILLIAM BYRNE
----------------------------------------
Title: Executive Vice President
<PAGE>
EXHIBIT 10.3
BURNHAM PACIFIC PROPERTIES, INC.
MANAGEMENT SEVERANCE PLAN
1. PURPOSE. Burnham Pacific Properties, Inc. (the "Corporation")
considers it essential to the best interests of its stockholders to foster the
continuous employment of key management personnel. The Board of Directors of the
Corporation (the "Board") recognizes, however, that, as is the case with many
publicly held corporations, the possibility of a Change in Control (as defined
in Section 2 hereof) exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Corporation and its
stockholders. Therefore, the Board has determined that the Burnham Pacific
Properties, Inc. Management Severance Plan (the "Plan") should be adopted to
reinforce and encourage the continued attention and dedication of the
individuals listed on SCHEDULE A hereto, as such Schedule may be amended from
time to time by the Chief Executive Officer of the Corporation (each, a "Covered
Individual;" collectively, the "Covered Individuals"), to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control. Nothing in this Plan shall be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Covered Individual and the
Corporation or any of its subsidiaries or affiliates (together with the
Corporation, the "Employers"), the Covered Individual shall not have any right
to be retained in the employ of the Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in
Control" shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Corporation or any of its subsidiaries),
together with all "affiliates" and "associates" (as such terms are
defined in Rule 12b-2 under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Corporation representing
thirty percent (30%) or more of either (A) the combined voting power of
the Corporation's then outstanding securities having the right to vote in
an election of the Corporation's Board of Directors ("Voting Securities")
or (B) the then outstanding shares of the Corporation's no par common
stock ("Common Stock") (in either case other than as a result of an
acquisition of securities directly from the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of
the Corporation subsequent to June 19, 1999 shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by a
<PAGE>
vote of at least a majority of the Incumbent Directors; but provided
further, that any such person whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of members of the Board of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
PERSON other than the Board, including by reason of agreement intended to
avoid or settle any such actual or threatened contest or solicitation,
shall not be considered an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of the
Corporation, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent (50%) or more of the
voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Corporation or (C)
any plan or proposal for the liquidation or dissolution of the
Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed
to have occurred for purposes of the foregoing clause (a) solely as the result
of an acquisition of securities by the Corporation which, by reducing the number
of shares of Common Stock or other Voting Securities outstanding, increases the
proportionate number of shares beneficially owned by any person to thirty
percent (30%) or more of the combined voting power of all then outstanding
Voting Securities; PROVIDED, HOWEVER, that if any person referred to in this
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Corporation), then a "CHANGE OF CONTROL" shall be deemed to have occurred
for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean the
termination of employment of a Covered Individual or, with respect to a Covered
Individual who is providing services to the Employers, as an independent
contractor or in some other capacity (a "Contract Employee"), the termination of
the Covered Individual's contractual relationship with the Employers, in
connection with any of the events provided in this Section 3 occurring within
twenty-four (24) months following a Change in Control:
(a) termination by the Employers of the employment of the
Covered Individual or, with respect to a Contract Employee, termination
by the Employers of the contractual relationship in effect with respect
to the Contract Employee, with the Employers for any reason other than
for Cause or the death or disability (as determined under the Employers'
then existing long-term disability coverage) of such Covered Individual.
"Cause" shall mean, and shall be limited to, the occurrence of any one or
more of the following events:
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(i) a willful act of dishonesty by the Covered
Individual with respect to any matter involving any of the
Employers; or
(ii) conviction of the Covered Individual of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the Covered
Individual (other than by reason of the Covered Individual's
physical or mental illness, incapacity or disability) to
substantially perform the Covered Individual's duties with the
Employers and the continuation of such failure for a period of 30
days after delivery by the Employers to the Covered Individual of
written notice specifying the scope and nature of such failure and
their intention to terminate the Covered Individual for Cause.
A Terminating Event shall not be deemed to have occurred pursuant
to this Section 3(a) solely as a result of the Covered Individual being
an employee of, or a Contract Employee with, any direct or indirect
successor to the business or assets of any of the Employers, rather than
continuing as an employee of, or Contract Employee with, the Employers
following a Change in Control. For purposes of clauses (i) and (iii) of
this Section 3(a), no act, or failure to act, on the Covered Individual's
part shall be deemed "willful" unless done, or omitted to be done, by the
Covered Individual without reasonable belief that the Covered
Individual's act, or failure to act, was in the best interest of the
Employers; or
(b) termination by the Covered Individual of the Covered
Individual's employment or, with respect to a Contract Employee, the
termination of the contractual relationship in effect with respect to the
Contract Employee, with the Employers for Good Reason. "Good Reason"
shall mean the occurrence of any of the following events:
(i) a material diminution in the nature or scope of the
Covered Individual's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Covered Individual
immediately prior to the Change in Control; or
(ii) a change in the reporting relationship of the
Covered Individual such that the Covered Individual is required to
report to a person below the level of the person to whom the
Covered Individual reported immediately prior to the Change in
Control;
(iii) a reduction in the Covered Individual's annual base
salary or commission schedule as in effect on June 19, 1999 or as
the same may be increased from time to time; or
3
<PAGE>
(iv) the relocation of the Employers' offices at which
the Covered Individual is principally employed immediately prior
to the date of a Change in Control to a location more than fifty
(50) miles from such offices, or the requirement by the Employers
for the Covered Individual to be based anywhere other than the
Employers' offices at such location, except for required travel on
the Employers' business to an extent substantially consistent with
the Covered Individual's business travel obligations immediately
prior to the Change in Control; or
(v) the failure by the Employers to obtain an effective
agreement from any successor to assume and agree to perform this
Agreement.
4. SPECIAL TERMINATION BENEFITS. In the event a Terminating Event
occurs within twenty-four (24) months after a Change in Control with respect to
a Covered Individual,
(a) the Employers shall pay to the Covered Individual an amount
equal to the sum of the following:
(i) one (1) times the amount of the current annual base
salary of the Covered Individual, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) one (1) times the amount of the average annual bonus
earned by the Covered Individual with respect to the three (3)
calendar years ending immediately prior to the Change in Control.
Said amount shall be paid in one lump sum payment no later than
thirty-one (31) days following the Date of Termination (as such term is
defined in Section 7(b)); and
(b) if the Covered Individual is an employee of any of the
Employers, the Employers shall continue to provide health, dental and
life insurance to the Covered Individual, on the same terms and
conditions as though the Covered Individual had remained an active
employee, for twelve (12) months after the Terminating Event; and if the
Covered Individual is not an employee of any of the Employers, the
Employers shall reimburse the Covered Individual for the full cost of
continuing the health, dental and/or life insurance coverage in effect
for the Covered Individual (if any) immediately prior to the Change in
Control or any similar coverage obtained by the Covered Individual (not
to exceed the cost of such coverages to the Covered Individual
immediately prior to the Change in Control), for up to twelve (12) months
after the Terminating Event; and
(c) if the Covered Individual is an employee of any of the
Employers, the Employers shall make available COBRA coverage to the
Covered Individual following the end of the period referred to in Section
4(b) above, such benefits to be determined
4
<PAGE>
as though the Covered Individual's employment had terminated at the end
of such period; and
(d) the Employers shall pay to the Covered Individual all
reasonable legal and mediation fees and expenses incurred by the Covered
Individual in obtaining or enforcing any right or benefit provided by
this Plan, except in cases involving frivolous or bad faith litigation
initiated by the Covered Individual.
For purposes of this Plan, the terms "base salary" and "bonus" shall
include comparable amounts paid to a Contract Employee.
Notwithstanding the foregoing, the special termination benefits required
by Section 4(a) shall be offset by any amount paid or payable to the Covered
Individual by the Employers under the terms of any employment agreement or other
plan.
5. ADDITIONAL LIMITATION.
(a) Anything in this Plan to the contrary notwithstanding, in
the event that any compensation, payment or distribution by the Employers
to or for the benefit of the Covered Individual, whether paid or payable
or distributed or distributable pursuant to the terms of this Plan or
otherwise, (the "Severance Payments"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), then the benefits payable under this Plan shall be reduced
(but not below zero) to the extent necessary so that the maximum
Severance Payments shall not exceed the Threshold Amount. To the extent
that there is more than one method of reducing the payments to bring them
within the Threshold Amount, the Covered Individual shall determine which
method shall be followed; provided that if the Covered Individual fails
to make such determination within 45 days after the Employers have sent
the Covered Individual written notice of the need for such reduction, the
Employers may determine the amount of such reduction in its sole
discretion.
For the purposes of this Section 5, "Threshold Amount" shall mean three
times the Covered Individual's "base amount" within the meaning of
Section 280G(b)(3) of the Code and the regulations promulgated thereunder
less one dollar ($1.00); and "Excise Tax" shall mean the excise tax
imposed by Section 4999 of the Code, or any interest or penalties
incurred by the Covered Individual with respect to such excise tax.
(b) The determination as to the application of Section 5(a)
with respect to the Covered Individual shall be made by Deloitte & Touche
LLP or any other nationally recognized accounting firm selected by the
Employers (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Employers and the Covered Individual
within 15 business days of the Date of Termination, if applicable, or at
such earlier time as is reasonably requested by the Employers or the
Covered Individual.
5
<PAGE>
For purposes of determining the application of Section 5(a), the Covered
Individual shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for
the calendar year in which the determination is to be made, and state and
local income taxes at the highest marginal rates of individual taxation
in the state and locality of the Covered Individual's residence on the
Date of Termination, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Employers
and the Covered Individual.
6. WITHHOLDING. All payments made by the Employers under this Plan
shall be net of any tax or other amounts required to be withheld by the
Employers under applicable law.
7. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. Within twenty-four (24) months after
a Change in Control, any purported termination of a Covered Individual's
employment or, with respect to a Contract Employee, the termination of
the contractual relationship in effect, with respect to the Contract
Employee (other than by reason of death) shall be communicated by written
Notice of Termination from the Employers to the Covered Individual or
vice versa in accordance with this Section 7. For purposes of this Plan,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Plan relied upon and the Date of
Termination. Further, a Notice of Termination for Cause is required to
include a copy of a resolution duly adopted by the affirmative vote of
not less than two-thirds (2/3) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to the Covered Individual
and an opportunity for the Covered Individual, accompanied by the Covered
Individual's counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, the termination met the criteria for
Cause set forth in Section 3(a) hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect to
any purported termination of a Covered Individual's employment or, with
respect to a Contract Employee, the termination of the contractual
relationship in effect with respect to the Contract Employee, within
twenty-four (24) months after a Change in Control, shall mean the date
specified in the Notice of Termination. In the case of a termination by
the Employers other than a termination for Cause (which may be effective
immediately), the Date of Termination shall not be less than 30 days
after the Notice of Termination is given. In the case of a termination by
a Covered Individual, the Date of Termination shall not be less than 15
days from the date such Notice of Termination is given. Notwithstanding
Section 3(a) of this Plan, in the event that a Covered Individual gives a
Notice of Termination to the Employers, the Employers may unilaterally
accelerate the Date of Termination and such acceleration shall not result
in a second Terminating Event for purposes of Section 3(a) of this Plan.
6
<PAGE>
(c) NO MITIGATION. The Covered Individual is not required to
seek other employment or to attempt in any way to reduce any amounts
payable to the Covered Individual by the Employers under this Plan.
Further, the amount of any payment provided for in this Plan shall not be
reduced by any compensation earned by the Covered Individual as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Covered Individual to
the Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of or
relating to this Plan or the breach thereof through mediation with JAMS,
Endispute or similar organizations. If the controversy or claim is not
resolved within 90 days, the parties shall be free to pursue other legal
remedies in law or equity.
8. BENEFITS AND BURDENS. This Plan shall inure to the benefit of and
be binding upon the Employers and the Covered Individuals, their respective
successors, executors, administrators, heirs and permitted assigns. In the event
of a Covered Individual's death after a Terminating Event but prior to the
completion by the Employers of all payments due him under this Plan, the
Employers shall continue such payments to the Covered Individual's beneficiary
designated in writing to the Employers prior to his death (or to his estate, if
the Covered Individual fails to make such designation).
9. ENFORCEABILITY. If any portion or provision of this Plan shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Plan, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Plan shall be valid and enforceable to the fullest
extent permitted by law.
10. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Plan, or the waiver
by any party of any breach of this Plan, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
11. NOTICES. Any notices, requests, demands, and other communications
provided for by this Plan shall be sufficient if in writing and delivered in
person or sent by registered or certified mail, postage prepaid, to a Covered
Individual at the last address the Covered Individual has filed in writing with
the Employers, or to the Employers at their main office, attention of the Board
of Directors.
12. EFFECT ON OTHER PLANS. Nothing in this Plan shall be construed to
limit the rights of the Covered Individuals under the Employers' benefit plans,
programs or policies.
7
<PAGE>
13. AMENDMENT OR TERMINATION OF PLAN. The Corporation may amend or
terminate this Plan at any time or from time to time; provided, however, that no
such amendment shall, without the consent of the Covered Individuals, in any
material adverse way affect the rights of the Covered Individuals, and no
termination shall be made without the written consent of the Covered
Individuals.
14. GOVERNING LAW. This Plan shall be construed under and be governed
in all respects by the laws of the State of Maryland.
15. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to perform this Plan in
the same manner and to the same extent that the Employers would be required to
perform if no such succession had taken place.
Adopted: As of June 19, 1999
8
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
MANAGEMENT SEVERANCE PLAN
SCHEDULE A
COVERED INDIVIDUALS
1. John Adair
2. Scott D. Beggs
3. Carole R. Caffey
4. Anthony L. Cardoza
5. Kevin Cavanaugh
6. Penny M. Evans
7. Jeffrey R. Fisher
8. Emmanuel C. Gavino
9. Donna D. Godbout
10. Christopher James Holden
11. Warren B. Hughes, Jr.
12. Robyn K. Lamb
13. Allison M. Lynch
14. Mark S. Mayer
15. Thomas D. Ohlson
16. Lisa H. Pam
17. Thomas W. Rau
18. Michael L. Rubin
19. John E. Shockey
20. Christopher Clark Sloan
21. Kimberly D. Solomon
22. Christopher Sullivan
23. Margaret A. Thraikill
24. Patrick C. Toomey
25. Courtney R. Trujillo
26. Jeanne S. Wilson
9
<PAGE>
EXHIBIT 10.4
BURNHAM PACIFIC PROPERTIES, INC.
MANAGEMENT SEVERANCE PLAN
First Amendment
A. Pursuant to the powers reserved to it in Section 13 of the Burnham
Pacific Properties, Inc. Management Severance Plan (the "Plan"), Burnham Pacific
Properties, Inc. hereby amends the Plan, effective as of July 23, 1999, as
follows:
1. Section 4(a)(ii) is hereby amended by deleting such subsection in
its entirety and inserting the following in lieu thereof:
"(ii) one (1) times the sum of (a) the amount of the average
annual bonus earned by the Covered Individual with respect to the
three (3) calendar years ending immediately prior to the Change in
Control, plus (b) the sum of the commission payments made to the
Covered Individual during the four consecutive full calendar
quarters ending immediately prior to the Change in Control."
B. Except as so amended, the Plan in all other respects is hereby confirmed.
IN WITNESS WHEREOF, Burnham Pacific Properties, Inc. has caused
this First Amendment to the Plan to be duly executed on this 1st
day of August, 1999.
BURNHAM PACIFIC PROPERTIES, INC
By: /S/ JOSEPH WILLIAM BYRNE
----------------------------------------
Title: Executive Vice President
<PAGE>
EXHIBIT 10.5
BURNHAM PACIFIC PROPERTIES, INC.
RANK AND FILE SEVERANCE PLAN
1. EMPLOYEES COVERED
This Rank and File Severance Plan shall apply to all employees other than
employees subject to a collective bargaining agreement or those otherwise
entitled to any other severance benefit (each, a "Covered Employee,"
collectively, the "Covered Employees"), of Burnham Pacific Properties, Inc. (the
"Corporation") or any of its subsidiaries and affiliates (together with the
Corporation, the "Employers").
2. SPECIAL TERMINATION BENEFITS
Any Covered Employee whose employment is terminated or is Deemed
Terminated (as hereinafter defined) within twelve (12) months following a Change
in Control (as hereinafter defined), unless such termination is for Cause (as
hereinafter defined), by reason of death or by reason of disability (as
determined under the Employers' then existing long-term disability coverage),
shall be provided with the following Special Termination Benefits by the
Employers:
(a) An amount equal to the sum of:
(i) three (3) times the amount of the current monthly
base salary of the Covered Employee; and
(ii) one (1) week's base salary for each full year of
service with any of the Employers (including any service with the
John Burnham Co.) and any successor institution.
Base salary shall be determined prior to any reductions for pre-tax
contributions to a cash or deferred arrangement or a cafeteria plan. Said
amount shall be paid in one lump sum payment no later than thirty-one
(31) days following the date of termination; and
(b) Continuation of health, dental and life insurance benefits
for three (3) months (or such longer period for which payment is being
made pursuant to Section 2(a)) after termination on the same terms and
conditions as though the Covered Employee had remained an active
employee; and
1
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(c) COBRA benefits following the period referred to in Section
2(b) above, such benefits to be determined as though employment had
terminated at the end of such period; and
(d) Payment to the Covered Employee of all reasonable legal and
mediation fees and expenses incurred by the Covered Employee in obtaining
or enforcing any right or benefit provided by this Plan, except in cases
involving frivolous or bad faith litigation initiated by the Covered
Employee; and
(e) The foregoing Special Termination Benefits are subject
to Section 3 below.
For purposes of this Plan, a Covered Employee shall be "Deemed
Terminated" if he resigns his employment in connection with the relocation of
the offices at which the Covered Employee is principally employed immediately
prior to the date of a Change in Control to a location more than 50 miles from
such offices, or the requirement for the Covered Employee to be based anywhere
other than the offices at such location, except for required travel on business
to an extent substantially consistent with the Covered Employee's business
travel obligations immediately before the Change in Control.
3. ADJUSTMENTS IN SPECIAL TERMINATION BENEFITS
The Special Termination Benefits payable pursuant to Section 2 above
shall be adjusted as follows:
(a) All payments shall be reduced by the amount of any
severance pay or notice pay benefits payable to any employee under any
employment, change in control or special termination agreement or under
any "tin parachute," WARN or similar law.
(b) All payments will be subject to usual and customary tax
withholding.
4. DEFINITION OF "CHANGE IN CONTROL"
For purposes of this Plan, a "Change in Control" shall mean the
occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Corporation or any of its subsidiaries),
together with all "affiliates" and "associates" (as such terms are
defined in Rule 12b-2 under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Corporation representing
thirty percent (30%) or more of either (A) the combined voting power of
the Corporation's then outstanding securities having the right to vote in
an election of the Corporation's Board of Directors ("Voting Securities")
or (B) the then outstanding shares
2
<PAGE>
of the Corporation's no par common stock ("Common Stock") (in either
case other than as a result of an acquisition of securities directly
from the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of
the Corporation subsequent to June 19, 1999 shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any such person whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the
Board of Directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a PERSON other than the Board, including
by reason of agreement intended to avoid or settle any such actual or
threatened contest or solicitation, shall not be considered an Incumbent
Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of the
Corporation, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent (50%) or more of the
voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Corporation or (C)
any plan or proposal for the liquidation or dissolution of the
Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed
to have occurred for purposes of the foregoing clause (a) solely as the result
of an acquisition of securities by the Corporation which, by reducing the number
of shares of Common Stock or other Voting Securities outstanding, increases the
proportionate number of shares beneficially owned by any person to thirty
percent (30%) or more of the combined voting power of all then outstanding
Voting Securities; PROVIDED, HOWEVER, that if any person referred to in this
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Corporation), then a "CHANGE OF CONTROL" shall be deemed to have occurred
for purposes of the foregoing clause (a).
5. DEFINITION OF "CAUSE"
For purposes of this Plan, the term "Cause" shall mean and include:
(a) deliberate dishonesty with respect to any of the Employers
or any successor institution; or
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(b) the conviction of any crime involving moral turpitude; or
(c) gross neglect of or refusal to perform any duty or
responsibility as an employee of any of the Employers after written
notice to the Covered Employee, other than as a result of sickness,
accident, disability or similar cause beyond the control of the Covered
Employee.
6. AMENDMENT OR TERMINATION
The Corporation may amend or terminate this Plan at any time or from time
to time; provided, however, that no amendment or termination shall be made on or
after a Change in Control without the consent of the Covered Employees.
7. GOVERNING LAW
This Plan shall be construed under and be governed in all respects by the
laws of the State of Maryland.
8. NO CONTRACT OF EMPLOYMENT
Nothing in this Plan shall be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing between the
Covered Employee and any of the Employers, the Covered Employee shall not have
any right to be retained in the employ of the Employers.
9. EFFECT ON OTHER PLANS
Nothing in this Plan shall be construed to limit the rights of the
Covered Employees under the Employers' benefit plans, programs or policies.
Adopted: As of June 19, 1999
4
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EXHIBIT 10.6
BURNHAM PACIFIC PROPERTIES, INC.
RANK AND FILE SEVERANCE PLAN
First Amendment
A. Pursuant to the powers reserved to it in Section 6 of the Burnham Pacific
Properties, Inc. Rank and File Severance Plan (the "Plan"), Burnham Pacific
Properties, Inc. hereby amends the Plan, effective as of July 23, 1999, as
follows:
1. Section 2(a)(i) is hereby amended by deleting such subsection in
its entirety and inserting the following in lieu thereof:
"(i) three (3) times the sum of (a) the amount of the current
monthly base salary of the Covered Employee, plus (b) one-twelfth
(1/12) of the sum of the commission payments made to the Covered
Employee during the four consecutive full calendar quarters ending
immediately prior to the Change in Control; and"
B. Except as so amended, the Plan in all other respects is hereby confirmed.
IN WITNESS WHEREOF, Burnham Pacific Properties, Inc. has caused this
First Amendment to the Plan to be duly executed on this 1st day of
August, 1999.
BURNHAM PACIFIC PROPERTIES, INC
By:/S/ JOSEPH WILLIAM BYRNE
-----------------------------------------
Title: Executive Vice President
<PAGE>
Exhibit 10.7
BURNHAM PACIFIC PROPERTIES, INC.
SENIOR EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made as of this 30th day of June, 1999 by and among
BurnhamPacific Properties, Inc., a Maryland corporation with its principal
place of business in San Diego, California (the "Corporation" and together
with its subsidiaries and affiliates, the "Employers") and J. David Martin of
San Francisco, California (the "Executive"), an individual presently employed
as President and Chief Executive Officer of the Corporation.
1. PURPOSE. The Corporation considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Corporation (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders. Therefore,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Employers'
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Employers, the
Executive shall not have any right to be retained in the employ of the
Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Corporation or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of either (A) the
combined voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of
the Corporation's no par common stock ("Common Stock") (in either case
other than as a result of an acquisition of securities directly from
the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Board, provided that any person becoming a
director of the
<PAGE>
Corporation subsequent to June 19, 1999 shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by a vote of at least a majority of
the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the
Board of Directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a PERSON other than the Board,
including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered
an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of
the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation,
if any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
thirty percent (30%) or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities
directly from the Corporation), then a "CHANGE OF CONTROL" shall be deemed to
have occurred for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean any of the
events provided in this Section 3 occurring:
(a) within twelve (12) months following a Change in Control,
termination by the Employers of the employment of the Executive with
the Employers for any reason other than for Cause or the death or
disability (as determined under the Employers' then existing long-term
disability coverage) of the Executive. "Cause" shall mean, and shall be
limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Executive
with respect to any matter involving any of the Employers; or
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(ii) conviction of the Executive of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the
Executive (other than by reason of the Executive's physical or
mental illness, incapacity or disability) to substantially
perform the Executive's duties with the Employers and the
continuation of such failure for a period of 30 days after
delivery by the Employers to the Executive of written notice
specifying the scope and nature of such failure and their
intention to terminate the Executive for Cause.
A Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the Executive being
an employee of any direct or indirect successor to the business or
assets of any of the Employers, rather than continuing as an employee
of the Employers following a Change in Control. For purposes of clauses
(i) and (iii) of this Section 3(a), no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to
be done, by the Executive without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Employers; or
(b) within twelve (12) months following a Change in Control,
termination by the Executive of the Executive's employment with the
Employers for Good Reason. "Good Reason" shall mean the occurrence of
any of the following events:
(i) a material diminution in the nature or scope of
the Executive's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Executive
immediately prior to the Change in Control; or
(ii) a change in reporting relationship such that the
Executive is required to report to someone other than the
Board; or
(iii) a reduction in the Executive's annual base
salary as in effect on June 19, 1999 or as the same may be
increased from time to time; or
(iv) the relocation of the Employers' offices at
which the Executive is principally employed immediately prior
to the date of a Change in Control to a location more than
fifty (50) miles from such offices, or the requirement by the
Employers for the Executive to be based anywhere other than
the Employers' offices at such location, except for required
travel on the Employers' business to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control; or
(v) the failure by the Employers to obtain an
effective agreement from any successor to assume and agree to
perform this Agreement; or
3
<PAGE>
(c) after twelve (12) months following a Change in Control but
within thirteen (13) months following a Change in Control, termination
by the Executive of the Executive's employment with the Employers for
any reason or for no reason.
4. SPECIAL TERMINATION PAYMENTS. In the event a Terminating
Event occurs,
(a) the Employers shall pay to the Executive an amount
equal to the sum of the following:
(i) three (3) times the amount of the then current
annual base salary of the Executive, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) three (3) times the then current target annual
bonus of the Executive.
For purposes of (ii) above, the Executive's current target annual bonus
shall in no event be deemed to be less than the Executive's current
annual base salary as used for purposes of (i) above.
The foregoing amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination; and
(b) the Employers shall continue to provide health, dental and
life insurance to the Executive, on the same terms and conditions as
though the Executive had remained an active employee, for thirty-six
(36) months after the Terminating Event; and
(c) the Employers shall provide COBRA benefits to the
Executive following the end of the period referred to in Section 4(b)
above, such benefits to be determined as though the Executive's
employment had terminated at the end of such period; and
(d) the Employers shall pay to the Executive all reasonable
legal and mediation fees and expenses incurred by the Executive in
obtaining or enforcing any right or benefit provided by this Agreement,
except in cases involving frivolous or bad faith litigation initiated
by the Executive.
Notwithstanding the foregoing, the special termination benefits
required by Section 4(a) shall be offset by any amount paid or payable to the
Executive by the Employers under the terms of any other plan.
4
<PAGE>
5. ADDITIONAL BENEFITS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
compensation payment or distribution by the Employers to or for the
benefit of the Executive (the "Severance Payments"), whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, excluding, however, any payment or distribution
made in connection with the Phantom Shares Award granted by the
Corporation to the Executive by agreement dated as of August 1, 1999
covering the right of the Executive to receive 237,037 Phantom Shares
(the "Long-Term Retention Award"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") such that the
net amount retained by the Executive, after deduction of any Excise Tax
on the Severance Payments, any Federal, state, and local income tax,
employment tax and Excise Tax upon the payment provided by this
subsection, and any interest and/or penalties assessed with respect to
such Excise Tax and not after the deduction of any other taxes or
amounts, shall be equal to the Severance Payments. The Gross-Up Payment
shall be calculated as if the Executive did not receive any payments or
distributions in connection with the Long-Term Retention Award. In
particular, if no Excise Tax is payable by the Executive in connection
with the Severance Payments alone, but an Excise Tax is payable by the
Executive when the Severance Payments are considered in conjunction
with payments or distributions made in connection with the Long-Term
Retention Award, the Employers shall not be required to make any
gross-up payment to the Executive with respect to the Severance
Payments or any other payments. (The Gross-Up Payment is not intended
to compensate the Executive for any income taxes payable with respect
to the Severance Payments or any income or excise taxes payable with
respect to payments or distributions made in connection with the
Long-Term Retention Award.)
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by Deloitte & Touche LLP or any other nationally
recognized accounting firm selected by the Employers (the "Accounting
Firm"), which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably
requested by the Employers or the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's
5
<PAGE>
residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. The initial Gross-Up Payment, if any, as
determined pursuant to this Section 5(b), shall be paid to the
Executive within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive in connection with the Severance Payments, the
Employers shall furnish the Executive with an opinion of counsel that
failure to report any Excise Tax on the Executive's applicable federal
income tax return with respect to the Severance Payments (without
regard to any payments or distributions made in connection with the
Long-Term Retention Award) would not result in the imposition of a
negligence or similar penalty. However, notwithstanding the foregoing,
it shall be the responsibility of the Executive to determine whether
any Excise Tax is payable by the Executive in connection with or as a
result of any payments or distributions made in connection with the
Long-Term Retention Award. Any determination by the Accounting Firm
shall be binding upon the Employers and the Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments will not have been made by the
Employers which should have been made with respect to the Severance
Payments (the "Underpayment"). In the event that the Employers exhaust
their remedies pursuant to Section 5(c) and the Executive thereafter is
required to make a payment of any Excise Tax in connection with the
Severance Payments, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, consistent with the calculations
required to be made hereunder, and any such Underpayment, and any
interest and penalties imposed on the Underpayment and required to be
paid by the Executive in connection with the proceedings described in
Section 5(c), shall be promptly paid by the Employers to or for the
benefit of the Executive.
(c) The Executive shall notify the Employers in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Employers of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive knows of such claim and shall apprise
the Employers of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on
which he gives such notice to the Employers (or such shorter period
ending on the date that any payment of taxes with respect to such claim
is due). If the Employers notify the Executive in writing prior to the
expiration of such period that they desire to contest such claim,
provided that the Employers have set aside adequate reserves to cover
the Underpayment and any interest and penalties thereon that may
accrue, the Executive shall:
(i) give the Employers any information
reasonably requested by the Employers relating to such claim,
6
<PAGE>
(ii) take such action in connection with contesting
such claim as the Employers shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney selected by the Employers,
(iii) cooperate with the Employers in good faith in
order effectively to contest such claim, and
(iv) permit the Employers to participate in any
proceedings relating to such claim; provided, however, that
the Employers shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(c),
the Employers shall control all proceedings taken in
connection with such contest and, at their sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole
option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Employers shall determine; provided, however, that if
the Employers direct the Executive to pay such claim and sue
for a refund, the Employers shall advance the amount of such
payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Employers'
control of the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case
may be, any other issues raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 5(c), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Employers' complying with the
requirements of Section 5(c)) promptly pay to the Employers the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the
7
<PAGE>
Employers pursuant to Section 5(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such
claim and the Employers do not notify the Executive in writing of their
intent to contest such denial of refund prior to the expiration of 30
days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required
to be paid.
6. TERM. This Agreement shall take effect on the date first set forth
above and shall terminate upon the earliest of (a) the termination by the
Employers of the employment of the Executive for Cause; (b) the termination by
the Employers of the employment of the Executive for any reason other than for
Cause, unless such termination occurs after a Change in Control; (c) the
resignation or voluntary termination of the Executive for any reason prior to a
Change in Control; or (d) the resignation of the Executive within twelve (12)
months after a Change in Control for any reason other than the occurrence of any
of the events enumerated in Section 3(b) of this Agreement.
7. WITHHOLDING. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
8. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to
the other party hereto in accordance with this Section 8. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and the Date of Termination. Further, a Notice of
Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds (2/3)
of the entire membership of the Board at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the
Executive, accompanied by the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the
termination met the criteria for Cause set forth in Section 3(a)
hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's employment after a
Change in Control and during the term of this Agreement, shall mean the
date specified in the Notice of Termination. In the case of a
termination by the Employers other than a termination for Cause (which
may be effective immediately), the Date of Termination shall not be
less than 30 days after the Notice of Termination is given. In the case
of a termination by the Executive, the Date of Termination shall not be
less than 15 days from the date such Notice of Termination is given.
Notwithstanding Section 3(a) of this Agreement,
8
<PAGE>
in the event that the Executive gives a Notice of Termination to the
Employers, the Employers may unilaterally accelerate the Date of
Termination and such acceleration shall not result in a second
Terminating Event for purposes of Section 3(a) of this Agreement.
(c) NO MITIGATION. The Employers agree that, if the
Executive's employment by the Employers is terminated during the term
of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to
the Executive by the Employers pursuant to Sections 4 and 5 hereof.
Further, the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of
or relating to this Agreement or the breach thereof through mediation
with JAMS, Endispute or similar organizations. If the controversy or
claim is not resolved within 90 days, the parties shall be free to
pursue other legal remedies in law or equity.
9. ASSIGNMENT; PRIOR AGREEMENTS. Neither the Employers nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Employers and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death after a Terminating Event but prior to the completion by the Employers of
all payments due him under Sections 4 and 5 of this Agreement, the Employers
shall continue such payments to the Executive's beneficiary designated in
writing to the Employers prior to his death (or to his estate, if the Executive
fails to make such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
9
<PAGE>
12. NOTICES. Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers, or to the Employers at their main office, attention of the Board of
Directors.
13. EFFECT ON OTHER PLANS. Nothing in this Agreement shall be construed
to limit the rights of the Executive under the Employers' benefit plans,
programs or policies.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employers.
15. GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the State of Maryland.
16. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Employers would be
required to perform if no such succession had taken place.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers by their duly authorized officers and by the
Executive, as of the date first above written.
BURNHAM PACIFIC PROPERTIES, INC.
By:/s/ Daniel B. Platt
------------------------------------
Name: Daniel B. Platt
Title: Chief Financial Officer
/s/ J. DAVID MARTIN
---------------------------------------
J. David Martin
10
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Exhibit 10.8
BURNHAM PACIFIC PROPERTIES, INC.
SENIOR EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made as of this 30th day of June, 1999 by and among Burnham
Pacific Properties, Inc., a Maryland corporation with its principal place of
business in San Diego, California (the "Corporation" and together with its
subsidiaries and affiliates, the "Employers") and Joseph William Byrne of
Lafayette, California (the "Executive"), an individual presently employed as the
Executive Vice President and Chief Operating Officer of the Corporation.
1. PURPOSE. The Corporation considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Corporation (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders. Therefore,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Employers'
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Employers, the
Executive shall not have any right to be retained in the employ of the
Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Corporation or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of either (A) the
combined voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of
the Corporation's no par common stock ("Common Stock") (in either case
other than as a result of an acquisition of securities directly from
the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
<PAGE>
least a majority of the Board, provided that any person becoming a
director of the Corporation subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's election was approved
by or such person was nominated for election by a vote of at least a
majority of the Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
members of the Board of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a PERSON other
than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not
be considered an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of
the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation,
if any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
thirty percent (30%) or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities
directly from the Corporation), then a "CHANGE OF CONTROL" shall be deemed to
have occurred for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean any of the
events provided in this Section 3 occurring:
(a) within twelve (12) months following a Change in Control,
termination by the Employers of the employment of the Executive with
the Employers for any reason other than for Cause or the death or
disability (as determined under the Employers' then existing long-term
disability coverage) of the Executive. "Cause" shall mean, and shall be
limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Executive
with respect to any matter involving any of the Employers; or
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(ii) conviction of the Executive of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the
Executive (other than by reason of the Executive's physical or
mental illness, incapacity or disability) to substantially
perform the Executive's duties with the Employers and the
continuation of such failure for a period of 30 days after
delivery by the Employers to the Executive of written notice
specifying the scope and nature of such failure and their
intention to terminate the Executive for Cause.
A Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the Executive being
an employee of any direct or indirect successor to the business or
assets of any of the Employers, rather than continuing as an employee
of the Employers following a Change in Control. For purposes of clauses
(i) and (iii) of this Section 3(a), no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to
be done, by the Executive without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Employers; or
(b) within twelve (12) months following a Change in Control,
termination by the Executive of the Executive's employment with the
Employers for Good Reason. "Good Reason" shall mean the occurrence of
any of the following events:
(i) a material diminution in the nature or scope of
the Executive's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Executive
immediately prior to the Change in Control; or
(ii) a change in reporting relationship such that the
Executive is required to report to someone other than the
Chief Executive Officer of the Corporation; or
(iii) a reduction in the Executive's annual base
salary as in effect on June 19, 1999 or as the same may be
increased from time to time; or
(iv) the relocation of the Employers' offices at
which the Executive is principally employed immediately prior
to the date of a Change in Control to a location more than
fifty (50) miles from such offices, or the requirement by the
Employers for the Executive to be based anywhere other than
the Employers' offices at such location, except for required
travel on the Employers' business to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control; or
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(v) the failure by the Employers to obtain an
effective agreement from any successor to assume and agree to
perform this Agreement; or
(c) after twelve (12) months following a Change in Control but
within thirteen (13) months following a Change in Control, termination
by the Executive of the Executive's employment with the Employers for
any reason or for no reason.
4. SPECIAL TERMINATION PAYMENTS. In the event a Terminating Event
occurs,
(a) the Employers shall pay to the Executive an amount
equal to the sum of the following:
(i) three (3) times the amount of the then current
annual base salary of the Executive, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) three (3) times the then current target annual
bonus of the Executive.
For purposes of (ii) above, the Executive's current target annual bonus
shall in no event be deemed to be less than the Executive's current
annual base salary as used for purposes of (i) above.
The foregoing amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination; and
(b) the Employers shall continue to provide health,
dental and life insurance to the Executive, on the same terms and
conditions as though the Executive had remained an active employee, for
thirty-six (36) months after the Terminating Event; and
(c) the Employers shall provide COBRA benefits to the
Executive following the end of the period referred to in Section 4(b)
above, such benefits to be determined as though the Executive's
employment had terminated at the end of such period; and
(d) the Employers shall pay to the Executive all
reasonable legal and mediation fees and expenses incurred by the
Executive in obtaining or enforcing any right or benefit provided by
this Agreement, except in cases involving frivolous or bad faith
litigation initiated by the Executive.
Notwithstanding the foregoing, the special termination benefits
required by Section 4(a) shall be offset by any amount paid or payable to the
Executive by the Employers under the terms of any other plan.
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5. ADDITIONAL BENEFITS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
compensation payment or distribution by the Employers to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the
"Severance Payments"), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the
Severance Payments, any Federal, state, and local income tax,
employment tax and Excise Tax upon the payment provided by this
subsection, and any interest and/or penalties assessed with respect to
such Excise Tax and not after the deduction of any other taxes or
amounts, shall be equal to the Severance Payments. (The Gross-Up
Payment is not intended to compensate the Executive for any income
taxes payable with respect to the Severance Payments.)
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by Deloitte & Touche LLP or any other nationally
recognized accounting firm selected by the Employers (the "Accounting
Firm"), which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably
requested by the Employers or the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 5(b),
shall be paid to the Executive within five days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, the Employers shall furnish
the Executive with an opinion of counsel that failure to report the
Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be binding upon the
Employers and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employers should
have been made (an "Underpayment"). In the event that the Employers
exhaust their remedies pursuant to
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Section 5(c) and the Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, consistent with the calculations
required to be made hereunder, and any such Underpayment, and any
interest and penalties imposed on the Underpayment and required to be
paid by the Executive in connection with the proceedings described in
Section 5(c), shall be promptly paid by the Employers to or for the
benefit of the Executive.
(c) The Executive shall notify the Employers in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Employers of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive knows of such claim and shall apprise
the Employers of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on
which he gives such notice to the Employers (or such shorter period
ending on the date that any payment of taxes with respect to such claim
is due). If the Employers notify the Executive in writing prior to the
expiration of such period that they desire to contest such claim,
provided that the Employers have set aside adequate reserves to cover
the Underpayment and any interest and penalties thereon that may
accrue, the Executive shall:
(i) give the Employers any information reasonably
requested by the Employers relating to such claim,
(ii) take such action in connection with contesting
such claim as the Employers shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney selected by the Employers,
(iii) cooperate with the Employers in good faith in
order effectively to contest such claim, and
(iv) permit the Employers to participate in any
proceedings relating to such claim; provided, however, that
the Employers shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(c),
the Employers shall control all proceedings taken in
connection with such contest and, at their sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole
option, either direct the Executive to pay the tax claimed and
sue for a
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<PAGE>
refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Employers shall determine;
provided, however, that if the Employers direct the Executive to pay
such claim and sue for a refund, the Employers shall advance the amount
of such payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Employers' control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 5(c), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Employers' complying with the
requirements of Section 5(c)) promptly pay to the Employers the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Employers pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Employers do not notify the
Executive in writing of their intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
6. TERM. This Agreement shall take effect on the date first set
forth above and shall terminate upon the earliest of (a) the termination by the
Employers of the employment of the Executive for Cause; (b) the termination by
the Employers of the employment of the Executive for any reason other than for
Cause, unless such termination occurs after a Change in Control; (c) the
resignation or voluntary termination of the Executive for any reason prior to a
Change in Control; or (d) the resignation of the Executive within twelve (12)
months after a Change in Control for any reason other than the occurrence of any
of the events enumerated in Section 3(b) of this Agreement.
7. WITHHOLDING. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
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8. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to
the other party hereto in accordance with this Section 8. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and the Date of Termination. Further, a Notice of
Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds (2/3)
of the entire membership of the Board at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the
Executive, accompanied by the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the
termination met the criteria for Cause set forth in Section 3(a)
hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's employment after a
Change in Control and during the term of this Agreement, shall mean the
date specified in the Notice of Termination. In the case of a
termination by the Employers other than a termination for Cause (which
may be effective immediately), the Date of Termination shall not be
less than 30 days after the Notice of Termination is given. In the case
of a termination by the Executive, the Date of Termination shall not be
less than 15 days from the date such Notice of Termination is given.
Notwithstanding Section 3(a) of this Agreement, in the event that the
Executive gives a Notice of Termination to the Employers, the Employers
may unilaterally accelerate the Date of Termination and such
acceleration shall not result in a second Terminating Event for
purposes of Section 3(a) of this Agreement.
(c) NO MITIGATION. The Employers agree that, if the
Executive's employment by the Employers is terminated during the term
of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to
the Executive by the Employers pursuant to Sections 4 and 5 hereof.
Further, the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of
or relating to this Agreement or the breach thereof through mediation
with JAMS, Endispute or similar organizations. If the controversy or
claim is not resolved within 90 days, the parties shall be free to
pursue other legal remedies in law or equity.
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9. ASSIGNMENT; PRIOR AGREEMENTS. Neither the Employers nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Employers and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death after a Terminating Event but prior to the completion by the Employers of
all payments due him under Sections 4 and 5 of this Agreement, the Employers
shall continue such payments to the Executive's beneficiary designated in
writing to the Employers prior to his death (or to his estate, if the Executive
fails to make such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. NOTICES. Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers, or to the Employers at their main office, attention of the Board of
Directors.
13. EFFECT ON OTHER PLANS. Nothing in this Agreement shall be construed
to limit the rights of the Executive under the Employers' benefit plans,
programs or policies.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employers.
15. GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the State of Maryland.
16. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to
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perform this Agreement in the same manner and to the same extent that the
Employers would be required to perform if no such succession had taken place.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers by their duly authorized officers and by the
Executive, as of the date first above written.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. David Martin
--------------------------------------
Name: J. David Martin
Title: President
/s/ Joseph William Byrne
-----------------------------------------
Joseph William Byrne
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Exhibit 10.9
BURNHAM PACIFIC PROPERTIES, INC.
SENIOR EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made as of this 30th day of June, 1999 by and among Burnham
Pacific Properties, Inc., a Maryland corporation with its principal place of
business in San Diego, California (the "Corporation" and together with its
subsidiaries and affiliates, the "Employers") and James. W. Gaube of Lake
Oswego, California (the "Executive"), an individual presently employed as the
Executive Vice President and Chief Investment Officer of the Corporation.
1. PURPOSE. The Corporation considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Corporation (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders. Therefore,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Employers'
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Employers, the
Executive shall not have any right to be retained in the employ of the
Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in
Control" shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Corporation or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of either (A) the
combined voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of
the Corporation's no par common stock ("Common Stock") (in either case
other than as a result of an acquisition of securities directly from
the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
<PAGE>
least a majority of the Board, provided that any person becoming a
director of the Corporation subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's election was approved
by or such person was nominated for election by a vote of at least a
majority of the Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
members of the Board of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a PERSON other
than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not
be considered an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of
the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation,
if any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
thirty percent (30%) or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities
directly from the Corporation), then a "CHANGE OF CONTROL" shall be deemed to
have occurred for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean any of the
events provided in this Section 3 occurring:
(a) within twelve (12) months following a Change in Control,
termination by the Employers of the employment of the Executive with
the Employers for any reason other than for Cause or the death or
disability (as determined under the Employers' then existing long-term
disability coverage) of the Executive. "Cause" shall mean, and shall be
limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Executive
with respect to any matter involving any of the Employers; or
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(ii) conviction of the Executive of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the
Executive (other than by reason of the Executive's physical or
mental illness, incapacity or disability) to substantially
perform the Executive's duties with the Employers and the
continuation of such failure for a period of 30 days after
delivery by the Employers to the Executive of written notice
specifying the scope and nature of such failure and their
intention to terminate the Executive for Cause.
A Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the Executive being
an employee of any direct or indirect successor to the business or
assets of any of the Employers, rather than continuing as an employee
of the Employers following a Change in Control. For purposes of clauses
(i) and (iii) of this Section 3(a), no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to
be done, by the Executive without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Employers; or
(b) within twelve (12) months following a Change in
Control, termination by the Executive of the Executive's employment
with the Employers for Good Reason. "Good Reason" shall mean the
occurrence of any of the following events:
(i) a material diminution in the nature or scope of
the Executive's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Executive
immediately prior to the Change in Control; or
(ii) a change in reporting relationship such that the
Executive is required to report to someone other than the
Chief Executive Officer of the Corporation; or
(iii) a reduction in the Executive's annual base
salary as in effect on June 19, 1999 or as the same may be
increased from time to time; or
(iv) the relocation of the Employers' offices at
which the Executive is principally employed immediately prior
to the date of a Change in Control to a location more than
fifty (50) miles from such offices, or the requirement by the
Employers for the Executive to be based anywhere other than
the Employers' offices at such location, except for required
travel on the Employers' business to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control; or
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(v) the failure by the Employers to obtain an
effective agreement from any successor to assume and agree to
perform this Agreement; or
(c) after twelve (12) months following a Change in Control but
within thirteen (13) months following a Change in Control, termination
by the Executive of the Executive's employment with the Employers for
any reason or for no reason.
4. SPECIAL TERMINATION PAYMENTS. In the event a Terminating Event
occurs,
(a) the Employers shall pay to the Executive an amount
equal to the sum of the following:
(i) three (3) times the amount of the then current
annual base salary of the Executive, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) three (3) times the then current target annual
bonus of the Executive.
For purposes of (ii) above, the Executive's current target annual bonus
shall in no event be deemed to be less than the Executive's current
annual base salary as used for purposes of (i) above.
The foregoing amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination; and
(b) the Employers shall continue to provide health,
dental and life insurance to the Executive, on the same terms and
conditions as though the Executive had remained an active employee, for
thirty-six (36) months after the Terminating Event; and
(c) the Employers shall provide COBRA benefits to the
Executive following the end of the period referred to in Section 4(b)
above, such benefits to be determined as though the Executive's
employment had terminated at the end of such period; and
(d) the Employers shall pay to the Executive all
reasonable legal and mediation fees and expenses incurred by the
Executive in obtaining or enforcing any right or benefit provided by
this Agreement, except in cases involving frivolous or bad faith
litigation initiated by the Executive.
Notwithstanding the foregoing, the special termination benefits
required by Section 4(a) shall be offset by any amount paid or payable to the
Executive by the Employers under the terms of any other plan.
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5. ADDITIONAL BENEFITS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
compensation payment or distribution by the Employers to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the
"Severance Payments"), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the
Severance Payments, any Federal, state, and local income tax,
employment tax and Excise Tax upon the payment provided by this
subsection, and any interest and/or penalties assessed with respect to
such Excise Tax and not after the deduction of any other taxes or
amounts, shall be equal to the Severance Payments. (The Gross-Up
Payment is not intended to compensate the Executive for any income
taxes payable with respect to the Severance Payments.)
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by Deloitte & Touche LLP or any other nationally
recognized accounting firm selected by the Employers (the "Accounting
Firm"), which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably
requested by the Employers or the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 5(b),
shall be paid to the Executive within five days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, the Employers shall furnish
the Executive with an opinion of counsel that failure to report the
Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be binding upon the
Employers and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employers should
have been made (an "Underpayment"). In the event that the Employers
exhaust their remedies pursuant to
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Section 5(c) and the Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, consistent with the calculations
required to be made hereunder, and any such Underpayment, and any
interest and penalties imposed on the Underpayment and required to be
paid by the Executive in connection with the proceedings described in
Section 5(c), shall be promptly paid by the Employers to or for the
benefit of the Executive.
(c) The Executive shall notify the Employers in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Employers of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive knows of such claim and shall apprise
the Employers of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on
which he gives such notice to the Employers (or such shorter period
ending on the date that any payment of taxes with respect to such claim
is due). If the Employers notify the Executive in writing prior to the
expiration of such period that they desire to contest such claim,
provided that the Employers have set aside adequate reserves to cover
the Underpayment and any interest and penalties thereon that may
accrue, the Executive shall:
(i) give the Employers any information reasonably
requested by the Employers relating to such claim,
(ii) take such action in connection with contesting
such claim as the Employers shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney selected by the Employers,
(iii) cooperate with the Employers in good faith in
order effectively to contest such claim, and
(iv) permit the Employers to participate in any
proceedings relating to such claim; provided, however, that
the Employers shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(c),
the Employers shall control all proceedings taken in
connection with such contest and, at their sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole
option, either direct the Executive to pay the tax claimed and
sue for a
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refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Employers shall determine;
provided, however, that if the Employers direct the Executive to pay
such claim and sue for a refund, the Employers shall advance the amount
of such payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Employers' control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 5(c), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Employers' complying with the
requirements of Section 5(c)) promptly pay to the Employers the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Employers pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Employers do not notify the
Executive in writing of their intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
6. TERM. This Agreement shall take effect on the date first set
forth above and shall terminate upon the earliest of (a) the termination by the
Employers of the employment of the Executive for Cause; (b) the termination by
the Employers of the employment of the Executive for any reason other than for
Cause, unless such termination occurs after a Change in Control; (c) the
resignation or voluntary termination of the Executive for any reason prior to a
Change in Control; or (d) the resignation of the Executive within twelve (12)
months after a Change in Control for any reason other than the occurrence of any
of the events enumerated in Section 3(b) of this Agreement.
7. WITHHOLDING. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
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8. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to
the other party hereto in accordance with this Section 8. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and the Date of Termination. Further, a Notice of
Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds (2/3)
of the entire membership of the Board at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the
Executive, accompanied by the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the
termination met the criteria for Cause set forth in Section 3(a)
hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's employment after a
Change in Control and during the term of this Agreement, shall mean the
date specified in the Notice of Termination. In the case of a
termination by the Employers other than a termination for Cause (which
may be effective immediately), the Date of Termination shall not be
less than 30 days after the Notice of Termination is given. In the case
of a termination by the Executive, the Date of Termination shall not be
less than 15 days from the date such Notice of Termination is given.
Notwithstanding Section 3(a) of this Agreement, in the event that the
Executive gives a Notice of Termination to the Employers, the Employers
may unilaterally accelerate the Date of Termination and such
acceleration shall not result in a second Terminating Event for
purposes of Section 3(a) of this Agreement.
(c) NO MITIGATION. The Employers agree that, if the
Executive's employment by the Employers is terminated during the term
of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to
the Executive by the Employers pursuant to Sections 4 and 5 hereof.
Further, the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of
or relating to this Agreement or the breach thereof through mediation
with JAMS, Endispute or similar organizations. If the controversy or
claim is not resolved within 90 days, the parties shall be free to
pursue other legal remedies in law or equity.
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9. ASSIGNMENT; PRIOR AGREEMENTS. Neither the Employers nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Employers and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death after a Terminating Event but prior to the completion by the Employers of
all payments due him under Sections 4 and 5 of this Agreement, the Employers
shall continue such payments to the Executive's beneficiary designated in
writing to the Employers prior to his death (or to his estate, if the Executive
fails to make such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. NOTICES. Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers, or to the Employers at their main office, attention of the Board of
Directors.
13. EFFECT ON OTHER PLANS. Nothing in this Agreement shall be construed
to limit the rights of the Executive under the Employers' benefit plans,
programs or policies.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employers.
15. GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the State of Maryland.
16. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to
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perform this Agreement in the same manner and to the same extent that the
Employers would be required to perform if no such succession had taken place.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers by their duly authorized officers and by the
Executive, as of the date first above written.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. David Martin
-------------------------------------
Name: J. David Martin
Title: President
/s/ James W. Gaube
-----------------------------------------
James W. Gaube
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EXHIBIT 10.10
BURNHAM PACIFIC PROPERTIES, INC.
SENIOR EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made as of this day of this 30th day of June, 1999 by and
among Burnham Pacific Properties, Inc., a Maryland corporation with its
principal place of business in San Diego, California (the "Corporation" and
together with its subsidiaries and affiliates, the "Employers") and Daniel B.
Platt of Rancho Santa Fe, California (the "Executive"), an individual presently
employed as the Executive Vice President, Chief Financial Officer, and Chief
Administrative Officer of the Corporation.
1. PURPOSE. The Corporation considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Corporation (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders. Therefore,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Employers'
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Employers, the
Executive shall not have any right to be retained in the employ of the
Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Corporation or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of either (A) the
combined voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of
the Corporation's no par common stock ("Common Stock") (in either case
other than as a result of an acquisition of securities directly from
the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
<PAGE>
least a majority of the Board, provided that any person becoming a
director of the Corporation subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's election was approved
by or such person was nominated for election by a vote of at least a
majority of the Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
members of the Board of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a PERSON other
than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not
be considered an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of
the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation,
if any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
thirty percent (30%) or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities
directly from the Corporation), then a "CHANGE OF CONTROL" shall be deemed to
have occurred for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean any of the
events provided in this Section 3 occurring:
(a) within twelve (12) months following a Change in Control,
termination by the Employers of the employment of the Executive with
the Employers for any reason other than for Cause or the death or
disability (as determined under the Employers' then existing long-term
disability coverage) of the Executive. "Cause" shall mean, and shall be
limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Executive
with respect to any matter involving any of the Employers; or
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(ii) conviction of the Executive of a crime
involving moral turpitude; or
(iii) the deliberate or willful failure by the
Executive (other than by reason of the Executive's physical or
mental illness, incapacity or disability) to substantially
perform the Executive's duties with the Employers and the
continuation of such failure for a period of 30 days after
delivery by the Employers to the Executive of written notice
specifying the scope and nature of such failure and their
intention to terminate the Executive for Cause.
A Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the Executive being
an employee of any direct or indirect successor to the business or
assets of any of the Employers, rather than continuing as an employee
of the Employers following a Change in Control. For purposes of clauses
(i) and (iii) of this Section 3(a), no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to
be done, by the Executive without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the
Employers; or
(b) within twelve (12) months following a Change in Control,
termination by the Executive of the Executive's employment with the
Employers for Good Reason. "Good Reason" shall mean the occurrence of
any of the following events:
(i) a material diminution in the nature or scope of
the Executive's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Executive
immediately prior to the Change in Control; or
(ii) a change in reporting relationship such that the
Executive is required to report to someone other than the
Chief Executive Officer of the Corporation; or
(iii) a reduction in the Executive's annual base
salary as in effect on June 19, 1999 or as the same may be
increased from time to time; or
(iv) the relocation of the Employers' offices at
which the Executive is principally employed immediately prior
to the date of a Change in Control to a location more than
fifty (50) miles from such offices, or the requirement by the
Employers for the Executive to be based anywhere other than
the Employers' offices at such location, except for required
travel on the Employers' business to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control; or
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(v) the failure by the Employers to obtain an
effective agreement from any successor to assume and agree to
perform this Agreement; or
(c) after twelve (12) months following a Change in Control but
within thirteen (13) months following a Change in Control, termination
by the Executive of the Executive's employment with the Employers for
any reason or for no reason.
4. SPECIAL TERMINATION PAYMENTS. In the event a Terminating
Event occurs,
(a) the Employers shall pay to the Executive an amount
equal to the sum of the following:
(i) three (3) times the amount of the then current
annual base salary of the Executive, determined prior to any
reductions for pre-tax contributions to a cash or deferred
arrangement or a cafeteria plan; and
(ii) three (3) times the then current target annual
bonus of the Executive.
For purposes of (ii) above, the Executive's current target annual bonus
shall in no event be deemed to be less than the Executive's current
annual base salary as used for purposes of (i) above.
The foregoing amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination; and
(b) the Employers shall continue to provide health, dental and
life insurance to the Executive, on the same terms and conditions as
though the Executive had remained an active employee, for thirty-six
(36) months after the Terminating Event; and
(c) the Employers shall provide COBRA benefits to the
Executive following the end of the period referred to in Section 4(b)
above, such benefits to be determined as though the Executive's
employment had terminated at the end of such period; and
(d) the Employers shall pay to the Executive all reasonable
legal and mediation fees and expenses incurred by the Executive in
obtaining or enforcing any right or benefit provided by this Agreement,
except in cases involving frivolous or bad faith litigation initiated
by the Executive.
Notwithstanding the foregoing, the special termination benefits
required by Section 4(a) shall be offset by any amount paid or payable to the
Executive by the Employers under the terms of any other plan.
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5. ADDITIONAL BENEFITS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
compensation payment or distribution by the Employers
to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Severance Payments"), would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or
penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Severance Payments, any
Federal, state, and local income tax, employment tax and Excise Tax
upon the payment provided by this subsection, and any interest and/or
penalties assessed with respect to such Excise Tax and not after the
deduction of any other taxes or amounts, shall be equal to the
Severance Payments. (The Gross-Up Payment is not intended to compensate
the Executive for any income taxes payable with respect to the
Severance Payments.)
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by Deloitte & Touche LLP or any other nationally
recognized accounting firm selected by the Employers (the "Accounting
Firm"), which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably
requested by the Employers or the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 5(b),
shall be paid to the Executive within five days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, the Employers shall furnish
the Executive with an opinion of counsel that failure to report the
Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be binding upon the
Employers and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employers should
have been made (an "Underpayment"). In the event that the Employers
exhaust their remedies pursuant to
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Section 5(c) and the Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, consistent with the calculations
required to be made hereunder, and any such Underpayment, and any
interest and penalties imposed on the Underpayment and required to be
paid by the Executive in connection with the proceedings described in
Section 5(c), shall be promptly paid by the Employers to or for the
benefit of the Executive.
(c) The Executive shall notify the Employers in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the
Employers of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than 10 business days after the
Executive knows of such claim and shall apprise the Employers of the
nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice
to the Employers (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Employers
notify the Executive in writing prior to the expiration of such period
that they desire to contest such claim, provided that the Employers
have set aside adequate reserves to cover the Underpayment and any
interest and penalties thereon that may accrue, the Executive shall:
(i) give the Employers any information
reasonably requested by the Employers relating to such claim,
(ii) take such action in connection with
contesting such claim as the Employers shall reasonably
request in writing from time to time, including, without
limitation, accepting legal representation with respect to
such claim by an attorney selected by the Employers,
(iii) cooperate with the Employers in good faith
in order effectively to contest such claim, and
(iv) permit the Employers to participate in any
proceedings relating to such claim; provided, however, that
the Employers shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(c),
the Employers shall control all proceedings taken in
connection with such contest and, at their sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole
option, either direct the Executive to pay the tax claimed and
sue for a
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refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Employers shall determine; provided, however, that if
the Employers direct the Executive to pay such claim and sue
for a refund, the Employers shall advance the amount of such
payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited
solely to such contested amount.
Furthermore, the Employers' control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issues
raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 5(c), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Employers' complying with the
requirements of Section 5(c)) promptly pay to the Employers the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Employers pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Employers do not notify the
Executive in writing of their intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
6. TERM. This Agreement shall take effect on the date first set forth
above and shall terminate upon the earliest of (a) the termination by the
Employers of the employment of the Executive for Cause; (b) the termination by
the Employers of the employment of the Executive for any reason other than for
Cause, unless such termination occurs after a Change in Control; (c) the
resignation or voluntary termination of the Executive for any reason prior to a
Change in Control; or (d) the resignation of the Executive within twelve (12)
months after a Change in Control for any reason other than the occurrence of any
of the events enumerated in Section 3(b) of this Agreement.
7. WITHHOLDING. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
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8. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to
the other party hereto in accordance with this Section 8. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and the Date of Termination. Further, a Notice of
Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds (2/3)
of the entire membership of the Board at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the
Executive, accompanied by the Executive's counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the
termination met the criteria for Cause set forth in Section 3(a)
hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's employment after a
Change in Control and during the term of this Agreement, shall mean the
date specified in the Notice of Termination. In the case of a
termination by the Employers other than a termination for Cause (which
may be effective immediately), the Date of Termination shall not be
less than 30 days after the Notice of Termination is given. In the case
of a termination by the Executive, the Date of Termination shall not be
less than 15 days from the date such Notice of Termination is given.
Notwithstanding Section 3(a) of this Agreement, in the event that the
Executive gives a Notice of Termination to the Employers, the Employers
may unilaterally accelerate the Date of Termination and such
acceleration shall not result in a second Terminating Event for
purposes of Section 3(a) of this Agreement.
(c) NO MITIGATION. The Employers agree that, if the
Executive's employment by the Employers is terminated during the term
of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to
the Executive by the Employers pursuant to Sections 4 and 5 hereof.
Further, the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of
or relating to this Agreement or the breach thereof through mediation
with JAMS, Endispute or similar organizations. If the controversy or
claim is not resolved within 90 days, the parties shall be free to
pursue other legal remedies in law or equity.
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9. ASSIGNMENT; PRIOR AGREEMENTS. Neither the Employers nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Employers and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death after a Terminating Event but prior to the completion by the Employers of
all payments due him under Sections 4 and 5 of this Agreement, the Employers
shall continue such payments to the Executive's beneficiary designated in
writing to the Employers prior to his death (or to his estate, if the Executive
fails to make such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. NOTICES. Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers, or to the Employers at their main office, attention of the Board of
Directors.
13. EFFECT ON OTHER PLANS. Nothing in this Agreement shall be construed
to limit the rights of the Executive under the Employers' benefit plans,
programs or policies.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employers.
15. GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the State of Maryland.
16. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to
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perform this Agreement in the same manner and to the same extent that the
Employers would be required to perform if no such succession had taken place.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers by their duly authorized officers and by the
Executive, as of the date first above written.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. David Martin
----------------------------------
Name: J. David Martin
Title: President
/s/ Daniel B. Platt
-------------------------------------
Daniel B. Platt
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EXHIBIT 10.11
BURNHAM PACIFIC PROPERTIES, INC.
SENIOR EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT made as of this 30th day of June, 1999 by and among Burnham
Pacific Properties, Inc., a Maryland corporation with its principal place of
business in San Diego, California (the "Corporation" and together with its
subsidiaries and affiliates, the "Employers") and Scott C. Verges of Berkeley,
California (the "Executive"), an individual presently providing services to the
Corporation as its Secretary and General Counsel.
1. PURPOSE. The Corporation considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. The Board of Directors of the Corporation (the "Board")
recognizes, however, that, as is the case with many publicly held corporations,
the possibility of a Change in Control (as defined in Section 2 hereof) exists
and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders. Therefore,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Employers'
management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control. Nothing in this Agreement shall be construed
as creating an express or implied contract of employment and, except as
otherwise agreed in writing between the Executive and the Employers, the
Executive shall not have any right to be retained in the service of the
Employers.
2. CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall mean the occurrence of any one of the following events:
(a) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Corporation, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Corporation or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of either (A) the
combined voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") or (B) the then outstanding shares of
the Corporation's no par common stock ("Common Stock") (in either case
other than as a result of an acquisition of securities directly from
the Corporation); or
(b) persons who, as of June 19, 1999, constitute the
Corporation's Board of Directors (the "Incumbent Directors") cease for
any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Board, provided that any person becoming a
director of the
<PAGE>
Corporation subsequent to June 19, 1999 shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by a vote of at least a majority of
the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the
Board of Directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a PERSON other than the Board,
including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered
an Incumbent Director; or
(c) the stockholders of the Corporation shall approve (A) any
consolidation or merger of the Corporation where the stockholders of
the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation,
if any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
thirty percent (30%) or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in this sentence shall thereafter become the beneficial owner of any additional
shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities
directly from the Corporation), then a "CHANGE OF CONTROL" shall be deemed to
have occurred for purposes of the foregoing clause (a).
3. TERMINATING EVENT. A "Terminating Event" shall mean any of the
events provided in this Section 3 occurring:
(a) within twelve (12) months following a Change in Control,
termination by the Employers of the contractual relationship in effect
with respect to the Executive with the Employers for any reason other
than for Cause or the death or disability (as determined under the
Employers' then existing long-term disability coverage) of the
Executive. "Cause" shall mean, and shall be limited to, the occurrence
of any one or more of the following events:
(i) a willful act of dishonesty by the Executive
with respect to any matter involving any of the Employers; or
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(ii) conviction of the Executive of a crime
involving moral turpitude;
or
(iii) the deliberate or willful failure by the
Executive (other than by reason of the Executive's physical or
mental illness, incapacity or disability) to substantially
perform the Executive's duties with the Employers and the
continuation of such failure for a period of 30 days after
delivery by the Employers to the Executive of written notice
specifying the scope and nature of such failure and their
intention to terminate the Executive for Cause.
A Terminating Event shall not be deemed to have occurred
pursuant to this Section 3(a) solely as a result of the Executive being
an employee of or otherwise providing services to any direct or
indirect successor to the business or assets of any of the Employers,
rather than continuing to provide services to the Employers following a
Change in Control. For purposes of clauses (i) and (iii) of this
Section 3(a), no act, or failure to act, on the Executive's part shall
be deemed "willful" unless done, or omitted to be done, by the
Executive without reasonable belief that the Executive's act, or
failure to act, was in the best interest of the Employers; or
(b) within twelve (12) months following a Change in Control,
termination by the Executive of the Executive's contractual
relationship with the Employers for Good Reason. "Good Reason" shall
mean the occurrence of any of the following events:
(i) a material diminution in the nature or scope of
the Executive's responsibilities, authorities, title, powers,
functions, or duties from the responsibilities, authorities,
powers, functions, or duties exercised by the Executive
immediately prior to the Change in Control; or
(ii) a change in reporting relationship such that the
Executive is required to report to someone other than the
Chief Executive Officer of the Corporation; or
(iii) a reduction in the Executive's annual base fees
as in effect on June 19, 1999 or as the same may be increased
from time to time; or
(iv) the relocation of the Employers' offices at
which the Executive is principally employed immediately prior
to the date of a Change in Control to a location more than
fifty (50) miles from such offices, or the requirement by the
Employers for the Executive to be based anywhere other than
the Employers' offices at such location, except for required
travel on the Employers' business to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control; or
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(v) the failure by the Employers to obtain an
effective agreement from any successor to assume and agree to
perform this Agreement; or
(c) after twelve (12) months following a Change in Control but
within thirteen (13) months following a Change in Control, termination
by the Executive of the Executive's contractual relationship with the
Employers for any reason or for no reason.
4. SPECIAL TERMINATION PAYMENTS. In the event a Terminating
Event occurs,
(a) the Employers shall pay to the Executive an amount
equal to the sum of the following:
(i) three (3) times the amount of the then
current annual base fees of the Executive; and
(ii) three (3) times the then current target annual
bonus payment of the Executive.
For purposes of (ii) above, the Executive's current target annual bonus
payment shall in no event be deemed to be less than the Executive's
current annual base fees as used for purposes of (i) above.
The foregoing amount shall be paid in one lump sum payment no
later than thirty-one (31) days following the Date of Termination; and
(b) the Employers shall reimburse the Executive for the full
cost of continuing the health, dental and/or life insurance coverage in
effect for the Executive immediately prior to the Change in Control or
any similar coverage obtained by the Executive, for up to thirty-six
(36) months after the Terminating Event; and
(c) the Employers shall pay to the Executive all reasonable
legal and mediation fees and expenses incurred by the Executive in
obtaining or enforcing any right or benefit provided by this Agreement,
except in cases involving frivolous or bad faith litigation initiated
by the Executive.
Notwithstanding the foregoing, the special termination benefits
required by Section 4(a) shall be offset by any amount paid or payable to the
Executive by the Employers under the terms of any other plan.
5. ADDITIONAL BENEFITS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
compensation payment or distribution by the Employers
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to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Severance Payments"), would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") such that the
net amount retained by the Executive, after deduction of any Excise Tax
on the Severance Payments, any Federal, state, and local income tax,
employment tax and Excise Tax upon the payment provided by this
subsection, and any interest and/or penalties assessed with respect to
such Excise Tax and not after the deduction of any other taxes or
amounts, shall be equal to the Severance Payments. (The Gross-Up
Payment is not intended to compensate the Executive for any income
taxes payable with respect to the Severance Payments.)
(b) Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by Deloitte & Touche LLP or any other nationally
recognized accounting firm selected by the Employers (the "Accounting
Firm"), which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably
requested by the Employers or the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 5(b),
shall be paid to the Executive within five days of the receipt of the
Accounting Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, the Employers shall furnish
the Executive with an opinion of counsel that failure to report the
Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be binding upon the
Employers and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employers should
have been made (an "Underpayment"). In the event that the Employers
exhaust their remedies pursuant to Section 5(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred, consistent with the calculations required to be made
hereunder, and any such Underpayment, and any interest and penalties
imposed on the Underpayment and
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required to be paid by the Executive in connection with the proceedings
described in Section 5(c), shall be promptly paid by the Employers to
or for the benefit of the Executive.
(c) The Executive shall notify the Employers in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Employers of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive knows of such claim and shall apprise
the Employers of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on
which he gives such notice to the Employers (or such shorter period
ending on the date that any payment of taxes with respect to such claim
is due). If the Employers notify the Executive in writing prior to the
expiration of such period that they desire to contest such claim,
provided that the Employers have set aside adequate reserves to cover
the Underpayment and any interest and penalties thereon that may
accrue, the Executive shall:
(i) give the Employers any information
reasonably requested by the Employers relating to such claim,
(ii) take such action in connection with contesting
such claim as the Employers shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney selected by the Employers,
(iii) cooperate with the Employers in good faith in
order effectively to contest such claim, and
(iv) permit the Employers to participate in any
proceedings relating to such claim; provided, however, that
the Employers shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 5(c),
the Employers shall control all proceedings taken in
connection with such contest and, at their sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole
option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Employers shall determine; provided, however, that if
the Employers direct the
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Executive to pay such claim and sue for a refund, the
Employers shall advance the amount of such payment to the
Executive on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount
is claimed to be due is limited solely to such contested
amount. Furthermore, the Employers' control of the contest
shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other
issues raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 5(c), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Employers' complying with the
requirements of Section 5(c)) promptly pay to the Employers the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Employers pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Employers do not notify the
Executive in writing of their intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
6. TERM. This Agreement shall take effect on the date first set forth
above and shall terminate upon the earliest of (a) the termination by the
Employers of the employment of the Executive for Cause; (b) the termination by
the Employers of the employment of the Executive for any reason other than for
Cause, unless such termination occurs after a Change in Control; (c) the
resignation or voluntary termination of the Executive for any reason prior to a
Change in Control; or (d) the resignation of the Executive within twelve (12)
months after a Change in Control for any reason other than the occurrence of any
of the events enumerated in Section 3(b) of this Agreement.
7. WITHHOLDING. All payments made by the Employers under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Employers under applicable law.
8. NOTICE AND DATE OF TERMINATION; DISPUTES; ETC.
(a) NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the
Executive's services (other than by
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reason of death) shall be communicated by written Notice of Termination
from one party hereto to the other party hereto in accordance with this
Section 8. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and the Date of Termination.
Further, a Notice of Termination for Cause is required to include a
copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to the Executive and an
opportunity for the Executive, accompanied by the Executive's counsel,
to be heard before the Board) finding that, in the good faith opinion
of the Board, the termination met the criteria for Cause set forth in
Section 3(a) hereof.
(b) DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's services after a Change
in Control and during the term of this Agreement, shall mean the date
specified in the Notice of Termination. In the case of a termination by
the Employers other than a termination for Cause (which may be
effective immediately), the Date of Termination shall not be less than
30 days after the Notice of Termination is given. In the case of a
termination by the Executive, the Date of Termination shall not be less
than 15 days from the date such Notice of Termination is given.
Notwithstanding Section 3(a) of this Agreement, in the event that the
Executive gives a Notice of Termination to the Employers, the Employers
may unilaterally accelerate the Date of Termination and such
acceleration shall not result in a second Terminating Event for
purposes of Section 3(a) of this Agreement.
(c) NO MITIGATION. The Employers agree that, if the
Executive's employment by the Employers is terminated during the term
of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to
the Executive by the Employers pursuant to Sections 4 and 5 hereof.
Further, the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employers, or otherwise.
(d) MEDIATION OF DISPUTES. The parties shall endeavor in good
faith to settle within 90 days any controversy or claim arising out of
or relating to this Agreement or the breach thereof through mediation
with JAMS, Endispute or similar organizations. If the controversy or
claim is not resolved within 90 days, the parties shall be free to
pursue other legal remedies in law or equity.
9. ASSIGNMENT; PRIOR AGREEMENTS. Neither the Employers nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect. This Agreement shall inure to the benefit of and be binding
upon the Employers and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns. In the event of the Executive's
death
8
<PAGE>
after a Terminating Event but prior to the completion by the Employers of all
payments due him under Sections 4 and 5 of this Agreement, the Employers shall
continue such payments to the Executive's beneficiary designated in writing to
the Employers prior to his death (or to his estate, if the Executive fails to
make such designation).
10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. NOTICES. Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers, or to the Employers at their main office, attention of the Board of
Directors.
13. EFFECT ON OTHER PLANS. Nothing in this Agreement shall be construed
to limit the rights of the Executive under the Employers' benefit plans,
programs or policies.
14. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employers.
15. GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the State of Maryland.
16. OBLIGATIONS OF SUCCESSORS. In addition to any obligations imposed
by law upon any successor to the Employers, the Employers will use their best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Employers to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Employers would be
required to perform if no such succession had taken place.
9
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers by their duly authorized officers and by the
Executive, as of the date first above written.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. David Martin
---------------------------------
Name: J. David Martin
Title: President
/s/ Scott C. Verges
------------------------------------
Scott C. Verges
10
<PAGE>
Exhibit 10.12
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to J. David Martin (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
to provide a long term incentive for the Executive to remain with the Company
and to further align his interests with the interests of the Company's
stockholders, covering the right to receive 237,037 Phantom Shares, subject
to the terms and conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
23,704 August 1, 2000
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2001
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2002
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2003
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2004
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2005
- ---------------------------------------- -----------------------------------------
23,704 August 1, 2006
- ---------------------------------------- -----------------------------------------
23,703 August 1, 2007
- ---------------------------------------- -----------------------------------------
23,703 August 1, 2008
- ---------------------------------------- -----------------------------------------
23,703 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment
by the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set
<PAGE>
forth above, the Participant shall forfeit all Phantom Shares
which have not yet vested, except as provided in (b) or (c)
below. The Committee's determination of the reason for
termination of the Participant's employment shall be
conclusive and binding on the Participant and his legal
representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office
2
<PAGE>
is in connection with an actual or threatened
election contest relating to the election of members
of the Board of Directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle
any such actual or threatened contest or
solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of
3
<PAGE>
certain amounts to be paid to the Participant as provided
herein. Phantom Shares shall not constitute or be treated as
property or as a trust fund of any kind or as Common Stock,
stock options or other form of equity or security for any
purpose. The Participant shall have only those rights set
forth in this Agreement with respect to Phantom Shares
credited to the Participant and shall have no rights as a
shareholder of the Company by virtue of having been granted
Phantom Shares. Any benefits which become payable hereunder
shall be paid from the general assets of the Company.
Notwithstanding the foregoing, prior to redemption, the
Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled
4
<PAGE>
thereto, (b) by facsimile with confirmation of receipt, (c) by
mailing in the United States mail to the last known address of
the party entitled thereto or (d) by express courier service.
The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of
receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier
service; provided, however, that if a notice, request or other
communication in not received during regular business hours,
it shall be deemed to be received on the next succeeding
business day of the Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ Daniel B. Platt
--------------------------
Title: Chief Financial Officer
--------------------------
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ J. David Martin
- -------------------------------------
J. David Martin
6
<PAGE>
Exhibit 10.13
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to J. David Martin (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
in recognition of his services to the Company rendered through December 31,
1998, and to further align his interests with the interests of the Company's
stockholders, covering the right to receive 122,222 Phantom Shares, subject
to the terms and conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
12,223 August 1, 2000
- ---------------------------------------- -----------------------------------------
12,223 August 1, 2001
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2002
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2003
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2004
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2005
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2006
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2007
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2008
- ---------------------------------------- -----------------------------------------
12,222 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment
by the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set
<PAGE>
forth above, the Participant shall forfeit all Phantom Shares
which have not yet vested, except as provided in (b) or (c)
below. The Committee's determination of the reason for
termination of the Participant's employment shall be
conclusive and binding on the Participant and his legal
representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office
2
<PAGE>
is in connection with an actual or threatened
election contest relating to the election of members
of the Board of Directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle
any such actual or threatened contest or
solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of
3
<PAGE>
certain amounts to be paid to the Participant as provided
herein. Phantom Shares shall not constitute or be treated as
property or as a trust fund of any kind or as Common Stock,
stock options or other form of equity or security for any
purpose. The Participant shall have only those rights set
forth in this Agreement with respect to Phantom Shares
credited to the Participant and shall have no rights as a
shareholder of the Company by virtue of having been granted
Phantom Shares. Any benefits which become payable hereunder
shall be paid from the general assets of the Company.
Notwithstanding the foregoing, prior to redemption, the
Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled
4
<PAGE>
thereto, (b) by facsimile with confirmation of receipt, (c) by
mailing in the United States mail to the last known address of
the party entitled thereto or (d) by express courier service.
The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of
receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier
service; provided, however, that if a notice, request or other
communication in not received during regular business hours,
it shall be deemed to be received on the next succeeding
business day of the Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ Daniel B. Platt
----------------------------
Title: Chief Financial Officer
----------------------------
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ J. David Martin
- -------------------------------------
J. David Martin
6
<PAGE>
Exhibit 10.14
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to J. David Martin (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
in recognition of his services to the Company rendered during 1999, and to
further align his interests with the interests of the Company's stockholders,
covering the right to receive 66,667 Phantom Shares, subject to the terms and
conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
6,667 August 1, 2000
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2001
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2002
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2003
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2004
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2005
- ---------------------------------------- -----------------------------------------
6,667 August 1, 2006
- ---------------------------------------- -----------------------------------------
6,666 August 1, 2007
- ---------------------------------------- -----------------------------------------
6,666 August 1, 2008
- ---------------------------------------- -----------------------------------------
6,666 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment
by the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set forth
above, the Participant shall forfeit all Phantom Shares which
have not yet vested, except as provided in (b) or (c) below.
The Committee's determination
<PAGE>
of the reason for termination of the Participant's employment
shall be conclusive and binding on the Participant and his
legal representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in
connection with an actual or threatened election
contest relating to the election of members of the
Board of Directors or other actual or
2
<PAGE>
threatened solicitation of proxies or consents by or
on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle
any such actual or threatened contest or
solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of certain amounts to be paid to
the Participant as provided herein. Phantom Shares shall not
constitute or be treated as property or as a trust fund of any
3
<PAGE>
kind or as Common Stock, stock options or other form of equity
or security for any purpose. The Participant shall have only
those rights set forth in this Agreement with respect to
Phantom Shares credited to the Participant and shall have no
rights as a shareholder of the Company by virtue of having
been granted Phantom Shares. Any benefits which become payable
hereunder shall be paid from the general assets of the
Company. Notwithstanding the foregoing, prior to redemption,
the Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with
confirmation of receipt, (c) by mailing in the United States
mail to the last known address of the party entitled thereto
or (d)
4
<PAGE>
by express courier service. The notice, request or other
communication shall be deemed to be received upon personal
delivery, upon confirmation of receipt of facsimile
transmission or upon receipt by the party entitled thereto if
by United States mail or express courier service; provided,
however, that if a notice, request or other communication in
not received during regular business hours, it shall be deemed
to be received on the next succeeding business day of the
Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ Daniel B. Platt
---------------------------
Title: Chief Financial Officer
---------------------------
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ J. David Martin
- -------------------------------------
J. David Martin
6
<PAGE>
Exhibit 10.15
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to Joseph William Byrne (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
to provide him with a long term incentive to remain with the Company and to
further align his interests with the interests of the Company's stockholders,
covering the right to receive 30,000 Phantom Shares, subject to the terms and
conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
3,000 August 1, 2000
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2001
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2002
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2003
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2004
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2005
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2006
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2007
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2008
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment
by the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set
<PAGE>
forth above, the Participant shall forfeit all Phantom Shares
which have not yet vested, except as provided in (b) or (c)
below. The Committee's determination of the reason for
termination of the Participant's employment shall be
conclusive and binding on the Participant and his legal
representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office
2
<PAGE>
is in connection with an actual or threatened
election contest relating to the election of members
of the Board of Directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle
any such actual or threatened contest or
solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of
3
<PAGE>
certain amounts to be paid to the Participant as provided
herein. Phantom Shares shall not constitute or be treated as
property or as a trust fund of any kind or as Common Stock,
stock options or other form of equity or security for any
purpose. The Participant shall have only those rights set
forth in this Agreement with respect to Phantom Shares
credited to the Participant and shall have no rights as a
shareholder of the Company by virtue of having been granted
Phantom Shares. Any benefits which become payable hereunder
shall be paid from the general assets of the Company.
Notwithstanding the foregoing, prior to redemption, the
Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled
4
<PAGE>
thereto, (b) by facsimile with confirmation of receipt, (c) by
mailing in the United States mail to the last known address of
the party entitled thereto or (d) by express courier service.
The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of
receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier
service; provided, however, that if a notice, request or other
communication in not received during regular business hours,
it shall be deemed to be received on the next succeeding
business day of the Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. DAVID MARTIN
--------------------------
Title: President and Chief Executive Officer
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ JOSEPH WILLIAM BYRNE
- ------------------------
Joseph William Byrne
6
<PAGE>
Exhibit 10.16
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to James W. Gaube (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
to provide him with a long term incentive to remain with the Company and to
further align his interests with the interests of the Company's stockholders,
covering the right to receive 30,000 Phantom Shares, subject to the terms and
conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
3,000 August 1, 2000
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2001
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2002
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2003
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2004
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2005
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2006
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2007
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2008
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment by
the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any
<PAGE>
reason prior to one or more of the dates on which the
restrictions lapse as set forth above, the Participant shall
forfeit all Phantom Shares which have not yet vested, except
as provided in (b) or (c) below. The Committee's determination
of the reason for termination of the Participant's employment
shall be conclusive and binding on the Participant and his
legal representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but
2
<PAGE>
provided further, that any such person whose initial
assumption of office is in connection with an actual
or threatened election contest relating to the
election of members of the Board of Directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the
Board, including by reason of agreement intended to
avoid or settle any such actual or threatened contest
or solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
3
<PAGE>
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of certain amounts to be paid to
the Participant as provided herein. Phantom Shares shall not
constitute or be treated as property or as a trust fund of any
kind or as Common Stock, stock options or other form of equity
or security for any purpose. The Participant shall have only
those rights set forth in this Agreement with respect to
Phantom Shares credited to the Participant and shall have no
rights as a shareholder of the Company by virtue of having
been granted Phantom Shares. Any benefits which become payable
hereunder shall be paid from the general assets of the
Company. Notwithstanding the foregoing, prior to redemption,
the Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
4
<PAGE>
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with
confirmation of receipt, (c) by mailing in the United States
mail to the last known address of the party entitled thereto
or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon
personal delivery, upon confirmation of receipt of facsimile
transmission or upon receipt by the party entitled thereto if
by United States mail or express courier service; provided,
however, that if a notice, request or other communication in
not received during regular business hours, it shall be deemed
to be received on the next succeeding business day of the
Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. DAVID MARTIN
--------------------------------------
Title: President and Chief Executive Officer
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ JAMES W. GAUBE
- -----------------------------
James W. Gaube
6
<PAGE>
Exhibit 10.17
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to Daniel B. Platt (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
to provide him with a long term incentive to remain with the Company and to
further align his interests with the interests of the Company's stockholders,
covering the right to receive 30,000 Phantom Shares, subject to the terms and
conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
<S> <C>
- -------------------------------------------------------------
3,000 August 1, 2000
- -------------------------------------------------------------
3,000 August 1, 2001
- -------------------------------------------------------------
3,000 August 1, 2002
- -------------------------------------------------------------
3,000 August 1, 2003
- -------------------------------------------------------------
3,000 August 1, 2004
- -------------------------------------------------------------
3,000 August 1, 2005
- -------------------------------------------------------------
3,000 August 1, 2006
- -------------------------------------------------------------
3,000 August 1, 2007
- -------------------------------------------------------------
3,000 August 1, 2008
- -------------------------------------------------------------
3,000 August 1, 2009
- -------------------------------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment by
the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set forth
above, the Participant shall forfeit all Phantom Shares which
have not yet
<PAGE>
vested, except as provided in (b) or (c) below. The
Committee's determination of the reason for termination of the
Participant's employment shall be conclusive and binding on
the Participant and his legal representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in
connection with an actual or threatened election
contest relating to
2
<PAGE>
the election of members of the Board of Directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the
Board, including by reason of agreement intended to
avoid or settle any such actual or threatened contest
or solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of certain amounts to be paid to
the Participant as provided herein. Phantom
3
<PAGE>
Shares shall not constitute or be treated as property or as a
trust fund of any kind or as Common Stock, stock options or
other form of equity or security for any purpose. The
Participant shall have only those rights set forth in this
Agreement with respect to Phantom Shares credited to the
Participant and shall have no rights as a shareholder of the
Company by virtue of having been granted Phantom Shares. Any
benefits which become payable hereunder shall be paid from the
general assets of the Company. Notwithstanding the foregoing,
prior to redemption, the Participant shall be entitled to
receive in cash amounts equivalent to the amounts paid as
actual cash dividends with respect to a number of shares of
Common Stock equal to the number of the Participant's Phantom
Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with
confirmation of receipt, (c) by mailing in the
4
<PAGE>
United States mail to the last known address of the party
entitled thereto or (d) by express courier service. The
notice, request or other communication shall be deemed to be
received upon personal delivery, upon confirmation of receipt
of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier
service; provided, however, that if a notice, request or other
communication in not received during regular business hours,
it shall be deemed to be received on the next succeeding
business day of the Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. DAVID MARTIN
------------------------------------------
Title: President and Chief Executive Officer
<PAGE>
Accepted this 1st day of August, 1999.
/s/ DANIEL B. PLATT
- ------------------------------
Daniel B. Platt
6
<PAGE>
Exhibit 10.18
BURNHAM PACIFIC PROPERTIES, INC.
PHANTOM SHARES AGREEMENT
Dated as of August 1, 1999
Burnham Pacific Properties, Inc., a corporation organized under the
laws of Maryland (the "Company"), hereby awards to Scott C. Verges (the
"Participant"), as of August 1, 1999, a Phantom Shares Award (the "Award"),
to provide him with a long term incentive to remain with the Company and to
further align his interests with the interests of the Company's stockholders,
covering the right to receive 30,000 Phantom Shares, subject to the terms and
conditions set forth below.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT. The Award shall not be valid
and binding unless the Participant accepts this Agreement by executing
it in the space provided below and returning such original execution
copy to the Company.
2. VESTING OF AWARD. Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Board of Directors or its
Compensation Committee (the "Committee") to accelerate the vesting
schedule hereunder, this Award shall be vested and nonforfeitable with
respect to the following number of Phantom Shares on the dates
indicated:
<TABLE>
<CAPTION>
Number of Phantom Shares
Subject to Vesting Date Restrictions Lapse
- ---------------------------------------- -----------------------------------------
<S> <C>
3,000 August 1, 2000
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2001
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2002
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2003
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2004
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2005
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2006
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2007
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2008
- ---------------------------------------- -----------------------------------------
3,000 August 1, 2009
- ---------------------------------------- -----------------------------------------
</TABLE>
3. a. TERMINATION OF EMPLOYMENT. If the Participant's employment
by the Company or any of its subsidiaries or affiliates (an
"Affiliate") is terminated for any reason prior to one or more
of the dates on which the restrictions lapse as set
<PAGE>
forth above, the Participant shall forfeit all Phantom Shares
which have not yet vested, except as provided in (b) or (c)
below. The Committee's determination of the reason for
termination of the Participant's employment shall be
conclusive and binding on the Participant and his legal
representatives and legatees.
b. TERMINATION DUE TO DEATH. If the Participant's employment
terminates by reason of death prior to the dates the
restrictions lapse as set forth above, the Participant's
estate shall become fully vested in all the Phantom Shares.
c. TERMINATION DUE TO DISABILITY. If the Participant's employment
terminates by reason of disability (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) prior to the dates the restrictions lapse as set
forth above, the Participant shall become fully vested in all
the Phantom Shares.
d. CHANGE OF CONTROL. Notwithstanding any other provision hereof
to the contrary, the Participant shall become fully vested in
all the Phantom Shares upon the occurrence of a Change of
Control of the Company. For purposes of this Agreement, a
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding
securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together
with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such
person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of either
(A) the combined voting power of the Company's then
outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of
the Company's common stock, $.01 par value per share
("Common Stock") (in either case other than as a
result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of June 19, 1999,
constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason,
including, without limitation, as a result of a
tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the
Board, provided that any person becoming a director
of the Company subsequent to June 19, 1999 shall be
considered an Incumbent Director if such person's
election was approved by or such person was nominated
for election by a vote of at least a majority of the
Incumbent Directors; but provided further, that any
such person whose initial assumption of office
2
<PAGE>
is in connection with an actual or threatened
election contest relating to the election of members
of the Board of Directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle
any such actual or threatened contest or
solicitation, shall not be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall
approve (A) any consolidation or merger of the
Company where the stockholders of the Company,
immediately prior to the consolidation or merger,
would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate fifty percent
(50%) or more of the voting shares of the corporation
issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions
contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not
be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Company
which, by reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to thirty percent (30%) or more of
either (A) the combined voting power of all then outstanding Voting
Securities or (B) PROVIDED, HOWEVER, that if any person referred to in
this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock
split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company) and immediately
thereafter beneficially owns thirty percent (30%) or more of Voting
Securities or Common Stock, then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
4. REDEMPTION OF PHANTOM SHARES. Upon any portion of the Participant's
Phantom Shares becoming vested, the Company shall redeem all, but not
less than all, such vested Phantom Shares at a price for each Phantom
Share equal to the "Fair Market Value" (as defined in Section 3(c) of
the Burnham Pacific Properties, Inc. Stock Option and Incentive Plan)
of one share of Common Stock determined as of such vesting date. Any
payment to be made pursuant to this Section 4 shall be made in cash in
a lump sum with ten (10) days of the vesting date.
5. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
a. NATURE OF PHANTOM SHARES. The Phantom Shares granted under
this Agreement shall be used solely as a device for the
measurement and determination of
3
<PAGE>
certain amounts to be paid to the Participant as provided
herein. Phantom Shares shall not constitute or be treated as
property or as a trust fund of any kind or as Common Stock,
stock options or other form of equity or security for any
purpose. The Participant shall have only those rights set
forth in this Agreement with respect to Phantom Shares
credited to the Participant and shall have no rights as a
shareholder of the Company by virtue of having been granted
Phantom Shares. Any benefits which become payable hereunder
shall be paid from the general assets of the Company.
Notwithstanding the foregoing, prior to redemption, the
Participant shall be entitled to receive in cash amounts
equivalent to the amounts paid as actual cash dividends with
respect to a number of shares of Common Stock equal to the
number of the Participant's Phantom Shares.
b. DECISIONS OF COMMITTEE. The Committee shall have the right to
resolve all questions which may arise in connection with the
Award, the lapse of the restrictions or this Agreement. Any
interpretation, determination or other action made or taken by
the Committee regarding this Agreement shall be final, binding
and conclusive.
c. CHANGE IN CAPITAL STRUCTURE. The terms of this Phantom Shares
Award shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or
more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
6. TAX WITHHOLDING. The Participant shall, not later than the date as of
which the vesting of this Award becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements
satisfactory to the Committee for payment of any Federal, state, and
local taxes required by law to be withheld on account of such taxable
event.
7. MISCELLANEOUS PROVISIONS.
a. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the
Participant, acquire any rights hereunder in accordance with
this Agreement.
b. NOTICES. All notices, requests or other communications
provided for in this Agreement shall be made, if to the
Company, to the Corporate Secretary of the Company at the
Company's principal executive office, and if to the
Participant, to his or her address on the books of the Company
(or to such other address as the Company or the Participant
may give to the other for purposes of notice hereunder).
All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by personal
delivery to the party entitled
4
<PAGE>
thereto, (b) by facsimile with confirmation of receipt, (c) by
mailing in the United States mail to the last known address of
the party entitled thereto or (d) by express courier service.
The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of
receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier
service; provided, however, that if a notice, request or other
communication in not received during regular business hours,
it shall be deemed to be received on the next succeeding
business day of the Company.
c. GOVERNING LAW. This Agreement and all determinations made and
actions taken pursuant hereto and thereto, to the extent not
governed by the laws of the United States, shall be governed
by the laws of the State of Maryland and construed in
accordance therewith without giving effect to principles of
conflicts of laws.
d. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and
both of which together shall constitute one and the same
instrument.
e. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity
or unenforceability of any one provision shall have no effect
on the continuing force and effect of the remaining
provisions.
f. FURTHER ASSURANCES. The Company and the Participant shall
execute and deliver such further instruments and take such
additional action as each party may reasonably request to
effect, consummate, confirm or evidence the grant of the Award
to the Participant, and they shall each execute such documents
as may be reasonably necessary to assist each other in
preserving or perfecting their respective rights in the Award.
g. NO RIGHT TO CONTINUED EMPLOYMENT. This Award does not confer
upon the Participant any right to continue in the employ of
the Company or an Affiliate, nor shall it interfere in any way
with the right of the Company or an Affiliate to terminate
such employment at any time.
BURNHAM PACIFIC PROPERTIES, INC.
By: /s/ J. DAVID MARTIN
-------------------------------------
Title: President and Chief Executive Officer
5
<PAGE>
Accepted this 1st day of August, 1999.
/s/ SCOTT C. VERGES
- -------------------
Scott C. Verges
6
