Document:

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “AGREEMENT”) is entered into as of the 1st day of
January, 2005 (the “EFFECTIVE DATE”), by and between John S. Gates, Jr. (“EXECUTIVE”)
and CENTERPOINT PROPERTIES TRUST, a Maryland business trust (the “COMPANY”).

 

RECITALS

 

WHEREAS, the
Company, a real estate investment trust, owns, manages, acquires, leases and
develops real estate;

 

WHEREAS,
Executive is knowledgeable and experienced in the Company’s business;

 

WHEREAS,
Executive has performed services for the Company as Chief Executive Officer and
a Trustee;

 

WHEREAS,
Executive desires to resign as Chief Executive Officer but continue to perform
certain services to the Company as an employee and as a Trustee for a
transitional period;

 

WHEREAS, the
Company desires to continue to employ Executive in this regard;

 

WHEREAS, a
prior Employment and Severance Agreement, dated March 12, 1999, and
attached to this Agreement as ATTACHMENT B, which set forth the terms and
conditions of the employment relationship between the Company and Executive
(the “Prior Agreement”); and

 

WHEREAS, the
Company and Executive desire to enter into a new agreement that sets forth the
terms and conditions of Executive’s new relationship to the Company.

 

NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
contained herein, the Company and Executive hereby agree as follows:

 

EMPLOYMENT AND BOARD STATUS.

 

Executive
shall continue as a regular, full-time employee and Chief Executive Officer of
the Company until the close of business on December 31, 2004 (the “Transition
Date”).  During this time, Executive will
assist in the orderly transition of duties and responsibilities as reasonably
requested by the Board of Trustees of the Company (the “Board”).  Through the Transition Date, Executive shall
continue to receive the salary and benefits that he is receiving on the
Effective Date.  As of the close of
business on the Transition Date, Executive shall resign as the Company’s Chief
Executive Officer but shall remain as an employee and Trustee of the Company.

 

The Board
shall use its best efforts to cause Executive to be reelected to the Board
during each annual meeting of the Company’s shareholders that occurs

 

 

during the Term (defined in SECTION 2).  During the period in which Executive serves
as a member of the Board during the Term, the Board shall designate and appoint
Executive as Co-Chairman of the Board and appoint Executive to the Board’s
Asset Allocation Committee.  If Executive
is a member of the Board on the Termination Date (defined below), then except
in the event of Executive’s death, Executive shall continue to serve as a
member of the Board on and after the Termination Date and until a successor
trustee is elected and qualified.

 

TERM.  The “Term” means
the period beginning as of the close of business on the Transition Date and
ending on the earliest of:

 

the close of
business on December 31, 2006; and

 

Executive’s
death.

 

The date the
Term ends in accordance with this SECTION 2 is the “Termination Date” for
purposes of this Agreement.  Effective on
the Termination Date, Executive shall no longer be an employee of the
Company.  Except to the extent that
Executive continues to serve as a member of the Board on and after the
Termination Date pursuant to SECTION 1, on the Termination Date neither
the Company nor Executive shall have any further obligations hereunder except,
in the case of Executive, his obligations as provided in SECTIONS 9, 10 and 11.

 

DUTIES AND
RESPONSIBILITIES.  During the Term, Executive shall perform the
services and have the duties set forth in ATTACHMENT A – EMPLOYMENT SERVICES
(the “Services”).  Executive shall
perform the Services at the discretion and direction and under the supervision
of the Company’s Chief Executive Officer (the “C.E.O.”) or his designee.

 

BASE SALARY.  During the
Term and in consideration for the Services and Executive’s duties and
responsibilities pursuant to SECTIONS 9, 10, and 11, the Company agrees to pay
Executive a base salary equal to $300,000 per year (the “Base Salary”).  The Company shall pay Executive the Base
Salary through the Termination Date in accordance with the Company’s regular
payroll procedures and notwithstanding whether Executive ceases to provide the
Services prior to the Termination Date.

 

BOARD FEES.  In consideration for Executive’s services to
the Company as a Trustee, the Company shall pay to Executive such annual fees
and meeting attendance fees as the Company pays to the other Co-Chairman of the
Board.

 

BENEFITS.  During the
Term and notwithstanding whether Executive ceases to provide the Services prior
to the Termination Date, Executive shall be entitled to the following benefits
in accordance with their terms:

 

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

 

 

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

 

paid vacations
and holidays in accordance with policies established by the Company for its
executive and managerial employees;

 

continued
memberships in those industry and business associations in which Executive is a
member on the Transition Date, including NAREIT, RER, ULI, NAIOP, WPO, the
Commercial Club, the Chicago Club and the Chicagoland Chamber of Commerce;

 

use of an
automobile, provided by the Company and consistent with its policy, including
automotive insurance coverage and reimbursement for maintenance;

 

and office
space located in downtown Chicago, and secretarial support and other assistance
reasonably necessary for Executive to perform the Services.  The size of such office space and the amount
of secretarial service shall be determined upon mutual agreement between the
C.E.O. and Executive.

 

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

 

STOCK-BASED AWARDS.

 

Each stock
option and restricted stock that Executive holds on the Transition Date shall
continue to vest and each stock option shall continue to be exercisable in
accordance with the terms and conditions of the underlying stock option
agreement, restricted stock agreement and the applicable plan under which such
option or restricted stock was granted.

 

The
Compensation Committee of the Board (the “Compensation Committee”) shall award
Executive each stock option and restricted stock that Executive earned for his
performance of services during 2004 in accordance with the terms of the Prior
Agreement and at such time and in such manner as the Compensation Committee
awards stock options and restricted stock to each of the Company’s other
employees for their performance of services during 2004.

 

During the
Term, and as additional consideration for the Services, Executive’s services as
a member of the Board and Executive’s duties and responsibilities pursuant to
SECTIONS 9, 10, and 11, the Compensation Committee shall grant Executive
additional stock option and restricted stock grants on a basis no less
favorable than the stock option and restricted stock grants that the
Compensation Committee provides to the other Co-Chairman of the Board, in its
sole discretion.

 

Notwithstanding
any provision of this Agreement, the Prior Agreement, any applicable stock
option agreement, and any applicable restricted stock agreement to the
contrary, each stock option and restricted stock that Executive holds on the 

 

 

Termination Date shall fully
vest on the Termination Date and each such stock option shall remain
exercisable until the end of the full term of the stock option.

 

REIMBURSEMENT OF EXPENSES. 
Executive shall be entitled to the reimbursement for such travel,
travel-related, entertainment and other business expenses reasonably incurred
by Executive in connection with the performance of the Services.  The reimbursement of such expenses shall be
subject to the approval of the C.E.O., in accordance with Company policy and
only upon presentation by Executive to the C.E.O. of substantiating evidence
thereof in such form as the C.E.O. may reasonably require.

 

NON-COMPETITION.  Executive
agrees that until the later of the Termination Date and the date that Executive
ceases to serve as a member of the Board, he will not directly or indirectly,
in any market which is served by the Company or which the Company is actively
preparing to serve, engage or participate (whether as an owner, officer,
partner, principal, joint venture, 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:

 

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 Retirement Date; and

 

Executive may engage in such other activities
related to the Real Estate Business as the Company’s Board of Trustees from
time to time may approve; provided that in no event shall any such activities
interfere with the performance of the Services.

 

Executive
agrees and acknowledges that the markets covered by the restrictions set forth
in this SECTION 9 specifically include, but are not limited to, any area
within 200 miles of any property that the Company owns, manages, acquires,
leases or develops.  Notwithstanding any
provision of this Agreement to the contrary, this SECTION 9 shall not
apply on or after a Change in Control as defined in the Prior Agreement.

 

NON-SOLICITATION.  Executive
agrees that until the later of the Termination Date and the date that Executive
ceases to serve as a member of the Board, Executive shall not (a) 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 the Company or any of its subsidiaries or affiliates any person who
is employed or otherwise engaged by the Company or any of its subsidiaries or
affiliates, or (b) induce or attempt to induce any customer, supplier,
licensee, or other business relation of the Company or any of its subsidiaries
or affiliates to cease doing business with the Company

 

 

or any of its subsidiaries or affiliates or otherwise
interfere with the relationship between the Company or any of its subsidiaries
or affiliates and such business relation.

 

NONDISCLOSURE AND NONUSE OF
CONFIDENTIAL INFORMATION.

 

Executive
shall not disclose or use at any time, either during the Term or thereafter, any
Confidential Information (as defined in paragraph (b)) 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
the Executive’s performance of the Services. 
Executive shall take all appropriate steps to safeguard Confidential
Information and to protect it against disclosure, misuse, espionage, loss and
theft.

 

As used in
this Agreement, “Confidential Information” means information that is not
generally known to the public and that is used, developed or obtained by the
Company or its subsidiaries or affiliates in connection with their
business.  Confidential Information
excludes 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.  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.

 

SPECIFIC PERFORMANCE. 
Executive understands and agrees that the Services are of a special, unique and
extraordinary character, that it would be extremely difficult to quantify the
money damages which would accrue to the Company by reason of Executive’s
failure to perform any of his obligations under this Agreement, that it would
be extremely difficult to replace the Services, and that any violation of any
provision of this Agreement would be likely to be highly injurious to the
Company.  By reason of the foregoing,
Executive consents and agrees that if he violates any provision of this
Agreement the Company 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 the Company shall institute any action or proceeding to
enforce the provisions of this Agreement 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.

 

ASSIGNMENT.

 

ASSIGNMENT BY
THE COMPANY.

 

This Agreement shall be binding upon, and shall
inure to the benefit of, the Company and its successors.  Any such successor shall be deemed to be the
Company for all purposes of this Agreement. 
As used in this Agreement, the term “successor” shall mean any surviving
corporation in a merger or consolidation, or any person, corporation,
partnership, or other business entity

 

 

which, whether by purchase
or otherwise, acquires all or substantially all of the assets of the
Company.  Notwithstanding such
assignment, the Company shall remain, with such successor, jointly and
severally liable for all its obligations hereunder.

 

The Company shall require any successor to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such succession
were to take place.

 

Except as provided in this SECTION 13, this
Agreement may not be assigned by the Company.

 

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 to Executive’s estate.

 

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 or deposited, postage prepaid, certified mail, return receipt requested,
in the United States mail, and addressed, if to Executive as follows:

 

	
   

  	
  John S. Gates, Jr.

  
	
   

  	
  568 Hawthorne Place

  
	
   

  	
  Chicago, IL 60657

  
	
   

  
	
  And, if to the Company as follows:

  
	
   

  
	
   

  	
  CenterPoint Properties Trust

  
	
   

  	
  Attn: Daniel J. Hemmer

  
	
   

  	
  1808 Swift Road

  
	
   

  	
  Oak Brook, IL 60523-1501

  
	
   

  	
  Facsimile: 630-586-8010

  

 

Notices sent
by personal messenger, facsimile, regular mail and overnight mail shall be
deemed received upon delivery of same.

 

ENTIRE AGREEMENT.  This
Agreement supersedes any prior agreement or understanding, oral or written,
between Executive and the Company, with respect to the subject matter hereof
and constitutes the entire agreement of the parties with respect thereto.

 

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.

 

 

SEVERABILITY.  If any
provision of this Agreement shall be held invalid or unenforceable, the
remainder shall remain in full force and effect.

 

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

 

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.

 

AMENDMENT.  The parties may amend this Agreement only by
a written agreement of the parties that identifies itself as an amendment to
this Agreement.

 

*   *   *  
*   *

 

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

 

	
   

  	
  /s/ John S. Gates, Jr.

  	
   

  
	
   

  	
  John S. Gates, Jr.

  
	
   

  	
   

  
	
   

  	
  CENTERPOINT PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan D. Feld

  	
   

  
	
   

  	
   

  	
  Alan D. Alan Feld

  
	
   

  	
   

  	
  Chair, Compensation Committee of

  
	
   

  	
   

  	
  Board of Trustees

  
				

 

 

ATTACHMENT A

EMPLOYMENT SERVICES

 

As
consideration for the Base Salary and the benefits described in SECTIONS 4, 6,
and 7 of the Agreement and pursuant to SECTION 3 of the Agreement and
subject to the obligations and requirements therein, Executive shall provide
the following services to the Company during the Term.

 

•                                          Train
and transition the Company’s management.

 

•                                          “ZTU”
ambassador to the Company’s customers.

 

•                                          Upon
request by the Board, serve on the Boards of Directors of the Company’s joint
ventures.

 

•                                          Assist
in the management of the Company’s relationships with its principal
shareholders and shareholders generally during the Company’s regular “road
shows” and the Company’s Annual Investor Conference.

 

•                                          Continue
to serve as a liaison to federal, state and local government officials and
agencies and the public sector generally, including as financial contributor to
political campaigns.

 

•                                          At
the request of the National Association of Real Estate Investment Trusts (“NAREIT”),
continue to serve as a member of the Executive Committee of NAREIT; provided,
however, Executive shall not state, orally or in writing, any Company position
as a member of NAREIT without prior approval of the C.E.O.

 

•                                          Continue
involvement with the Real Estate Round Table, the Urban Land Institute and
other industry organizations.

 

•                                          Continue
to serve on the Boards of the Metropolitan Planning Council, The University of
Chicago - Harris School of Public Policy, The University of Wisconsin Real
Estate School and Children’s Memorial Hospital, at the request of such
entities.

 

•                                          Continue
to be the Company’s ambassador to various local business and community
organizations such as the Commercial Club and the Chicagoland Chamber of
Commerce.

 

•                                          Publicly
represent the Company through interviews, speeches and other public remarks,
orally and in writing, only upon prior approval of the C.E.O. of both the
opportunity and content of such representations.

 

•                                          Such
other services and duties as the C.E.O. shall reasonably request from time to
time.Exhibit 10.1

 

 

350 Campus Drive

Marlborough, MA 01752

T: 508.323.1010; F: 508.323.1111

 

January 6, 2005

 

VIA AIRBORNE EXPRESS

 

Dennis Connors

1500 North Crossing Dr.

Allen, TX 
75013

 

Re:          Addendum II to
Severance Agreement and General Release

 

Dear Dennis:

 

This letter constitutes Addendum II to your Severance Agreement and
General Release (“Agreement”) in accordance with Section 18 of the Agreement.  Under Section 3(c) of the Agreement, you are
entitled to (among other benefits) continuation of individual long-term
disability insurance (“LTD”) until the earlier of (i) December 31, 2006, or
(ii) the date upon which you become covered under another employer’s group
long-term disability insurance plan with comparable benefits and levels of
coverage.

 

Consistent with that provision, over the past several months 3Com has
used its best efforts to identify an insurer and facilitate your completion of
an application for individual LTD coverage. 
Pursuant to your discussions with Patti Hanna, 3Com’s Benefits Manager, your
application for individual LTD coverage was recently denied by the
insurer.  Further, based on our
discussions with the insurer and 3Com’s insurance broker, we have been advised
that it is unlikely that another insurer will approve your application for
individual LTD coverage based on your status as a former 3Com employee.  Therefore, 3Com has offered to provide you
with a monetary payment in the net amount of $20,000.00 in lieu of the
continuation of your LTD coverage.

 

By signing below and accepting the payment referenced above, you agree
to abandon your right to receive continuation of LTD coverage under the
Agreement and you release the Released Parties from any and all Claims (as
those capitalized terms are defined in Section 5 of the Agreement) arising from
or relating to your right to Company-paid LTD insurance coverage under Section
3(c) of the Agreement.  You and 3Com
hereby agree that nothing in this Addendum II modifies, terminates, supersedes
or otherwise impacts any other rights and obligations that you and 3Com have
under the Agreement.  Payment of the
amount referenced above will be made no later than fourteen (14) calendar days
after 3Com receives your original executed copy of this Addendum.

 

 

By signing below, you warrant and agree that you have carefully read
and understand the provisions of this Addendum II; that you have had sufficient
time to consider this Addendum II before signing it; that you are entering into
this Addendum II knowingly and voluntarily, intending that it will have binding
legal effect; and that you have been advised by 3Com to consult with an
attorney of your own choice and at your own expense concerning the terms of
this Addendum II prior to signing it. 
You further agree that Sections 8 (Tax Consequences), 11
(Confidentiality), 15 (Waiver), 16 (Costs), 17 (Governing Law and Venue), 18
(Amendments) and 19 (Counterparts) of the Agreement apply to this Addendum II
and are hereby incorporated into this Addendum II.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ Neal D. Goldman

  	
   

  
	
   

  	
   

  
	
   

  	
  Neal D. Goldman

  
	
   

  	
  Senior Vice President, Management Services,

  General Counsel and Secretary

  

 

 

I
hereby knowingly and voluntarily accept the terms and conditions of this
Addendum II in their entirety and without reservation.

 

 

	
  /s/
  Dennis Connors

  	
   

  
	
  Dennis
  Connors

  
	
   

  
	
  January
  10, 2005

  	
   

  
	
  Date

  

 

2

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