EXHIBIT 10.19
Bedford Property Investors, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
__________ __, 1998
[Addressee]
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Form of
Retention Agreement
Dear ________:
Bedford Property Investors, Inc., a Maryland corporation
(the Company), considers it essential to the best interests of its stock-
holders to take reasonable steps to retain key management personnel.
Further, the Board of Directors of the Company (the Board) recognizes
that the uncertainty and questions which might arise among management in the
context of a change in control of the Company could result in the departure
or distraction of management personnel to the detriment of the Company and
its stockholders.
The Board has determined, therefore, that appropriate steps should
be taken to reinforce and encourage the continued attention and dedication of
members of the management of the Company and its subsidiaries, including
yourself, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible change in
control of the Company.
In order to induce you to remain in the employ of the Company, the
Company has determined to enter into this letter agreement (this Agreement)
which addresses the terms and conditions of your employment in the event of a
change in control of the Company. Capitalized words which are not otherwise
defined herein shall have the meanings assigned to such words in
Section 5 of this Agreement.
1. Severance Payments. In the event of your Involuntary
Termination during the Change in Control Period, the Company shall pay you the
following amounts, in one lump sum cash payment, within ten days following your
Involuntary Termination:
(a) the full amount of any earned but unpaid base salary through
the Date of Termination at the rate in effect at the time of the Notice
of Termination;
(b) a payment (calculated on the basis of your Reference Salary)
for all unused vacation time which you may have accrued as of the Date
of Termination;
(c) a pro rata portion of the annual bonus for the year in which your
Involuntary Termination occurs, calculated on the basis of your target
bonus for that year and on the assumption that all performance targets
have been or will be achieved; and
(d) an amount (the Severance Payment) equal to the product of (i)
your Annual Compensation and (ii) your Severance Factor.
Your right to receive the Severance Payment shall be conditioned upon your
execution of a release in favor of the Company which is in a form reasonably
acceptable to the Company and which is not revoked by you within the revocation
period provided therein. The Severance Payment shall be reduced by any
amount of severance payable under any other plan, arrangement
or agreement under which you are entitled to receive cash severance payments.
2. Date and Notice of Termination. Any termination of your
employment by the Company or by you during the Change in Control Period shall
be communicated by a notice of termination to the other party hereto (the
Notice of Termination). The Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated. The date of
your termination of employment with the Company and its subsidiaries (the
Date of Termination) shall be determined as follows:
(i) if your employment is terminated for Disability, 30 days after a Notice of
Termination is given (provided that your shall not have returned to the
full-time performance of your duties during such 30-day period), (ii) if your
employment is terminated by the Company in an Involuntary Termination, five
days after the date the Notice of Termination is received by you and (iii) if
your employment is terminated by the Company for Cause, the later of the date
specified in the Notice of Termination or ten days following the date such
notice is received by you. If the basis for your Involuntary Termination is
your resignation for Good Reason, the Date of Termination shall be ten days
after the date your Notice of Termination is received by the Company; provided,
that the events or circumstances cited by you as constituting Good Reason
are not cured by the Company during such period in accordance with the terms
hereof. The Date of Termination for a resignation of employment other than
for Good Reason shall be the date set forth in the applicable notice, which
shall be no earlier than ten days after the date such notice is received by
the Company.
3. No Mitigation or Offset. You shall not be required to mitigate
the amount of any payment provided for herein by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for herein
be reduced by any compensation earned by you as the result of employment by
another employer.
4. Successors; Binding Agreement.
(a) Assumption by Successor. The Company will 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 Company expressly
to assume and to agree to perform its obligations under this Agreement in the
same manner and to the same extent that the Company would be required to
perform such obligations if no such succession had taken place; provided,
however, that no such assumption shall relieve the Company of its obligations
hereunder. As used herein, the Company shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform its obligations by operation of law or otherwise.
(b) Enforceability; Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of you (and your personal representatives and
heirs) and the Company and any organization which succeeds to substantially
all of the business or assets of the Company, whether by means of merger,
consolidation, acquisition of all or substantially all of the assets of
the Company or otherwise, including, without limitation, as a result of a
Change in Control or by operation of law. This Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no such designee,
to your estate.
5. Definitions. For purposes of this Agreement, the following
capitalized terms have the meanings set forth below:
Annual Compensation shall mean the sum of your Reference Salary and
Reference Bonus.
Bedford Acquisitions shall mean Bedford Acquisitions, Inc., a
California corporation.
Cause shall mean (a) your felony conviction, (b) your willful
disclosure of material trade secrets or other material confidential information
related to the business of the Company and its subsidiaries or (c) your
willful and continued failure to substantially perform your duties with the
Company (other than any such failure resulting from your incapacity due to
physical or mental illness or any such actual or anticipated failure resulting
from your resignation for Good Reason) after a written demand for substantial
performance is delivered to you by the Board, which demand specifically
identifies the manner in which the Board believes that you have not
substantially performed your duties, and which performance is not substantially
corrected by you within ten days of receipt of such demand. For purposes of
the previous sentence, no act or failure to act on your part shall be deemed
willful unless done, or omitted to be done, by you not in good faith and
without reasonable belief that your action or omission was in the best
interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote
of not less than three-fourths of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of the Board you were
guilty of conduct set forth above in clause (a), (b) or (c) of the first
sentence of this section and specifying the particulars thereof in detail.
Change in Control shall mean a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or
not the Company is then subject to such reporting requirement; provided, that
anything in this Agreement to the contrary notwithstanding, a Change in Control
shall be deemed to have occurred if:
(a) any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity or person, or any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act (other than (i) AEW Capital Management, (ii) the Company or
any of its subsidiaries or (iii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or of any of
its subsidiaries), is or becomes the beneficial owner (as defined in Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the Company;
(b) during any period of two consecutive years (not including any
period prior to the effective date of this Agreement), individuals who at
the beginning of such period constituted the Board and any new directors,
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least three-fourths of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof;
(c) there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company, in each case with respect to
which the stockholders of the Company immediately prior to such
transaction do not, immediately after such transaction, own more than 50%
of the combined voting power of the Company or other corporation
resulting from such transaction; or
(d) all or substantially all of the assets of the Company are sold,
liquidated or distributed.
Change in Control Date shall mean the date on which a Change in
Control occurs.
Change in Control Period shall mean the two-year period commencing on
the Change in Control Date; provided, however, that if your employment with the
Company and its subsidiaries terminates prior to the Change in Control Date
but on or after a Potential Change in Control Date, and it is reasonably
demonstrated that your termination of employment (a) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (b) otherwise arose in connection with or in anticipation of a
Change in Control, then the Change in Control Period shall mean, as applied
to you, the two-year period beginning on the date immediately prior to the
date of your termination of employment.
Code shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder,
and any successor provisions thereto.
Date of Termination has the meaning assigned thereto in Section 2.
Disability shall mean (a) your incapacity due to physical or mental
illness which causes you to be absent from the full-time performance of your
duties with the Company for six consecutive months and (b) your failure to
return to full-time performance of your duties for the Company within 30 days
after written Notice of Termination due to Disability is given to you.
Any question as to the existence a Disability upon which you and the Company
cannot agree shall be determined by a qualified independent physician selected
by you (or, if your are unable to make such selection, such selection shall be
made by any adult member of your immediate family), and approved by the
Company. The determination of such physician made in writing to
the Company and to you shall be final and conclusive for all purposes hereunder.
Exchange Act shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder, and any successor provisions thereto.
Good Reason shall mean the occurrence of any of the following
during the Change in Control Period:
(a) A meaningful and detrimental alteration in your position,
titles, or nature or status of responsibilities (including reporting
responsibilities) from those in effect immediately prior to the Change in
Control Date;
(b) A reduction by the Company in your annual base salary as in
effect immediately prior to the Change in Control Date or as the same may be
increased from time to time thereafter; or a reduction in your target annual
bonus (expressed as a percentage of base salary) below the target in effect for
you prior to the Change in Control Date;
(c) The relocation of the office of the Company where you are
employed immediately prior to the Change in Control Date (the CIC Location) to
a location which is more than 25 miles away from the CIC Location or the
Company's requiring you to be based more than 25 miles away from the CIC
Location (except for required travel on the Company's business to an extent
substantially consistent with your customary business travel obligations in
the ordinary course of business prior to the Change in Control Date);
(d) The failure by the Company to continue to provide you with
benefits at least as favorable in the aggregate to those enjoyed by you under
the Company's savings, life insurance, medical, health and accident, disability,
and fringe benefit plans and arrangements in which you were participating
immediately prior to the Change in Control Date; or the failure by the
Company to provide you with the number of paid vacation days to which you are
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect immediately prior to the
Change in Control;
(e) The failure of the Company to obtain an agreement from any
successor to assume and agree to perform the Company's obligations under this
Agreement, as contemplated in Section 4(a) hereof;
(f) Any termination of your employment which is not effected
pursuant to the terms of this Agreement; or
(g) A material breach by the Company of the provisions of this
Agreement; provided, however, that an event described above in clause (a),
(b), (d) or (g) shall not constitute Good Reason unless it is communicated
by you to the Company in writing and is not corrected by the Company in a
manner which is reasonably satisfactory to you (including full retroactive
correction with respect to any monetary matter) within ten days of the
Company's receipt of such written notice from you.
Involuntary Termination shall mean (a) your termination of
employment by the Company and its subsidiaries during the Change in Control
Period other than for Cause or Disability or (b) your resignation of
employment with the Company and its subsidiaries during the Change in Control
Period for Good Reason.
Notice of Termination has the meaning assigned thereto in Section 2.
Potential Change in Control shall mean the earliest to occur of (a)
the date on which the Company executes an agreement or letter of intent, the
consummation of the transactions described in which would result in the
occurrence of a Change in Control, (b) the date on which the Board approves a
transaction or series of transactions, the consummation of which would result
in a Change in Control, or (c) the date on which a tender offer for the
Company's voting stock is publicly announced, the completion of which would
result in a Change in Control; provided, that no such event shall be a
Potential Change in Control unless it is followed by a Change in Control
within 180 days thereafter.
Potential Change in Control Date shall mean the date on which a
Potential Change in Control occurs.
Reference Bonus shall mean the greater of (a) the average of the
aggregate annual bonuses paid to you by the Company and Bedford Acquisitions
for the three calendar years prior to the your Date of Termination and (b)
the average of the aggregate annual bonuses paid to you by the Company and
Bedford Acquisitions for the three calendar years prior to the Change in
Control Date; provided, however, that if you have been eligible to receive
fewer than three annual bonuses prior to your Date of Termination or the Change
in Control Date, as applicable, the amounts described in clauses (a) and
(b) hereof shall be calculated using such lesser number of annual bonuses;
provided further, however, that any annual bonus described in clauses (a) and
(b) shall be annualized for any year during which you were employed by the
Company and its subsidiaries for less than a full calendar year.
Reference Salary shall mean the greater of (a) the annual rate of
your aggregate base salary from the Company and Bedford Acquisitions in effect
immediately prior to the date of your Involuntary Termination and (b) the
annual rate of your aggregate base salary from the Company and Bedford
Acquisitions in effect immediately prior to the Change in Control Date.
Severance Factor shall mean the number set forth on the signature
page hereof.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Board of Directors, Bedford Property Investors, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, with a copy to the General Counsel of the Company,
or to you at the address set forth on the first page of this Agreement or to
such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
7. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement
and this Agreement shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or
written, with respect to the subject matter hereof; provided, however, that
any employment agreement between you and the Company shall remain in full
force and effect, subject to the last sentence of Section 1.
(b) Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(c) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(d) No Contract of Employment. Nothing in this Agreement shall be
construed as giving you any right to be retained in the employ of the Company
or shall affect the terms and conditions of your employment with the Company
prior to the commencement of the Change in Control Period.
(e) Withholding. Amounts paid to you hereunder shall be subject to
all applicable federal, state and local withholding taxes.
(f) Source of Payments. All payments provided under this Agreement
shall be paid in cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation of assets made,
to assure payment. You will have no right, title or interest whatsoever in
or to any investments which the Company may make to aid it in meeting its
obligations hereunder. To the extent that any person acquires a right to
receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.
(g) Headings. The headings contained in this Agreement are intended
solely for convenience of reference and shall not affect the rights of the
parties to this Agreement.
* * * * *
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
BEDFORD PROPERTY
INVESTORS, INC.
By: Name:
Title:
Agreed to as of this ___ day of , 1998
____________________________
Severance Factor: ____