Exhibit 99.7
AGREEMENT REGARDING DIRECTORSHIP
THIS AGREEMENT REGARDING DIRECTORSHIP (this "Agreement") is entered into as
of this 30th day of June, 1998, by and between Boston Properties, Inc., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxx (the "Nominee").
Reference is made to that certain Contribution and Conveyance Agreement, dated
as of June 30, 1998, by and among the Company, the Nominee and certain other
persons named therein (as may be amended, supplemented or modified from time to
time, the "Contribution Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Contribution
Agreement.
WHEREAS, the Nominee and the Company have entered into the Contribution
Agreement and desire to consummate the transactions contemplated thereby;
WHEREAS, it is a condition precedent to the obligations of the Xxxxxx
Parties (including the Nominee) under the Contribution Agreement that the Board
of Directors of the Company (the "Board") appoint the Nominee to the Board, and
it is a condition of the Nominee that to accept such appointment the Nominee
enter into this Agreement; and
WHEREAS, the Board has appointed the Nominee to the Board (subject to the
execution of this Agreement and the completion of the Closing) and the Nominee
desires to accept such appointment.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, do hereby agree as follows:
SECTION 1. APPOINTMENT. The Board has appointed the Nominee as a Class
I director of the Company, to serve for a term expiring at the Company's annual
meeting of stockholders in 2001 (subject to the Nominee's earlier death,
resignation or removal by the stockholders of the Company), effective upon (i)
the completion of the Closing and (ii) the Nominee's execution and delivery of
this Agreement, the Non-Competition Agreement referred to in Section 8, and the
Director's Questionnaire referred to in Section 7.
SECTION 2. RESIGNATION. The Nominee agrees to tender his resignation
as a director of the Company if on the last business day of a calendar quarter
the Nominee and his Related Parties (as defined below) do not continue to
Beneficially Own (as defined below) Common Shares, Common Units and Preferred
Units with an aggregate fair market value of at least $35,000,000.
For purposes of this Agreement, (i) a share of Common Stock shall be deemed
to have a fair market value as of any particular date equal to the average of
the closing prices of the
Common Stock on the New York Stock Exchange on the immediately preceding twenty
(20) consecutive trading days, (ii) a Common Unit shall be deemed to have a fair
market value as of any particular date equal to the value of a share of Common
Stock on such date and (iii) a Preferred Unit shall be deemed to have a fair
market value as of any particular date equal to the value of the number of
Common Units into which a Preferred Unit may be converted.
As used herein, the term "Related Parties" refers to:
(x) the Nominee's spouse, siblings, parents, grandparents (or spouses of
such persons) or any natural or adopted children or other descendants
or to any personal trust in which any such family members retain a
majority of the beneficial interests, and
(y) any entity in which the Nominee and/or Related Parties under the
preceding clause (x) (together or alone) directly or indirectly
control (i) equity interests entitled to a majority of the cash
distributions to equity holders and (ii) a majority of the voting
stock or similar interests issued by the entity (except that such
entity shall be deemed for purposes of this Agreement to Beneficially
Own only the number of Common Shares, Common Units and Preferred Units
owned by such entity multiplied in each case by the percentage of the
voting stock or similar interests issued by such entity that are
directly or indirectly Beneficially Owned by the Nominee and the
Related Parties identified in the preceding clause (x)).
As used herein, the term "Beneficial Ownership" refers to beneficial
ownership within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), except that the Nominee and its Related
Parties shall not be deemed to Beneficially Own any shares of Common Stock or
Units with respect to which they no longer maintain substantially all of the
risk of economic detriment or the opportunity for economic benefit from the
Beneficial Ownership of such securities (e.g., because of the entry by Nominee
or a Related Party into a "collar" arrangement or other risk-eliminating
derivative arrangement which reduced such risk or benefit of Beneficial
Ownership to an insubstantial amount).
SECTION 3. RE-NOMINATION. The Company agrees that at each of the
Company's annual meetings of stockholders occurring in a year when the Nominee's
term as a director of the Company expires, the Board shall nominate the Nominee
for re-election as a Class I director of the Company, provided that this
obligation shall not exist if: (i) the Nominee is not serving as a director of
the Company immediately prior to the time of the nomination of directors for
election, (ii) the Nominee, in any calendar year since his last appointment or
re-election, shall have failed to attend a number of meetings of the Company's
board of directors or any committee thereof such that the Company was required
(or will be required) to report such failure to attend in the Company's annual
proxy statement pursuant to Rule 14a-101 under
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the Exchange Act (or any successor provision), (iii) the Nominee and its related
parties shall not continue to Beneficially Own at least 1.0% of the aggregate
number of outstanding Common Shares and Common Units (including for such
determination (a) in the numerator, the Common Units issuable upon the
conversion of Preferred Units, and (b) in the denominator, (x) the Common Units
issuable upon the conversion of Preferred Units and the conversion of any other
outstanding preferred units of limited partnership interest in BPLP then
convertible into Common Units and (y) any Common Shares issuable upon the
conversion of any outstanding shares of preferred stock in the Company then
convertible into Common Shares) or (iv) two-thirds of those directors other than
Nominee who are non-employee directors of the Company (which group shall in no
event include Xxxxxxxx X. Xxxxxxxxx or Xxxxxx X. Xxxxx) shall have determined in
good faith (with the reason therefor stated in a resolution adopted by such
directors) that (x) Nominee has violated any of the policies identified in
Section 4 below and has failed to timely cure or cease such violation after
adequate notice thereof or (y) Nominee's continued membership on the Board of
Directors is not in the best interests of the stockholders of the Company.
SECTION 4. COMPLIANCE WITH BOARD POLICIES.
(a) The Nominee acknowledges receipt of the Company's Statement of
Company Policy on Xxxxxxx Xxxxxxx and Policy Regarding Special Trading
Procedures, which are attached hereto as Exhibit A, and the Nominee agrees that,
for so long as the Nominee is a director of the Company, the Nominee shall
comply with such policies as they may be amended from time to time.
(b) The Nominee agrees that, for so long as the Nominee is a director
of the Company, the Nominee shall comply with the policies of the Company's
Board of Directors regarding conflicts of interest, as such policies may be in
effect from time to time.
(c) The Nominee agrees that, for so long as the Nominee is a Director
of the Company, the Nominee shall comply with all other policies of the
Company's Board of Directors that are generally applicable to all directors, as
such policies may be in effect from time to time.
SECTION 5. INDEMNIFICATION. The Nominee and the Company shall, as of
the date hereof, enter into an Indemnification Agreement in the form attached
hereto as Exhibit B.
SECTION 6. SECTION 16 AND RULE 144. The Nominee represents to the
Company that the Nominee has been advised by counsel concerning the Nominee's
obligations as a director of the Company pursuant to Section 16 under the
Exchange Act and the limitation on transferability of Common Shares under Rule
144 under the Securities Act of 1933, as amended. Within ten (10) days after
the date hereof, the Nominee shall file a Form 3 with the Securities and
Exchange Commission as required under Section 16(a) of the Exchange Act.
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SECTION 7. DIRECTOR'S QUESTIONNAIRE. Prior to the date hereof, the
Nominee shall have completed and returned to the Company a Director's
Questionnaire in the form attached hereto as Exhibit C.
SECTION 8. NON-COMPETITION AGREEMENT. Simultaneously with his
execution hereof, Nominee is executing and delivering a Non-Competition
Agreement in the form attached hereto as Exhibit D.
SECTION 9. STATEMENT REGARDING OWNERSHIP. For the purpose of enabling
the Company to ascertain and verify the Beneficial Ownership of Common Shares
and Common Units by the Nominee and Related Parties for purposes of Section 2
and clause (iii) of Section 3, promptly upon request by the Company, the Nominee
shall provide such written statements, documentation and verifying information
as the Company may reasonably require.
SECTION 10. EFFECTIVENESS. This Agreement shall be effective upon the
completion of the Closing.
SECTION 11. NOTICE. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressee, on the
date of such receipt or (ii) if mailed by domestic certified or registered mail
with postage prepaid, on the third business day after the date postmarked.
Addresses for notice to any party are as shown on the signature page of this
Agreement, or as subsequently modified by written notice.
SECTION 12. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware as
applied to contracts between Delaware residents entered into and to be performed
entirely within the State of Delaware.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BOSTON PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Senior Vice President
Address:
0 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Nominee
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Address:
[Signature Page to Agreement Regarding Directorship]
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