Exhibit 10.1
EMPLOYMENT
AGREEMENT
THE AGREEMENT (the
“Agreement” ) made as of the 29th day of
November, 2002, by and between E. Mitchell Norville (the
“Employee” ) and Boston Properties, Inc., a
Delaware corporation, with its principal executive office located
at 111 Huntington Avenue, Suite 300, Boston, Massachusetts
02199-7610 (together with its subsidiaries, the
“Company” ) is hereby amended and restated this
25th day of August, 2005, to be effective on September 1, 2005
(the “Effective Date” ).
WITNESSETH THAT:
WHEREAS, the Company and the
Employee have determined that it is in its best interest to amend
and restate the Agreement in connection with the Employee’s
promotion;
WHEREAS, the Employee wishes to be
so employed pursuant to the terms hereinafter set forth;
WHEREAS, the Company has adopted
that certain Senior Executive Severance Plan, effective as of
July 30, 1998 (the “Severance Plan” ), as
may be amended from time to time, and which the parties desire to
remain in full force and effect after the date hereof;
NOW, THEREFORE, in consideration of
the mutual covenants and premises set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Employee hereby
agree as follows:
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1.
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Term. Subject to the provisions of Paragraph 8, the
term of employment pursuant to this Agreement (the
“Term” ) shall be two (2) years from the
Effective Date and shall be renewed automatically for periods of
one (1) year commencing at each anniversary of the Effective
Date, unless written notice is given by either party to the other
not less than ninety (90) days prior to any such anniversary of
such party’s election not to extend the Term.
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2.
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Employment;
Duties; Location.
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(a)
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Employee shall
serve as an officer of the Company with the title Executive Vice
President for Operations. Employee’s duties and authority
shall be commensurate with his title and position with the Company.
The Employee shall report directly to the President and Chief
Executive Officer and shall serve the Company in such other
capacity or capacities as the Employee may be requested to serve by
the Board of Directors of the Company (the “Board of
Directors” ). In such capacity or capacities, the
Employee shall perform such services and duties in connection with
the business, affairs and operations of the Company as may be
assigned or delegated to the Employee from time to time by or under
the authority of the Board of Directors. The Employee shall be
principally located at the Company’s Boston office beginning
in mid-2006.
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(b)
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Employee agrees
to his employment as described in this Paragraph 2 and agrees
to devote substantially all of his working time and efforts to the
performance of his duties hereunder, except as otherwise approved
by the Board of Directors. Notwithstanding the foregoing, nothing
herein shall be interpreted to preclude Employee from
(i) engaging in Minority Interest Passive Investments (as
defined below), including Minority Interest Passive Investments in,
or relating to the ownership, development, operation, management,
or leasing of, commercial real estate properties or
(ii) participating as an officer or director of, or advisor
to, any charitable or other tax exempt organization;
provided that such activities and related duties and
pursuits do not restrict Employee’s ability to fulfill his
obligations as an officer and employee of the Company as set forth
herein.
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Engaging in a “Minority
Interest Passive Investment” means acquiring, holding,
and exercising the voting rights associated with an investment made
through (i) the purchase of securities (including partnership
interests) that represent a non-controlling, minority interest in
an entity or (ii) the lending of money, in either case with
the purpose or intent of obtaining a return on such investment but
without management by Employee of the property or business to which
such investment directly or indirectly relates and without any
business or strategic consultation by Employee with such
entity.
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(a)
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Base
Salary. Employee’s
annual salary shall be increased to Four Hundred Twenty-five
Thousand Dollars ($425,000) (the “Base Salary”
). Such amount shall be payable in accordance with the
Company’s normal business practices for senior executives
(including tax withholding), but in no event less frequently than
monthly. Employee’s Base Salary shall be reviewed at least
annually by the Board of Directors or the Compensation Committee of
the Board of Directors (the “Compensation
Committee” ) and may be increased but not decreased in
its discretion.
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(b)
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Bonus. On each annual compensation determination date
established by the Company during the Term, the Company shall
review the performance of the Company and of Employee during the
prior year, and the Company may provide Employee with additional
compensation as a bonus if the Board of Directors, or the
Compensation Committee, in its discretion, determines that
Employee’s contribution to the Company warrants such
additional payment and the Company’s anticipated financial
performance for the present period permits such payment.
Employee’s target annual bonus shall be 100% of his Base
Salary; provided , however , that Employee’s
target annual bonus for 2005 shall equal the sum of (A) his
pre-existing target percentage multiplied by his pre-existing base
salary pro-rated for the period from January 1, 2005 to
August 31, 2005, plus (B) a pro-rated portion of 100% of
his Base Salary for the period from September 1, 2005 to
December 31, 2005.
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(a)
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Medical/Dental Insurance.
Employee shall be entitled to
participate in any and all employee benefit plans, including all
medical and dental insurance plans as in effect from time to time
for senior executives of the Company. Such participation shall be
subject to (i) the terms of the applicable plan documents,
(ii) generally applicable policies of the Company, and
(iii) the discretion of the Board of Directors, the
Compensation Committee or any administrative or other committee
provided for in, or contemplated by, such plan. Nothing contained
in this Agreement shall be construed to create any obligation on
the part of the Company to establish any such plan or to maintain
the effectiveness of any such plan which may be in effect from time
to time.
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(b)
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Life
Insurance/Disability Insurance. The Company shall provide Employee with such
life and/or disability insurance as the Company may from time to
time make available to senior executives of the Company.
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(c)
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Expenses. The Company shall promptly reimburse Employee
for all reasonable business expenses incurred by Employee in
accordance with the practices of the Company for senior executives
of the Company, as in effect from time to time.
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(d)
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Vacation. Employee shall receive paid vacation annually in
accordance with terms determined for such Employee by the Company,
but in no event shall Employee receive less than four weeks of paid
vacation per year.
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(e)
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Stock Options; Restricted
Stock; LTIP Awards. Employee shall be entitled to grants of stock
options and restricted stock awards or LTIP awards in an amount to
be determined by the Compensation Committee in its discretion under
the Boston Properties, Inc. 1997 Stock Option and Incentive Plan or
any other stock option or incentive plan adopted by the Company
from time
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to time (the “Stock Option
Plan” ). Employee’s target annual equity incentive
for 2005 shall equal the sum of (A) his pre-existing target
percentage for annual equity incentive multiplied by his
pre-existing base salary pro-rated for the period from
January 1, 2005 to August 31, 2005, plus (B) a
pro-rated portion of $600,000 for the period from September 1,
2005 to December 31, 2005. Employee’s target annual
equity incentive shall be $700,000 for 2006. Thereafter, such
target shall be determined in the discretion of the Board of
Directors or the Compensation Committee. Upon Employee’s
relocation to the greater Boston area, Employee shall be granted
either a restricted stock or LTIP award with a value of $500,000.
Such grant will vest in five equal annual installments, with the
vesting period to commence as of September 1, 2005, without
regard to the actual date of Employee’s
relocation.
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(f)
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Deferred
Compensation. Employee
shall be entitled to participate in any deferred compensation plan
or arrangement that the Company may have in place for its senior
executives and/or officers.
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(g)
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Automobile. The Company shall provide Employee with an
automobile allowance of Seven Hundred Fifty Dollars ($750) per
month, such amount to be increased from time to time in the
Company’s sole discretion and to be paid to Employee no less
frequently than monthly. The Company shall further reimburse
Employee for car rental expenses (or for car expenses if Employee
chooses to leave his own car in Boston) incurred while Employee is
in Boston, but prior to the time of Employee’s permanent
relocation to the greater Boston area.
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(h)
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Temporary
Housing. Prior to
Employee’s relocation to the greater Boston area, which is
anticipated in mid-2006, the Company shall provide an apartment and
a parking space near the Company’s headquarters for
Employee’s use.
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(i)
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Other
Benefits. The Company
shall provide to Employee such other benefits, including the right
to participate in such retirement or pension plans, as are made
generally available to senior executives of the Company from time
to time. Such participation shall be subject to (i) the terms
of the applicable plan documents, (ii) generally applicable
policies of the Company, and (iii) the discretion of the Board
of Directors, the Compensation Committee, or any administrative or
other committee provided for in, or contemplated by, such
plan.
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(j)
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Taxation of
Payments and Benefits. The Company shall undertake to make deductions,
withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good
faith believes that it is required to make such deductions,
withholdings and tax reports. Payments under this Agreement shall
be in amounts net of any such deductions or withholdings. Except as
set forth in the next sentence, nothing in this Agreement shall be
construed to require the Company to make any payments to compensate
the Employee for any adverse tax effect associated with any
payments or benefits or for any deduction or withholding from any
payment or benefit. In the event that it shall be determined that
the temporary car expense reimbursement and temporary housing
provided to Employee under Subparagraphs 4(g) and 4(h) above (the
“Temporary Payments”) are subject to federal, state and
local income tax and employment tax (the “Income Tax”),
Employee shall be entitled to receive an additional payment from
the Company (the “Gross-Up Amount”) such that the net
amount, after deductions of any Income Tax on the Temporary
Payments and any Income Tax upon the payment provided by this
sentence, shall be equal to the Temporary Payments.
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5.
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Indemnification. To the full extent permitted by law and subject
to the Company’s Certificate of Incorporation and Bylaws, the
Company shall indemnify Employee with respect to any actions
commenced against Employee in his capacity as a director or officer
or former director or officer of the Company, or any affiliate
thereof for which he may serve in such capacity, and the Company
shall advance on a timely basis any expenses incurred in defending
such actions. The obligation to indemnify hereunder shall survive
the termination of this Agreement. The Company agrees to use its
best efforts to secure and maintain directors’ and
officers’ liability insurance with respect to
Employee.
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6.
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Company
Authority/Policies. Employee agrees to observe and comply with the
rules and regulations of the Company as adopted by its Board of
Directors respecting the performance of his duties and to carry out
and perform orders, directions and policies communicated to him
from time to time by the Board of Directors.
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7.
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Records/Nondisclosure/Company
Policies.
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(a)
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General. All records, financial statements and similar
documents obtained, reviewed or compiled by Employee in the course
of the performance by him of services for the Company, whether or
not confidential information or trade secrets, shall be the
exclusive property of the Company. Employee shall have no rights in
such documents upon any termination of this Agreement.
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(b)
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Confidential
Information. Employee
will not disclose to any person or entity (except as required by
applicable law, the rules of the New York Stock Exchange, or
otherwise in connection with the performance of his duties and
responsibilities hereunder), or use for his own benefit or gain,
any confidential information of the Company obtained by him
incident to his employment with the Company. Employee shall take
all reasonable steps to safeguard any confidential information and
to protect such confidential information against disclosure,
misuse, loss, or theft. The term “confidential
information” includes, without limitation, financial
information, business plans, prospects, and opportunities which
have been discussed or considered by the management of the Company,
but does not include any information which has become part of the
public domain by means other than Employee’s non-observance
of his obligations hereunder.
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This Paragraph 7 shall survive the
termination of this Agreement.
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8.
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Termination/Severance.
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(i)
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At Will
Employment. Employee’s employment hereunder is
“at will” and, therefore, may be terminated at any
time, with or without cause, at the option of the Company, subject
only to the severance obligations under this Paragraph
8.
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(ii)
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Notice of
Termination. Except for
termination as a result of Employee’s death as specified in
Subparagraph 8(b), any termination of Employee’s employment
by the Company or any such termination by Employee shall be
communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the
specific termination provision hereunder relied upon by the
terminating party.
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(iii)
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Date of
Termination. “Date of Termination” shall
mean: (A) if Employee’s employment is terminated by his
death, the date of his death; (B) if Employee&
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