Document:

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EXHIBIT 10.8

PRENTISS PROPERTIES TRUST

CHANGE IN CONTROL SEVERANCE PROTECTION PLAN

FOR KEY EMPLOYEES

ARTICLE I

Effective Date

     Effective as of October 3, 2005 (the “Effective Date”) PRENTISS PROPERTIES TRUST (the
“Company”) hereby establishes the PRENTISS PROPERTIES TRUST Change in Control Severance Protection
Plan for Key Employees (the “Plan”) as set forth in this document.

ARTICLE II

Definitions

     For purposes of this Plan, the following terms shall be defined as follows:

     2.1 “Accrued Compensation” shall mean an amount that includes all amounts earned,
accrued or otherwise payable to a Participant as of the Participant’s Termination Date including
(i) accrued pro rata Base Salary, (ii) reimbursement for reasonable and necessary expenses incurred
by the Participant on behalf of the Company during the period ending on the Termination Date, (iii)
vacation pay, (iv) the full target cash bonus for the year in which the termination occurs under
the Company’s applicable annual bonus plan and any other bonus for any prior period which has not
been paid as of the Qualifying Termination, and (v) any commissions that have accrued but have not
been paid prior to the Termination Date, and/or any commissions or partial commissions that become
payable after the Qualifying Termination.

     2.2 “Affiliate” means (i) any person directly or indirectly controlling, controlled
by, or under common control with such other person, (ii) any executive officer, director, trustee
or general partner of such other person, and (iii) any legal entity for which such person acts as
an executive officer, director, trustee or general partner. The term “person” means and includes
any natural person, corporation, partnership, association, limited liability company or any other
legal entity.

     2.3 “Base Salary” shall mean a Participant’s annualized base salary, calculated at the
greater of the rate in effect (i) immediately prior to a Change in Control or (ii) as of the
Participant’s Termination Date.

     2.4 “Board” means the Board of Trustees of the Company.

     2.5 “Bonus Amount” shall mean the 2004 bonuses paid to a Participant or deferred by a
Participant.

 

 

     2.6 “Cause” shall mean:

             (a) Willful misconduct of the Participant in connection with the performance of any of his or
her duties, including without limitation, misappropriation of funds or property of the Company or
any of its Affiliates or securing or attempting to secure personally any profit in connection with
any transaction entered into on behalf of the Company or any of its Affiliates;

             (b) Conduct by the Participant that would result in material injury to the reputation of the
Company if he or she were retained in his or her position with the Company, including without
limitation, conviction of a felony under the laws of the United States or any state thereof, or of
an equivalent crime under the laws of any other jurisdiction;

             (c) Continued or deliberate neglect by the Participant of his or her employment duties;

             (d) Any failure to comply substantially with any written rules, regulations, policies or
procedures of the Company, if such non-compliance could be expected to have a material and adverse
effect on the Company’s business and which has not been cured after reasonable notice;

             (e) Any willful failure to comply with the Company’s internal policies regarding insider
trading or insider dealing which has not been cured after reasonable notice;

             Provided, however, that in the case of a determination by the Company that
Cause exists based upon clauses (b) or (c) of this definition, the Company shall provide the
Participant written notice of such grounds for termination, and the Participant shall have a period
of fourteen (14) days in which to cure such Cause to the reasonable satisfaction of the Board; and

     2.7 “Change in Control” shall mean that (a) the Company has consummated a transaction
pursuant to any agreement with any person or entity that involves the transfer of ownership of more
than fifty percent (50%) of the Company’s total assets or earnings power on a consolidated basis,
as reported in the Company’s consolidated financial statements filed with the Securities and
Exchange Commission (including an agreement for the acquisition of the Company by merger,
consolidation, or statutory share exchange regardless of whether the Company is intended to be the
surviving or resulting entity after the merger, consolidation, or statutory share exchange or for
the sale of substantially all of the Company’s assets to the person or entity), (b) as the direct
or indirect result of, or in connection with, a cash tender or exchange offer, a merger or other
business combination or combination of these transactions, the persons who were trustees of the
Company before such transactions cease to constitute a majority of the Board, or any successor’s
board, within two years of the last such transaction, (c) any person or entity is or becomes an
Acquiring Person, or (d) during any period of two consecutive calendar years, the Continuing
Trustees cease for any reason to constitute a majority of the Board. For purposes of the preceding
sentence, “Continuing Trustee” means any member of the Board, while a member of the Board and (1)
who was a member of the Board prior to May 11, 2005 or (2) whose subsequent nomination or election
to the Board was recommended or approved by a majority of the Continuing Trustees; and “Acquiring
Person” means that (i) a person, considered

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alone or together with all Affiliates and associates of that person or entity, becomes directly or
indirectly the beneficial owner of securities representing at least twenty percent (20%) of the
Company’s outstanding securities entitled to vote generally in the election of the Board, or (ii) a
person or entity enters into an agreement that would result in that person or entity satisfying the
conditions in subsection (i) or that would result in an Affiliate’s failure to be an Affiliate.

     2.8 “Class A Participant” shall mean the Company’s Chief Financial Officer and any
Regional Managing Director of the Company employed by the Company prior to and on the date of the
occurrence of a Change in Control.

     2.9 “Class B Participant” shall mean any Senior Vice President of the Company employed
by the Company prior to and on the date of the occurrence of a Change in Control.

     2.10 “Class C Participant” shall mean any other officer of the Company employed by the
Company prior to and on the date of the occurrence of a Change in Control other than Michael V.
Prentiss and Thomas F. August.

     2.11 “Code” shall mean the Internal Revenue Code of 1986 as amended and the
regulations promulgated thereunder.

     2.12 “Company” shall mean Prentiss Properties Trust, a Maryland real estate trust or
any successor thereto.

     2.13 “Continuation Period” shall mean for a Class A Participant, the two-year period
commencing on a Participant’s Termination Date; for a Class B Participant, the eighteen month
period commencing on a Participant’s Termination Date; and for a Class C Participant, the one-year
period commencing on a Participant’s Termination Date.

     2.14 “Disability” shall mean (i) a Participant’s physical or mental inability,
confirmed by a licensed physician, to perform substantially any of the material responsibilities of
his or her position that continues for a period of 180 consecutive days, or (ii) by reason of any
medically determinable physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months, a Participant’s receipt
of income replacement benefits for a period of not less than 3 months under an accident and health
plan covering employees of the Company.

     2.15 “Effective Date” shall mean the date the Plan is approved by the Board or such
other date as the Board shall designate in its resolution approving the Plan.

     2.16 “Good Reason” shall mean:

	 	(a)	 	The Company requiring the Participant’s relocation more than
fifty (50) miles from the Participant’s primary office subsequent to the Change
in Control, without such Participant’s consent;

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	 	(b)	 	A material adverse alteration in the nature of his or her
position, provided that (i) a change of title or (ii) a change of reporting
and, in either case, a concomitant change of duties, shall not be considered a
material adverse alteration unless the duties are materially inconsistent with
the participant’s duties at the time of the Change in Control took place;
	 
	 	(c)	 	Exclusion from the Company’s, or upon a Change of Control, its
successor’s, long term incentive plan or reduction by the Company of the
Participant’s (i) annual base salary, or (ii) target bonus; or
	 
	 	(d)	 	An assignment of duties to the Participant that are materially
inconsistent with his or her job description at the time the Change in Control
took place.

     2.17 “Notice of Termination” shall mean a notice that indicates the specified
provisions in this Plan, if any, relied upon as the basis for any termination of employment and
shall set forth in reasonable detail the facts and circumstances, if any, claimed to provide a
basis for termination of the Participant’s employment under the provision so indicated.

     2.18 “Participant” shall mean any Class A Participant, Class B Participant or Class C
Participant.

     2.19 “Plan” shall mean the Prentiss Properties Trust Change in Control Severance
Protection Plan for Key Employees.

     2.20 “Qualifying Termination” shall mean a termination of employment (1) by the
Company for any reason other than Cause (including death or Disability) or (2) by the Participant
for Good Reason, and in the case of either (1) or (2), within (a) for purposes of eligibility for
the Severance Benefit, (i) two years of a Change in Control for Class A Participants and Class B
Participants or (ii) one year of a Change in Control for Class C Participants, and (b) for purposes
of equity vesting and acceleration under Section 4.5 of the Plan, three years from the later of:
(i) a Change in Control or (ii) the date of grant of any award of restricted stock or option in a
successor entity that was granted in connection with a Change in Control; provided, however, that
if any such termination occurs within one year prior to a Change in Control then the termination of
such Participant shall be deemed to be a Qualifying Termination and such Participant shall be
eligible for the benefits provided under Article IV immediately upon the occurrence of the Change
in Control.

     2.21 “Severance Benefit” shall mean the compensation and benefits payable in
accordance with Article IV of the Plan.

     2.22 “Termination Date” shall mean the date of termination of a Participant’s
employment.

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ARTICLE III

Participation

     Participants shall be those officers who qualify as Class A Participants, Class B Participants
or Class C Participants. Any individual who is a Participant as of the occurrence of a Change in
Control shall continue as a Participant until the date on which the Participant has received the
entire amount of the Severance Benefit, if any, payable to such Participant under the Plan, and for
three years after a Change in Control for purposes of Section 4.5 of the Plan.

ARTICLE IV

Severance Benefit

     4.1 Right to Severance Benefit. A Participant shall be eligible for the severance
benefits set forth in this Article IV in the event that the Participant experiences a Qualifying
Termination. If the employment of a Participant is terminated for any reason other than those
constituting a Qualifying Termination, the Participant shall not be entitled to any of the benefits
provided under this Article IV. Specifically, and without limiting the generality of the
foregoing, neither a termination of a Participant’s employment by the Company for Cause nor a
resignation by a Participant other than for Good Reason shall constitute a Qualifying Termination.
Notwithstanding anything to the contrary, in the event of a Qualifying Termination of a
Participant, the Company shall require a Participant to execute a release of claims, in a form
satisfactory to the Company, as a precondition to receiving the benefits provided under this
Article IV.

     4.2 Amount of Severance Benefit. If a Participant experiences a Qualifying
Termination, he or she shall be entitled to the following Severance Benefit:

           (a) The Company shall pay to the Participant all Accrued Compensation within fifteen (15) days
after the Participant’s Termination Date;

           (b) The Company shall pay to a Class A Participant or Class B Participant, as severance pay
and in lieu of any further salary for periods subsequent to such Participant’s Termination Date, an
amount equal to the sum of (i) such Participant’s Base Salary and (ii) such Participant’s Bonus
Amount, multiplied by the appropriate multiple which for a Class A Participant shall be 2.0 and for
a Class B Participant shall be 1.5. The Company shall pay to a Class C Participant, as severance
pay and in lieu of any further salary for periods subsequent to the Participant’s Termination Date,
an amount equal to the greater of (x) the sum of (1) the Participant’s Base Salary and (2) the
Participant’s Bonus Amount or (y) an amount equal to the product of (A) one-twelfth (1/12) of the
Participant’s Base Salary and (B) the number of years such Participant had been employed by the
Company prior to the Termination Date. If any Participant receives any payment under any severance
plan or policy of the Company prior to payment under this Plan, the amount payable to the
Participant under this Section 4.2(b) shall be offset by the amount already paid to the Participant
under such plan or policy. The amount due under the first sentence of this Section 4.2(b) shall be
payable in a lump sum within fifteen (15)

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days after the later of: (i) the Participant’s Termination Date and (ii) the occurrence of
the Change in Control if the Participant’s Qualifying Termination took place prior to the Change in
Control; and

           (c) During the Continuation Period, the Company shall at its sole expense continue on behalf
of the Participant and his or her dependents and beneficiaries (i) medical, health, dental and
prescription drug benefits, (ii) long-term disability coverage and (iii) life insurance and other
death benefits coverage. The coverage and benefits (including deductibles, costs and contributions
by the Participant, if any) provided under this Section 4.2(c) during the Continuation Period shall
be no less favorable to the Participant and his or her dependents and beneficiaries than the most
favorable of such coverage and benefits provided the Participant and his or her dependents and
beneficiaries during the 90-day period immediately prior to the Change in Control or as of any date
following the Change in Control but preceding the Participant’s Termination Date. The obligation
under this Section 4.2(c) with respect to the foregoing benefits shall be limited if the
Participant obtains any such benefits pursuant to a subsequent employer’s benefit plans, in which
case the Company may reduce or eliminate the coverage and benefits it is required to provide the
Participant hereunder as long as the aggregate coverage and benefits of the combined benefit plans
is no less favorable to the Participant than the coverage and benefits required to be provided
hereunder. Any period during which benefits are continued pursuant to this Section 4.2(c) shall be
considered to be in satisfaction of the Company’s obligation to provide “continuation coverage”
pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended, and the period of
coverage under Section 4980B shall be reduced by the period during which benefits are provided
pursuant to this Section 4.2(c).

           (d) Notwithstanding the foregoing, if any Participant has an individual arrangement or
agreement with the Company that would provide different benefits than those set forth in this
Section 4.2, such Participant must choose between those benefits and the benefits set forth in this
Section 4.2; provided, however, that should any such Participant elect not to receive the benefits
under this Section 4.2, he or she shall still be entitled to benefits under Sections 4.3, 4.4 and
4.5 hereof and shall receive the benefits hereunder in addition to any benefits that may be offered
under the individual arrangement; provided however, there shall be no duplication of benefits. For
example, if a Participant is entitled to one year of compensation under this Plan and two years of
compensation under the individual arrangement, such Participant shall receive two years of
compensation.

     4.3 Mitigation. The Participant shall not be required to mitigate the amount of any
payment or benefit provided for in this Plan by seeking other employment or otherwise and no such
payment or benefit shall be offset or reduced by the amount of any compensation or benefits
provided to the Participant in any subsequent employment except to the extent provided in Section
4.2(c).

     4.4 Other Benefits. The Participant’s entitlement to any other compensation or
benefits shall be determined in accordance with the Company’s employee benefit plans and other
applicable programs, policies and practices as in effect from time to time.

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     4.5 Equity Vesting and Acceleration. If the Qualifying Termination takes place within
three years of the later of: (i) a Change in Control or (ii) the date of grant of any award of
restricted stock or any option in a successor entity that was granted in connection with a Change
in Control, then the restrictions with respect to any such grant of restricted stock to such
Participant shall immediately lapse, and any such option granted to such Participant shall become
immediately vested and exercisable.

ARTICLE V

Termination of Employment

     Following a Change in Control, any purported termination of employment, either by the Company
or by the Participant, shall be communicated by written notice of termination to the other.

ARTICLE VI

Tax Gross-Up

     6.1 Gross-Up Payment. In the event it shall be determined that any payment or
distribution of any type to or for the benefit of the Participant, by the Company, any Affiliate,
any person who acquires ownership or effective control of the Company or ownership of a substantial
portion of the Company’s assets (within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and the regulations thereunder) or any Affiliate of such person,
whether paid or payable or distributed or distributable pursuant to any of the terms of this
Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are collectively referred to as the “Excise
Tax”), then the Participant shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Participant of all taxes (including any
interest or penalties imposed with respect to such taxes), including any income tax, employment tax
or Excise Tax, imposed upon the Gross Up Payment, the Participant retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Total Payments.

     6.2 Determination By Accountant. All mathematical determinations, and all
determinations as to whether any of the Total Payments are “parachute payments” (within the meaning
of Section 280G of the Code), that are required to be made under this Section 6.2, including
determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment
and amounts relevant to the last sentence of this Section 6.2, shall be made by an independent
accounting firm selected by the Participant from among the five (5) largest accounting firms in the
United States (the “Accounting Firm”), which shall provide its determination (the “Determination”),
together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to the Company and the Participant by no later than ten (10) days
following the Termination Date, if applicable, or such earlier time as is requested by the Company
or the Participant (if the Participant reasonably believes that any of the Total Payments may be
subject to the Excise Tax). If the Accounting

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Firm determines that no Excise Tax is payable by the Participant, it shall furnish the Participant
and the Company with a written statement that such Accounting Firm has concluded that no Excise Tax
is payable (including the reasons therefor) and that the Participant has substantial authority not
to report any Excise Tax on his or her federal income tax return. If a Gross-Up Payment is
determined to be payable, it shall be paid to the Participant within twenty (20) days after the
Determination (and all accompanying calculations and other material supporting the Determination)
is delivered to the Company by the Accounting Firm. Any determination by the Accounting Firm shall
be binding upon the Company and the Participant, absent manifest error. As a result of 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 not made by the Company should
have been made (“Underpayment”), or that Gross-Up Payments will have been made by the Company which
should not have been made (“Overpayments”). In either such event, the Accounting Firm shall
determine the amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall be promptly paid by the Company to or for the
benefit of the Participant. In the case of an Overpayment, the Participant shall, at the direction
and expense of the Company, take such steps as are reasonably necessary (including the filing of
returns and claims for refund), follow reasonable instructions from, and procedures established by,
the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment,
provided, however, that (i) the Participant shall not in any event be obligated to return to the
Company an amount greater than the net after-tax portion of the Overpayment that he or she has
retained or has recovered as a refund from the applicable taxing authorities and (ii) this
provision shall be interpreted in a manner consistent with the intent of Section 6.2, which is to
make the Participant whole, on an after-tax basis, from the application of the Excise Tax, it being
understood that the correction of an Overpayment may result in the Participant repaying to the
Company an amount which is less than the Overpayment.

ARTICLE VII

Successors to Company; Assignability by Participant

     7.1 Successors to Company. This Plan shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the Company shall require any successor or
assign to expressly assume and agree to perform this Plan in the same manner and to the same extent
that the Company would be required to perform it if no such succession or assignment had taken
place. The term “Company” as used herein shall mean a trust, corporation or other entity acquiring
all or substantially all the assets and business of the Company whether by operation of law or
otherwise.

     7.2 Assignability by Participant. Neither this Plan nor any right or interest
hereunder shall be assignable or transferable by a Participant or his or her beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This Plan shall inure
to the benefit of and be enforceable by a Participant’s legal personal representative.

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ARTICLE VIII

Duration, Amendment and Plan Termination

     8.1 Duration. This Plan shall continue in effect until terminated in accordance with
Section 8.2.

     8.2 Amendment and Termination. Prior to a Change in Control, the Plan may be amended
or modified in any respect, and may be terminated, by resolution adopted by a majority of the
Board; provided, however, that no such amendment, modification or termination that
would adversely affect the benefits or protection of any individual hereunder shall be effective if
the Board action authorizing such amendment, modification or termination is taken within the one
(1) year period immediately prior to a Change in Control, any such attempted amendment,
modification or termination being null and void ab initio; and further  provided,
that the Plan may not be amended, modified or terminated, (i) at the request of a third party who
has indicated an intention or taken steps to effect a Change in Control and who effectuates a
Change in Control or (ii) otherwise in connection with, or in anticipation of, a Change in Control
that actually occurs, any such attempted amendment, modification or termination being null and void
ab initio. From and after the occurrence of a Change in Control, the Plan (i) may not be amended
or modified in any manner that would in any way adversely affect the benefits or protections
provided to any individual hereunder and (ii) may not be terminated until the third anniversary of
the Change in Control. Notwithstanding the foregoing, prior to the earlier of the effective date
of a Change in Control and December 31, 2005 (or such later date that may be permitted under
regulations and other guidance that may be issued under Section 409A of the Code), the Board, in
its sole discretion, shall have the authority, but not the obligation, to modify the Plan to
conform with Section 409A of the Code so long as such modification is not adverse to Participants.

     8.3 Form of Amendment. Any amendment or termination of the Plan shall be effected by
written instrument signed by a duly authorized officer or officers of the Company, certifying that
the amendment or termination has been approved by the Board.

ARTICLE IX

Miscellaneous

     9.1 Employment at Will. Each Participant shall be an employee-at-will and the Plan
does not constitute a contract of employment or impose on the Company any obligation to retain the
Participant as an employee or change any employment policies of the Company.

     9.2 Validity and Severability. The invalidity or unenforceability of any provision of
the Plan shall not affect the validity or enforceability of any other provision of the Plan, which
shall remain in full force and effect, any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction.

     9.3 Non-exclusivity of Rights. Nothing in this Plan shall prevent or limit any
Participant’s continuing or future participation in any benefit, bonus, incentive or other plan
or program provided by the Company or any of its Affiliates and for which the Participant may

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qualify, nor shall anything herein limit or reduce such rights as any Participant may have under
any other agreements with the Company or any of its Affiliates; provided, however,
that a Participant who is entitled to receive a Severance Benefit hereunder shall not be entitled
to any severance pay or benefit under any other plan of, or agreement with, the Company or any
Affiliate. Amounts that are vested benefits or to which a Participant is otherwise entitled under
any plan or program of the Company or any of its Affiliates shall be payable in accordance with
such plan or program, except as explicitly modified by this Plan.

     9.4 Settlement of Claims. The Company’s obligations to make the payments provided for
in this Plan and otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, defense, recoupment, or
other right that the Company may have against a Participant or others.

     9.5 Governing Law. The validity, interpretation, construction and performance of the
Plan shall, to the extent not preempted by federal law, in all respects be governed by and
construed and enforced in accordance with the laws of the State of Texas without giving effect to
conflicts of law principles thereof.

     9.6 Notwithstanding anything contained herein to the contrary, a Class A Participant, Class B
participant or Class C Participant shall not include the Regional Managing Director for Southern
California.

[Signature Page Follows]

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	 	PRENTISS PROPERTIES TRUST

 	 
	 	By:  	/s/ Thomas F. August
 	 
	 	 	Thomas F. August 	 
	 	 	Chief Executive Officer 	 
	 

Change In Control Severance Protection Plan for Key Employees Dated October 3, 2005exv10w9

 

EXHIBIT 10.9

PRENTISS PROPERTIES TRUST

CHANGE IN CONTROL SEVERANCE PROTECTION PLAN

FOR HOURLY AND SALARIED NON-OFFICER EMPLOYEES

ARTICLE I

Effective Date

     Effective as of October 3, 2005 (the “Effective Date”) PRENTISS PROPERTIES TRUST (the
“Company”) hereby establishes the PRENTISS PROPERTIES TRUST Change in Control Severance Protection
Plan for Hourly and Salaried Non-Officer Employees (the “Plan”) as set forth in this document.

ARTICLE II

Definitions

     For purposes of this Plan, the following terms shall be defined as follows:

     2.1 “Accrued Compensation” shall mean an amount that includes all amounts earned,
accrued or otherwise payable to a Participant as of the Participant’s Termination Date including
(i) accrued pro rata Base Salary, (ii) accrued bonus (if any), (iii) reimbursement for reasonable
and necessary expenses incurred by the Participant on behalf of the Company during the period
ending on the Termination Date, and (iv) vacation pay.

     2.2 “Affiliate” means (i) any person directly or indirectly controlling, controlled
by, or under common control with such other person, (ii) any executive officer, director, trustee
or general partner of such other person, and (iii) any legal entity for which such person acts as
an executive officer, director, trustee or general partner. The term “person” means and includes
any natural person, corporation, partnership, association, limited liability company or any other
legal entity.

     2.3 “Base Salary” shall mean one-twelfth (1/12) of a Participant’s annualized base
salary, calculated at the greater of the rate in effect (i) immediately prior to a Change in
Control or (ii) as of the Participant’s Termination Date.

     2.4 “Board” means the Board of Trustees of the Company.

     2.5 “Cause” shall mean:

           (a) willful misconduct of the Participant in connection with the performance of any of his or
her duties, including without limitation, misappropriation of funds or property of the Company or
any of its Affiliates or securing or attempting to secure personally any profit in connection with
any transaction entered into on behalf of the Company or any of its Affiliates;

 

 

           (b) conduct by the Participant that would result in material injury to the reputation of the
Company if he or she were retained in his or her position with the Company, including without
limitation, conviction of a felony under the laws of the United States or any state thereof, or of
an equivalent crime under the laws of any other jurisdiction, bankruptcy, insolvency or general
assignment for the benefit of his creditors;

           (c) continued or deliberate neglect or continued poor performance by the Participant of his or
her employment duties;

           (d) any failure to comply substantially with any written rules, regulations, policies or
procedures of the Company, if such non-compliance could be expected to have a material and adverse
effect on the Company’s business and which has not been cured after reasonable notice;

           (e) any willful failure to comply with the Company’s internal policies regarding insider
trading or insider dealing which has not been cured after reasonable notice;

           provided, however, that in the case of a determination by the Company that
Cause exists based upon clauses (b) or (c) of this definition, the Company shall provide the
Participant written notice of such grounds for termination, and the Participant shall have a period
of fourteen (14) days in which to cure such Cause; and

     2.6 “Change in Control” shall mean that (a) the Company has consummated a transaction
pursuant to any agreement with any person or entity that involves the transfer of ownership of more
than fifty percent (50%) of the Company’s total assets or earnings power on a consolidated basis,
as reported in the Company’s consolidated financial statements filed with the Securities and
Exchange Commission (including an agreement for the acquisition of the Company by merger,
consolidation, or statutory share exchange regardless of whether the Company is intended to be the
surviving or resulting entity after the merger, consolidation, or statutory share exchange or for
the sale of substantially all of the Company’s assets to the person or entity), (b) as the direct
or indirect result of, or in connection with, a cash tender or exchange offer, a merger or other
business combination or combination of these transactions, the persons who were trustees of the
Company before such transactions cease to constitute a majority of the Board, or any successor’s
board, within two years of the last such transaction, (c) any person or entity is or becomes an
Acquiring Person, or (d) during any period of two consecutive calendar years, the Continuing
Trustees cease for any reason to constitute a majority of the Board. For purposes of the preceding
sentence, “Continuing Trustee” means any member of the Board, while a member of the Board and (1)
who was a member of the Board prior to May 11, 2005 or (2) whose subsequent nomination or election
to the Board was recommended or approved by a majority of the Continuing Trustees; and “Acquiring
Person” means that (i) a person, considered alone or together with all Affiliates and associates of
that person or entity, becomes directly or indirectly the beneficial owner of securities
representing at least twenty percent (20%) of the Company’s outstanding securities entitled to vote
generally in the election of the Board, or (ii) a person or entity enters into an agreement that
would result in that person or entity satisfying the conditions in subsection (i) or that would
result in an Affiliate’s failure to be an Affiliate.

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     2.7 “Code” shall mean the Internal Revenue Code of 1986 as amended and the regulations
promulgated thereunder.

     2.8 “Company” shall mean Prentiss Properties Trust, a Maryland real estate trust or
any successor thereto.

     2.9 “Continuation Period” shall mean the period commencing on a Participant’s
Termination Date that shall be equal to the number of months’ Base Salary that a Participant shall
be paid upon a Qualifying Termination.

     2.10 “Disability” shall mean (i) a Participant’s physical or mental inability,
confirmed by a licensed physician, to perform substantially any of the material responsibilities of
his or her position that continues for a period of not less than 180 consecutive days or (ii) by
reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 12 months, a
Participant’s receipt of income replacement benefits for a period of not less than 3 months under
an accident and health plan covering employees of the Company.

     2.11 “Effective Date” shall mean the date the Plan is approved by the Board or such
other date as the Board shall designate in its resolution approving the Plan.

     2.12 “Good Reason” shall mean:

	 	(a)	 	the Company requiring the Participant’s relocation more than
fifty (50) miles from the Participant’s primary office subsequent to the Change
in Control, without such Participant’s consent;
	 
	 	(b)	 	a material adverse alteration in the nature of his or her
position;
	 
	 	(c)	 	a reduction by the Company of the Participant’s annual base
salary or target bonus; or
	 
	 	(d)	 	an assignment of duties to the Participant that are materially
inconsistent with his or her job description at the time the Change in Control
took place.

     2.13 “Notice of Termination” shall mean a notice that indicates the specified
provisions in this Plan, if any, relied upon as the basis for any termination of employment and
shall set forth in reasonable detail the facts and circumstances, if any, claimed to provide a
basis for termination of the Participant’s employment under the provision so indicated.

     2.14 “Participant” shall mean any hourly or salaried non-officer employee who meets
the requirements set forth in Article III hereof.

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     2.15
“Plan” shall mean the Prentiss Properties Trust Change in Control Severance
Protection Plan for Hourly and Salaried Non-Officer Employees.

     2.16 “Qualifying Termination” shall mean a termination of employment (1) by the
Company for any reason other than Cause (including death or Disability) or (2) by the Participant
for Good Reason, and in the case of either (1) or (2), within six months of a Change in Control for
purposes of eligibility for the Severance Benefit; provided, however, that if any such termination
occurs within six months prior to a Change in Control and the Company determines that such
termination (i) was at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a Change in Control or (ii)
otherwise occurred in connection with, or in anticipation of, a Change in Control that actually
occurs, then the termination of such Participant shall be deemed to be a Qualifying Termination and
such Participant shall be eligible for the benefits provided under Article IV immediately upon the
occurrence of the Change in Control.

     2.17
Notwithstanding anything contained in this Plan to the contrary, no termination of
employment will be deemed to have occurred if it is a result of (1) the sale of one or more properties
owned by the Company in the normal course of business, (2) the sale
of one or more properties owned by the Company in Colorado, Illinois
or Michigan or (3) the loss of third party management and/or
leasing contracts in the normal course of business. If any such individual is terminated in
connection with such an event and is not hired by the succeeding
company, he or she shall not be covered by
this Plan and any severance benefits to which such individual may be entitled, if any, shall be
provided under the Company’s normal severance practices.

     2.18
“Severance Benefit” shall mean the compensation and benefits payable in
accordance with Article IV of the Plan.

     2.19 “Termination Date” shall mean the date of termination of a Participant’s
employment.

ARTICLE III

Participation

     All
hourly and nonofficer salaried employees of the Company (excluding part-time employees)
as of October 3, 2005 shall be participants (“Participants”) in
the Plan. Any individual who is a Participant as of the occurrence of a Change in Control shall
continue as a Participant until the date on which the Participant has received the entire amount of
the Severance Benefit, if any, payable to such Participant under the Plan.

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ARTICLE IV

Severance Benefit

     4.1 Right to Severance Benefit. A Participant shall be eligible for the severance
benefits set forth in this Article IV in the event that the Participant experiences a Qualifying
Termination. If the employment of a Participant is terminated for any reason other than those
constituting a Qualifying Termination, the Participant shall not be entitled to any of the benefits
provided under this Article IV. Specifically, and without limiting the generality of the
foregoing, neither a termination of a Participant’s employment by the Company for Cause nor a
resignation by a Participant other than for Good Reason shall constitute a Qualifying Termination.
Notwithstanding anything to the contrary, in the event of a Qualifying Termination of a
Participant, the Company shall require a Participant to execute a release of claims, in a form
satisfactory to the Company, as a precondition to receiving the benefits provided under this
Article IV.

     4.2 Amount of Severance Benefit.

     (a) If a Participant experiences a Qualifying
Termination, he or she shall be entitled to the following Severance Benefit:

           (1) the Company shall pay to the Participant all Accrued Compensation within fifteen (15) days
after the Participant’s Termination Date;

           (2) the Company shall pay to the Participant, as severance pay and in lieu of any further
salary for periods subsequent to the Participant’s Termination Date, an amount equal the
Participant’s Base Salary multiplied by the number of full and partial years that the Participant
has been employed by the Company or any predecessor thereto but excluding service with any entity
or property acquired by the Company or any predecessor thereto (even if such entity or property has
been merged into the Company or predecessor); provided, however, that such multiple shall in no
event be lower than three (3); and further provided, that if any such Participant receives any
payment under any severance plan or policy of the Company prior to payment under this Plan, the
amount payable to the Participant under this Section 4.2(a) shall be offset by the amount already
paid to the Participant under such plan or policy. The amount due under the first sentence of this
Section 4.2(a)(2) (the “Base Benefit”) shall be payable in a lump sum within fifteen (15) days after the later of: (i) the
Participant’s Termination Date and (ii) the occurrence of the Change in Control if the
Participant’s Qualifying Termination took place prior to the Change in Control; and

          (3) during the Continuation Period, the Company shall at its sole expense continue on behalf
of the Participant and his or her dependents and beneficiaries (i) medical, health, dental and
prescription drug benefits, (ii) long-term disability coverage and (iii) life insurance and other
death benefits coverage. Any period during which benefits are continued pursuant to this Section
4.2(a)(3) shall be considered to be in satisfaction of the Company’s obligation to provide
“continuation coverage” pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended,
and the period of coverage under Section 4980B shall be reduced by the period during which benefits
are provided pursuant to this Section 4.2(a)(3).

          (b) If a Participant is employed by a successor company after a Change in Control and
experiences a termination that would have constituted a Qualifying Termination but for the fact
that such termination occurred after six months of a Change in Control, he or she shall be entitled
to the following Severance Benefit:

          (1) such successor company shall pay to the Participant all Accrued
Compensation within fifteen (15) days after the Participant’s Termination Date;

          (2) the Company shall pay to the Participant, as severance pay and in lieu of
any further salary for periods subsequent to the Participant’s Termination Date, an
amount equal the Base Benefit less the sum of the Participant’s Base Salary
multiplied by the number of full and partial months that the Participant has been
employed by the successor company after the date of the Change in Control. The
amount due under the first sentence of this Section 4.2(b)(2) shall be payable in a
lump sum within fifteen (15) days after the Participant’s Termination Date; and

          (3) for a period equal to the number of months’ Base Salary that a Participant
shall be paid under Section 4.2(b)(2) commencing on the Participant’s Termination
Date, the Company shall at its sole expense continue on behalf of the Participant
and his or her dependents and beneficiaries (i) medical, health, dental and
prescription drug benefits, (ii) long-term disability coverage and (iii) life
insurance and other death benefits coverage. Any period during which benefits are
continued pursuant to this Section 4.2(b)(3) shall be considered to be in
satisfaction of such successor company’s obligation to provide “continuation
coverage” pursuant to Section 4980B of the Internal Revenue Code of 1986, as
amended, and the period of coverage under Section 4980B shall be reduced by the
period during which benefits are provided pursuant to this Section 4.2(b)(3).

     4.3 Mitigation. The Participant shall not be required to mitigate the amount of any
payment or benefit provided for in this Plan by seeking other employment or otherwise and

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no such payment or benefit shall be offset or reduced by the amount of any compensation or benefits
provided to the Participant in any subsequent employment.

     4.4 Other Benefits. The Participant’s entitlement to any other compensation or
benefits shall be determined in accordance with the Company’s employee benefit plans and other
applicable programs, policies and practices as in effect from time to time.

ARTICLE V

Termination of Employment

     Following a Change in Control, any purported termination of employment, either by the Company
or by the Participant, shall be communicated by written notice of termination to the other.

ARTICLE VI

Successors to Company; Assignability by Participant

     6.1 Successors to Company. This Plan shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the Company shall require any successor or
assign to expressly assume and agree to perform this Plan in the same manner and to the same extent
that the Company would be required to perform it if no such succession or assignment had taken
place. The term “Company” as used herein shall mean a trust, corporation or other entity acquiring
all or substantially all the assets and business of the Company whether by operation of law or
otherwise.

     6.2 Assignability by Participant. Neither this Plan nor any right or interest
hereunder shall be assignable or transferable by a Participant or his or her beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This Plan shall inure
to the benefit of and be enforceable by a Participant’s legal personal representative.

ARTICLE VII

Duration, Amendment and Plan Termination

     7.1 Duration. This Plan shall continue in effect until terminated in accordance with
Section 7.2.

     7.2 Amendment and Termination. Prior to a Change in Control, the Plan may be amended
or modified in any respect, and may be terminated, by resolution adopted by a majority of the
Board; provided, however, that no such amendment, modification or termination that would adversely
affect the benefits or protection of any individual hereunder shall be effective if the Board
action authorizing such amendment, modification or termination is taken within the one (1) year
period immediately prior to a Change in Control, any such attempted amendment,

6

 

modification or termination being null and void ab initio; and further provided, that the Plan may not be amended,
modified or terminated, (i) at the request of a third party who has indicated an
intention or taken steps to effect a Change in Control and who effectuates a Change in Control
or (ii) otherwise in connection with, or in anticipation of, a Change in Control that actually
occurs, any such attempted amendment, modification or termination being null and void ab initio.
From and after the occurrence of a Change in Control, the Plan may be amended, modified, or
terminated on or after the six month anniversary of a Change in Control; provided, however, that no
such amendment, modification or termination shall decrease or eliminate the benefits hereunder to
Participants who became entitled to such benefits prior to such amendment, modification or
termination. Notwithstanding the foregoing, prior to the earlier of the effective date of a Change
in Control and December 31, 2005 (or such later date that may be permitted under regulations and
other guidance that may be issued under Section 409A of the Code), the Board, in its sole
discretion, shall have the authority, but not the obligation, to modify the Plan to conform with
Section 409A of the Code so long as such modification is not adverse to Participants.

     7.3 Form of Amendment. Any amendment or termination of the Plan shall be effected by
written instrument signed by a duly authorized officer or officers of the Company, certifying that
the amendment or termination has been approved by the Board.

ARTICLE VIII

Miscellaneous

     8.1 Employment at Will. Each Participant shall be an employee-at-will and the Plan
does not constitute a contract of employment or impose on the Company any obligation to retain the
Participant as an employee or change any employment policies of the Company.

     8.2 Validity and Severability. The invalidity or unenforceability of any provision of
the Plan shall not affect the validity or enforceability of any other provision of the Plan, which
shall remain in full force and effect, any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction.

     8.3 Non-exclusivity of Rights. Nothing in this Plan shall prevent or limit any
Participant’s continuing or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company or any of its Affiliates and for which the Participant may qualify,
nor shall anything herein limit or reduce such rights as any Participant may have under any other
agreements with the Company or any of its Affiliates; provided, however, that a
Participant who is entitled to receive a Severance Benefit hereunder shall not be entitled to any
severance pay or benefit under any other plan of, or agreement with, the Company or any Affiliate.
Amounts that are vested benefits or to which a Participant is otherwise entitled under any plan or
program of the Company or any of its Affiliates shall be payable in accordance with such plan or
program, except as explicitly modified by this Plan.

     8.4 Settlement of Claims. The Company’s obligations to make the payments provide for
in this Plan and otherwise to perform its obligations hereunder shall not be affected

7

 

by any circumstances, including, without limitation, any set-off, counterclaim, defense, recoupment, or
other right that the Company may have against a Participant or others.

     8.5 Governing Law. The validity, interpretation, construction and performance of the
Plan shall, to the extent not preempted by federal law, in all respects be governed by and
construed and enforced in accordance with the laws of the State of Texas without giving effect to
conflicts of law principles thereof.

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	 	PRENTISS PROPERTIES TRUST

 	 
	 	By:  	/s/ Thomas F. August
 	 
	 	 	Thomas F. August 	 
	 	 	Chief Executive Officer 	 
	 

9

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