Document:

Document

Exhibit 10.10

FIRST-CITIZENS BANK & TRUST COMPANY
LONG-TERM INCENTIVE PLAN

Long-Term Incentive Plan Award Agreement

Name of Participant:                                                                                                                                           
Grant Date:                                                                                                                                                      
Performance Period:                                                                                                                                          

THIS AGREEMENT ("Agreement"), made effective the            day of                    , 20__, between First-Citizens Bank & Trust Company (the "Company"), and                                            , an employee of the Company or an affiliate (the "Participant").
R E C I T A L S :

In furtherance of the purposes of the First-Citizens Bank & Trust Company Long-Term Incentive Performance Plan, as it may be hereafter amended (the "Plan"), and in consideration of the services of the Participant and such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Participant hereby agree as follows:

1.Incorporation of Plan.  The rights and duties of the Company and the Participant under this Agreement shall in all respects be subject to and governed by the provisions of the Plan, a copy of which is delivered herewith or has been previously provided to the Participant and the terms of which are incorporated herein by reference.  In the event of any conflict between the provisions in the Agreement and those of the Plan, the provisions of the Plan shall govern.  Unless otherwise defined herein, capitalized terms in this Agreement shall have the same definitions as set forth in the Plan.

2.Performance Award.  Subject to the terms of this Agreement and the Plan, the Company hereby grants the Participant a long-term incentive compensation opportunity (the “Award”) in accordance with the following provisions, it being understood that all or a portion of the Award, is predicated on the closing of the pending merger transaction with CIT Group Inc.:

a.The Award shall equal the annualized rate of salary of the Participant in effect on                                     , 20__ multiplied by the percentage (the “Award Percentage”) determined in accordance with the following table based upon the rate of growth (the “TBV+D Growth Rate”) in Tangible Book Value per share of the Company (“TBV”) plus cumulative dividends per share paid during the Performance Period:

						
	TBV+D Growth Rate	Award Percentage
	Threshold Level: [ ]%	[ ]%
	Target Level: [ ]%	[ ]%
	Stretch Level: [ ]%	[ ]%

b.For this purpose, the TBV+D Growth Rate for the Performance Period shall be determined by the Committee in accordance with the following formula:

(Ending TBV minus Beginning TBV) plus cumulative Dividends 
Beginning TBV

c.The TBV at the beginning and ending of the Performance Period shall be determined by reference to the audited financial statements of the Company.  If the TBV+D Growth Rate does not at least equal the Threshold Level, no Award will be earned by the Participant for the Performance Period.  If the TBV+D Growth Rate exceeds the Threshold Level but not the Target Level or exceeds the Target Level but not the Stretch Level, then the Award Percentage earned will be interpolated by the Committee from the table above.  A TBV+D Growth Rate in excess of the Stretch Level will not result in an increase in the Award Percentage.  

3.Vesting of Award.  Subject to the terms of the Plan and the Agreement, the Award shall be 100% vested and earned on January 1 following the ending of the Performance Period (the “Vesting Date”).  The Committee has sole authority to 

determine whether and to what degree the Award has vested and is payable and to interpret the terms and conditions of this Agreement and the Plan. 

4.Forfeiture of Award.  Except as may otherwise be provided in the Plan or this Agreement (including but not limited to the provisions of Section 5(b) herein), in the event that the employment of the Participant with the Company or an affiliate terminates for any reason and the Award has not vested pursuant to Section 3 or the Participant violates the provisions of Section 8 of this Agreement at any time, then the Award shall be forfeited immediately upon such termination or violation, and the Participant shall have no further right with respect to the Award.  The Committee (or its designee, to the extent permitted under the Plan) shall have the sole discretion to determine if a Participant’s rights have terminated pursuant to the Plan and this Agreement, including but not limited to the authority to determine the basis for the Participant’s termination of employment or violation of Section 8.  The Participant expressly acknowledges and agrees that, except as otherwise provided in this Agreement, the termination of the Participant’s employment shall result in forfeiture of the Award and any underlying payout to the extent the Award has not vested as of the Participant’s termination of employment date, and further, that the Participant’s violation of Section 8 of this Agreement shall result in the forfeiture of the Award in all cases.

5.Award Payout.  
a.The Award shall be paid in cash following the determination of the amount, if any, of the Award earned by the Participant during the Performance Period, but in no event later than 90 days following the last day of the Performance Period.    

b.If the Participant dies, retires, becomes disabled, is assigned to a different position, is granted a leave of absence, or if the Participant's employment is otherwise terminated (except for cause) by the Company during the Performance Period, a pro rata share of the Participant's Award based on the period of actual participation may, at the Committee's discretion, be paid after the end of the Performance Period if and to the extent that it would have become earned and payable had the Participant's employment status not changed during the Performance Period.

6.No Right of Continued Employment.  Neither the Plan, this Agreement, nor the Award shall confer upon the Participant any right to continue in the employment of the Company or an affiliate or to interfere in any way with the right of the Company or an affiliate to terminate the Participant’s employment at any time.  Except as otherwise expressly provided in the Plan or this Agreement, or as determined by the Committee, all rights of the Participant with respect to the Award shall terminate upon termination of the employment of the Participant with the Company or an affiliate.

7.Nontransferability of Award.  The Award, and any Award payout, shall not be transferable (including by sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession.   The designation of a beneficiary in accordance with the Plan procedures does not constitute a transfer. 

8.Nonsolicitation and Nondisclosure.  During the course of Participant's employment with the Company, Participant has been and shall continue to be given, and has obtained and developed and shall continue to obtain and develop, substantial knowledge of and familiarity with the customers and prospective customers of the Company, and the Company’s dealings with them, and other information concerning the Company’s Business.  In addition, the Company has spent and shall continue to spend considerable amounts of time, effort, and resources in providing Participant with, and Participant has participated and shall continue to participate in the development of, confidential information relating to the Company's Business.  Such confidential information may include but is not limited to (i) lists of customers and prospective customers, (ii) nonpublic and proprietary information associated with such entities (including but not limited to requirements, preferences and specifications), (iii) other nonpublic and proprietary information relating to the Company's Business (including but not limited to research and development, formulae, production methods, computer programs, marketing investigations and strategies, prices, costs, discounts, and future plans), and (iv) intellectual property, including but not limited to copyrights, trademarks, trade secrets, inventions, and patents (collectively, the "Information").  Participant acknowledges and agrees that the Company has a right to and does regard all such Information as proprietary, and a trade secret or confidential, and has a right to protect it from disclosure and misuse.  For and in consideration of Participant’s employment with the Company and the Award and to protect the Company from Participant's use, disclosure, or exploitation of customer and prospective customer contacts and the Information, and to provide assurance to the Company that it safely may continue to provide Participant with Information relating to the Company's Business, subject to the limitations set forth below in subparagraph (d), Participant expressly covenants and agrees as follows:

  (a)           Covenant of Nonsolicitation.  During the term of Participant's employment by the Company and for a period of one (1) year after the termination of that employment, for any or no reason, Participant shall not, directly, indirectly, or through any person or entity, other than on behalf of the Company, without the prior written consent of the Company (which consent may be withheld in the Company's sole discretion)

     (i)            employ or solicit for employment, or advise or recommend to any other person that such person employ or solicit for employment, any person employed by the Company who was supervised by Participant or otherwise personally known to Participant in connection with and as a result of Participant’s employment with the Company;
(ii)          solicit any Customer or Prospective Customer of the Company with whom Participant had Material Contact on behalf of the Company during the last two (2) years of Participant's employment with the Company to do any banking or banking-related business with Participant or with any other bank, trust company, or financial services firm; or
(iii)         divert or attempt to divert, or recommend or advise that any other person or entity divert or attempt to divert, the business of any Customer or Prospective Customer of the Company with whom Participant had Material Contact on behalf of the Company during the last two (2) years of Participant's employment with the Company to any other bank, trust company, or financial services firm;

            (b)           Covenant of Nondisclosure.  At all times, whether during Participant's employment with the Company or after the termination of Participant's employment for any reason, Participant agrees as follows: 
(i)            Participant shall treat as confidential, not disclose, and use only for the advancement of the interests of the Company, all information, plans, records, trade secrets, business secrets, and confidential or other data of the Company submitted to Participant or compiled, received, or otherwise discovered by Participant, including but not limited to the Information, from time to time in the course of Participant's employment by the Company for use in the Company's Business, which Participant knows to have been acquired by him or her in confidence or which Participant knows would not otherwise be available to competitors of the Company or to members of the public and which would not otherwise become known to said competitors or members of the public.  For purposes of this Section 8, "trade secrets" shall mean any information concerning any matters relating to the affairs or business of the Company, including, without limitation, (i) the names or addresses of any customers of the Company; (ii) information concerning the accounts or portfolios of the customers of the Company; and (iii) any other information concerning the business of the Company, its manner of operation, its plans, or other related data.
 (ii)           Participant agrees that all customer records, files, lists, information, data, forms, notes, or questionnaires, whether written, printed or electronically stored, including all or any information collected by Participant from any source within or by any means from the Company are deemed to be the sole property of the Company.  Participant will not remove any such materials from the offices or other premises of the Company, either in original form, copy or electronic form, or transmit such information or materials verbally or in written form, except as necessary in the ordinary course of conducting Business for the Company.  Participant further agrees that, upon termination of Participant's employment with the Company, for any or no cause, voluntarily or involuntarily, or at any other time upon the Company's request, Participant shall immediately return to the Company any and all property, customer lists, information, forms, formulae, plans, documents, memoranda, notes, records, and other written or electronic material or data, software, or firmware, and all copies of same, belonging to the Company (including any of such materials compiled by or for employees of either) or any of their customers, within Participant's possession, and will not at any time thereafter copy, reproduce, or otherwise facilitate the disclosure of such information or data.   Participant further agrees not to retain, use or at any time sue for, any trade name, trademark, service mark, or other proprietary business designation used or owned in connection with the Company's Business.

            (c)           Definitions.  As used in this Section 8, the following terms, when capitalized, shall have the following meanings:
(i)            Company.  Where the context permits, the use of the term “Company” shall be equivalent to the use of the phrase “the Company and/or its affiliates.”
(ii)           Business.  The term “Business” shall mean the business of operating a bank with a presence in numerous states, with licensure in certain states as an insurance agency for the sale of insurance products
 (iii)          Customer.  The term "Customer" shall refer only to those customers of the Company who or which are or were actively engaged in matters related to the Company's Business within the two (2) year period immediately preceding the termination of Participant's employment with the Company.  
(iv)          Prospective Customer.  The term "Prospective Customer" shall refer only to those prospective customers of the Company who or which had been actively engaged in discussions concerning the Company's Business, within the two (2) year period immediately preceding the termination of Participant's employment with the Company.
(v)           Material Contact.  For purposes of this Agreement, Participant will be deemed to have had "Material Contact" with a person or business entity if Participant was provided or otherwise obtained Information (as defined above) concerning the person or entity, or Participant had personal dealings with the person or entity in the normal course of Participant's employment with the Company for the purpose of engaging or attempting to engage in matters related to the Company's Business.

               (d)           Limitations/Interpretation/Severability.  
(i)            Nothing in this Agreement is intended to or shall interfere with Participant's right to report possible violations of law to, file a charge with, or participate in any investigation or proceeding conducted by a federal, state or local government agency, nor shall this Agreement prohibit Participant from cooperating with any such agency in its investigation or 

from making other disclosures that are protected under the whistleblower provisions of applicable federal or state law or regulation. 
(ii)           Furthermore, notwithstanding any confidentiality provision of this Agreement, the Company agrees that if Participant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Participant may disclose any trade secret to his/her attorney and use the trade secret information in that court proceeding, if Participant: (A) files any document containing such trade secret under seal; and (B) does not disclose any such trade secret, except pursuant to court order. The Company also hereby notifies Participant that he/she may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret made in confidence, directly or indirectly, to a federal, state, or local government official, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(iii)          Notwithstanding the Covenants of Nonsolicitation set forth above in Section 8(a), Participant shall not be prohibited from providing any individual or entity (including but not limited to any Customer or Prospective Customer) any service if Participant does not initiate contact with or solicit such customer or client; provided, however, that Participant shall at all times abide by the Covenant of Nondisclosure described above in Section 8(b), which covenant Participant understands and agrees shall continue to apply according to its terms.
(iv)          If one or more of the provisions contained in this Section 8 is for any reason held by a court to be excessively broad as to duration, activity or subject, Participant intends that such court would reduce or “blue pencil” such provision by limiting or reducing it, so as to be enforceable to the extent compatible with the applicable law. In case one or more of the provisions contained in this Section 8 is for any reason (including the failure of a court to “blue pencil” it) held to be invalid or unenforceable in any respect, Participant agrees that such invalidity or unenforceability shall not affect the other provisions contained herein, and the remaining covenants shall be construed as if such invalid or unenforceable provision had never been contained herein.

9. Superseding Agreement; Binding Effect.  This Agreement supersedes any statements, representations on agreements of the Company with respect to the grant of the Award or any related rights, and the Participant hereby waives any rights or claims related to any such statements, representations or agreements.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective executors, administrators, next-of-kin, successors and assigns.  This Agreement does not supersede, replace, invalidate, amend or otherwise limit any non-competition agreement, non-solicitation agreement, employment agreement, consulting agreement or any other similar agreement between the Participant and the Company, including, but not limited to, any restrictive covenants contained in such agreements. Any such agreements and the restrictive covenants contained therein shall remain in full force and effect and the Participant shall remain bound by all such agreements and restrictive covenants.  To the extent the restrictions contained in this Agreement conflict in any way with any restrictions contained in any other agreements between the Participant and the Company, such conflict shall be resolved by giving effect to the provision that provides the greatest protection to the Company that is enforceable under applicable law

10. Governing Law.  Except as otherwise provided in the Plan or herein, this Agreement shall be construed and enforced according to the State of North Carolina, without regard to conflicts of laws provisions of any state, and in accordance with applicable federal laws of the United States.

11. Amendment and Termination.  Subject to the terms of the Plan, this Agreement may be amended, altered and/or terminated only by written agreement of the parties hereto.  Notwithstanding the foregoing, the Committee shall have unilateral authority to amend the Plan and this Agreement, without the consent of Participant, to the extent necessary to comply with applicable laws or changes to applicable laws (including but not limited to Code Sections 162(m) and 409A, and federal securities laws), or to reduce or eliminate the amount of the Award as provided in Section 14 of this Agreement.   

12. Withholding; Tax Matters.  
a.The Company shall report all income and withhold all required, local, state, federal, foreign income and other taxes and any other amounts required to be withheld by any governmental authority or law from any amount payable in cash with respect to the Award.
b.The Company has made no representations or warranties to the Participant with respect to the tax consequences (including but not limited to the income tax consequences) related to the Award or the payout, if any, pursuant to the Award, and the Participant is in no manner relying on the Company or its representatives for an assessment of such tax consequences.  The Participant acknowledges that there may be adverse tax consequences with respect to the Award and that the Participant should consult a tax advisor.  The Participant acknowledges that the Participant has been advised that the Participant should consult with the Participant’s own attorney, accountant and/or tax advisor regarding the decision to enter into this Agreement and the consequences thereof.  The Participant also acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.  

13. Administration.  The authority to construe and interpret this Agreement and the Plan, and to administer all aspects of the Plan, shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as are provided in the Plan.  Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement shall be final and binding.

14. Adjustment of Award.  The Committee shall have the unilateral discretion to reduce or eliminate the amount of the Award, including an Award otherwise earned and payable pursuant to the terms of the Plan

15. Clawback.  At the discretion of the Committee and based upon the terms of the Incentive Compensation Policy, a Participant may be obligated to forfeit future incentives or to repay the Bank all or any portion, of any performance based compensation previously paid if a) an accounting restatement occurred due to a material non-compliance of any financial reporting requirement under the Federal securities laws, through intentional misconduct or if incorrectly calculated without misconduct or b) a discovery was made that a performance metric or calculation used in determining performance-based compensation was materially inaccurate or c) a significant violation of the Bank's Code of Ethics, as determined by the Independent Directors of the Committee resulted in financial or reputational impact for the Bank.  The Incentive Compensation Policy may be amended from time to time, or as otherwise required by law or applicable stock exchange listing standards.  Each Participant, by accepting an Award pursuant to the Plan, agrees to repay the full amount required under this Section 15 at such time and in such manner as the Committee shall determine in its sole discretion and consistent with applicable law.

16. Notices.  Except as may be otherwise provided by the Plan or determined by the Committee, any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail.  Notices sent by mail shall be deemed received three business days after mailed but in no event later than the date of actual receipt.  Notices shall be directed, if to the Participant, at the Participant's address indicated by the Company's records, or if to the Company, at the Company's principal office

17. Severability.         The provisions of this Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. 

18. Right of Offset.  Notwithstanding any other provision of the Plan or the Agreement, the Company may reduce the amount of any payment or benefit otherwise payable to or on behalf of the Participant by the amount of any obligation of the Participant to the Company or an affiliate, and the Participant shall be deemed to have consented to such reduction

19. Counterparts; Further Instruments.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The parties hereto agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement. 

[Signatures on the following page.] 

IN WITNESS WHEREOF, this Agreement has been executed in behalf of the Company and by the Participant effective as of the day and year first above written.

FIRST-CITIZENS BANK & TRUST COMPANY

By:                                                                                                          Printed Name:                                                                                       Title:                                                                                                      

PARTICIPANT

Signed:                                                                                                   Printed Name:Document

Exhibit 4.2

Description of the Registrant’s Securities Registered Pursuant to
Section 12 of the Securities and Exchange Act of 1934, as amended

The common stock, par value $0.01 per share (“Common Stock”), of Boston Properties, Inc. (“BXP”) is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The common units of limited partnership interest (“Common OP Units”) of Boston Properties Limited Partnership (“BPLP”) are registered pursuant to Section 12(g) of the Exchange Act.

The following description of the Common Stock and the Common OP Units sets forth certain general terms and provisions of each class of securities. These descriptions are in all respects subject to and qualified in their entirety by, and should be read in conjunction with, all applicable provisions of the Amended and Restated Certificate of Incorporation of Boston Properties, Inc., as further amended and supplemented (the “Charter”), the Third Amended and Restated By-laws of Boston Properties, Inc., as further amended (the “By-laws”) and the Second Amended and Restated Agreement of Limited Partnership of Boston Properties Limited Partnership, as further amended (the “Limited Partnership Agreement”), each of which is incorporated herein by reference and copies of which are incorporated by reference as exhibits to our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, and the applicable provisions of the Delaware General Corporation Law (the “DGCL”) and the Delaware Revised Uniform Limited Partnership Act. 

General

BXP’s Charter provides that it may issue up to 250,000,000 shares of Common Stock, up to 50,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), and up to 150,000,000 shares of excess stock, par value $0.01 per share (“Excess Stock”). 

Common Stock 

Subject to the provisions of BXP’s Charter regarding Excess Stock, all shares of BXP’s Common Stock have equal dividend, distribution, liquidation and other rights. BXP’s board of directors must approve the amount of stock BXP sells and the price for which it is sold. 

Dividend Rights 

Subject to the preferential rights of any other shares of BXP’s stock and the provisions of BXP’s Charter regarding Excess Stock, holders of BXP’s Common Stock may receive dividends out of assets that BXP can legally use to pay dividends when and if they are authorized and declared by BXP’s board of directors.   

Voting Rights 

Subject to the rights of any other shares of BXP’s stock,  the provisions of BXP’s Charter regarding Excess Stock, and the rights of limited partners of BPLP other than BXP to vote on certain extraordinary transactions, holders of BXP’s Common Stock will have the exclusive power to vote on all matters presented to BXP’s stockholders, including the election of directors, except as otherwise provided by Delaware law. Holders of BXP’s Common Stock are entitled to one vote per share. 

See “Important Provisions of Delaware Law, BXP’s Charter and By-laws and Other Governance Documents—Board of Directors” and “Units of Limited Partnership Interest of BPLP—Voting Rights” below for more information.  

Distributions on Liquidation

In the event of BXP’s liquidation, dissolution or winding up, each holder of BXP’s Common Stock will share in the same proportion as other holders of BXP’s Common Stock out of assets that BXP can legally use to pay distributions after BXP pays or makes adequate provision for all of its known debts and liabilities. 

Other Rights 

All shares of BXP’s Common Stock have no preference, appraisal or exchange rights, except for any appraisal rights provided by Delaware law. BXP’s Common Stock does not have any redemption or sinking fund provisions or any conversion rights. Holders of BXP’s Common Stock do not have any preferential rights or preemptive rights to buy or subscribe for capital stock or other securities that BXP may issue.

Restrictions on Ownership 

For BXP to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), no more than 50% in value of BXP’s outstanding stock may be owned, actually or constructively, by five or fewer individuals during the last half of a taxable year. To assist BXP in meeting this requirement, it may take actions including the automatic conversion of shares in excess of this ownership restriction into Excess Stock to limit the ownership of the outstanding equity securities of BXP, actually or constructively, by one person or entity. See “Limits on Ownership of BXP’s Capital Stock” below for more information. 

Transfer Agent

The transfer agent and registrar for BXP’s Common Stock is Computershare Trust Company, N.A.

Stock Exchange Listing

BXP’s Common Stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “BXP.”

Relationship to Preferred Stock

BXP may issue Preferred Stock from time to time, in one or more series, as authorized by its board of directors. Prior to the issuance of shares of each series, BXP’s board of directors is required by the DGCL and its Charter to fix for each series, subject to the provisions of the Charter regarding Excess Stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption, as are permitted by Delaware law. 
BXP’s board of directors could authorize the issuance of Preferred Stock with terms and conditions that could have the effect of discouraging a takeover or other transaction that holders of BXP’s Common Stock might believe to be in their best interests or in which holders of some, or a majority, of BXP’s Common Stock might receive a premium for their shares over the then market price of BXP’s Common Stock.

As of the date of the Annual Report with which this Exhibit 4.2 is filed, no shares of Preferred Stock are outstanding.

Limits on Ownership of BXP’s Capital Stock

Ownership Limits

For BXP to qualify as a REIT under the Code, among other things, not more than 50% in value of BXP’s outstanding stock may be owned, actually or constructively, by five or fewer individuals during the last half of a taxable year, and BXP’s outstanding stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. In order to protect BXP against the risk of losing its status as a REIT and to otherwise protect it from the consequences of a concentration of ownership among its stockholders, its Charter provides that generally no holder may beneficially own more than 6.6% of any class or series of its stock. Under BXP’s Charter, a person generally “beneficially owns” shares if:
 
•the person has direct ownership of the shares;
•the person has indirect ownership of the shares taking into account the constructive ownership rules of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code; or
•the person would be deemed to beneficially own the shares pursuant to Rule 13d-3 under the Exchange Act.

BXP’s Charter provides two exceptions to the 6.6% ownership limit:

•15% Related Party Ownership Limit: BXP’s Charter provides that Mr. Mortimer B. Zuckerman, together with his heirs, legatees and devisees, and any other person who beneficially owns shares of BXP’s stock that are also deemed to be beneficially owned by Mr. Zuckerman or his heirs, legatees or devisees, are subject to an aggregate ownership limit with respect to each class or series of BXP’s stock of 15%. The heirs, legatees and devisees of Mr. Edward H. Linde, and any other person who beneficially owns shares of BXP’s stock that are also deemed to be beneficially owned by Mr. E. Linde’s heirs, legatees or devisees, are subject to an aggregate ownership limit with respect to each class or series of BXP’s stock of 15%.

•15% Look-Through Entity Ownership Limit: Trusts described in Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code, as modified by Section 856(h)(3) of the Code, and entities registered under the Investment Company Act of 1940 are subject to an ownership limit of 15%. These types of entities are among the entities that are not treated as stockholders under the requirement that not 

more than 50% in value of BXP’s outstanding stock be owned by five or fewer individuals during the last half of a taxable year other than BXP’s first year. Rather, the beneficial owners of these entities will be counted as stockholders for this purpose. 

Additionally, BXP’s board of directors may, in its sole discretion, waive the foregoing ownership limits if evidence satisfactory to the board of directors is presented that the changes in ownership will not jeopardize BXP’s status as a REIT and the board of directors otherwise determines that such action is in the best interests of BXP.

These ownership limitations may have the effect of precluding the acquisition of control of BXP. 

Shares in Excess of Ownership Limits 

Purported transfers of BXP’s stock or beneficial ownership of BXP’s stock that would result in:

•any person violating the ownership limit applicable to that person;
•BXP’s stock being beneficially owned by fewer than 100 persons;
•BXP being “closely held” within the meaning of Section 856(h) of the Code; or
•BXP constructively owning 10% or more of one of its tenants,

shall be null and void and of no effect with respect to the number of shares of stock that would cause such result. These shares will be converted automatically into an equal number of shares of BXP’s Excess Stock that will be transferred by operation of law to a trust for the benefit of a qualified charitable organization selected by BXP. Additionally, events other than purported transfers that would result in the occurrence of any of the events described above will result in a number of shares of stock sufficient to prevent the occurrence of such event converting into an equal number of shares of BXP’s Excess Stock and being transferred to the trust. As soon as practicable after the transfer of shares to the trust, the trustee of the trust will be required to sell the Excess Stock to a person who could own the shares without violating the applicable limits and distribute to the original transferee-stockholder an amount equal to the lesser of:

•the proceeds of the sale; or
•the price paid by the original transferee-owner for the shares of stock that converted into Excess Stock in the purported transfer that triggered such conversion or, if the event that triggered the conversion of shares into Excess Stock was a gift or an event other than a transfer, the market price of the shares of BXP’s stock that converted into Excess Stock on the date of such event, which will be determined in the manner set forth in BXP’s Charter.

All dividends and other distributions received with respect to the Excess Stock prior to their sale by the trust and any proceeds from the sale by the trust in excess of the amount distributable to the original transferee-owner will be distributed to the beneficiary of the trust. 

The foregoing restrictions will not apply if BXP’s board of directors determines that it is no longer in the best interests of BXP to attempt to, or to continue to, qualify as a REIT. 

Right to Purchase Excess Stock 

In addition to the foregoing transfer restrictions, BXP has the right, for a period of 90 days during the time any shares of Excess Stock are held by the trust, to purchase all or any portion of these shares for the lesser of:

•the price paid by the original transferee-owner for the shares of BXP’s stock that converted into Excess Stock in the purported transfer that triggered such conversion or, if the event that triggered the conversion of shares into Excess Stock was a gift or an event other than a transfer, the market price of the shares of BXP’s stock that converted into Excess Stock on the date of such event, which will be determined in the manner set forth in BXP’s Charter; or
•the market price of BXP’s stock on the date BXP exercises its option to purchase, which will be determined in the manner set forth in BXP’s Charter.

The 90-day period begins on the date of the purported transfer or other event that resulted in the conversion of shares into Excess Stock if the original transferee-stockholder gives BXP notice of such event or, if no notice is given, the date on which BXP’s board of directors determines that such event has occurred. 

Disclosure of Stock Ownership by the Stockholders of BXP

Each of the stockholders of BXP will be required to disclose to BXP upon demand in writing any information that BXP may request to determine its status as a REIT and ensure compliance with the ownership limits. 

Important Provisions of Delaware Law, BXP’s Charter and By-laws and Other Governance Documents

Business Combinations with Interested Stockholders under Delaware Law 

Section 203 of the DGCL prevents a publicly held corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless: 

•before the date on which the person became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the person becoming an interested stockholder;
•the interested stockholder owned at least 85% of the outstanding voting stock of the corporation at the time the transaction commenced, excluding stock held by directors who are also officers of the corporation and by employee stock plans that do not provide participants with the rights to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•at or after the date on which the person became an interested stockholder, the business combination is approved by the board of directors and the holders of at least two-thirds of the voting stock of the corporation voting at a meeting, excluding the voting stock owned by the interested stockholder. 

As defined in Section 203, the term “interested stockholder” is generally (1) a person who, together with affiliates and associates, owns 15% or more of a corporation’s outstanding voting stock or (2) a person who is an affiliate or associate of the corporation and was, together with affiliates and associates, the owner of 15% or more of a corporation’s outstanding voting stock within the past three years. As defined in Section 203, a “business combination” includes mergers, consolidations, stock and assets sales and other transactions with the interested stockholder. 

The provisions of Section 203 may have the effect of delaying, deferring or preventing a change of control of BXP. 

Amendment of BXP’s Charter and By-laws 

Amendments to BXP’s Charter must be approved by the affirmative vote of more than 75% of the directors then in office and generally by the vote of a majority of the votes entitled to be cast at a meeting of BXP’s stockholders. However, the affirmative vote of not less than 75% of BXP’s outstanding shares entitled to vote thereon, voting together as a single class, and the affirmative vote of not less than 75% of the outstanding shares of each class entitled to vote thereon, is required for amendments dealing with fundamental governance provisions of BXP’s Charter, including provisions relating to:

•stockholder action;
•the powers, election of, removal of and terms of directors;
•limitation of liability; and
•amendment of BXP’s Charter or By-laws. 

Unless otherwise required by law, BXP’s board of directors may amend BXP’s By-laws by a majority vote of the directors of BXP then in office. BXP’s By-laws may also be amended at a meeting of stockholders by the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to be cast on such amendment, voting together as a single class, if BXP’s board of directors recommends the approval of the amendment. Otherwise, BXP’s By-laws may be amended at a meeting of stockholders by the affirmative vote of at least 75% of the outstanding shares of capital stock entitled to vote on such amendment, voting together as a single class. 

Approval of Extraordinary Actions

Delaware law generally requires that BXP obtain the approval of a majority of the outstanding shares of BXP’s Common Stock that are entitled to vote before BXP may consolidate or merge with another corporation. However, Delaware law does not require that BXP seek approval of its stockholders to enter into a merger in which BXP is the surviving corporation following the merger if:

•BXP’s Charter is not amended in any respect by the merger;
•each share of BXP’s stock outstanding prior to the merger is to be an identical share of stock following the merger; and
•any shares of BXP’s Common Stock (together with any other securities convertible into shares of BXP’s Common Stock) to be issued or delivered as a result of the merger represent in the aggregate no more than 20% of the number of shares of BXP’s Common Stock outstanding immediately prior to the merger.

Meetings of Stockholders 

Under BXP’s By-laws, BXP will hold annual meetings of its stockholders at a date and time as determined by BXP’s board of directors, Chairman, Chief Executive Officer or President of BXP. BXP’s By-laws require advance notice for the stockholders of BXP to make nominations of candidates for BXP’s board of directors or bring other business before an annual meeting of the stockholders of BXP. Only BXP’s board of directors can call special meetings of the stockholders of BXP and any special meeting is restricted to considering and acting upon matters set forth in the notice of that special meeting. 

Proxy Access

BXP’s By-laws include proxy access provisions that permit a stockholder, or group of no more than five stockholders, meeting specified eligibility requirements, to include director nominees in BXP’s proxy materials for annual meetings of its stockholders. In order to be eligible to utilize these proxy access provisions, a stockholder, or group of stockholders, must, among other requirements:

•have owned shares of BXP’s Common Stock equal to at least 3% of the aggregate of the issued and outstanding shares of BXP’s Common Stock continuously for at least the prior three years;
•represent that such shares were acquired in the ordinary course of business and not with the intent to change or influence control and that such stockholder or group does not presently have such intent; and
•provide a notice requesting the inclusion of director nominees in BXP’s proxy materials and provide other required information to BXP not less than 120 days prior to the anniversary of the date of the proxy statement for the prior year’s annual meeting of stockholders (with adjustments if the date for the upcoming annual meeting of stockholders is more than 30 days before or more than 60 days after the anniversary date of the prior year’s annual meeting).

For purposes of the foregoing requirements, issued and outstanding Common OP Units, other than those owned by BXP, BPLP or any of their directly or indirectly wholly owned subsidiaries and excluding issued and outstanding long term incentive units of BPLP, will be treated as issued and outstanding shares of BXP’s Common Stock as such Common OP Units are generally economically equivalent to, and exchangeable for, shares of BXP’s Common Stock. Additionally, all director nominees submitted through these provisions must be independent and meet specified additional criteria, and stockholders will not be entitled to utilize this proxy access right at an annual meeting if BXP receives notice through its traditional advanced notice by-law provisions that a stockholder intends to nominate a director at such meeting. The maximum number of director nominees that may be submitted pursuant to these provisions may not exceed 25% of the number of directors then in office.

The foregoing proxy access right is subject to additional eligibility, procedural and disclosure requirements set forth in BXP’s By-laws.

Board of Directors 

Each director of BXP holds office for a one year term expiring at the next succeeding annual meeting of stockholders, or until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.  

BXP’s Charter provides that the affirmative vote of more than 75% of the directors then in office is required to approve fundamental transactions or actions, including: 

•a change of control of BXP or of BPLP; 
•any amendment to BPLP’s Limited Partnership Agreement;
•any waiver of the limitations on ownership contained in BXP’s Charter;
•any merger, consolidation or sale of all or substantially all of the assets of BXP or of BPLP;
•certain issuances of equity securities by BXP (but not including, among others, underwritten public offerings);
•BXP or BPLP making a general assignment for the benefit of creditors or instituting any proceedings in bankruptcy or for the liquidation, dissolution, reorganization or winding up of either entity or consenting to the taking of any of these actions against either entity;
•any amendment of BXP’s Charter;
•BXP conducting business other than through BPLP or for either of them to engage in any business other than the ownership, construction, development, management and operation of commercial real estate properties; and
•termination of BXP’s status as a REIT.

There is no cumulative voting in the election of directors of BXP. Generally, all matters to be voted on by stockholders, other than the election of directors, must be approved by a majority of the votes present in person or represented by proxy and entitled to vote at a meeting at which a quorum is present, subject to any voting rights granted to holders of any then outstanding Preferred Stock. In uncontested elections of directors, a majority voting standard will apply pursuant to which, in order for a director nominee to be elected, the votes cast “for” his or her election must exceed the votes cast “against” his or her election. In contested elections of directors, which generally will include any situation in which BXP receives a notice that a stockholder has nominated a person for election to BXP’s board of directors at a meeting of the stockholders that is not withdrawn on or before the tenth day before BXP first mails notice for such meeting to its stockholders, a plurality voting standard will apply. 

Exclusive Forum

BXP’s By-laws generally provide that, unless BXP consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder to bring (1) any derivative action or proceeding on behalf of BXP, (2) any action asserting a claim of, or a claim based on, breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of BXP to BXP or its stockholders, (3) any action asserting a claim against BXP or any current or former director, officer, employee or stockholder of BXP arising pursuant to any provision of the DGCL or BXP’s Charter or By-laws or (4) any action asserting a claim against BXP or any current or former director, officer, employee or stockholder of BXP governed by the internal affairs doctrine. 

Units of Limited Partnership Interest of BPLP

BPLP, a partnership with no publicly traded equity, is the entity through which BXP conducts substantially all of its business and owns, either directly or through subsidiaries, substantially all of its assets. BXP is the sole general partner and also a limited partner of BPLP. As the sole general partner of BPLP, BXP has exclusive control of BPLP’s day-to-day management. Net proceeds from equity offerings by BXP are contributed to the capital of BPLP in exchange for Common OP Units or preferred units of limited partnership interest, as applicable. 

Distributions 

BPLP’s Limited Partnership Agreement provides that BPLP will distribute all available cash on at least a quarterly basis, in amounts determined by BXP, as the general partner, in its sole discretion, to the limited partners in accordance with their respective percentage interests in BPLP. 

Distributions Upon Liquidation

Upon liquidation of BPLP, after payment of, or adequate provision for, BPLP’s debts and obligations, including any partner loans, any of BPLP’s remaining assets will be distributed to all limited partners with positive capital accounts in accordance with their respective positive capital account balances. BPLP’s profit and loss for each fiscal year generally will be allocated among the limited partners in accordance with their respective interest in BPLP. Taxable income and loss will be allocated in the same manner, subject to compliance with the provisions of the Code, sections 704(b) and 704(c) and the Treasury Regulations promulgated thereunder.

Voting Rights

Under BPLP’s Limited Partnership Agreement, limited partners do not have voting rights relating to the operation and management of BPLP, except in connection with matters, as described more fully below, involving amendments to the Limited Partnership Agreement, dissolution of BPLP and the sale or exchange of all or substantially all of BPLP’s assets, including mergers or other combinations. Holders of all classes of preferred units have the right to a separate class vote on any matter that would materially and adversely affect any right, preference, privilege or voting power of the preferred units or their holders.

•Vote Required to Dissolve the Partnership: Under BPLP’s Limited Partnership Agreement and Delaware law, BPLP may be dissolved only upon an election to dissolve by BXP, as general partner, and the affirmative consent of limited partners (including BXP) holding 85% of the Common OP Units.

•Vote Required to Sell Assets or Merge: BXP, as general partner, has agreed in BPLP’s Limited Partnership Agreement not to engage in business combinations unless the limited partners of BPLP other than BXP who hold the remaining Common OP Units receive, or have the opportunity to receive, either (1) the same consideration for their partnership interests as holders of BXP’s Common Stock in the transaction or (2) limited partnership units that, among other things, would entitle the holders, upon redemption of these units, to receive shares of common equity of a publicly traded company or the same consideration as 

holders of BXP’s Common Stock received in the transaction. If these limited partners do not receive the same consideration, BXP cannot engage in the transaction unless 75% of these holders of Common OP Units vote to approve the transaction. In addition, BXP has agreed in BPLP’s Limited Partnership Agreement that it will not consummate business combinations in which it received the approval of the stockholders of BXP unless holders of Common OP Units are also allowed to vote and the transaction would have been approved had these holders of Common OP Units been able to vote as stockholders on the transaction. Therefore, if the stockholders of BXP approve a business combination that requires a vote of stockholders, BPLP’s Limited Partnership Agreement requires the following before BXP can consummate the transaction:

◦holders of Common OP Units (including BXP) vote on the matter;
◦BXP must vote its Common OP Units in the same proportion as its stockholders voted on the transaction; and
◦the result of this vote of holders of Common OP Units must be such that had the vote been a vote of stockholders, the business combination would have been approved.

Meetings of the Partners

Meetings of the partners may be called by BXP, as the general partner, and must be called by BXP, as the general partner, upon receipt of a written request by limited partners holding 20% or more of the partnership interests. The notice must state the nature of the business to be transacted, and must be given to all partners not less than seven days nor more than thirty days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Partners can act without a meeting with the written consent of holders of 75% or more of the percentage interests of the partners.

Transferability of Interests

BXP may not transfer any of its general partner interest or withdraw as general partner of BPLP or transfer any of its Common OP Units, except in certain specifically identified types of transactions, including under certain circumstances in the event of a merger, consolidation or sale of all or substantially all of the assets of BXP. Generally, Common OP Units may be transferred without the consent of BXP as general partner. However, as general partner, BXP, in its sole discretion, may or may not consent to the admission as a limited partner any transferee of Common OP Units. If BXP, as general partner, does not consent to the admission of a transferee, the transferee will be an assignee of an economic interest in BPLP but will not be a holder of Common OP Units for any other purpose; accordingly, the assignee will not be permitted to vote on any affairs or issues on which a limited partner may vote.

Issuance of Additional Units

BXP, as general partner, is authorized, in its sole discretion and without limited partner approval, to cause BPLP to issue additional Common OP Units, preferred units and other equity securities of BPLP for any partnership purpose at any time to the limited partners or to other persons on terms established by BXP, as general partner. 

Redemption Rights

Pursuant to BPLP’s Limited Partnership Agreement, the limited partners (other than BXP) have redemption rights which, subject to certain limitations, enable them to cause BPLP to redeem each unit of limited partnership interest for cash equal to the market value of a share of BXP’s Common Stock or, at BXP’s election, as general partner, BXP may purchase each unit of limited partnership interest offered for redemption for cash or one share of BXP’s Common Stock. If BXP so elects, its Common Stock will be exchanged for Common OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. BXP generally expects that it will elect to issue its Common Stock in connection with each such presentation for redemption rather than having BPLP pay cash. With each such exchange or redemption, BXP’s percentage ownership in BPLP will increase. In addition, whenever BXP issues shares of its Common Stock other than to acquire Common OP Units, BXP must contribute any net proceeds it receives to BPLP and BPLP must issue to BXP an equivalent number of Common OP Units.

Amendment to BPLP’s Limited Partnership Agreement

Amendments to BPLP’s Limited Partnership Agreement may be proposed by BXP, as general partner, or by limited partners holding 20% or more of the partnership interests. Generally, amendments require approval of BXP, as general partner, and the consent of a majority of the holders of Common OP Units. Amendments that would, among other things, convert a limited partner’s interest into a general partner’s interest, modify the limited liability of any limited partner, alter the interest of any limited partner in profits, losses or distributions, alter or modify the 

redemption right described herein, or cause the termination of BPLP at a time inconsistent with the terms of BPLP’s Limited Partnership Agreement, must be approved by BXP, as general partner, and each limited partner that would be adversely affected by the amendment.

Relationship to Preferred Units

BPLP’s preferred units have the rights, preferences and other privileges (including the right to convert into BPLP’s Common OP Units) as are set forth in amendments to BPLP’s Limited Partnership Agreement.

As of the date of the Annual Report with which this Exhibit 4.2 is filed, there are no preferred units outstanding. 

Term

BPLP will continue until December 31, 2095, or until sooner dissolved upon (i) withdrawal of BXP, the general partner (unless the remaining partners elect to continue BPLP), (ii) through December 31, 2055, an election to dissolve BPLP made by BXP, as general partner, with the consent of the limited partners (including BXP) holding 85% of the interests in BPLP, (iii) on or after January 1, 2056, an election to dissolve BPLP made by BXP, as general partner, in its sole and absolute discretion, (iv) entry of a decree of judicial dissolution, (v) the sale of all or substantially all of BPLP’s assets and properties, or (vi) a final and non-appealable judgment ruling BXP, as general partner, bankrupt or insolvent (unless the limited partners elect to continue BPLP prior to the entry of such order or judgment).

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