CHANGE IN CONTROL AND
NONCOMPETITION AGREEMENT
THIS
AMENDED AND RESTATED CHANGE IN CONTROL AND NONCOMPETITION AGREEMENT
(the “Agreement”) is dated as of
, between AMB Property, L.P., a Delaware limited partnership (the
“Company”), and
(the “Executive”). This Agreement supersedes in its
entirety that certain Amended and Restated Change in Control and
Noncompetition Agreement entered into between the Company and the
Executive as of
.
This
Agreement shall commence on the date hereof and will terminate on
November 26, 2007; provided, however , that commencing
on November 26, 2007, and each November 26 thereafter,
the term of this Agreement shall be automatically extended for one
additional year unless, not later than ninety (90) days prior
to the date such automatic extension would otherwise occur, the
Company shall have given notice that it does not wish to extend
this Agreement; provided, further, that if a Change in
Control (as defined in Section 2) occurs during the original
or extended term of this Agreement, this Agreement shall continue
in effect until the later of November 26, 2007 and twenty-four
(24) months after the date on which such Change in Control
occurred (the “Change in Control Date”).
For
purposes of this Agreement, the following terms shall have the
following meanings:
(a) gross
negligence or willful misconduct in the performance of the
Executive’s duties;
(b) the
Executive’s willful and continued failure to substantially
perform the Executive’s duties with the Company (other than a
failure resulting from the Executive’s incapacity due to
physical or mental illness or any failure after the
Executive’s issuance of a Notice of Termination (as defined
in Section 3.6)), after a written demand for substantial
performance is delivered to the Executive by the Board of Directors
(the “Board”) of AMB Property Corporation, a Maryland
corporation (the “General Partner”);
(c) fraud or other
conduct against the material best interests of the Company;
or
(d) a conviction
of a felony if such conviction has a material adverse effect on the
Company.
A
“Change in Control” shall be deemed to occur upon any
of the following events:
(a) the complete
liquidation of the General Partner or the sale or disposition by
the General Partner of all or substantially all of the General
Partner’s assets, or the disposition by the General Partner
of more than fifty percent (50%) of its interest in the
Company;
(b) any Person (as
defined below) is or becomes the Beneficial Owner (as defined
below), directly or indirectly, of securities of the General
Partner representing fifty percent (50%) or more of the combined
voting power of the General Partner’s then outstanding
securities. For purposes of this Agreement, (A) the term
“Person” is used as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); provided , however ,
that the term shall not include the General Partner, any trustee or
other fiduciary holding securities under an employee benefit plan
of the General Partner, and any corporation owned, directly or
indirectly, by the shareholders of the General Partner, in
substantially the same proportions as their ownership of stock of
the General Partner, and (B) the term “Beneficial
Owner” shall have the meaning given to such term in
Rule 13d-3 under the Exchange Act;
(c) during any
period of twelve (12) consecutive months (not including any
period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has
entered into an agreement with the General Partner to effect a
transaction described in clauses (a), (b) or (d)) whose
election by the Board or nomination for election by the General
Partner’s shareholders was approved by a vote of at least
two-thirds (2/3) 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 at least a majority thereof; or
(d) the
consummation of a merger or consolidation of the General Partner
with any other corporation (or other entity); provided ,
that , a Change in Control shall not be deemed to occur
(i) as the result of a merger or consolidation which would
result in the voting securities of the General Partner outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the General
Partner or such surviving entity outstanding immediately after such
merger or consolidation or (ii) where more than fifty percent
(50%) of the directors of the General Partner or the surviving
entity after such merger or consolidation were directors of the
General Partner immediately before such merger or
consolidation.
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“Date of
Termination” shall mean:
(a) if the
Executive’s employment is terminated by his death, the date
of his death;
(b) if the
Executive’s employment is terminated by reason of his
Disability, the date of the opinion of the physician referred to in
the definition of “Disability” hereof; or
(c) if the
Executive’s employment is terminated by the Company or by the
Executive for any reason other than death or Disability, the date
specified in the Notice of Termination;
provided, that,
if within fifteen (15) days after any Notice of Termination
(as defined in Section 3.6) is given, the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination
shall be the date on which the dispute is finally resolved, either
by mutual written agreement of the parties, or otherwise;
provided, however , that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in
good faith and the party giving such notice pursues the resolution
of such dispute with reasonable diligence.
“Disability”
shall mean the Executive’s physical or mental disability or
infirmity which, in the opinion of a competent physician selected
by the Board, renders the Executive unable to perform properly his
duties as an employee of the Company, and as a result, the
Executive is unable to perform such duties for six
(6) consecutive calendar months or for shorter periods
aggregating one hundred and eighty (180) business days in any
twelve (12) month period, but only to the extent that such
definition does not violate the Americans with Disabilities
Act.
“Good
Reason” shall mean, without the Executive’s express
written consent, the occurrence after a Change in Control of any of
the following circumstances unless such circumstances are fully
corrected (provided such circumstances are capable of correction)
prior to the Date of Termination as specified in the Notice of
Termination:
(a) the assignment
to the Executive of any duties inconsistent with the position in
the Company that the Executive held immediately prior to the Change
in Control Date, a significant adverse alteration in the nature or
status of the Executive’s responsibilities or the conditions
of the Executive’s employment from those in effect
immediately prior to the Change in Control Date, or any other
action by the Company that results in a material diminution in the
Executive’s position, authority, duties or responsibilities
from those in effect immediately prior to the Change in Control
Date;
(b) a reduction in
the Executive’s annual base compensation as in effect on the
Change in Control Date;
(c) the relocation
of the Company’s offices at which the Executive is
principally employed immediately prior to the Change in Control
Date (the “Principal Location”) to a location more than
fifty (50) miles from such location or the
Company’s
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requiring the
Executive, without the Executive’s written consent, to be
based anywhere other than the Principal Location, except for
required travel on the Company’s business to an extent
substantially consistent with the Executive’s business travel
obligations prior to the Change in Control Date;
(d) the
Company’s failure to pay to the Executive any portion of the
Executive’s compensation or to pay to the Executive any
portion of an installment of deferred compensation under any
deferred compensation program of the Company within seven
(7) days of the date such compensation is due; or
(e) the
Company’s failure to continue in effect any material
compensation or benefit plan or practice in which the Executive is
eligible to participate in on the Change in Control Date (other
than any equity based plan), unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the Company’s failure to
continue the Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of the Executive’s participation relative to other
participants, as existed at the time of the Change in Control
Date;
provided,
however , that the
Executive’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder.
3. COMPENSATION UPON TERMINATION
Whether
or not there is a Change in Control, if the Executive’s
employment shall be terminated due to the Executive’s death,
the Company shall pay monthly to the Executive’s estate for a
period equal to one (1) year following the Date of Termination
an amount equal to the sum of: (i) one-twelfth of the
Executive’s annual base compensation as in effect on the Date
of Termination plus (ii) one-twelfth of any bonus at the most
recent annual amount received, or entitled to be received, by the
Executive for the most recent annual period. At the
Executive’s estate’s expense, the Executive’s
spouse and children shall also be entitled to any continuation of
health insurance coverage rights under any applicable
law.
Whether
or not there is a Change in Control, if the Executive’s
employment shall be terminated by reason of Disability, the Company
shall pay to the Executive a single payment in an amount equal to
the sum of: (i) the Executive’s annual base compensation
as in effect on the Date of Termination plus (ii) an amount
equal to the annual bonus received, or entitled to be received, by
the Executive for the most recent annual period. Such payment shall
be in addition to any disability insurance payments to which the
Executive is otherwise entitled. At the Executive’s own
expense, the Executive and the Executive’s spouse and
children shall also be entitled to any continuation of health
insurance coverage rights under any applicable law.
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3.3.
Termination Upon Change in Control .
If
during the term or extended term of this Agreement and within two
(2) years following a Change in Control, the Executive’s
employment with the Company is terminated, in addition to his base
compensation and any bonus then payable through the Date of
Termination and, at the Executive’s own expense, any
continuation of health insurance coverage rights under any
applicable law, the Executive shall be entitled to the benefits
provided below, unless such termination is (i) because of the
Executive’s death, Disability or retirement, (ii) by the
Company for Cause or (iii) by the Executive other than for Good
Reason; provided, however , that in the event the
Executive’s employment is terminated for any reason and
subsequently a Change in Control occurs, the Executive shall not be
entitled to any benefits hereunder, other than pursuant to
Sections 3.1 and 3.2:
(a) the
Company shall pay to the Executive, when due, the Executive’s
base compensation and any bonus then payable through the Date of
Termination;
(b) in
lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to the Executive a lump sum payment in cash within
30 days of the Date of Termination equal to the sum of the
following:
(i) two
(2) times the Executive’s annual base compensation as in
effect as of the Date of Termination or immediately prior to the
Change in Control Date, whichever is greater; and
(ii) two
(2) times the average of the annual bonus payments received,
or entitled to be received, by the Executive for the three
(3) most recent annual periods; provided, however, that
if the Executive has been employed by the Company as an executive
officer for less than three (3) years, then he or she shall be paid
two (2) times the average of the annual bonus payments
received, or entitled to be received, by the Executive for all
prior annual periods that the Executive was employed by the Company
as an executive officer (annualizing any prorated bonus for a
partial first year);
(c) if
the Executive elects to receive continued healthcare coverage
pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), then
until the earlier of (i) twenty-four (24) months
following such termination and (ii) the expiration of the
Executive’s applicable COBRA continuation coverage period
(the “Coverage Period”), the Company shall reimburse
the COBRA premiums paid by Executive for the Executive and the
Executive’s covered dependents. During the Coverage Period,
the Company shall also provide the Executive and the
Executive’s eligible family members with life insurance at
least equal to those which would have been provided to the
Executive and such family members if the Executive’s
employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter;
and
(d) the
Company shall pay to the Executive a lump sum payment in cash
within thirty (30) days of the Date of Termination an amount
equal to two (2) times the matching or profit contributions,
if any, to which the Executive would be entitled in respect
of
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the amount
equal to the applicable maximum limitation for Executive under
Sections 402(g) and 414(v) of the Internal Revenue Code of 1986, as
amended (the “Code”) for the year in which
Executive’s termination of employment under the
Company’s 401(k) plan (the “401(k) Plan”) had
such amounts actually been deferred by the Executive under the
401(k) plan during the twenty-four (24) month period following
the Executive’s termination of employment, as determined
under the 401(k) Plan’s terms in effect as of the Date of
Termination.
3.4.
Certain Additional Payments by the Company .
(a) Anything
in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any Payment
would be subject to the Excise Tax, then the Executive shall be
entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) Subject
to the provisions of Section 3.4(c), all determinations
required to be made under this Section 3.4, including whether
and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by the nationally recognized
certified public accounting firm used b
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