EXHIBIT 10.3
Form of Noncompetition Agreement
NONCOMPETITION AGREEMENT
AGREEMENT (this "Agreement") made as of the __ day of June, 1997 by and
between Xxxxxxxx X. Xxxxxxxxx residing at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Xx. Xxxxxxxxx") and Boston Properties, Inc., a Delaware corporation,
with a principal place of business at 0 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (together with its subsidiaries, the "Company").
WHEREAS, Xx. Xxxxxxxxx is Chairman of the Board of Directors of the
Company;
WHEREAS, Xx. Xxxxxxxxx was a senior executive officer and has been a
director of the Company or its predecessor for __ years, during which time Xx.
Xxxxxxxxx has acquired specialized knowledge, expertise and abilities with
respect to the Company's business;
WHEREAS, Xx. Xxxxxxxxx has access, in the course of the performance by him
of his duties to the Company, to the Company's confidential information and the
Company desires to assure that such confidential information will not be
misappropriated by Xx. Xxxxxxxxx;
WHEREAS, the Company has decided to undertake an initial public offering of
its common stock (the "IPO") and desires to obtain Xx. Xxxxxxxxx'x commitment
not to compete against the Company for a period of time as provided herein; and
WHEREAS, Xx. Xxxxxxxxx will have a substantial interest in the Company
following the IPO through the ownership of equity interests in the Company, and
therefore, since he will benefit from the IPO, Xx. Xxxxxxxxx desires to further
assure its success by entering into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, Xx.
Xxxxxxxxx and the Company agree as follows:
1. NONCOMPETITION.
(a) Xx. Xxxxxxxxx covenants and agrees that for so long as he serves
as a director of the Company and for one year thereafter, and in any event until
the third anniversary of the closing of the IPO, Xx. Xxxxxxxxx shall not,
without the prior written consent of the Company (which shall be authorized by
approval of the Board of Directors of the Company, including the approval of a
majority of the independent Directors of the Company), directly or indirectly:
(i) engage, participate or assist in, either individually or as
an owner, partner, employee, consultant, director, officer, trustee, or agent of
any business that engages or attempts to engage in, directly or indirectly, the
acquisition, development, construction, operation, management, or leasing of any
commercial real estate property;
(ii) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Company or its
affiliates and any tenant, supplier, contractor, lender, employee, or
governmental agency or authority; or
(iii) call upon, compete for, solicit, divert, or take away,
or attempt to divert or take away any of the tenants or employees of the Company
or its affiliates, either for himself or for any other business, operation,
corporation, partnership, association, agency, or other person or entity.
(b) Subparagraph 1(a) shall not be interpreted to prevent Xx. Xxxxxxxxx
from (i) engaging in Minority Interest Passive Investments, (ii) conducting
ownership, development, operation, management or leasing activities with respect
to that property described as the "Excluded Property" in the Company's
registration statement on Form S-11 (Registration No. 333-25279) or (iii)
participating as an officer or director of, or advisor to, any charitable or
other tax exempt organization. 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 Xx. Xxxxxxxxx of the property or business to which such investment
directly or indirectly relates and without any business or strategic
consultation by Xx. Xxxxxxxxx with such entity.
(c) This Section 1 shall not apply and shall be of no force or effect
following a Change of Control. For this purpose a "Change of Control" shall be
deemed to occur if persons who, as of the effective date of the IPO, constitute
the Company's Board of Directors (the "Incumbent Directors") cease for any
reason, including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority of the
Board of Directors, provided that any person becoming a director of the Company
subsequent to such date whose election was approved by a vote of at least two-
thirds of the Incumbent Directors or whose nomination for election was approved
by a nominating committee comprised of Incumbent Directors shall, for purposes
of this Agreement, be considered an Incumbent Director.
2. RECORDS/NONDISCLOSURE/COMPANY POLICIES.
(a) GENERAL. All records, financial statements and similar documents
obtained, reviewed or compiled by Xx. Xxxxxxxxx in the course of the performance
by him of his duties to the Company, whether or not confidential information or
trade secrets, shall be the exclusive property of the Company. Xx. Xxxxxxxxx
shall have no rights in such documents under any circumstances.
(b) CONFIDENTIAL INFORMATION. Xx. Xxxxxxxxx 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 to the Company), or use for his own benefit or gain, any confidential
information of the Company obtained by him incident to his role as Chairman of
the Board of Directors of the Company or otherwise. Xx. Xxxxxxxxx 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
Xx. Xxxxxxxxx'x non-observance of his obligations hereunder.
This Paragraph 2 shall survive the termination of this Agreement.
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3. REASONABLE AND NECESSARY RESTRICTIONS. Xx. Xxxxxxxxx acknowledges and
agrees that the restrictions contained in Paragraphs 1 and 2 are reasonable,
fair and equitable in scope, term and duration, in view of the business in which
the Company is engaged and Xx. Xxxxxxxxx'x role as Chairman of the Board of
Directors of the Company. Xx. Xxxxxxxxx further acknowledges that such
restrictions are necessary to protect the legitimate business interests of the
Company and are supported by the substantial benefits that will accrue to him as
a result of the IPO.
4. CONFLICTING AGREEMENTS. Xx. Xxxxxxxxx hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.
5. NOTICES. 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 for the parties are as shown above, or as subsequently modified by
written notice.
6. MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
between the parties concerning the subjects hereof and supersedes any and all
prior agreements or understandings and (ii) may be assigned by the Company and
shall be binding upon, and inure to the benefit of, the Company's successors and
assigns. Headings herein are for convenience of reference only and shall not
define, limit or interpret the contents hereof.
7. AMENDMENT. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
8. ARBITRATION; OTHER DISPUTES. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by arbitration
in Boston, Massachusetts, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered in any court
having jurisdiction. Notwithstanding the above, the Company shall be entitled
to seek a restraining order or injunction in any court of competent jurisdiction
to prevent any continuation of any violation of Paragraph 1 or 2 hereof.
9. EFFECTIVENESS. This Agreement is conditioned and shall become
effective only upon the completion of the IPO.
10. SEVERABILITY. If any provision of this Agreement shall to any extent
be held void or unenforceable (as to duration, scope, activity, subject or
otherwise) by a court of competent jurisdiction, such provision shall be deemed
to be modified so as to constitute a
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provision conforming as nearly as possible to the original provision while still
remaining valid and enforceable. In such event, the remainder of this Agreement
(or the application of such provision to persons or circumstances other than
those in respect of which it is deemed to be void or unenforceable) shall not be
affected thereby. Each other provision of this Agreement, unless specifically
conditioned upon the voided aspect of such provision, shall remain valid and
enforceable to the fullest extent permitted by law; any other provisions of this
Agreement that are specifically conditioned on the voided aspect of such invalid
provision shall also be deemed to be modified so as to constitute a provision
conforming as nearly as possible to the original provision while still remaining
valid and enforceable to the fullest extent permitted by law.
11. GOVERNING LAW. This Agreement shall be construed and regulated in all
respects under the laws of the State of Delaware.
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IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.
BOSTON PROPERTIES, INC.
By:
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Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer and President
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Xxxxxxxx X. Xxxxxxxxx
514117.C2
5/21/97
