Document:

Exhibit 10.3

 

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 7th day of
March, 2006, by and between Michael M. Mullen (“Executive”) and Solstice
Holdings LLC, a Delaware limited liability company (the “Company”), and at and
after the Effective Time, by and among Executive, the Company and CenterPoint
Properties Trust, a Maryland real estate investment trust (“CenterPoint”). Certain
capitalized terms used herein, unless otherwise specified, are defined in
Section 12.

 

R E C I T A L S:

 

WHEREAS,
CenterPoint owns, manages, acquires, leases and develops real estate;

 

WHEREAS,
Executive is knowledgeable and experienced in certain aspects of CenterPoint’s
business;

 

WHEREAS,
Executive and CenterPoint are parties to the Prior Agreements, which set forth
the terms and conditions of Executive’s employment prior to the Effective Time;

 

WHEREAS,
CalEast Industrial Investors, LLC, a California limited liability company (“CalEast”),
Solstice Merger Trust, a Maryland real estate investment trust (“Merger Sub”)
and CenterPoint entered into the Agreement and Plan of Merger dated December 7,
2005, and amended February 2, 2006 (the “Merger Agreement”), pursuant to which
Merger Sub will be merged with and into CenterPoint (the “Merger”) at the
effective time as defined in Section 1.3(a) of the Merger Agreement (the “Effective
Time”), and CenterPoint will become a subsidiary of the Company, a subsidiary
of CalEast;

 

WHEREAS,
the Company and Executive entered into the Employment Agreement Term Sheet
dated December 7, 2005 (the “Term Sheet”) in connection with the execution of
the Merger Agreement with respect to certain terms and conditions of Executive’s
employment with CenterPoint on and after the Effective Time;

 

WHEREAS,
Executive desires to be employed by CenterPoint, and CenterPoint desires to
employ Executive upon the terms and conditions as set forth in this Agreement;

 

WHEREAS,
it is contemplated by the Company and Executive that this Agreement, which will
supersede and replace the Prior Agreements and the Term Sheet, will be
effective only upon and following the Effective Time and at such time
CenterPoint will join and be a party to this Agreement; and

 

WHEREAS,
Executive recognizes and acknowledges that the business of CenterPoint is
highly competitive and that by reason of his employment by CenterPoint he has
and will continue to have access to confidential and proprietary information
regarding CenterPoint and its business.

 

 

NOW
THEREFORE, in consideration of the foregoing recitals and mutual promises
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             EMPLOYMENT.
Effective as of the Effective Time, CenterPoint hereby agrees to employ
Executive under the terms and conditions set forth in this Agreement, and
Executive hereby agrees to accept such employment. The employment relationship
between CenterPoint and Executive shall be governed by this Agreement and the
general employment policies and practices of CenterPoint including, without
limitation, those policies and practices relating to confidential information
and avoidance of conflicts, to the extent such policies and practices do not
conflict with this Agreement.

 

2.             DUTIES.
Executive shall serve in the capacity specified on Schedule A, with the
duties generally associated with such position, together with such further and
additional duties of an executive nature as from time to time may be assigned
to him by the person or body specified in Schedule A, to whom or which
he is to report. Executive shall report directly to the person or body
specified in Schedule A. During the Employment Term, Executive will
devote his best efforts and his full business time and attention (exclusive of
vacation periods, holidays or periods of illness or incapacity) to the business
of CenterPoint and his duties hereunder; provided, however, that
Executive may devote a reasonable amount of his time to the management of
personal investments, and to industry, civic and community matters, so long as
such matters do not materially interfere with the performance of Executive’s
duties hereunder.

 

3.             TERM.
Subject to earlier termination of Executive’s employment as provided in Section
4, Executive’s employment shall be for an initial term commencing at the
Effective Time and ending on June 30, 2011 (the “Initial Term”). At the end of
the Initial Term, and each succeeding June 30th thereafter, the
employment of Executive shall continue upon the terms and conditions of this
Agreement set forth herein, as amended from time to time, unless CenterPoint or
Executive gives the other party written notice at least ninety (90) days prior
to the end of the Initial Term or any extended term of such party’s intention
not to extend the Employment Term and to terminate Executive’s employment. For
purposes of this Agreement, the Initial Term and any annual extension of this
Agreement shall collectively be referred to as the “Employment Term.”

 

4.             TERMINATION.
In addition to either party’s right to terminate Executive’s employment at the
end of the Employment Term as set forth in Section 3, Executive’s employment
under this Agreement shall terminate upon the occurrence of any of the
following:

 

(a)           Executive’s
death or Disability;

 

(b)           (i)
at CenterPoint’s election other than for Cause, upon delivery to Executive of
60 days’ advance written notice by CenterPoint of its intent to terminate
Executive’s employment other than for Cause, (ii) at Executive’s election for
Good Reason where such termination is not a Qualifying Termination, upon
delivery to CenterPoint of 60 days’ advance written notice by Executive of
Executive’s intent to voluntarily terminate for Good Reason, or (iii) at
Executive’s election for Good Reason where such termination is a Qualifying

 

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Termination,
upon delivery to CenterPoint of 30 days’ advance written notice by Executive of
Executive’s intent to voluntarily terminate his employment for Good Reason;

 

(c)           at
CenterPoint’s election for Cause; and

 

(d)           at
Executive’s election other than for Good Reason, upon delivery to CenterPoint
of three (3) months’ advance written notice by Executive of Executive’s intent
to voluntarily terminate employment without Good Reason.

 

5.             BASE
SALARY. In consideration of the services rendered by Executive hereunder,
during the Employment Term, CenterPoint agrees to pay to Executive an annual
base salary as provided on Schedule A (the “Base Salary”) payable in
accordance with CenterPoint’s payroll policies. The Base Salary will be
reviewed at least annually and may be increased or decreased (but not decreased
below the Base Salary on the Effective Date), based on the recommendation of
the Compensation Committee, and as determined by the Board in its sole
discretion.

 

6.             INCENTIVE
ARRANGEMENTS. During the Employment Term, Executive shall be entitled to
participate in the MIP established by
the Company’s MIP Unit Member and all other incentive, equity-based and
deferred compensation plans, practices, policies and programs established by
CenterPoint or the Company (other than the Retention Equity Compensation Plan
under the Company’s Retention and Incentive Equity Compensation Program (the “Equity
Compensation Program”)) for the general benefit of similarly-situated executive
and managerial employees.

 

(a)           Annual
Cash Bonus. To the extent not already paid, on or around the Effective
Date, CenterPoint shall pay Executive a cash bonus equal to the amount
Executive would have earned from CenterPoint had the Merger not occurred and
based on the performance multiple derived from the performance of CenterPoint
and Executive during the 2005 calendar year. On or around July 1, 2006,
CenterPoint shall pay Executive a cash bonus based upon Executive’s Target
Annual Bonus Award and performance multiple as of June 30, 2006, times fifty
percent (50%). During the Employment Term, Executive shall be eligible to
participate in CenterPoint’s annual bonus plan with a target annual cash bonus
award (the “Target Annual Bonus Award”), as set forth on Schedule A,
which may be increased or decreased (but not decreased below the Target Annual
Bonus Award on the Effective Date), based on the recommendation of the
Compensation Committee, and as determined by the
Board in its sole discretion. The actual amount paid based on the Target Annual
Bonus Award will be based on Executive’s performance and the results of
CenterPoint with respect to annual goals, as recommended by the Compensation
Committee and as determined by the Board in its sole discretion (the “Actual
Annual Bonus Award”). CenterPoint shall pay each Actual Annual Bonus Award to
Executive in a single lump sum on or around the date that CenterPoint pays the
annual bonuses to its other similarly-situated executives, in accordance with
the terms of CenterPoint’s annual bonus plan.

 

(b)           Initial
Incentive Award. The Company shall grant to Executive, as a one-time award,
Initial Unvested Class A Units in the amount set forth on Schedule A
(the “Initial Incentive Award”), which shall be in lieu of the share options,
restricted shares and/or performance units that CenterPoint would have awarded
to Executive in 2006 for CenterPoint’s

 

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fiscal
year 2005 performance, in the ordinary course, consistent with its past
practice. Subject to the terms and conditions set forth herein and in
accordance with the terms of the Equity Compensation Program, the Initial
Incentive Award shall no longer be subject to a substantial risk of forfeiture
on the fifth (5th) anniversary of the Effective Date.

 

(c)           MIP
Units. Executive shall be entitled to participate in the MIP with such
opportunities to receive awards of MIP Units, if any, in accordance with and
subject to the terms and conditions of the MIP, this Agreement, Executive’s MIP
Unit award agreement(s) and the MIP Unit Member Operating Agreement. Notwithstanding
anything in any of the foregoing agreements to the contrary, including, but not
limited to, the provisions relating to vesting and forfeiture upon a
termination of Executive’s employment and except as provided in this Section
6(c), any MIP Units held by Executive shall vest and become nonforfeitable upon
the occurrence of a Change in Control. Executive shall be entitled to
distributions with respect to such vested MIP Units on and after the Change in
Control and on and after a termination of employment, other than a termination
for Cause, pursuant to the terms of the MIP, Executive’s MIP Unit award
agreement(s) and the MIP Unit Member Operating Agreement. Such vested MIP Units
shall otherwise remain subject to the terms of the MIP, the Executive’s MIP
Unit award agreement(s), the MIP Unit Member Operating Agreement and this
Agreement; provided, however, that, upon a termination for Cause
as provided in Section 4(c), all MIP Units (whether vested or unvested,
including vesting pursuant to this Section 6(c)) held by Executive shall be
immediately forfeited pursuant to Section 9(f), and Executive will not be
entitled to any further payments or distributions and will have no further
rights under the MIP on and after Executive’s Termination Date.

 

7.             REQUIRED
INVESTMENT. (a) The amount of Executive’s initial investment in the Company
as of the Effective Date will consist of the following:  (i) all of Executive’s Initial Incentive
Award and (ii) cash (the “Cash Investment”), in each case, as set forth on Schedule
A thereto (the “Initial Investment”). Executive acknowledges and agrees
that Executive, the CFO and the other members of the Key Management Team have
committed to invest an aggregate of $20 million in the Company (the “Required
Investment”).

 

(b)           Executive
acknowledges and agrees that Executive’s Initial Investment, when aggregated
with the CFO’s Initial Investment, shall not be less than $14 million (the “Minimum
Investment”) plus the difference, if any, between the Required Investment and
the sum of (x) the Minimum Investment and (y) the aggregate value of (A) the
Initial Incentive Awards and (B) the Cash Investment in the Company by members
of the Key Management Team (other than Executive and the CFO) and the
Additional Employees, if any.

 

(c)           Executive
acknowledges and agrees that Executive, the other members of the Key Management
Team and the Additional Employees may subscribe to purchase at the Effective
Time up to an additional $7 million of 
common equity interests of the Company (the “Equity Interests”) by an
additional contribution of cash to the Company, in each case, subject to
compliance with applicable federal and state securities laws (the “Additional
Subscription”) and further acknowledge and agree that in no event shall the
total Equity Interests issued to the Key Management Team and the Additional
Employees by the Company pursuant to the terms of this Agreement and the
Company Operating Agreement exceed $27 million in the aggregate.

 

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(d)           In
consideration of the Cash Investment and the Additional Subscription, if any,
Executive will receive Equity Interests of the Company with an aggregate value
equal to such aggregate amount and having the same terms as the Equity
Interests of the Company issued to CalEast on or prior to the Effective Date,
which shall be subject to the terms of the Company Operating Agreement, the
Equity Compensation Program and this Agreement. Executive will be fully vested
in the Equity Interests acquired as a result of Executive’s Cash Investment and
Additional Subscription, if any.

 

8.             OTHER
BENEFITS. During the Employment Term, Executive shall be entitled to the
following benefits, in addition to the benefits and perquisites, if any, set
forth on Schedule A:

 

(a)           life,
disability, medical insurance and other welfare benefit plans, practices,
policies and programs which CenterPoint maintains for the general benefit of
its executive and managerial employees;

 

(b)           participation
in CenterPoint’s qualified 401(k) plan, and all other savings and retirement
plans, practices, policies and programs (whether tax-qualified or not) which
CenterPoint maintains for the general benefit of its executive and managerial
employees;

 

(c)           paid
vacations and holidays in accordance with policies established by CenterPoint
for its executive and managerial employees;

 

(d)           reimbursement
for such travel, entertainment and other business expenses reasonably incurred
by Executive in connection with the performance of his duties hereunder upon
presentation by Executive to CenterPoint of substantiating evidence thereof in
such form as CenterPoint may reasonably require;

 

(e)           recognizing
that business promotion and entertainment of clients and prospective clients
are important aspects of Executive’s job responsibilities, CenterPoint will pay
club dues, membership fees and other related or similar club expenses,
including, without limitation, initiation fees and entertainment expenses for
memberships in such professional or social clubs or other organizations as
recommended by the Compensation Committee and approved by the Board, in its
sole discretion;

 

(f)            use
of an automobile, provided by CenterPoint and consistent with its policy,
including automotive insurance coverage and reimbursement for fuel and
maintenance;

 

(g)           reimbursement
for reasonable tax preparation costs; and

 

(h)           office
space, secretarial support and other assistance reasonably necessary to perform
Executive’s duties.

 

In
addition to the foregoing benefits, CenterPoint will use its best efforts to
obtain and maintain directors’ and officers’ liability insurance for the
benefit of Executive.

 

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9.             PAYMENTS
IN THE EVENT OF A NON-QUALIFYING TERMINATION.

 

(a)           Accrued
Payments. If Executive’s employment with CenterPoint is terminated for any
reason, CenterPoint shall pay to Executive (i) his Base Salary at the rate in effect
on the effective date of termination of Executive’s employment (the “Termination
Date”) payable through the Termination Date, (ii) the amount of any accrued but
unused vacation pay through the Termination Date, and (iii) any expenses
Executive incurred which were not previously reimbursed as of the Termination
Date, all of which, subject to Section 19, shall be paid in a lump sum in cash
within thirty (30) days of the Termination Date.

 

(b)           Death
or Disability. If Executive’s employment is terminated due to his death or
Disability, Executive, or in the case of death, Executive’s Beneficiary shall
be entitled to receive:

 

(i)            an amount
equal to a pro rata portion of Executive’s Actual Annual Bonus Award for
CenterPoint’s prior fiscal year multiplied by a fraction, (A) the numerator of
which is the number of calendar months in which Executive was employed during
CenterPoint’s fiscal year through the Termination Date (counting a partial
calendar month as a full month) and (B) the denominator of which is twelve (12)
(the “Pro Rata Annual Bonus Award”);

 

(ii)           accelerated
vesting of Executive’s MIP Units in an amount equal to (A) the number of MIP
Units awarded to Executive as of the Termination Date times (B) a ratio
(not to exceed one (1)) of (x) one (1) plus the number of full years (without
taking into account fractional portions thereof) Executive was employed by
CenterPoint from the Effective Date through the Termination Date to (y) five
(5) years, and payment of an allocable share of the next distribution
attributable to Executive’s vested MIP Units, if any, pursuant to the terms of
the Executive’s MIP Units award agreement(s) and the MIP Unit Member Operating
Agreement (all remaining unvested MIP Units and fractional portions thereof
will be forfeited as of the Termination Date and Executive will not be entitled
to any further payments and will have no further rights under the MIP); and

 

(iii)          accelerated
vesting of any unvested Equity Interests, which shall remain subject to the
terms of the Company Operating Agreement and the required sale provisions set
forth in Section 9(h)(ii).

 

(c)           Termination
by CenterPoint Without Cause or by Executive for Good Reason. If Executive’s
employment is terminated by CenterPoint without Cause or by Executive for Good
Reason prior to the occurrence of a Qualifying Termination, conditioned upon
Executive delivering to CenterPoint a release in a form reasonably satisfactory
to CenterPoint with all periods for revocation expired and subject to Section
18, Executive shall be entitled to:

 

(i)            receive
the Pro Rata Annual Bonus Award set forth in Section 9(b)(i);

 

(ii)           receive a
monthly payment equal to the sum of (A) Executive’s monthly Base Salary in
effect on the Termination Date plus (B) one-twelfth (1/12) of Executive’s prior
year’s Actual Annual Bonus Award for a twenty-four (24) month period, with such
payments commencing on the date set forth in Section 9(g); and

 

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(iii)          continue
participation in CenterPoint’s group health coverage in accordance with this
Section 9(c)(iii):

 

(A)          if
CenterPoint’s group health plan is insured on the Termination Date, CenterPoint
shall continue Executive’s active employee group health plan coverage for six
(6) months following the Termination Date under such insured group health plan;
thereafter, Executive may elect COBRA continuation coverage and for a period
not to exceed eighteen (18) months, Executive’s cost for such continued
coverage (including the continued active employee and COBRA coverage) shall not
exceed the amount Executive would otherwise be required to pay if he remained
an active employee of CenterPoint; or

 

(B)           if
CenterPoint’s group health plan is self-insured on the Termination Date,
Executive’s active employee group health plan coverage shall cease on the
Termination Date; thereafter, Executive may elect COBRA continuation coverage
and for a period not to exceed twenty-four (24) months, Executive’s cost for
such continued coverage (including the continued active employee and COBRA
coverage) shall not exceed the amount Executive would otherwise be required to
pay if he remained an active employee of CenterPoint;

 

provided,
however, that to the extent Executive becomes eligible for any other
group health coverage that is substantially similar to the group health
coverage provided in Section 9(c)(iii)(A) or (B) during the coverage period,
the continued group health plan coverage provided by CenterPoint pursuant to
this Section 9(c)(iii) shall terminate to the extent COBRA permits such
termination;

 

(iv)          accelerated
vesting of Executive’s MIP Units in an amount equal to (A) the number of
MIP Units awarded to Executive as of the Termination Date times (B) a
ratio (not to exceed one (1)) of (x) the number of full years (without taking into
account fractional portions thereof) Executive was employed by CenterPoint from
the Effective Date through the Termination Date to (y) five (5) years, and
payment of an allocable share of the next distribution attributable to
Executive’s vested MIP Units, if any, pursuant to the terms of the Executive’s
MIP Units award agreement(s) and the MIP Unit Member Operating Agreement (all
remaining unvested MIP Units and fractional portions thereof will be forfeited
as of the Termination Date and Executive will not be entitled to any further
payments and will have no further rights under the MIP); and

 

(v)           accelerated
vesting of Executive’s unvested Equity Interests in an amount equal to (A) the
number of Equity Interests awarded to Executive under the Equity Compensation
Program times (B) a ratio (not to exceed one (1)) of (x) the number of full
years (without taking into account fractional portions thereof) Executive was
employed by CenterPoint from the Effective Date through the Termination Date to
(y) five (5) years, as provided in Executive’s applicable Equity Interests
award agreement, and all

 

7

 

remaining
unvested Equity Interests awarded pursuant to the Equity Compensation Program
(and fractional portions thereof) shall be forfeited. All vested Equity
Interests held by Executive shall remain subject to the terms of the Company
Operating Agreement and the put/call rights set forth in Section 9(h)(i). All
other unvested Equity Interests awarded to Executive, if any, shall be governed
by the terms of the applicable plans.

 

(d)           Termination
in Connection with Non-Renewal. In the event that Executive’s employment is
terminated because a party elects not to renew this Agreement pursuant to
Section 3 and prior to the occurrence of a Qualifying Termination, conditioned
upon Executive delivering to CenterPoint a release in a form reasonably
satisfactory to CenterPoint with all periods for revocation expired and subject
to Section 18, Executive shall be entitled to:

 

(i)            receive a
monthly payment equal to the sum of (A) his monthly Base Salary in effect on
the Termination Date plus (B) one-twelfth (1/12) of his prior year’s Actual
Annual Bonus Award for a twelve (12) month period, with such payments
commencing on the date set forth in Section 9(g);

 

(ii)           continue
participation in CenterPoint’s group health coverage in accordance with Section
9(c)(iii), except that for purposes of this Section 9(d)(ii), the reference in
Section 9(c)(iii)(A) to “eighteen (18) months” shall be changed to “six (6)
months” and the reference in Section 9(c)(iii)(B) to “twenty-four (24) months”
shall be changed to “twelve (12) months;”

 

(iii)          accelerated
vesting of Executive’s MIP Units in an amount equal to (A) the number of MIP
Units awarded to Executive as of the Termination Date times (B) a ratio (not to
exceed one (1)) of (x) the number of full years (without taking into account
fractional portions thereof) Executive was employed by CenterPoint from the
Effective Date through the Termination Date to (y) five (5) years, and payment
of an allocable share of the next distribution attributable to Executive’s
vested MIP Units, if any, pursuant to the terms of the Executive’s MIP Units
award agreement(s) and the MIP Unit Member Operating Agreement (all remaining
unvested MIP Units and fractional portions thereof will be forfeited as of the
Termination Date and Executive will not be entitled to any further payments and
will have no further rights under the MIP); and

 

(iv)          accelerated
vesting of Executive’s unvested Equity Interests as provided in Section
9(c)(v), all vested Equity Interests held by Executive shall remain subject to
the terms of the Company Operating Agreement and the put/call rights set forth
in Section 9(h)(i), and all other unvested Equity Interests awarded to
Executive, if any, shall be governed by the terms of the applicable plans.

 

(e)           Termination
by Executive Without Good Reason. In the event Executive terminates his
employment without Good Reason, Executive shall:

 

(i)            forfeit
or receive pro rata vesting of Executive’s MIP Units in accordance with this
paragraph 9(e)(i):

 

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(A)          if
Executive’s Termination Date occurs before the Initial Payout Date, Executive
will forfeit all MIP Units and will have no further rights under the MIP; or

 

(B)           if
Executive’s Termination Date occurs on or after the Initial Payout Date,
subject to Executive’s execution and non-revocation of a release in a form
reasonably satisfactory to CenterPoint with all periods for revocation expired,
Executive shall vest in Executive’s MIP Units in an amount equal to (I) the
number of MIP Units awarded to Executive as of his Termination Date times (II)
the number of full years (without taking into account fractional portions
thereof) Executive was employed by CenterPoint from the Effective Date through
his Termination Date divided by ten (10), and payment of an allocable share of
the next distribution attributable to Executive’s vested MIP Units, if any,
pursuant to the terms of the Executive’s MIP Units award agreement(s) and the
MIP Unit Member Operating Agreement (all remaining unvested MIP Units and
fractional portions thereof will be forfeited as of the Termination Date and
Executive will not be entitled to any further payments and will have no further
rights under the MIP); and

 

(ii)           forfeit
all unvested Equity Interests held by Executive and all vested Equity Interests
held by Executive shall remain subject to the terms of the Company Operating
Agreement and the required sale provisions set forth in Section 9(h)(ii).

 

(f)            Termination
by CenterPoint For Cause. If Executive’s employment is terminated by
CenterPoint for Cause, except as provided in Section 9(a), Executive shall not
be eligible to receive Executive’s Base Salary or to participate in any of
CenterPoint’s incentive arrangements, employee benefit plans and as provided in
Section 8 with respect to future periods after Executive’s Termination Date,
except for the right to receive vested benefits under any of CenterPoint’s
employee benefit plans in accordance with the terms of such plans. Executive
shall immediately forfeit all MIP Units held (whether vested or unvested,
including vesting pursuant to Section 6(c)) and shall have no further rights
under the MIP. Executive shall also immediately forfeit all unvested Equity
Interests held by Executive and all vested Equity Interests held by Executive
shall remain subject to the terms of the Company Operating Agreement and this
Agreement as follows:  Executive shall be
required to sell and the Company shall be required to purchase all, but not
less than all, of the vested Equity Interests held by Executive as of the
Termination Date, including the vested Equity Interests Executive acquired
pursuant to the Equity Compensation Program, at the lesser of (x) Fair Market
Value and (y) the purchase price paid for such Equity Interests, payable within
sixty (60) days of the Termination Date, with Fair Market Value based on the
most recent Fair Market Value determination by the Company Board if made within
the preceding six (6) months (or such purchase shall be made within thirty (30)
days after and based upon the next Fair Market Value determination made by the
Company Board if such Board has not made any such determination or if the most
recent determination was made more than six (6) months before the Termination
Date and in either case the Company Board elects not to pay the purchase price
described in clause (y)). In the case of

 

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vested
Equity Interests that were acquired through the Equity Compensation Program,
the purchase price for such vested Equity Interests shall equal zero.

 

(g)           Delayed
Payment. Notwithstanding any provision in this Agreement to the contrary,
if Executive’s employment is terminated pursuant to Section 3 by CenterPoint
without Cause or pursuant to Section 4(b) and Section 409A(a)(2)(B)(i) of the
Code applies to the payments described in Section 9(c) or Section 9(d), as
applicable, and Executive is a “specified employee” thereunder, CenterPoint
shall pay the Pro Rata Annual Bonus Award described in Section 9(c)(i), in the
event of a termination pursuant to Section 4(b), and begin paying the continued
salary described in Section 9(c)(ii) or Section 9(d)(i), as applicable, no
earlier than six (6) months after Executive terminates employment or such other
date as would be permissible under the Code and applicable regulations. If
Executive’s employment is terminated pursuant to Section 3 by CenterPoint
without Cause or pursuant to Section 4(b) and Section 409A(a)(2)(B)(i) of the
Code does not apply to the payments described in Section 9(c) or Section 9(d),
as applicable, or Executive is not a “specified employee” thereunder, then
CenterPoint shall pay the Pro Rata Annual Bonus Award described in Section
9(c)(i), in the event of a termination pursuant to Section 4(b), and begin
paying the continued salary described in Section 9(c)(ii) or Section 9(d)(i),
as applicable, as soon as possible after Executive’s termination of employment
but in no event later than 30 days after the Termination Date.

 

(h)           Put/Call
Rights/Required Sale.

 

(i)            Put/Call
Rights. In the event of termination of Executive’s employment without
Cause, for Good Reason or as a result of non-renewal of this Agreement,
Executive shall have a put option to require, by providing the Company with a
notice (the “Put Notice”) within thirty (30) days after the Termination Date,
the Company to purchase within thirty (30) days after the Company’s receipt of
the Put Notice all, but not less than all, of the vested Equity Interests held
by Executive as of the Termination Date, including the vested Equity Interests
Executive acquired pursuant to the Equity Compensation Program, at Fair Market
Value based on the most recent Fair Market Value determination made by the
Company Board if made within the preceding six (6) months (or such purchase
will be made within thirty (30) days after and based upon the next Fair Market
Value determination made by the Company Board if such Board has not yet made
any such determination or if the most recent determination was made more than
six (6) months before the Termination Date). If such put option is not
exercised by delivery of a Put Notice within the thirty (30) day period
described above, then the Company shall have a call option to purchase on the
next Scheduled Liquidity Event all, but not less than all, of the vested Equity
Interests in the Company held by Executive as of the Termination Date,
including the vested Equity Interests acquired through the Equity Compensation
Program, at Fair Market Value determined at the next Scheduled Liquidity Event.
To exercise the call option, the Company shall notify Executive on or before
the next Scheduled Liquidity Event.

 

(ii)           Required
Sale. In the event of termination of Executive’s employment without Good
Reason or as a result of Executive’s death or Disability, Executive shall be
required to sell and the Company shall be required to purchase within sixty
(60) days after the Termination Date all, but not less than all, of the vested
Equity Interests held by

 

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Executive
as of the Termination Date, including the vested Equity Interests Executive
acquired pursuant to the Equity Compensation Program, at Fair Market Value
based on the most recent Fair Market Value determination made by the Company
Board if made within the preceding six (6) months (or such purchase will be
made within thirty (30) days after and based upon the next Fair Market Value
determination made by the Company Board if such Board has not yet made any such
determination or if the most recent determination was made more than six (6)
months preceding the Termination Date).

 

10.           PAYMENTS
IN THE EVENT OF A QUALIFYING TERMINATION.

 

(a)           Benefits
Payable. Subject to Sections 10(b) and 10(c), if Executive experiences a
Qualifying Termination (other than a Qualifying Termination as provided in
Section 12(eee)(iv)), CenterPoint shall provide Executive the following
severance benefits (“Severance Benefits”):

 

(i)            A payment
equal to the following:

 

(A)          the accrued
payments set forth in Section 9(a) and the Pro Rata Annual Bonus Award set
forth in Section 9(b)(i);

 

(B)           three (3)
times Executive’s Base Salary in effect on the date of the Qualifying
Termination or, if greater, three (3) times Executive’s Base Salary in effect
immediately prior to the Change in Control;

 

(C)           three (3)
times Executive’s highest Actual Annual Bonus Award paid during the Employment
Term;

 

(D)          payment or
reimbursement (at Executive’s option) for outplacement services of a scope and
nature customary for executives holding comparable positions and provided by a
nationally-recognized outplacement firm of Executive’s selection, for a period
of up to two (2) years commencing on the date of Executive’s Qualifying
Termination; provided, however, that the aggregate amount of such
reimbursement shall not exceed twenty-five percent (25%) of Executive’s Base
Salary in effect as of the date of the Qualifying Termination; and

 

(E)           all other
compensation and benefits to which Executive has a vested right on the date of
the Qualifying Termination, except to the extent Executive elects to receive
payment of such compensation at a later date;

 

(ii)           accelerated
vesting of all of Executive’s unvested Equity Interests, which shall remain
subject to the terms of the Company Operating Agreement and the put/call rights
set forth in Section 9(h)(i); and

 

11

 

(iii)          except
as otherwise provided in this Section 10(a)(iii) and subject to Section 19,
CenterPoint shall continue Executive’s participation in CenterPoint’s group
health plan coverage (at the same cost to Executive and at the same coverage
level in effect on the date of the Qualifying Termination) for thirty-six (36)
months from the date of the Qualifying Termination (the “Continuation Period”).
The maximum required period under COBRA shall run concurrently with the
Continuation Period; provided, however, that to the extent
Executive becomes eligible for any other substantially similar group health
coverage during the Continuation Period, the continued group health plan
coverage provided by CenterPoint pursuant to this Section 10(a)(iii) shall
terminate to the extent COBRA permits such termination.

 

(iv)          To the
extent Section 409A(a)(2)(B)(i) of the Code applies to the Severance Benefits
and Executive is a “specified employee” thereunder, all of the Severance
Benefits described in Section 10(a)(i) shall be paid in cash to Executive in a
single lump sum no earlier than six (6) months after the effective date of the
Qualifying Termination or such other date as would be permissible under such
Code provision. To the extent Section 409A(a)(2)(B)(i) of the Code does not
apply to the Severance Benefits or Executive is not a “specified employee”
thereunder, all of the Severance Benefits described in Section 10(a)(i) shall
be paid in cash to Executive in a single lump sum as soon as possible after the
effective date of the Qualifying Termination (but in no event later than 30
days after such date). Notwithstanding the preceding two sentences to the
contrary, the Severance Benefits described in Section 10(a)(i)(D) shall be paid
or reimbursed to Executive following the later of the applicable payment date
set forth in the preceding two sentences or the date Executive promptly submits
an invoice of the firm providing the outplacement services described in such
subsection. Executive shall not be obligated to seek other employment or take
any other action to mitigate the amounts payable to Executive under this
Agreement.

 

(b)           Qualifying
Termination Due to Non-Renewal. In the event that Executive’s employment is
terminated because a party elects not to renew this Agreement pursuant to
Section 3 within twenty-four (24) months of a Change in Control, conditioned
upon Executive delivering to CenterPoint a release in a form reasonably
satisfactory to CenterPoint with all periods for revocation expired and subject
to Section 18, Executive shall be entitled to receive:

 

(i)            the
accrued payments set forth in Section 9(a);

 

(ii)           the Base
Salary amount set forth in Section 10(a)(i)(B), Actual Annual Bonus Award
amount set forth in Section 10(a)(i)(C) and continued group health plan
coverage specified in Section 10(a)(iii), except that for purposes of this
Section 10(b)(ii), references in Sections 10(a)(i)(B) and (C) to “three (3)”
shall be changed to “two (2)” and references in Section 10(a)(iii) to “thirty-six
(36) months” shall be changed to “twenty-four (24) months”; and

 

(iii)          the
accelerated vesting of Executive’s unvested Equity Interests as provided in
Section 9(c)(v), all vested Equity Interests held by Executive shall remain
subject to the terms of the Operating Agreement and the put/call rights set
forth in

 

12

 

Section
9(h)(i), and all other unvested Equity Interests awarded to Executive, if any,
shall be governed by the terms of the applicable plans;

 

provided,
however, that the payments and benefits provided pursuant to this
Section 10(b) shall be subject to the provisions of Section 10(a)(iv).

 

(c)           Severance
Benefits Limit. Notwithstanding any provision of this Agreement to the
contrary, to the extent the Severance Benefits would constitute a “parachute
payment,” as defined in Section 280G(b)(2) of the Code, Executive shall be
entitled to receive the Severance Benefits unless the aggregate value of the
(i) after-tax amount that would be retained by Executive (after taking into
account all federal, state and local income taxes payable by Executive (the “Income
Taxes”) and the amount of any excise taxes payable by Executive pursuant to
Section 4999 of the Code (the “Excise Taxes”)) if Executive were to receive the
Severance Benefits is less than (ii) the after-tax amount that would be
retained by Executive (after taking into account all Income Taxes and Excise
Taxes payable by Executive) if Executive were to receive the maximum amount of
the Severance Benefits that Executive could receive without being subject to
the Excise Taxes (the “Reduced Payments”), in which case Executive shall be
entitled only to receive the Reduced Payments. CenterPoint’s auditors shall
determine the application of Section 280G of the Code to the Severance Benefits
and shall perform the calculations necessary to determine the amounts and
values described in this Section 10(c).

 

11.           RESTRICTIVE
COVENANTS. The non-competition, non-solicitation and confidentiality
provisions found in this Section 11 replace and supersede any prior or existing
agreement by and between Executive and CenterPoint with respect to the subject
matter therein, including but not limited to the Prior Agreements. In
consideration of the benefits payable to Executive under this Agreement,
Executive agrees as follows:

 

(a)           Covenant
Not To Compete. Executive agrees that during the Employment Term and for a
period of one (1) year thereafter if Executive’s employment terminates due to
non-renewal of Executive’s employment pursuant to Section 3 prior to the
occurrence of a Qualifying Termination, and two (2) years thereafter if
Executive’s employment terminates for any other reason, including termination
due to non-renewal of Executive’s employment pursuant to Section 3 within
twenty-four (24) months of a Change in Control, (the “Non-Competition Period”),
Executive will not directly or indirectly, in any market which is served by
CenterPoint or any Subsidiary or Affiliate of CenterPoint or which CenterPoint
or any Subsidiary or Affiliate of CenterPoint is actively preparing to serve,
engage or participate (whether as an owner, officer, partner, principal, joint
venturer, shareholder, director, member, manager, investor, employee,
independent contractor, consultant, or otherwise) in any other company or
entity primarily engaged in the business of acquiring, owning, developing,
operating, leasing, and/or managing warehouse, airport, or industrial real
estate for development and investment purposes or any business which provides
consulting, leasing, management, or brokerage services to such businesses (the “Real
Estate Business”), subject to the following exceptions:

 

(i)            Executive
may continue to be a limited partner in any limited partnership engaged in the
Real Estate Business in which he is a limited partner on the date of this
Agreement; and

 

13

 

(ii)           Executive
may engage in such other activities related to the Real Estate Business as
CenterPoint’s independent directors from time to time may approve; provided,
however, that in no event shall any such activities interfere with the
performance of Executive’s duties under this Agreement.

 

Executive
agrees and acknowledges that the markets covered by the restrictions set forth
in this Section 11(a) specifically include, but are not limited to, any area
within two hundred (200) miles of any property that CenterPoint or the Company
owns, manages, acquires, leases or develops.

 

(b)           Non-Solicitation.
During the Employment Term and for a period of three (3) years thereafter (the “Non-Solicitation
Period”), Executive shall not (i) employ, retain, solicit for employment or
retention, knowingly assist in the employment or retention of, or seek to
influence or induce to leave the employment or service of CenterPoint or any
Subsidiary or Affiliate of CenterPoint any person who is employed or otherwise
engaged by CenterPoint or any Subsidiary or Affiliate of CenterPoint, or (ii)
induce or attempt to induce any customer, supplier, licensee, or other business
relation of CenterPoint or any Subsidiary or Affiliate of CenterPoint to cease
doing business with CenterPoint or any Subsidiary or Affiliate of CenterPoint
or otherwise interfere with the relationship between CenterPoint or any
Subsidiary or Affiliate of CenterPoint and such business relation.

 

(c)           Nondisclosure
and Nonuse of Confidential Information.

 

(i)            Executive
shall not disclose or use at any time, either during the Employment Term or
thereafter, any Confidential Information (as defined below) of which Executive
is or becomes aware, whether or not such information is developed by him,
except to the extent that such disclosure or use is directly related to and
required by Executive’s performance of duties assigned to Executive by
CenterPoint. Executive shall take all appropriate steps to safeguard Confidential
Information and to protect it against disclosure, misuse, espionage, loss and
theft.

 

(ii)           As used in
this Agreement, the term “Confidential Information” means information that is
not generally known to the public and that is used, developed or obtained by
CenterPoint or any Subsidiary or Affiliate of CenterPoint, the Company or any
subsidiary, affiliate, or controlling entity of the Company in connection with
their businesses. Confidential Information shall not include (i) any
information that has been published in a form generally available to the public
prior to the date Executive proposes to disclose or use such information, and
(ii) any information that Executive is legally required to disclose. Information
shall not be deemed to have been published merely because individual portions
of the information have been separately published, but only if all material
features comprising such information have been published in combination.

 

(d)           Specific
Performance. The parties agree that Executive’s services are of a special,
unique and extraordinary character, that it would be extremely difficult to
quantify the money damages which would accrue to CenterPoint by reason of
Executive’s failure to perform any of his obligations under this Section 11,
that it would be extremely difficult to replace such services, and that any
violation of the provisions of this Section 11 likely would be highly

 

14

 

injurious
to CenterPoint. By reason of the foregoing, Executive consents and agrees that
if he violates any of the provisions of this Section 11 CenterPoint shall be
entitled, in addition to any other rights and remedies that it may have,
including money damages, to apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce or prevent any continuing violation of the provisions hereof. Therefore,
if CenterPoint shall institute any action or proceeding to enforce the
provisions of this Section 11 against Executive, Executive hereby waives the
claim or defense that there is an adequate remedy at law and agrees in any such
action or proceeding not to interpose the claim or defense that such remedy
exists at law. The parties hereby specifically affirm the appropriateness of
injunctive or other equitable relief in any such action.

 

(e)           Breach.
In the event that CenterPoint hereafter believes that Executive has breached
any of the covenants of this Agreement, it shall notify Executive of such
alleged breach, setting forth the substance of said alleged breach. Within ten
(10) days from receipt by Executive of such notice, Executive either shall
remedy said alleged breach or provide CenterPoint with evidence that the
activity concerned was permitted by the provisions of this Agreement. Accordingly,
Executive acknowledges, consents and agrees that, in addition to any other
rights or remedies that CenterPoint may have at law, in equity or under this
Agreement, upon adequate proof of Executive’s violation of any such provision
of this Agreement, CenterPoint will be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened or further breach,
without the necessity of proof of actual damage. Without limiting the
applicability of this Section 11(e) or in any way affecting the right of
CenterPoint to seek equitable remedies hereunder, in the event that Executive
breaches any of the provisions of this Section 11 or engages in any activity
that would constitute a breach save for Executive’s action being in a state
where any of the provisions of Section 11 is not enforceable as a matter of
law, then CenterPoint’s obligation to pay any remaining severance compensation
and benefits that have not already been paid to Executive pursuant to Section 9
or 10, as applicable, shall be terminated.

 

12.           DEFINITIONS.

 

(a)           “Actual
Annual Bonus Award” has the meaning specified in Section 6(a).

 

(b)           “Additional
Employees” means any additional employees selected by the CenterPoint
Management Team and approved in writing by the Company to invest in Equity
Interests of the Company on or prior to the Effective Date on terms that are no
more favorable to each Additional Employee than the terms specified in this
Agreement (subject to compliance with applicable federal and state securities
laws).

 

(c)           “Additional
Subscription” has the meaning set forth in Section 7(c).

 

(d)           “Affiliate”
has the meaning set forth in the Company Operating Agreement.

 

(e)           “Agreement”
has the meaning set forth in the introductory paragraph of this agreement.

 

(f)            “Base
Salary” has the meaning specified in Section 5.

 

15

 

(g)           “Beneficiary”
means the person or persons designated by Executive, in a writing provided to
CenterPoint prior to Executive’s death, to receive amounts payable to Executive
under this Agreement upon his death. Subject to such exception, in the absence
of such a written beneficiary designation, the Beneficiary shall be Executive’s
surviving spouse, or if none, Executive’s estate.

 

(h)           “Board”
means the Board of Trustees of CenterPoint.

 

(i)            “CalEast”
has the meaning set forth in the fourth (4th) recital of this
Agreement.

 

(j)            “Cash
Investment” has the meaning set forth in Section 7(a).

 

(k)           “Cause”
means the occurrence of any one or more of the following as determined in the
good faith and reasonable judgment of the Board:

 

(i)            Executive’s
commission of a felony;

 

(ii)           Executive’s
commission of fraud with respect to CenterPoint, the Company or any of their
Subsidiaries;

 

(iii)          Executive’s
misappropriation of any material funds or assets of CenterPoint, the Company or
any of their Subsidiaries or any of their employees, customers or suppliers;

 

(iv)          Executive’s
gross negligence or willful misconduct in the performance of his duties
hereunder, which causes financial or reputational harm to the business or
operations of CenterPoint, the Company or any of their Subsidiaries, and which,
if curable, has not been cured within fifteen (15) days’ written notice thereof
from the Board;

 

(v)           Executive’s
repeated failure to perform his duties after written notice from the Board and
such failure has not been cured within fifteen (15) days’ written notice
thereof from the Board; or

 

(vi)          any other
material breach by Executive of this Agreement or any policy of CenterPoint,
the Company or any of their Subsidiaries, and which, if curable, has not been
cured within fifteen (15) days’ written notice thereof from the Board.

 

(l)            “CenterPoint”
has the meaning set forth in the introductory paragraph of this Agreement.

 

(m)          “CenterPoint
Management Team” means the CEO and the CFO.

 

(n)           “CenterPoint
Members” has the meaning set forth in the Company Operating Agreement.

 

(o)           “CEO”
means the Chief Executive Officer of CenterPoint.

 

16

 

(p)           “CFO”
means the Chief Financial Officer of CenterPoint.

 

(q)           “Change
in Control” means the first to occur of any one or more of the following:

 

(i)            any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act), other than CalEast and its Affiliates, acquires
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of (A) more than fifty percent (50%) of the combined voting power
of the then outstanding Voting Securities of CenterPoint or the Company or (B)
more than fifty percent (50%) of the total equity securities of CenterPoint or
the Company having pari passu
economic and other rights and privileges (but not voting power), as the equity
securities beneficially owned by CalEast and CenterPoint Members immediately
after completion of the Merger; provided, however, that any
acquisition of securities by any employee benefit plan (or related trust)
sponsored or maintained by CenterPoint or the Company shall not constitute a
Change in Control; or

 

(ii)           the number
of designees to the Company Board nominated by CalEast cease for any reason to
constitute at least a Majority of the Company Board; or

 

(iii)          CenterPoint
or the Company consummates a reorganization, merger or consolidation, unless,
following such reorganization, merger or consolidation, all of the following
are true:

 

(A)          more than
fifty percent (50%) of the combined voting power of the then outstanding Voting
Securities of CenterPoint or the Company, as applicable or the Successor are
then beneficially owned, directly or indirectly, by the individual, entity or
group who beneficially owned the Controlling Interest immediately prior to such
reorganization, merger or consolidation; and

 

(B)           at least a
Majority of the members of the Company Board or the board of directors of the
Successor, if applicable, were designees of CalEast at the time of the
execution of the initial agreement providing for such reorganization, merger or
consolidation; or

 

(iv)          the
shareholders of CenterPoint approve (A) a complete liquidation or dissolution
of CenterPoint or (B) the sale or other disposition of all or substantially all
of the assets of CenterPoint; or

 

(v)           an initial
public offering of CenterPoint.

 

Notwithstanding paragraphs (i), (ii), (iii) and (v) of
this Section 12(q), in no event will a Change in Control be deemed to occur:

 

(vi)          upon
consummation of the Merger;

 

(vii)         as
result of a change in the status of CenterPoint as a “real estate investment
trust” under Section 856 of the Code; or

 

17

 

(viii)        if
CalEast or CalEast’s Affiliates maintain a direct or indirect Controlling
Interest in CenterPoint or in an entity that maintains a direct or indirect
Controlling Interest in CenterPoint.

 

Notwithstanding
any of the foregoing, the transaction contemplated in the Merger Agreement
shall not constitute a Change in Control for purposes of this Agreement, the
Prior Agreements or any other agreements in effect prior to or on and after the
Effective Date between CenterPoint and Executive.

 

(r)            “COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
from time to time.

 

(s)           “Code”
means the Internal Revenue Code of 1986, as amended.

 

(t)            “Company”
has the meaning specified in the introductory paragraph of this Agreement.

 

(u)           “Company
Board” means the board of managers of the Company, as provided in the Company
Operating Agreement.

 

(v)           “Company
Operating Agreement” means that certain Amended and Restated Limited Liability
Company Agreement of the Company, as may be amended from time to time, dated
March 7, 2006.

 

(w)          “Compensation
Committee” means the Compensation Committee of the Board (or such other
committee of the Board that may be responsible for executive compensation).

 

(x)            “Continuation
Period” has the meaning set forth in Section 10(a)(iii).

 

(y)           “Controlling
Interest” in an entity means beneficial ownership of more than fifty percent
(50%) of the equity securities representing more than fifty percent (50%) of
the voting power of the outstanding equity securities of the entity.

 

(z)            “Disability”
shall mean the Board’s reasonable determination based upon medical evidence (to
be provided by a mutually agreed upon physician) that Executive is no longer
able to adequately perform his duties (with or without reasonable
accommodation) due to physical or mental illness.

 

(aa)         “Effective
Date” means the date on which the Effective Time occurs.

 

(bb)         “Effective
Time” has the meaning specified in the fourth (4th) recital of this
Agreement.

 

(cc)         “Employment
Term” has the meaning specified in Section 3.

 

(dd)         “Equity
Compensation Program” has the meaning specified in Section 6.

 

(ee)         “Equity
Interests” has the meaning specified in Section 7(c) of this Agreement.

 

18

 

(ff)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(gg)         “Excise
Taxes” has the meaning specified in Section 10(c).

 

(hh)         “Executive”
has the meaning specified in the introductory paragraph of this Agreement.

 

(ii)           “Fair
Market Value” has the meaning specified in the Company Operating Agreement.

 

(jj)           “Good
Reason” shall mean the occurrence, without Executive’s prior written consent,
of any one or more of the following:

 

(i)            a
relocation of Executive of more than fifty (50) miles from the place where
Executive was located at the time of a Change in Control;

 

(ii)           a
reduction in Executive’s Base Salary below the Base Salary on the Effective
Date;

 

(iii)          a
material reduction in the benefits provided to Executive pursuant to Section 8,
except for across-the-board reductions of such benefits for all senior
management of CenterPoint;

 

(iv)          a material
breach of the Agreement by CenterPoint; or

 

(v)           a
reduction of Executive’s Target Annual Bonus Award within twenty-four (24)
months of a Change in Control.

 

Notwithstanding the
foregoing, the transactions contemplated in the Merger Agreement shall not
constitute a basis upon which to claim termination for Good Reason.

 

(kk)         “Guidance”
has the meaning set forth in Section 19.

 

(ll)           “Income
Taxes” has the meaning set forth in Section 10(c).

 

(mm)       “Initial
Incentive Award” has the meaning set forth in Section 6(b) of this Agreement.

 

(nn)         “Initial
Investment” has the meaning specified in Section 7(a).

 

(oo)         “Initial
Term” has the meaning specified in Section 3.

 

(pp)         “Initial
Unvested Class A Units” has the meaning set forth in the Equity Compensation
Program.

 

(qq)         “Key
Management Team” means the CenterPoint Management Team and up to ten (10) other
senior executives of CenterPoint who enter into new employment agreements with
the Company and CenterPoint effective at the Effective Time.

 

19

 

(rr)           “Majority”
has the meaning set forth in the Company Operating Agreement.

 

(ss)         “Merger”
has the meaning specified in the fourth (4th) recital of this
Agreement.

 

(tt)           “Merger
Agreement” has the meaning specified in the fourth (4th) recital of
this Agreement.

 

(uu)         “Merger
Sub” has the meaning specified in the fourth (4th) recital of this
Agreement.

 

(vv)         “Minimum
Investment”  has the meaning specified in
Section 7(b).

 

(ww)       “MIP”
means the Management Incentive Plan established by the MIP Unit Member, as
amended from time to time.

 

(xx)          “MIP
Unit” has the meaning set forth in the MIP Unit Member Operating Agreement.

 

(yy)         “MIP
Unit Member” has the meaning set forth in the Company Operating Agreement.

 

(zz)          “MIP
Unit Member Operating Agreement” means the operating agreement with respect to
the Company’s MIP Unit Member.

 

(aaa)       “Non-Competition
Period” has the meaning specified in Section 11(a).

 

(bbb)      “Non-Solicitation
Period” has the meaning specified in Section 11(b).

 

(ccc)       “Prior
Agreements” means any agreements between CenterPoint and the Executive in
effect prior to the Effective Date, including, the Employment and Severance
Agreement and the Non-Competition, Non-Solicitation and Confidentiality
Agreement, effective July 1, 2005, by and between CenterPoint and Executive.

 

(ddd)      “Pro
Rata Annual Bonus Award” has the meaning specified in Section 9(b)(i).

 

(eee)       “Qualifying
Termination” means the occurrence of any one or more of the following:

 

(i)            CenterPoint’s
termination of Executive’s employment other than for Cause within twenty-four
(24) months following a Change in Control;

 

(ii)           Executive’s
voluntary termination of employment for Good Reason within twenty-four (24)
months following a Change in Control;

 

(iii)          a
successor of CenterPoint fails to assume expressly CenterPoint’s entire obligations
under this Agreement prior to becoming such a successor as required by Section
13(a)(ii); or

 

20

 

(iv)          the Board’s
election not to renew the term of this Agreement as provided in Section 3
within twenty-four (24) months following a Change in Control;

 

provided, however, that a
Qualifying Termination shall not include a termination of Executive’s
employment by reason of death, Disability, Executive’s voluntary termination
other than for Good Reason, CenterPoint’s termination of Executive’s employment
for Cause; provided, further, that the Merger shall not
constitute a Qualifying Termination for purposes of this Agreement or any Prior
Agreements. Notwithstanding the foregoing, if Executive’s employment is
terminated before a Change in Control and Executive can reasonably demonstrate
that the termination by CenterPoint or the actions constituting Good Reason for
termination by Executive were at the request of a third party who had indicated
an intention or taken steps reasonably calculated to effect a Change in Control
who then effects a Change in Control, then the date of the Change in Control
shall be deemed to be the date immediately prior to Executive’s termination of
employment.

 

(fff)         “Real
Estate Business” has the meaning set forth in Section 11(a).

 

(ggg)      “Reduced
Payments” has the meaning specified in Section 10(c).

 

(hhh)      “Required
Investment” has the meaning specified in Section 7(a).

 

(iii)          “Scheduled
Liquidity Event” has the meaning set forth in the Company Operating Agreement.

 

(jjj)          “Section”
shall, unless the context otherwise requires, mean a section of this Agreement.

 

(kkk)       “Severance
Benefits” has the meaning specified in Section 10(a).

 

(lll)          “Subsidiary”
means a United States or foreign corporation with respect to which CenterPoint
owns, directly or indirectly, fifty percent (50%) or more of the then
outstanding common shares.

 

(mmm)    “Successor”
has the meaning set forth in the Company Operating Agreement.

 

(nnn)      “Target
Annual Bonus Award” has the meaning specified in Section 6(a).

 

(ooo)      “Term
Sheet” has the meaning specified in the fifth (5th) recital of this
Agreement.

 

(ppp)      “Termination
Date” has the meaning set forth in Section 9(a).

 

13.           ASSIGNMENT.

 

(a)           Assignment
by CenterPoint.

 

(i)            This
Agreement shall be binding upon, and shall inure to the benefit of CenterPoint
and any successor. The Company or CenterPoint may assign and transfer

 

21

 

this
Agreement, and delegate its duties hereunder, to a Subsidiary of CenterPoint or
the Company.

 

(ii)           CenterPoint
shall require any Successor to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that CenterPoint would be
required to perform if no such succession were to take place.

 

(b)           Executive’s
Successors. This Agreement shall inure to the benefit of and be enforceable
by Executive’s personal or legal representatives, executors, and
administrators, successors, heirs, distributees, devisees, and legatees. If
Executive should die while any amounts payable to Executive under this
Agreement remain outstanding, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Beneficiary.

 

14.           NOTICES.
All notices required or permitted to be given under this Agreement shall be in
writing, signed by the party giving notice, and sent by personal messenger,
facsimile, overnight mail, courier service or deposited, postage prepaid,
certified mail, return receipt requested, in the United States mail, and
addressed as provided in Schedule A, if to Executive,

 

if to the Company:

 

Solstice Holdings LLC

c/o LaSalle Investment
Management

200 East Randolph Drive

Chicago, Illinois 60601

 

if to CenterPoint:

 

CenterPoint Properties
Trust

Attn:  General Counsel

1808 Swift Road

Oak Brook, IL  60523-1501

Facsimile:  630-586-8010

 

Notices
sent by personal messenger, facsimile, overnight mail or courier service shall
be deemed received upon delivery of same. Notices sent by United States mail
shall be deemed received three (3) days after deposit in the United States mail
service.

 

15.           ENTIRE
AGREEMENT. This Agreement supersedes the Prior Agreements, the Term Sheet
and any other prior agreements or understandings, oral or written, express or
implied, between Executive and CenterPoint, with respect to the subject matter
hereof and constitutes the entire agreement of the parties with respect thereto.
No agreements other than the Company Operating Agreement, the MIP Unit Member
Operating Agreement, agreements evidencing any rights to or awards of Equity
Interests of the Company under the Equity Compensation Program and any evidence
of award relating to MIP Units granted under the MIP or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The

 

22

 

captions
of this Agreement are not part of the provisions hereof and shall be of no
effect. The parties hereby agree that the termination hereunder of the Prior
Agreements will not constitute a Qualifying Termination for purposes of the
terms of any Prior Agreement, and CenterPoint and Executive waive any express
assumption and performance by a successor provisions set forth in the Prior
Agreements.

 

16.           ENFORCEMENT.
Following a Qualifying Termination, CenterPoint shall reimburse Executive, on
an after-tax basis, for the reasonable fees and expenses (including legal fees
and disbursements) incurred by Executive in a good faith effort to enforce
Executive’s right to receive any of the Severance Benefits, regardless of the
outcome of such effort. CenterPoint shall reimburse Executive for such fees and
expenses on a monthly basis within ten (10) days after Executive’s request for
reimbursement accompanied by evidence Executive incurred such fees and expenses.
If Executive does not prevail (after exhaustion of all available judicial
remedies) in respect of a claim by Executive or by CenterPoint hereunder, and
CenterPoint establishes to the satisfaction of a court of competent
jurisdiction that Executive had no reasonable basis for Executive’s claim
hereunder, or for Executive’s response to CenterPoint’s claim hereunder, and acted
in bad faith, no further reimbursement for legal fees and expenses shall be due
to Executive in respect of such claim, and Executive shall refund any amounts
previously reimbursed hereunder with respect to such claim.

 

17.           LATE
PAYMENTS. Following a Qualifying Termination, if CenterPoint fails to pay
any of the Severance Benefits when due, then CenterPoint shall pay interest on
such amount at a rate equal to the highest rate of interest charged by
CenterPoint’s principal lender.

 

18.           MITIGATION
AND OFFSET. In no event shall Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable to
Executive under any provision of this Agreement. If Executive’s employment
terminates pursuant to Section 4(b) and such termination is not a Qualifying
Termination or because a party elects not to renew this Agreement pursuant to
Section 3 and, in either case, Executive becomes entitled to receive
compensation from a subsequent employer prior to the expiration of the
twenty-four (24) month or twelve (12) month period described in Section
9(c)(ii) or 9(d)(i), as applicable, the monthly amounts payable to Executive
pursuant to Section 9(c)(ii) or 9(d)(i), as applicable, shall be reduced by the
monthly amount Executive is entitled to receive from such subsequent employer.

 

19.           COMPLIANCE
WITH SECTION 409A OF THE CODE. This Agreement is intended to comply and
shall be administered in a manner that is intended to comply with Section 409A
of the Code and shall be construed and interpreted in accordance with such
intent. To the extent that a payment and/or benefit is subject to Section 409A
of the Code, it shall be paid in a manner that will comply with Section 409A of
the Code, including proposed, temporary or final regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto (the “Guidance”). Any provision of this Agreement
that would cause a payment and/or benefit to fail to satisfy Section 409A of
the Code shall have no force and effect until amended to comply with Code
Section 409A (which amendment may be retroactive to the extent permitted by the
Guidance).

 

23

 

20.           WITHHOLDING
OF TAXES. CenterPoint may withhold from any amounts payable under this
Agreement all federal, state, city, local or other taxes as CenterPoint is
required to withhold pursuant to any applicable law or government regulation or
ruling.

 

21.           CONTINUED
AVAILABILITY AND COOPERATION.

 

(a)           In
the event of termination of Executive’s employment, Executive shall cooperate
fully with CenterPoint and with CenterPoint’s counsel in connection with any
present and future actual or threatened litigation or administrative proceeding
involving CenterPoint that relates to events, occurrences or conduct occurring
(or claimed to have occurred) during the Employment Term. This cooperation by
Executive will include, but not be limited to:

 

(i)            making
himself reasonably available for interviews and discussions with CenterPoint’s
counsel as well as for depositions and trial testimony;

 

(ii)           if
depositions or trial testimony are to occur, making himself reasonably
available and cooperating in the preparation therefor as and to the extent that
CenterPoint or CenterPoint’s counsel reasonably requests;

 

(iii)          refraining
from impeding in any way CenterPoint’s prosecution or defense of such
litigation or administrative proceeding; and

 

(iv)          cooperating
fully in the development and presentation of CenterPoint’s prosecution or
defense of such litigation or administrative proceeding.

 

(b)           Executive
will be reimbursed by CenterPoint for reasonable travel, lodging, telephone and
similar expenses, as well as reasonable attorneys’ fees (if independent legal
counsel is necessary), incurred in connection with any cooperation,
consultation and advice rendered under this Agreement after Executive’s
termination of employment. Executive shall not unreasonably withhold Executive’s
availability for such cooperation, consultation and advice.

 

22.           GOVERNING
LAW. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois, without reference to principles of
conflict of laws.

 

23.           VALIDITY/SEVERABILITY.
If any provision of this Agreement or the application of any provision hereof
to any person or circumstances is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of such provision
to any other person or circumstances will not be affected, and the provision so
held to be invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid or
legal. To the extent any provisions held to be invalid, unenforceable or
otherwise illegal cannot be reformed, such provisions are to be stricken
herefrom and the remainder of this Agreement will be binding on the parties and
their successors and assigns as if such invalid or illegal provisions were
never included in this Agreement from the first instance.

 

24

 

24.           SURVIVAL
OF PROVISIONS. Notwithstanding any other provision of this Agreement, the
parties’ respective rights and obligations under Sections 9, 10, 11, 16 and 21
will survive any termination or expiration of this Agreement or the termination
of Executive’s employment for any reason whatsoever.

 

25.           REPRESENTATIONS.

 

(a)           Executive
hereby represents that he is not subject to any restriction of any nature
whatsoever on his ability to enter into this Agreement or to perform his duties
and responsibilities hereunder, including, but not limited to, any covenant not
to compete with any former employer, any covenant not to disclose or use any
non-public information acquired during the course of any former employment or
any covenant not to solicit any customer of any former employer.

 

(b)           Executive
hereby represents that, except as he has disclosed in writing to CenterPoint,
he is not bound by the terms of any agreement with any previous employer or
other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of Executive’s employment
with CenterPoint or to refrain from competing, directly or indirectly, with the
business of such previous employer or any other party.

 

(c)           Executive
further represents that, to the best of his knowledge, his performance of all
the terms of this Agreement and his employment by CenterPoint does not and will
not breach any agreement with another party, including without limitation any
agreement to keep in confidence proprietary information, knowledge or data
Executive acquired in confidence or in trust prior to his employment with
CenterPoint, and that he will not knowingly disclose to CenterPoint or induce
CenterPoint to use any confidential or proprietary information or material
belonging to any previous employer or others.

 

26.           AMENDMENT;
WAIVER. This Agreement may not be modified, amended or waived in any manner
except by an instrument in writing signed by all parties hereto. No waiver by
one party hereto at any time of any breach by a party hereto or compliance with
any condition or provision of this Agreement to be performed by such party will
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.

 

27.           TITLES
AND HEADINGS. Titles and headings to paragraphs herein are for purposes of
reference only and in no way shall limit, define or otherwise affect the
provisions hereof.

 

28.           COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement.

 

REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

 

SIGNATURE PAGE FOLLOWS

 

25

 

IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the day and year written above.

 

	
   

  	
   

  
	
   

  	
  Michael M. Mullen

  
	
   

  	
   

  
	
   

  	
  Solstice Holdings LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And At and After the Effective Date:

  
	
   

  	
   

  
	
   

  	
  CenterPoint Properties Trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  

 

(Signature Page - Michael
M. Mullen Employment Agreement)

 

 

SCHEDULE A

 

	
  NAME:

  	
  Michael M. Mullen

  
	
   

  	
   

  
	
  ADDRESS:

  	
  1340 Ridgewood

  
	
   

  	
   

  
	
   

  	
  Northbrook, IL 60062

  
	
   

  	
   

  
	
  TITLE:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
  REPORTING RELATIONSHIP:

  	
  Board

  
	
   

  	
   

  
	
  BASE SALARY:

  	
  $350,000

  
	
   

  	
   

  
	
  TARGET ANNUAL BONUS AWARD:

  	
  $507,500

  
	
   

  	
   

  
	
  TOTAL INITIAL INCENTIVE AWARD:

  	
  $1,986,750

  
	
   

  	
   

  
	
  SPECIFIC BENEFITS:

  	
  None

  

 

 

INITIAL INVESTMENT

 

	
  CASH INVESTMENT:

  	
  $

  	
  5,013,250

  	
   

  
	
   

  	
   

  	
   

  
	
  INITIAL
  INCENTIVE AWARD INVESTMENT:

  	
  $

  	
  1,986,750Exhibit 10.1

 

COMPENSATION OF EXECUTIVE
OFFICERS OF NITROMED, INC.

 

As of January 19,
2006, the following sets forth the compensation of the executive officers of
NitroMed, Inc.:

 

	
  EXECUTIVE OFFICER

  	
   

  	
  2006 ANNUAL

  SALARY

  	
   

  	
  2005 BONUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael D.
  Loberg, Ph.D. 

  President and Chief Executive Officer

  	
   

  	
  $

  	
  361,328

  	
   

  	
  $

  	
  85,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manuel
  Worcel, M.D.(1) 

  Medical and Scientific Advisor

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  49,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L. Gordon
  Letts, Ph.D.

  Chief Scientific Officer and Senior Vice

  President, Research and Development

  	
   

  	
  $

  	
  270,218

  	
   

  	
  $

  	
  45,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lawrence E.
  Bloch, M.D., J.D.

  Chief Financial Officer and Chief Business 

  Officer

  	
   

  	
  $

  	
  279,734

  	
   

  	
  $

  	
  67,173

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mark H.
  Pavao

  Senior Vice President of Sales and Marketing

  	
   

  	
  $

  	
  265,850

  	
   

  	
  $

  	
  54,320

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lisa
  Kelly(2)

  Vice President, Human Resources

  	
   

  	
  $

  	
  210,700

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael L.
  Sabolinski(3)

  Chief Medical Officer

  	
   

  	
  $

  	
  270,105

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jane Kramer

  Vice President, Corporate Communications

  	
   

  	
  $

  	
  212,800

  	
   

  	
  $

  	
  12,250

  	
   

  

 

 

(1)                                  Dr. Worcel
ceased to serve as an executive officer of NitroMed on January 5, 2006.

 

(2)                                  Ms. Kelly
became an executive officer of NitroMed on January 6, 2006.

 

(3)                                  Mr. Sabolinski
became an executive officer of NitroMed on January 6, 2006.

 

In addition, each of NitroMed, Inc.’s executive officers is eligible
to participate in NitroMed’s 2003 Amended and Restated Stock Incentive Plan and
any successor plan.

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