Document:

<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

                             EFFECTIVE MARCH 1, 2002

                               COPYRIGHT (C) 2001
            BY CLARK/BARDES CONSULTING - COMPENSATION RESOURCE GROUP,
                   A DIVISION OF CLARK/BARDES CONSULTING, INC.
                               ALL RIGHTS RESERVED

<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                          PAGE
                                                                                                          ----
<S>          <C>                                                                                           <C>
PURPOSE      ...............................................................................................1

ARTICLE 1    DEFINITIONS....................................................................................1

ARTICLE 2    SELECTION, ENROLLMENT, ELIGIBILITY.............................................................4

     2.1     SELECTION BY COMPENSATION COMMITTEE............................................................4
     2.2     ENROLLMENT REQUIREMENTS........................................................................4
     2.3     ELIGIBILITY; COMMENCEMENT OF PARTICIPATION.....................................................4
     2.4     TERMINATION OF PARTICIPATION AND/OR DEFERRALS..................................................4

ARTICLE 3    DEFERRAL COMMITMENTS/ 401(k) RESTORATION MATCHING AMOUNTS/VESTING/CREDITING/TAXES..............5

     3.1     MINIMUM DEFERRALS..............................................................................5
     3.2     MAXIMUM DEFERRAL...............................................................................5
     3.3     ELECTION TO DEFER; EFFECT OF ELECTION FORM.....................................................5
     3.4     WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS.........................................................6
     3.5     ANNUAL 401(k) RESTORATION MATCHING AMOUNT......................................................6
     3.6     VESTING........................................................................................6
     3.7     CREDITING/DEBITING OF ACCOUNT BALANCES.........................................................6
     3.8     FICA AND OTHER TAXES...........................................................................8

ARTICLE 4    SHORT-TERM PAYOUT; WITHDRAWAL ELECTION.........................................................8

     4.1     SHORT-TERM PAYOUT..............................................................................8
     4.2     OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM.................................................9
     4.3     WITHDRAWAL ELECTION............................................................................9

ARTICLE 5    RETIREMENT BENEFIT.............................................................................9

     5.1     RETIREMENT BENEFIT.............................................................................9
     5.2     PAYMENT OF RETIREMENT BENEFIT..................................................................9
     5.3     DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT................................................9

ARTICLE 6    PRE-RETIREMENT SURVIVOR BENEFIT...............................................................10

     6.1     PRE-RETIREMENT SURVIVOR BENEFIT...............................................................10
     6.2     PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT....................................................10

ARTICLE 7    TERMINATION BENEFIT...........................................................................10
</Table>

                                       -i-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

<Table>
<S>          <C>                                                                                           <C>
     7.1     TERMINATION BENEFIT...........................................................................10
     7.2     PAYMENT OF TERMINATION BENEFIT................................................................10

ARTICLE 8    BENEFICIARY DESIGNATION.......................................................................10

     8.1     BENEFICIARY...................................................................................10
     8.2     BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT..............................................10
     8.3     ACKNOWLEDGEMENT...............................................................................11
     8.4     NO BENEFICIARY DESIGNATION....................................................................11
     8.5     DOUBT AS TO BENEFICIARY.......................................................................11
     8.6     DISCHARGE OF OBLIGATIONS......................................................................11

ARTICLE 9    LEAVE OF ABSENCE..............................................................................11

     9.1     PAID LEAVE OF ABSENCE.........................................................................11
     9.2     UNPAID LEAVE OF ABSENCE.......................................................................11

ARTICLE 10   TERMINATION, AMENDMENT OR MODIFICATION........................................................12

     10.1    TERMINATION...................................................................................12
     10.2    AMENDMENT.....................................................................................12
     10.3    DELEGATION TO BENEFITS COMMITTEE..............................................................12
     10.4    EFFECT OF PAYMENT.............................................................................12

ARTICLE 11   ADMINISTRATION................................................................................12

     11.1    BENEFITS COMMITTEE DUTIES.....................................................................12
     11.2    AGENTS........................................................................................13
     11.3    BINDING EFFECT OF DECISIONS...................................................................13
     11.4    INDEMNITY OF BENEFITS COMMITTEE...............................................................13
     11.5    SPONSOR INFORMATION...........................................................................13

ARTICLE 12   OTHER BENEFITS AND AGREEMENTS.................................................................13

     12.1    COORDINATION WITH OTHER BENEFITS..............................................................13

ARTICLE 13   CLAIMS PROCEDURES.............................................................................13

     13.1    PRESENTATION OF CLAIM.........................................................................13
     13.2    NOTIFICATION OF DECISION......................................................................14
     13.3    REVIEW OF A DENIED CLAIM......................................................................14
     13.4    DECISION ON REVIEW............................................................................14
     13.5    LEGAL ACTION..................................................................................15

ARTICLE 14   TRUST.........................................................................................15
</Table>

                                      -ii-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

<Table>
<S>          <C>                                                                                           <C>
     14.1    ESTABLISHMENT OF THE TRUST....................................................................15
     14.2    INTERRELATIONSHIP OF THE PLAN AND THE TRUST...................................................15
     14.3    DISTRIBUTIONS FROM THE TRUST..................................................................15

ARTICLE 15   MISCELLANEOUS.................................................................................15

     15.1    STATUS OF PLAN................................................................................15
     15.2    UNSECURED GENERAL CREDITOR....................................................................15
     15.3    SPONSOR'S LIABILITY...........................................................................15
     15.4    NONASSIGNABILITY..............................................................................15
     15.5    NOT A CONTRACT OF EMPLOYMENT..................................................................16
     15.6    FURNISHING INFORMATION........................................................................16
     15.7    TERMS.........................................................................................16
     15.8    CAPTIONS......................................................................................16
     15.9    GOVERNING LAW.................................................................................16
     15.10   NOTICE........................................................................................16
     15.11   SUCCESSORS....................................................................................17
     15.12   SPOUSE'S INTEREST.............................................................................17
     15.13   VALIDITY......................................................................................17
     15.14   INCOMPETENT...................................................................................17
     15.15   COURT ORDER...................................................................................17
     15.16   DISTRIBUTION IN THE EVENT OF TAXATION.........................................................17
     15.17   INSURANCE.....................................................................................18
</Table>

                                      -iii-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

                                BOSTON PROPERTIES
                           DEFERRED COMPENSATION PLAN
                             Effective March 1, 2002

                                     PURPOSE

          The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees who contribute materially to
the continued growth, development and future business success of Boston
Properties Limited Partnership. This Plan shall be unfunded for tax purposes and
for purposes of Title I of ERISA.

                                    ARTICLE 1
                                   DEFINITIONS

          For the purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the following indicated
meanings:

1.1       "Account Balance" shall mean, with respect to a Participant, a credit
          on the records of the Sponsor equal to the sum of (i) the Deferral
          Account balance and (ii) the 401(k) Restoration Matching Account
          balance. The Account Balance, and each other specified account
          balance, shall be a bookkeeping entry only and shall be utilized
          solely as a device for the measurement and determination of the
          amounts to be paid to a Participant, or his or her designated
          Beneficiary, pursuant to this Plan.

1.2       "Annual Bonus" shall mean any compensation, in addition to Base Annual
          Salary, payable during the Plan Year to a Participant as an Employee
          under the Sponsor's annual bonus and cash incentive plans, excluding
          stock options and restricted stock, which the Benefits Committee, in
          its sole discretion, determines to be eligible for deferral under this
          Plan.

1.3       "Annual Deferral Amount" shall mean that portion of a Participant's
          Base Annual Salary, Annual Bonus and/or LTIP Bonus that a Participant
          defers in accordance with Article 3 for any one Plan Year. In the
          event of a Participant's Retirement, death or a Termination of
          Employment prior to the end of a Plan Year, such year's Annual
          Deferral Amount shall be the actual amount withheld prior to such
          event.

1.4       "Annual 401(k) Restoration Matching Amount" for any one Plan Year
          shall be the amount determined in accordance with Section 3.5.

1.5       "Annual Installment Method" shall be an annual installment payment
          over the number of years selected by the Participant in accordance
          with this Plan, calculated as follows: (i) for the first annual
          installment, the Account Balance of the Participant shall be
          calculated as of the close of business on or around the last business
          day of the Plan Year in which the Participant Retires and (ii) for
          remaining annual installments, the Account Balance of the Participant
          shall be calculated on every applicable anniversary of the last
          business day of the Plan Year in which the Participant Retired. The
          annual installment shall be calculated by multiplying this balance by
          a fraction, the numerator of which is one and the denominator of which
          is the remaining number of annual

                                       -1-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          payments due the Participant. By way of example, if the Participant
          elects a ten (10) year Annual Installment Method, the first payment
          shall be 1/10 of the Account Balance, calculated as described in this
          definition. The following year, the payment shall be 1/9 of the
          Account Balance, calculated as described in this definition. The first
          annual installment payment shall be paid no later than fifteen (15)
          days after the last day of the Plan Year in which the Participant
          Retires. Remaining annual installments shall be paid no later than
          fifteen (15) days after the last day of the applicable Plan Year.

1.6       "Base Annual Salary" shall mean the annual cash compensation included
          on the Federal Income Tax Form W-2 for such calendar year, excluding
          bonuses, commissions, overtime, fringe benefits, stock options,
          relocation expenses, incentive payments, non-monetary awards,
          directors fees and other fees, and automobile and other allowances
          paid to a Participant for employment services rendered (whether or not
          such allowances are included in the Employee's gross income). Base
          Annual Salary shall be calculated before reduction for compensation
          voluntarily deferred or contributed by the Participant pursuant to all
          qualified or non-qualified plans of the Sponsor and shall be
          calculated to include amounts not otherwise included in the
          Participant's gross income under Code Sections 125, 132(f), 402(e)(3),
          402(h), or 403(b) pursuant to plans established by the Sponsor;
          provided, however, that all such amounts will be included in
          compensation only to the extent that had there been no such plan, the
          amount would have been payable in cash to the Employee.

1.7       "Beneficiary" shall mean one or more persons, trusts, estates or other
          entities, designated in accordance with Article 8, that are entitled
          to receive benefits under this Plan upon the death of a Participant.

1.8       "Beneficiary Designation Form" shall mean the form established from
          time to time by the Benefits Committee that a Participant completes,
          signs and returns to the Benefits Committee to designate one or more
          Beneficiaries.

1.9       "Benefits Committee" shall mean the committee described in Article 11.

1.10      "Claimant" shall have the meaning set forth in Section 13.1.

1.11      "Code" shall mean the Internal Revenue Code of 1986, as it may be
          amended from time to time.

1.12      "Compensation Committee" shall mean the Compensation Committee of the
          Board of Directors of Boston Properties, Inc.

1.13      "Deferral Account" shall mean (i) the sum of all of a Participant's
          Annual Deferral Amounts, plus (ii) amounts credited in accordance with
          all the applicable crediting and debiting provisions of this Plan that
          relate to the Participant's Deferral Account, less (iii) all
          distributions made to the Participant or his or her Beneficiary
          pursuant to this Plan that relate to his or her Deferral Account.

1.14      "Election Form" shall mean the form established from time to time by
          the Benefits Committee that a Participant completes, signs and returns
          to the Benefits Committee to make an election under the Plan.

                                       -2-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

1.15      "Employee" shall mean a person who is an employee of the Sponsor or an
          affiliate of the Sponsor.

1.16      "ERISA" shall mean the Employee Retirement Income Security Act of
          1974, as it may be amended from time to time.

1.17      "First Plan Year" shall mean the period beginning March 1, 2002 and
          ending December 31, 2002.

1.18      "401(k) Plan" shall be the Boston Properties Retirement Savings Plan
          as in effect from time to time.

1.19      "401(k) Restoration Matching Account" shall mean (i) the sum of all of
          a Participant's Annual 401(k) Restoration Matching Amounts, plus (ii)
          amounts credited in accordance with all the applicable crediting and
          debiting provisions of this Plan that relate to the Participant's
          401(k) Restoration Matching Account, less (iii) all distributions made
          to the Participant or his or her Beneficiary pursuant to this Plan
          that relate to the Participant's 401(k) Restoration Matching Account.

1.20      "LTIP Bonus" shall mean any compensation payable to a Participant as
          an Employee under the Sponsor's long-term incentive plan or any other
          long-term incentive arrangement designated by the Benefits Committee
          as eligible for deferral under this Plan.

1.21      "Participant" shall mean any Employee (i) who is selected to
          participate in the Plan, (ii) who elects to participate in the Plan,
          (iii) who signs an Election Form and a Beneficiary Designation Form,
          (iv) whose signed Election Form and Beneficiary Designation Form are
          accepted by the Benefits Committee, (v) who commences participation in
          the Plan, and (vi) whose participation in the Plan has not terminated.
          A spouse or former spouse of a Participant shall not be treated as a
          Participant in the Plan or have an account balance under the Plan,
          even if he or she has an interest in the Participant's benefits under
          the Plan as a result of applicable law or property settlements
          resulting from legal separation or divorce.

1.22      "Plan" shall mean the Boston Properties Deferred Compensation Plan,
          which shall be evidenced by this instrument, as it may be amended from
          time to time.

1.23      "Plan Year" shall, except for the First Plan Year, mean a period
          beginning on January 1 of each calendar year and continuing through
          December 31 of such calendar year.

1.24      "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
          Article 6.

1.25      "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
          Employee, severance from employment with the Sponsor (or any affiliate
          thereof) for any reason other than a leave of absence or death, on or
          after the earlier of the attainment of (a) age sixty-five (65) or (b)
          age fifty-five (55) with seven (7) Years of Service.

1.26      "Retirement Benefit" shall mean the benefit set forth in Article 5.

1.27      "Short-Term Payout" shall mean the payout set forth in Section 4.1.

1.29      "Sponsor" shall mean Boston Properties Limited Partnership, a Delaware
          limited partnership, and any successor to all or substantially all of
          the Sponsor's assets or business.

                                       -3-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

1.30      "Termination Benefit" shall mean the benefit set forth in Article 7.

1.31      "Termination of Employment" shall mean the severing of employment with
          the Sponsor voluntarily or involuntarily, for any reason other than
          Retirement, death or an authorized leave of absence.

1.32      "Trust" shall mean one or more trusts, if any, established by the
          Sponsor in its sole discretion.

1.33      "Years of Service" shall mean the total number of full years in which
          a Participant has been employed by the Sponsor (or any affiliate
          thereof). For purposes of this definition, a year of employment shall
          be a 365 day period (or 366 day period in the case of a leap year)
          that, for the first year of employment, commences on the Employee's
          date of hiring and that, for any subsequent year, commences on an
          anniversary of that hiring date. The Benefits Committee shall make a
          determination as to whether any partial year of employment shall be
          counted as a Year of Service.

                                    ARTICLE 2
                       SELECTION, ENROLLMENT, ELIGIBILITY

2.1       SELECTION BY COMPENSATION COMMITTEE. Participation in the Plan shall
          be limited to a select group of management and highly compensated
          Employees of the Sponsor, as determined by the Compensation Committee
          in its sole discretion. From that group, the Compensation Committee
          shall select, in its sole discretion, Employees to participate in the
          Plan.

2.2       ENROLLMENT REQUIREMENTS. As a condition to participation, each
          selected Employee shall complete, execute and return to the Benefits
          Committee an Election Form and a Beneficiary Designation Form, all
          within thirty (30) days after he or she is selected to participate in
          the Plan. In addition, the Benefits Committee shall establish from
          time to time such other enrollment requirements as it determines in
          its sole discretion are necessary.

2.3       ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee
          selected to participate in the Plan has met all enrollment
          requirements set forth in this Plan and required by the Benefits
          Committee, including returning all required documents to the Benefits
          Committee within the specified time period, that Employee shall
          commence participation in the Plan on the first day of the month
          following the month in which the Employee completes all enrollment
          requirements. If an Employee fails to meet all such requirements
          within the period required, in accordance with Section 2.2, that
          Employee shall not be eligible to participate in the Plan until the
          first day of the Plan Year following the delivery to and acceptance by
          the Benefits Committee of the required documents.

2.4       TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Compensation
          Committee determines in good faith that a Participant no longer
          qualifies as a member of a select group of management or highly
          compensated employees, as membership in such group is determined in
          accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the
          Compensation Committee shall have the right, in its sole discretion,
          to (i) terminate any deferral election the Participant has made for
          the remainder of the Plan Year in which the Participant's membership
          status changes, (ii) prevent the

                                       -4-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Participant from making future deferral elections and/or (iii)
          immediately distribute the Participant's then Account Balance as a
          Termination Benefit and terminate the Participant's participation in
          the Plan.

                                    ARTICLE 3
                DEFERRAL COMMITMENTS/ 401(k) RESTORATION MATCHING
                        AMOUNTS/VESTING/CREDITING/TAXES

3.1       MINIMUM DEFERRALS.

          (a)  ANNUAL DEFERRAL AMOUNT. For each Plan Year, a Participant may
               elect to defer, as his or her Annual Deferral Amount, an
               aggregate minimum of $2,000 of Base Annual Salary, Annual Bonus
               and/or LTIP Bonus. If an election is made for less than stated
               minimum amounts, or if no election is made, the amount deferred
               shall be zero.

          (b)  SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant
               first becomes a Participant after the first day of a Plan Year,
               the minimum Annual Deferral Amount shall be an amount equal to
               the minimum set forth above, multiplied by a fraction, the
               numerator of which is the number of complete months remaining in
               the Plan Year and the denominator of which is 12.

3.2       MAXIMUM DEFERRAL.

          (a)  BASE ANNUAL SALARY, ANNUAL BONUS AND/OR LTIP BONUS. For each Plan
               Year, a Participant may elect to defer, as his or her Annual
               Deferral Amount, Base Annual Salary, Annual Bonus and/or LTIP
               Bonus up to the maximum percentages established by the Benefits
               Committee from time to time. For the First Plan Year, the maximum
               percentage for Base Annual Salary shall be twenty percent (20%)
               and no deferral shall be permitted from Annual Bonus or LTIP
               Bonus. The Benefits Committee may impose additional limitations
               on any Participant's Annual Deferral Amount in any Plan Year in
               which the Benefits Committee determines, in its sole discretion,
               that such additional limitation is in the best interests of the
               Sponsor.

          (b)  SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant
               first becomes a Participant after the first day of a Plan Year,
               the maximum Annual Deferral Amount (i) with respect to Base
               Annual Salary shall be limited to the amount of compensation not
               yet earned by the Participant as of the date the Participant
               submits an Election Form to the Benefits Committee for
               acceptance, and (ii) with respect to Annual Bonus and/or LTIP
               Bonus shall be limited to those amounts deemed eligible for
               deferral, in the sole discretion of the Benefits Committee.

3.3       ELECTION TO DEFER; EFFECT OF ELECTION FORM.

          (a)  FIRST PLAN YEAR. In connection with a Participant's commencement
               of participation in the Plan, the Participant shall make an
               irrevocable deferral election for the Plan Year in which the
               Participant commences participation in the Plan, along with such
               other elections as the Benefits Committee deems necessary or
               desirable under the Plan. For

                                       -5-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

               these elections to be valid, the Election Form must be completed
               and signed by the Participant, timely delivered to the Benefits
               Committee (in accordance with Section 2.2 above) and accepted by
               the Benefits Committee.

          (b)  SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an
               irrevocable deferral election for that Plan Year, and such other
               elections as the Benefits Committee deems necessary or desirable
               under the Plan, shall be made by timely delivering to the
               Benefits Committee, in accordance with its rules and procedures,
               before the end of the Plan Year preceding the Plan Year for which
               the election is made, a new Election Form. If no such Election
               Form is timely delivered for a Plan Year, the Annual Deferral
               Amount shall be zero for that Plan Year.

3.4       WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
          Annual Salary portion of the Annual Deferral Amount shall be withheld
          from each regularly scheduled Base Annual Salary payroll in equal
          amounts, as adjusted from time to time for increases and decreases in
          Base Annual Salary to the extent the Annual Deferral Amount is
          denominated as a percentage of Base Annual Salary. The Annual Bonus
          portion of the Annual Deferral Amount shall be withheld at the time
          the Annual Bonus and/or LTIP Bonus are or otherwise would be paid to
          the Participant, whether or not this occurs during the Plan Year
          itself.

3.5       ANNUAL 401(k) RESTORATION MATCHING AMOUNT. For each Plan Year during
          which a Participant participates in the Sponsor's 401(k) Plan and the
          Sponsor makes a matching contribution to such 401(k) Plan, the Sponsor
          shall credit a Participant's Annual 401(k) Restoration Matching
          Account under this Plan with an amount equal to the difference between
          (i) the amount the Sponsor contributed to the 401(k) Plan on behalf of
          such Participant during the Plan Year, and (ii) the amount that the
          Sponsor would have contributed to the 401(k) Plan on behalf of such
          Participant during such plan year had any deferrals of Base Annual
          Salary under this Plan been considered compensation under the 401(k)
          Plan, subject to the compensation limit under Section 401(a)(17) of
          the Code. The amount credited as a Participant's Annual 401(k)
          Restoration Matching Amount for any Plan Year under this Section 3.5
          shall be credited to the Participant's 401(k) Restoration Matching
          Account on a date or dates to be determined by the Benefits Committee
          in its sole discretion.

3.6       VESTING. A Participant shall at all times be 100% vested in his or her
          Deferral Account and 401(k) Restoration Matching Account.

3.7       CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and
          subject to, the rules and procedures that are established from time to
          time by the Benefits Committee, in its sole discretion, amounts shall
          be credited or debited to a Participant's Account Balance in
          accordance with the following rules:

          (a)  MEASUREMENT FUNDS. The Participant may elect one or more of the
               measurement funds (the "Measurement Funds"), based on certain
               mutual funds or other investment indices, for the purpose of
               crediting or debiting additional amounts to his or her Account
               Balance. At the beginning of each Plan Year, the Benefits
               Committee shall provide the Participant

                                       -6-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

               with a list of Measurement Funds available. As necessary, the
               Benefits Committee may, in its sole discretion, discontinue,
               substitute or add a Measurement Fund.

          (b)  ELECTION OF MEASUREMENT FUNDS. A Participant, in connection with
               his or her initial deferral election in accordance with Section
               3.3(a) above, shall elect, on the Election Form, one or more
               Measurement Fund(s) (as described in Section 3.7(a) above) to be
               used to determine the amounts to be credited or debited to his or
               her Account Balance. The Participant may (but is not required to)
               subsequently elect at any time, by submitting an Election Form
               (or other form of communication) to the Benefits Committee that
               is accepted by the Benefits Committee, to add or delete one or
               more Measurement Fund(s) to be used to determine the amounts to
               be credited or debited to his or her Account Balance, or to
               change the portion of his or her Account Balance allocated to
               each previously or newly elected Measurement Fund. If, in
               accordance with the previous sentence, an election is on any
               business day prior to 4:00 p.m. Eastern Standard Time, it shall
               be effective as of the day on which such election is made and
               shall continue thereafter for each subsequent day in which the
               Participant participates in the Plan, unless changed in
               accordance with this Section 3.7(b). If such election is made on
               any business day after 4:00 p.m. Eastern Standard Time or on any
               non-business day, it shall be effective as of the first business
               day following the day on which such election is made and shall
               continue thereafter for each subsequent day in which the
               Participant participates in the Plan, unless changed in
               accordance with this Section 3.7(b).

          (c)  PROPORTIONATE ALLOCATION. In making any election described in
               Section 3.7(b) above, the Participant shall specify on the
               Election Form (or such other form of communication acceptable to
               the Committee), in increments of one percent (1%), the percentage
               of his or her Account Balance to be allocated to a Measurement
               Fund (as if the Participant was making an investment in that
               Measurement Fund with that portion of his or her Account
               Balance).

          (d)  CREDITING OR DEBITING METHOD. The performance of each elected
               Measurement Fund (either positive or negative) will be determined
               by the Benefits Committee, in its reasonable discretion, based on
               the performance of the Measurement Funds themselves. A
               Participant's Account Balance shall be credited or debited on a
               daily basis, if possible, based on the performance of each
               Measurement Fund selected by the Participant, SUCH PERFORMANCE
               BEING DETERMINED BY THE BENEFITS COMMITTEE IN ITS SOLE
               DISCRETION.

          (e)  NO ACTUAL INVESTMENT. Notwithstanding any other provision of this
               Plan that may be interpreted to the contrary, the Measurement
               Funds are to be used for measurement purposes only, and a
               Participant's election of any such Measurement Fund, the
               allocation to his or her Account Balance thereto, the calculation
               of additional amounts and the crediting or debiting of such
               amounts to a Participant's Account Balance SHALL NOT be
               considered or construed in any manner as an actual investment of
               his or her Account Balance in any such Measurement Fund. In the
               event that the Sponsor or the Trustee (as that term is defined in
               the Trust), in its own discretion, decides to invest in any of
               the investments on which the Measurement Funds are based, no
               Participant shall have any

                                       -7-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

               rights in or to such investments themselves. Without limiting the
               foregoing, a Participant's Account Balance shall at all times be
               a bookkeeping entry only and shall not represent any investment
               made on his or her behalf by the Sponsor or the Trust; the
               Participant shall at all times remain an unsecured creditor of
               the Sponsor.

3.8       FICA AND OTHER TAXES3.

          (a)  ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an Annual
               Deferral Amount is being withheld from a Participant, the Sponsor
               shall withhold from that portion of the Participant's Base Annual
               Salary, Annual Bonus and/or LTIP Bonus that is not being
               deferred, in a manner determined by the Sponsor, the
               Participant's share of FICA and other employment taxes on such
               Annual Deferral Amount. If necessary, the Benefits Committee may
               reduce the Annual Deferral Amount in order to comply with this
               Section 3.8.

          (b)  401(k) RESTORATION MATCHING ACCOUNT. When the Sponsor credits an
               Annual 401(k) Restoration Matching Amount to a Participant's
               401(k) Restoration Matching Account, the Sponsor shall withhold
               from the Participant's Base Annual Salary, Annual Bonus and/or
               LTIP Bonus, as applicable, that is not deferred, in a manner
               determined by the Sponsor, the Participant's share of FICA and
               other employment taxes. If necessary, the Benefits Committee may
               reduce the Participant's Annual 401(k) Restoration Matching
               Amount in order to comply with this Section 3.8.

          (c)  DISTRIBUTIONS. The Sponsor, or the trustee of the Trust, shall
               withhold from any payments made to a Participant under this Plan
               all federal, state and local income, employment and other taxes
               required to be withheld by the Sponsor, or the trustee of the
               Trust, in connection with such payments, in amounts and in a
               manner to be determined in the sole discretion of the Sponsor and
               the trustee of the Trust.

                                    ARTICLE 4
                     SHORT-TERM PAYOUT; WITHDRAWAL ELECTION

4.1       SHORT-TERM PAYOUT. In connection with each election to defer an Annual
          Deferral Amount, a Participant may irrevocably elect to receive a
          future "Short-Term Payout" from the Plan with respect to all or a
          portion of such Annual Deferral Amount. The Short-Term Payout shall be
          a lump sum payment in an amount that is equal to the portion of the
          Annual Deferral Amount the Participant elected to have distributed as
          a Short-Term Payout plus amounts credited or debited in the manner
          provided in Section 3.7 above on that amount, calculated as of the
          close of business on or around the date on which the Short-Term Payout
          becomes payable, as determined by the Benefits Committee in its sole
          discretion. Subject to the other terms and conditions of this Plan,
          each Short-Term Payout elected shall be paid out during a fifteen (15)
          day period commencing immediately after the first day of any Plan Year
          designated by the Participant. The Plan Year designated by the
          Participant must be at least five Plan Years after the end of the Plan
          Year in which the Annual Deferral Amount is actually deferred. By way
          of example, if a five year Short-Term Payout is elected for Annual
          Deferral Amounts that are deferred in the Plan

                                       -8-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Year commencing January 1, 2002, the five year Short-Term Payout would
          become payable during a fifteen (15) day period commencing January 1,
          2008.

4.2       OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur
          that triggers a benefit under Article 5, 6, or 7, any Annual Deferral
          Amount, plus amounts credited or debited thereon, that is subject to a
          Short-Term Payout election under Section 4.1 shall not be paid in
          accordance with Section 4.1 but shall be paid in accordance with the
          other applicable Article.

4.3       WITHDRAWAL ELECTION. A Participant may elect, at any time, to withdraw
          all or any portion of his or her Account Balance. For purposes of this
          Section 4.3, the value of a Participant's Account Balance shall be
          calculated as of the close of business on or around the date the
          Participant's benefit distribution is processed, as determined by the
          Benefits Committee, in its sole discretion, less a withdrawal penalty
          equal to 10% of such amount (the net amount shall be referred to as
          the "Withdrawal Amount"). This election can be made at any time,
          before or after Retirement, death or Termination of Employment, and
          whether or not the Participant (or Beneficiary) is in the process of
          being paid pursuant to an installment payment schedule. The
          Participant (or his or her Beneficiary) shall make this election by
          giving the Benefits Committee advance written notice of the election
          in a form determined from time to time by the Benefits Committee. The
          Participant (or his or her Beneficiary) shall be paid the Withdrawal
          Amount within fifteen (15) days of his or her election. Once the
          Withdrawal Amount is paid, the Participant's participation in the Plan
          shall be suspended for the remainder of the Plan Year in which the
          withdrawal is elected and for one (1) full Plan Year thereafter.

                                    ARTICLE 5
                               RETIREMENT BENEFIT

5.1       RETIREMENT BENEFIT. A Participant who Retires shall receive, as a
          Retirement Benefit, his or her Account Balance calculated as of the
          close of business on or around the date the Participant's benefit
          distribution is processed, as determined by the Benefits Committee in
          its sole discretion.

5.2       PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his
          or her commencement of participation in the Plan, shall elect on an
          Election Form to receive the Retirement Benefit in a lump sum or
          pursuant to an Annual Installment Method of up to 15 years. The
          Participant may change his or her election to an allowable alternative
          payout period by submitting a new Election Form to the Benefits
          Committee, provided that any such Election Form is submitted to and
          accepted by the Benefits Committee in its sole discretion at least
          thirteen (13) months prior to the Participant's Retirement. The
          Election Form most recently accepted by the Benefits Committee shall
          govern the payout of the Retirement Benefit. If a Participant does not
          make any election with respect to the payment of the Retirement
          Benefit, or if the Participant's Account Balance on the date of the
          Participant's Retirement is less than $25,000, then such benefit shall
          be payable in a lump sum. The lump sum payment shall be made, or
          installment payments shall commence, no later than fifteen (15) days
          after the last day of the Plan Year in which the Participant Retires.

5.3       DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
          after Retirement but before the Retirement Benefit is paid in full,
          the Participant's Beneficiary shall receive a lump

                                       -9-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          sum payment that is equal to the Participant's unpaid remaining
          Account Balance calculated as of the close of business on or around
          the date the benefit distribution is processed, as determined by the
          Benefits Committee in its sole discretion. The lump sum payment shall
          be made no later than fifteen (15) days after the Benefits Committee
          is provided with proof that is satisfactory to the Benefits Committee
          of the Participant's death.

                                    ARTICLE 6
                         PRE-RETIREMENT SURVIVOR BENEFIT

6.1       PRE-RETIREMENT SURVIVOR BENEFIT. If the Participant dies before he or
          she Retires or experiences a Termination of Employment, the
          Participant's Beneficiary shall receive a Pre-Retirement Survivor
          Benefit equal to the Participant's Account Balance calculated as of
          the close of business on or around the date the benefit distribution
          is processed, as determined by the Benefits Committee in its sole
          discretion.

6.2       PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. The Pre-Retirement
          Survivor Benefit shall be paid to the Participant's Beneficiary in a
          lump sum payment no later than fifteen (15) days after the Benefits
          Committee is provided with proof that is satisfactory to the Benefits
          Committee of the Participant's death.

                                    ARTICLE 7
                               TERMINATION BENEFIT

7.1       TERMINATION BENEFIT. If a Participant experiences a Termination of
          Employment prior to his or her Retirement or death, the Participant
          shall receive a Termination Benefit, which shall be equal to the
          Participant's Account Balance calculated as of the close of business
          on or around the date the benefit distribution is processed, as
          determined by the Benefits Committee in its sole discretion.

7.2       PAYMENT OF TERMINATION BENEFIT. The Participant shall receive his or
          her Termination Benefit in a lump sum payment no later than fifteen
          (15) days after the last day of the Plan Year in which the Participant
          experiences the Termination of Employment.

                                    ARTICLE 8
                             BENEFICIARY DESIGNATION

8.1       BENEFICIARY. Each Participant shall have the right, at any time, to
          designate his or her Beneficiary(ies) (both primary as well as
          contingent) to receive any benefits payable under the Plan to a
          beneficiary upon the death of a Participant. The Beneficiary
          designated under this Plan may be the same as or different from the
          Beneficiary designation under any other plan of the Sponsor in which
          the Participant participates.

8.2       BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
          designate his or her Beneficiary by completing and signing the
          Beneficiary Designation Form, and returning it to the

                                      -10-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Benefits Committee or its designated agent. A Participant shall have
          the right to change a Beneficiary by completing, signing and otherwise
          complying with the terms of the Beneficiary Designation Form and the
          Benefits Committee's rules and procedures, as in effect from time to
          time. If the Participant resides in a community property state and
          names someone other than his or her spouse as a Beneficiary, a spousal
          consent, in the form designated by the Benefits Committee, must be
          signed by that Participant's spouse and returned to the Benefits
          Committee. Upon the acceptance by the Benefits Committee of a new
          Beneficiary Designation Form, all Beneficiary designations previously
          filed shall be canceled. The Benefits Committee shall be entitled to
          rely on the last Beneficiary Designation Form filed by the Participant
          and accepted by the Benefits Committee prior to his or her death.

8.3       ACKNOWLEDGMENT. No designation or change in designation of a
          Beneficiary shall be effective until received and acknowledged in
          writing by the Benefits Committee or its designated agent.

8.4       NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
          Beneficiary as provided in Sections 8.1, 8.2 and 8.3 above or, if all
          designated Beneficiaries predecease the Participant or die prior to
          complete distribution of the Participant's benefits, then the
          Participant's designated Beneficiary shall be deemed to be his or her
          surviving spouse. If the Participant has no surviving spouse, the
          benefits remaining under the Plan to be paid to a Beneficiary shall be
          payable to the executor or personal representative of the
          Participant's estate.

8.5       DOUBT AS TO BENEFICIARY. If the Benefits Committee has any doubt as to
          the proper Beneficiary to receive payments pursuant to this Plan, the
          Benefits Committee shall have the right, exercisable in its
          discretion, to cause the Sponsor to withhold such payments until this
          matter is resolved to the Benefits Committee's satisfaction.

8.6       DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
          Beneficiary shall fully and completely discharge the Sponsor and the
          Benefits Committee from all further obligations under this Plan with
          respect to the Participant, and that Participant's participation in
          the Plan shall terminate upon such full payment of benefits.

                                    ARTICLE 9
                                LEAVE OF ABSENCE

9.1       PAID LEAVE OF ABSENCE. If a Participant is authorized by the Sponsor
          for any reason to take a paid leave of absence from the employment of
          the Sponsor, the Participant shall continue to be considered employed
          by the Sponsor and the Annual Deferral Amount shall continue to be
          withheld during such paid leave of absence in accordance with Section
          3.3.

9.2       UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the Sponsor
          for any reason to take an unpaid leave of absence from the employment
          of the Sponsor, the Participant shall continue to be considered
          employed by the Sponsor and the Participant shall be excused from
          making deferrals until the earlier of the date the leave of absence
          expires or the Participant returns to a paid employment status. Upon
          such expiration or return, deferrals shall resume for the remaining
          portion of the Plan Year in which the expiration or return occurs,
          based on the deferral election, if any, made for that Plan Year. In
          the event of a deferral of a fixed dollar amount from Base

                                      -11-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Annual Salary, the Committee may make appropriate adjustments to
          reflect the period of unpaid leave. If no election was made for that
          Plan Year, no deferral shall be withheld.

                                   ARTICLE 10
                     TERMINATION, AMENDMENT OR MODIFICATION

10.1      TERMINATION. Although the Sponsor anticipates that it will continue
          the Plan for an indefinite period of time, there is no guarantee that
          the Sponsor will continue the Plan or will not terminate the Plan at
          any time in the future. Accordingly, the Sponsor reserves the right to
          discontinue its sponsorship of the Plan and/or to terminate the Plan
          at any time with respect to any or all of its participating Employees.
          Upon the termination of the Plan with respect to the Sponsor, the
          affected Participants' participation in the Plan shall terminate and
          their Account Balances shall be paid in a lump sum notwithstanding any
          elections made by the Participants. The termination of the Plan shall
          not adversely affect any Participant or Beneficiary who has become
          entitled to the payment of any benefits under the Plan as of the date
          of termination; provided however, that the Sponsor shall have the
          right to accelerate installment payments without a premium or
          prepayment penalty by paying the Account Balance in a lump sum.

10.2      AMENDMENT. The Sponsor may, at any time, amend or modify the Plan in
          whole or in part; provided, however, that no amendment or modification
          shall be effective to decrease or restrict the value of a
          Participant's Account Balance in existence at the time the amendment
          or modification is made, calculated as if the Participant had
          experienced a Termination of Employment as of the effective date of
          the amendment or modification or, if the amendment or modification
          occurs after the date upon which the Participant was eligible to
          Retire, the Participant had Retired as of the effective date of the
          amendment or modification. The amendment or modification of the Plan
          shall not affect any Participant or Beneficiary who has become
          entitled to the payment of benefits under the Plan as of the date of
          the amendment or modification; provided, however, that the Sponsor
          shall have the right to accelerate installment payments by paying the
          Account Balance in a lump sum or pursuant to an Annual Installment
          Method using fewer years.

10.3      DELEGATION TO BENEFITS COMMITTEE. The Sponsor has delegated its rights
          to act under Sections 10.1 and 10.2 above to the Benefits Committee
          and the Benefits Committee shall have the full power to take action
          under Sections 10.1 and 10.2.

10.4      EFFECT OF PAYMENT. The full payment of the applicable benefit under
          Articles 4, 5, 6, or 7 of the Plan shall completely discharge all
          obligations to a Participant and his or her designated Beneficiaries
          under this Plan and the Participant's participation in the Plan shall
          terminate.

                                   ARTICLE 11
                                 ADMINISTRATION

11.1      BENEFITS COMMITTEE DUTIES. Except as otherwise provided in this
          Article 11, this Plan shall be administered by the Benefits Committee
          of the Sponsor. The Benefits Committee shall also have the discretion
          and authority to (i) make, amend, interpret, and enforce all
          appropriate rules and

                                      -12-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          regulations for the administration of this Plan and (ii) decide or
          resolve any and all questions including interpretations of this Plan,
          as may arise in connection with the Plan. Any individual serving on
          the Benefits Committee who is a Participant shall not vote or act on
          any matter relating solely to himself or herself. When making a
          determination or calculation, the Benefits Committee shall be entitled
          to rely on information furnished by a Participant or the Sponsor.

11.2      AGENTS. In the administration of this Plan, the Benefits Committee
          may, from time to time, employ agents and delegate to them such
          administrative duties as it sees fit (including acting through a duly
          appointed representative) and may from time to time consult with
          counsel who may be counsel to the Sponsor.

11.3      BINDING EFFECT OF DECISIONS. The decision or action of the Benefits
          Committee with respect to any question arising out of or in connection
          with the administration, interpretation and application of the Plan
          and the rules and regulations promulgated hereunder shall be final and
          conclusive and binding upon all persons having any interest in the
          Plan.

11.4      INDEMNITY OF BENEFITS COMMITTEE. The Sponsor shall indemnify and hold
          harmless the members of the Benefits Committee and any Employee to
          whom the duties of the Benefits Committee may be delegated against any
          and all claims, losses, damages, expenses or liabilities arising from
          any action or failure to act with respect to this Plan, except in the
          case of willful misconduct by the Benefits Committee, any of its
          members, or any such Employee.

11.5      SPONSOR INFORMATION. To enable the Benefits Committee to perform its
          functions, the Sponsor shall supply full and timely information to the
          Benefits Committee, as the case may be, on all matters relating to the
          compensation of its Participants, the date and circumstances of the
          Retirement, death or Termination of Employment of its Participants,
          and such other pertinent information as the Benefits Committee may
          reasonably require.

                                   ARTICLE 12
                          OTHER BENEFITS AND AGREEMENTS

12.1      COORDINATION WITH OTHER BENEFITS. The benefits provided for a
          Participant and Participant's Beneficiary under the Plan are in
          addition to any other benefits available to such Participant under any
          other plan or program for employees of the Sponsor. The Plan shall
          supplement and shall not supersede, modify or amend any other such
          plan or program except as may otherwise be expressly provided.

                                   ARTICLE 13
                                CLAIMS PROCEDURES

13.1      PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
          Participant (such Participant or Beneficiary being referred to below
          as a "Claimant") may deliver to the Benefits Committee a written claim
          for a determination with respect to the amounts distributable to such
          Claimant from the Plan. If such a claim relates to the contents of a
          notice received by the Claimant, the claim must be made within sixty
          (60) days after such notice was received by the

                                      -13-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Claimant. All other claims must be made within 180 days of the date on
          which the event that caused the claim to arise occurred. The claim
          must state with particularity the determination desired by the
          Claimant.

13.2      NOTIFICATION OF DECISION. The Benefits Committee shall consider a
          Claimant's claim within a reasonable time, and shall notify the
          Claimant in writing:

          (a)  that the Claimant's requested determination has been made, and
               that the claim has been allowed in full; or

          (b)  that the Benefits Committee has reached a conclusion contrary, in
               whole or in part, to the Claimant's requested determination, and
               such notice must set forth in a manner calculated to be
               understood by the Claimant:

               (i)    the specific reason(s) for the denial of the claim, or any
                      part of it;

               (ii)   specific reference(s) to pertinent provisions of the Plan
                      upon which such denial was based;

               (iii)  a description of any additional material or information
                      necessary for the Claimant to perfect the claim, and an
                      explanation of why such material or information is
                      necessary; and

               (iv)   an explanation of the claim review procedure set forth in
                      Section 13.3 below.

13.3      REVIEW OF A DENIED CLAIM. Within sixty (60) days after receiving a
          notice from the Benefits Committee that a claim has been denied, in
          whole or in part, a Claimant (or the Claimant's duly authorized
          representative) may file with the Benefits Committee a written request
          for a review of the denial of the claim. Thereafter, but not later
          than thirty (30) days after the review procedure began, the Claimant
          (or the Claimant's duly authorized representative):

          (a)  may review pertinent documents;

          (b)  may submit written comments or other documents; and/or

          (c)  may request a hearing, which the Benefits Committee, in its sole
               discretion, may grant.

13.4      DECISION ON REVIEW. The Benefits Committee shall render its decision
          on review promptly, and not later than sixty (60) days after the
          filing of a written request for review of the denial, unless a hearing
          is held or other special circumstances require additional time, in
          which case the Benefits Committee's decision must be rendered within
          120 days after such date. Such decision must be written in a manner
          calculated to be understood by the Claimant, and it must contain:

          (a)  specific reasons for the decision;

          (b)  specific reference(s) to the pertinent Plan provisions upon which
               the decision was based; and

          (c)  such other matters as the Benefits Committee deems relevant.

                                      -14-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

13.5      LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
          this Article 13 is a mandatory prerequisite to a Claimant's right to
          commence any legal action with respect to any claim for benefits under
          this Plan.

                                   ARTICLE 14
                                      TRUST

14.1      ESTABLISHMENT OF THE TRUST. In order to provide assets from which to
          fulfill the obligations of the Participants and their beneficiaries
          under the Plan, the Sponsor may establish a Trust by a trust agreement
          with a third party, the trustee, to which the Sponsor may, in its
          discretion, contribute cash or other property, including securities
          issued by the Sponsor, to provide for the benefit payments under the
          Plan.

14.2      INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the
          Plan shall govern the rights of a Participant to receive distributions
          pursuant to the Plan. The provisions of the Trust shall govern the
          rights of the Sponsor, Participants and the creditors of the Sponsor
          to the assets transferred to the Trust. The Sponsor shall at all times
          remain liable to carry out its obligations under the Plan.

14.3      DISTRIBUTIONS FROM THE TRUST. The Sponsor's obligations under the Plan
          may be satisfied with Trust assets distributed pursuant to the terms
          of the Trust, and any such distribution shall reduce the Sponsor's
          obligations under this Plan.

                                   ARTICLE 15
                                  MISCELLANEOUS

15.1      STATUS OF PLAN. The Plan is intended to be a plan that is not
          qualified within the meaning of Code Section 401(a) and that "is
          unfunded and is maintained by an employer primarily for the purpose of
          providing deferred compensation for a select group of management or
          highly compensated employees" within the meaning of ERISA Sections
          201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
          interpreted to the extent possible in a manner consistent with that
          intent.

15.2      UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
          heirs, successors and assigns shall have no legal or equitable rights,
          interests or claims in any property or assets of the Sponsor. For
          purposes of the payment of benefits under this Plan, any and all of
          the Sponsor's assets shall be, and remain, the general, unpledged
          unrestricted assets of the Sponsor. The Sponsor's obligation under the
          Plan shall be merely that of an unfunded and unsecured promise to pay
          money in the future.

15.3      SPONSOR'S LIABILITY. The Sponsor's liability for the payment of
          benefits shall be defined only by the Plan. The Sponsor shall have no
          obligation to a Participant under the Plan except as expressly
          provided in the Plan.

15.4      NONASSIGNABILITY. Neither a Participant nor any other person shall
          have any right to commute, sell, assign, transfer, pledge, anticipate,
          mortgage or otherwise encumber, transfer, hypothecate,

                                      -15-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          alienate or convey in advance of actual receipt, the amounts, if any,
          payable hereunder, or any part thereof, which are, and all rights to
          which are expressly declared to be, unassignable and non-transferable.
          No part of the amounts payable shall, prior to actual payment, be
          subject to seizure, attachment, garnishment or sequestration for the
          payment of any debts, judgments, alimony or separate maintenance owed
          by a Participant or any other person, be transferable by operation of
          law in the event of a Participant's or any other person's bankruptcy
          or insolvency or be transferable to a spouse as a result of a property
          settlement or otherwise.

15.5      NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
          shall not be deemed to constitute a contract of employment between the
          Sponsor and the Participant. Such employment is hereby acknowledged to
          be an "at will" employment relationship that can be terminated at any
          time for any reason, or no reason, with or without cause, and with or
          without notice, unless expressly provided in a written employment
          agreement. Nothing in this Plan shall be deemed to give a Participant
          the right to be retained in the service of the Sponsor, as an
          Employee, or to interfere with the right of the Sponsor to discipline
          or discharge the Participant at any time.

15.6      FURNISHING INFORMATION. A Participant or his or her Beneficiary will
          cooperate with the Benefits Committee by furnishing any and all
          information requested by the Benefits Committee and take such other
          actions as may be requested in order to facilitate the administration
          of the Plan and the payments of benefits hereunder, including but not
          limited to taking such physical examinations as the Benefits Committee
          may deem necessary.

15.7      TERMS. Whenever any words are used herein in the masculine, they shall
          be construed as though they were in the feminine in all cases where
          they would so apply; and whenever any words are used herein in the
          singular or in the plural, they shall be construed as though they were
          used in the plural or the singular, as the case may be, in all cases
          where they would so apply.

15.8      CAPTIONS. The captions of the articles, sections and paragraphs of
          this Plan are for convenience only and shall not control or affect the
          meaning or construction of any of its provisions.

15.9      GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
          construed and interpreted according to the internal laws of the
          Commonwealth of Massachusetts without regard to its conflicts of laws
          principles.

15.10     NOTICE. Any notice or filing required or permitted to be given to the
          Benefits Committee under this Plan shall be sufficient if in writing
          and hand-delivered, or sent by registered or certified mail, to the
          address below:

                       Boston Properties Benefits Committee
                       c/o Boston Properties, Inc.
                       111 Huntington Avenue, Suite 300
                       Boston, MA 02199-7610

          Such notice shall be deemed given as of the date of delivery or, if
          delivery is made by mail, as of the date shown on the postmark on the
          receipt for registration or certification.

                                      -16-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          Any notice or filing required or permitted to be given to a
          Participant under this Plan shall be sufficient if in writing and
          hand-delivered, or sent by mail, to the last known address of the
          Participant.

15.11     SUCCESSORS. The provisions of this Plan shall bind and inure to the
          benefit of the Sponsor and its successors and assigns and the
          Participant and the Participant's designated Beneficiaries.

15.12     SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
          of a Participant who has predeceased the Participant shall
          automatically pass to the Participant and shall not be transferable by
          such spouse in any manner, including but not limited to such spouse's
          will, nor shall such interest pass under the laws of intestate
          succession.

15.13     VALIDITY. In case any provision of this Plan shall be illegal or
          invalid for any reason, said illegality or invalidity shall not affect
          the remaining parts hereof, but this Plan shall be construed and
          enforced as if such illegal or invalid provision had never been
          inserted herein.

15.14     INCOMPETENT. If the Benefits Committee determines in its discretion
          that a benefit under this Plan is to be paid to a minor, a person
          declared incompetent or to a person incapable of handling the
          disposition of that person's property, the Benefits Committee may
          direct payment of such benefit to the guardian, legal representative
          or person having the care and custody of such minor, incompetent or
          incapable person. The Benefits Committee may require proof of
          minority, incompetence, incapacity or guardianship, as it may deem
          appropriate prior to distribution of the benefit. Any payment of a
          benefit shall be a payment for the account of the Participant and the
          Participant's Beneficiary, as the case may be, and shall be a complete
          discharge of any liability under the Plan for such payment amount.

15.15     COURT ORDER. The Benefits Committee is authorized to make any payments
          directed by court order in any action in which the Plan or the
          Benefits Committee has been named as a party. In addition, if a court
          determines that a spouse or former spouse of a Participant has an
          interest in the Participant's benefits under the Plan in connection
          with a property settlement or otherwise, the Benefits Committee, in
          its sole discretion, shall have the right, notwithstanding any
          election made by a Participant, to immediately distribute the spouse's
          or former spouse's interest in the Participant's benefits under the
          Plan to that spouse or former spouse.

15.16     DISTRIBUTION IN THE EVENT OF TAXATION.

          (a)  IN GENERAL. If, for any reason, all or any portion of a
               Participant's benefits under this Plan becomes taxable to the
               Participant prior to receipt, a Participant may petition the
               Benefits Committee for a distribution of that portion of his or
               her benefit that has become taxable. Upon the grant of such a
               petition, which grant shall not be unreasonably withheld, the
               Sponsor shall distribute to the Participant immediately available
               funds in an amount equal to the taxable portion of his or her
               benefit (which amount shall not exceed a Participant's unpaid
               Account Balance under the Plan). If the petition is granted, the
               tax liability distribution shall be made within 90 days of the
               date when the Participant's petition is granted.

                                      -17-
<Page>

BOSTON PROPERTIES
Deferred Compensation Plan
MASTER PLAN DOCUMENT

          (b)  TRUST. If the Trust terminates in accordance with its terms and
               benefits are distributed from the Trust to a Participant in
               accordance therewith, the Participant's benefits under this Plan
               shall be reduced to the extent of such distributions.

15.17     INSURANCE. The Sponsor, on its own behalf or on behalf of the trustee
          of the Trust, and, in its sole discretion, may apply for and procure
          insurance on the life of the Participant, in such amounts and in such
          forms as the Trust may choose. The Sponsor or the trustee of the
          Trust, as the case may be, shall be the sole owner and beneficiary of
          any such insurance. The Participant shall have no interest whatsoever
          in any such policy or policies, and at the request of the Sponsor
          shall submit to medical examinations and supply such information and
          execute such documents as may be required by the insurance company or
          companies to whom the Sponsor has applied for insurance.

IN WITNESS WHEREOF, the Sponsor has caused this Plan document to be duly
executed by a duly authorized officer of its general partner as of __________,
2002.

                                     BOSTON PROPERTIES LIMITED PARTNERSHIP

                                     By BOSTON PROPERTIES, INC.,
                                     Its General Partner

                                     By:
                                         ---------------------------------------
                                     Title:

                                      -18-<Page>
                                                                    Exhibit 10.3

                     THOMAS K. GRUNDMAN EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (as from time to time amended in accordance with
the provisions hereof, this "Agreement"), is entered into this 15th day of
February, 2002, by and between THOMAS K. GRUNDMAN, residing at 4 Bowmans Drive
New Hope, Pennsylvania 18938 (the "Executive"), and KEY ENERGY SERVICES, INC., a
Maryland corporation with executive offices at 400 South River Road, New Hope,
Pennsylvania 18938 (the "Company").

     WHEREAS, the Executive has been employed by the Company as its Executive
Vice President and Chief Financial Officer pursuant to a prior written
employment agreement;

     WHEREAS, the Chief Executive Officer of the Company (the "Chief Executive
Officer") and the Board of Directors of the Company (the "Board") are each of
the view that obtaining a commitment from the Executive to serve as the
Company's Executive Vice President - M&A and International until June 30, 2004
is essential to the continued growth and success of the Company and is in the
best interests of the Company and its shareholders;

     WHEREAS, the Company desires to enter into this written Employment
Agreement with the Executive, effective as of February 15, 2002 (the
"Commencement Date"); and

     WHEREAS, the Executive is willing to serve as the Company's Executive Vice
President - M&A and International pursuant to the terms and conditions set forth
herein, effective as of the Commencement Date.

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

1.   EMPLOYMENT; TERM.

     (a)    Effective as of the Commencement Date, the Company hereby agrees to
employ the Executive, and the Executive hereby accepts employment by the
Company, as the Company's Executive Vice President - M&A and International, and
the Executive shall hold such position and continue employment with the Company
hereunder until the close of business on June 30, 2004, unless sooner terminated
in accordance with Section 5 hereof (the "Initial Employment Period"). The above
notwithstanding, at the close of business on each June 30, commencing with June
30, 2004, the term of the Executive's employment hereunder shall be
automatically extended for twelve (12) months (unless sooner terminated in
accordance with Section 5 hereof) unless either the Executive or the Company
shall have given written notice (in each case, a "Non-Renewal Notice") to the
other that such automatic extension shall not occur, which Non-Renewal Notice
shall have been given no later than ninety (90) days prior to the relevant June
30 (the Initial Employment Period, together with any extensions, until
termination in accordance herewith, is referred to hereby as the "Employment
Period").

     (b)    The Executive shall have the responsibilities, duties and authority
commensurate with his positions as the Executive Vice President - M&A and
International

<Page>

of the Company, including without limitation the general supervision and control
over, and responsibility for, (i) acquisitions and dispositions by the Company
and its subsidiaries of material businesses and material assets outside of the
ordinary course of business of the Company and its subsidiaries (including,
without limitation, identification, analysis, investigation and negotiations
relating thereto, and the closing of such transactions), (ii) corporate
development activities of the Company and its subsidiaries (including, without
limitation, new lines of business), (iii) international operations of the
Company and its subsidiaries and (iv) such other responsibilities, duties,
functions and authority as the Board, the Chief Executive Officer or the
President shall from time to time designate which do not effect a material
decrease in the responsibilities, importance, scope or dignity of the
Executive's position with the Company compared with those of such position as of
the Commencement Date, subject, however, to the supervision of the Board and
either the Chief Executive Officer or the President of the Company (the
"President"). The Executive will report only to the Board and either the Chief
Executive Officer or the President.

     (c)    The Executive will devote his full time and his best efforts to the
business and affairs of the Company; provided, however, that nothing contained
in this Section 1 shall be deemed to prevent or limit the Executive's right to:
(i) make investments in the securities of any publicly-owned corporation; or
(ii) make any other investments with respect to which he is not obligated or
required to, and to which he does not in fact, devote substantial managerial
efforts which materially interfere with his fulfillment of his duties hereunder;
or (iii) to serve on boards of directors and to serve in such other positions
with non-profit and for-profit organizations as to which the Board may from time
to time consent, which consent shall not be unreasonably withheld or delayed.
Reference is made to Section 6 hereof, which contains limitations on some of the
above activities.

     (d)    The principal location at which the Executive will substantially
perform his duties will be the Company's executive offices, as set forth above.
In the event the Company's executive offices are moved from their current
location, the Company will pay to the Executive (i) ordinary and reasonable
realtor fees and closing costs incurred in connection with the sale of the
Executive's primary residence, (ii) ordinary and reasonable closing costs
incurred in connection with the purchase of the Executive's new primary
residence in the vicinity of the Company's new executive offices, (iii) ordinary
and reasonable costs incurred to pack, transport, unpack, and insure the
Executive's household furnishings and effects to his new primary residence, (iv)
ordinary and reasonable fees for connecting utilities in his new primary
residence, (v) ordinary and reasonable costs for trips to look for a new
residence as well as up to thirty (30) days of temporary housing, and (vi) a
cash bonus calculated to pay all of the federal, state and local income and
payroll taxes which the Executive will incur, if any, as a result of (A) the
Company's reimbursement of the preceding expenses and (B) the amount of such
bonus (that is, a "gross-up" bonus).

2.   SALARY; BONUSES; EXPENSES.

     (a)    During the Employment Period, the Company will pay base compensation
to the Executive at the annual rate of Two Hundred Eighty Thousand Dollars
($280,000) per year (the "Base Salary"), payable in substantially equal
installments in accordance with the Company's existing payroll practices, but no
less frequently than monthly; provided,

                                       -2-
<Page>

however, that the Base Salary shall be not less than Three Hundred Thousand
Dollars ($300,000) on and after January 1, 2003 if the Executive shall continue
to be employed hereunder on such date. The Company will review the Base Salary
on a yearly basis promptly following the end of each fiscal year of the Company
to determine if an increase is advisable, and the Base Salary may be increased
(but not decreased) at the discretion of the Chief Executive Officer and the
Board, taking into account, among other factors, the Executive's performance and
the performance of the Company.

     (b)    For each six-month or other applicable period commencing on July 1,
2001 and thereafter, the Executive shall be eligible to participate in the
Company's Performance Compensation Plan or any successor plan (the "Performance
Compensation Plan") for the Company's executives providing for the payment of
cash bonuses, which plan will provide for the payment of bonuses based upon the
achievement of goals set forth in the Company's strategic plan as developed by
the Compensation Committee of the Board (the "Compensation Committee") after
consultation with the Chief Executive Officer and the Executive, payable within
ninety (90) days after the end of such period. The performance goals for the
Performance Compensation Plan will be based on objective criteria specified in
good faith in advance by the Compensation Committee after consultation with the
Chief Executive Officer and the Executive. The Executive shall also receive such
bonuses other than pursuant to the Performance Compensation Plan in such amounts
and at such times as the Compensation Committee, after consultation with the
Chief Executive Officer, in its discretion determines are appropriate to
recognize extraordinary performance by the Executive.

     (c)    The Executive shall be reimbursed by the Company for reasonable
travel, lodging, meal, entertainment and other expenses incurred by him in
connection with performing his services hereunder in accordance with the
Company's reimbursement policies from time to time in effect.

3.   STOCK OPTIONS.

     The Executive shall be eligible to participate in awards of stock options,
at the discretion of the Board. The performance goals for the grant of such
options will be based on objective criteria mutually negotiated and agreed upon
in good faith in advance by the Compensation Committee after consultation with
the Executive and the Chief Executive Officer.

4.   BENEFIT PLANS; VACATIONS.

     In connection with the Executive's employment hereunder, he shall be
entitled during the Employment Period (and thereafter to the extent provided in
Section 5(f) hereof) to the following additional benefits:

     (a)    At the Company's expense, such fringe benefits, including without
limitation group medical and dental, life, executive life, accident and
disability insurance and retirement plans and supplemental and excess retirement
benefits, as the Company may provide from time to time for its senior
management, but in any case, at least the benefits described on EXHIBIT A
hereto.

                                       -3-
<Page>

     (b)    The Executive shall be entitled to no less than the number of
vacation days in each fiscal year determined in accordance with the Company's
vacation policy as in effect from time to time, but not less than fifteen (15)
days in any fiscal year (prorated in any calendar year during which he is
employed hereunder for less than the entire year in accordance with the number
of days in such fiscal year in which he is so employed). The Executive shall
also be entitled to all paid holidays and personal days given by the Company to
its executives.

     (c)    The Executive shall be entitled to receive an allowance of $1,100
per month, plus reimbursement for reasonable insurance and maintenance expenses,
to cover costs incurred by the Executive in connection with the use of his
automobile during the Employment Period.

     (d)    The Company will pay the reasonable fees for personal: (i) financial
advisory, counseling, accounting and related services; (ii) legal advisory or
attorneys' fees and related expenses; and (iii) income tax return preparation
and tax audit services as reasonably requested by the Executive, provided by
certified public accountants and tax attorneys acceptable to him; provided,
however, that the maximum aggregate amount paid by the Company pursuant to this
Section 4(d) shall not exceed $15,000 in any fiscal year of the Company.

     (e)    Nothing herein contained shall preclude the Executive, to the extent
he is otherwise eligible, from participation in all group insurance programs or
other fringe benefit plans which the Company may from time to time in its sole
and absolute discretion make available generally to its personnel, or for
personnel similarly situated, but the Company shall not be required to establish
or maintain any such program or plan except as may be otherwise expressly
provided herein.

     (f)    The Company shall pay the initiation fee and any other initial
membership fee for the Executive to become and remain a member of one private
country club, golf club, tennis club or similar club or association for business
use selected by the Executive and approved by the Company, which approval shall
not be unreasonably withheld or delayed. In addition, the Company shall pay all
annual or other periodic fees, dues and costs, for the Executive's membership in
such club or association.

5.   TERMINATION, CHANGE IN CONTROL AND REASSIGNMENT OF DUTIES.

     (a)    TERMINATION BY THE COMPANY. The Company shall have the right to
terminate the Executive's employment under this Agreement and the Employment
Period for Cause (as defined below) at any time without obligation to make any
further payments to the Executive hereunder except the compensation described in
Section 5(g) hereof. Except as otherwise provided in Section 5(b) hereof, which
Section shall apply in the event the Executive becomes unable to perform his
obligations hereunder by reason of Disability (as defined below), the Company
shall have the right to terminate the Executive's employment hereunder and the
Employment Period for any reason other than for Cause (including, without
limitation, by giving the Executive a Non-Renewal Notice pursuant to Section
1(a) hereof) only upon at least ninety (90) days prior written notice to him
(provided that, in the event the Company gives the Executive a Non-Renewal
Notice pursuant to Section 1(a) hereof, only the 90-day notice period therein
provided shall be required). In the event the Company terminates the Executive's
employment hereunder for

                                       -4-
<Page>

any reason other than for Disability or Cause (including, without limitation, by
giving the Executive a Non-Renewal Notice pursuant to Section 1(a) hereof), then
for the purpose of effecting a transition during the ninety (90) day notice
period of the Executive's management functions from the Executive to another
person or persons, during such period the Company may reassign the Executive's
duties hereunder to another person or other persons. Such reassignment shall not
reduce the Company's obligations hereunder to make salary, bonus and other
payments to the Executive and to provide other benefits to him during the
remainder of his employment and, if applicable, following the termination of
employment.

     As used in this Agreement, the term "CAUSE" shall mean (i) the willful and
continued failure by the Executive to substantially perform his duties hereunder
(other than (A) any such willful or continued failure resulting from his
incapacity due to physical or mental illness or physical injury or (B) any such
actual or anticipated failure after the issuance of a notice of termination by
the Executive for Good Reason (as defined below)), after a written demand for
substantial performance is delivered by the Company to the Executive that
specifically identifies the manner in which the Company believes the Executive
has not substantially performed his duties; or (ii) the willful engaging by the
Executive in misconduct which is materially injurious to the Company, monetarily
or otherwise; or (iii) the conviction of the Executive of a felony by a court of
competent jurisdiction; or (iv) willful violation of the Key Energy Services,
Inc. Amended and Restated Policy Regarding Acquisition, Ownership and
Disposition of Company Securities, as amended from time to time. For purposes of
this paragraph, no act, or failure to act on the part of the Executive shall be
considered "willful" unless done or omitted to be done by him in bad faith and
without reasonable belief that his action or omission was in the best interest
of the Company. Notwithstanding the foregoing, the Executive's employment shall
not be deemed to have been terminated for Cause unless (A) reasonable notice
shall have been given to him setting forth in detail the reasons for the
Company's intention to terminate for Cause, and if such termination is pursuant
to clause (i) or (ii) above and any damage to the Company is curable, only if
Executive has been provided a period of ten (10) business days from receipt of
such notice to cease the actions or inactions and otherwise cure such damage,
and he has not done so (provided that only one such period needs to be provided
in any period of three (3) consecutive months); (B) an opportunity shall have
been provided for the Executive to be heard before the Board; and (C) if such
termination is pursuant to clause (i) or (ii) above, delivery shall have been
made to the Executive of a notice of termination from the Board finding that in
the good faith opinion of a majority of the Board (excluding the Executive, if
applicable) he was guilty of conduct set forth in clause (i) or (ii) above.

     (b)    TERMINATION UPON DISABILITY AND TEMPORARY REASSIGNMENT OF DUTIES DUE
TO DISABILITY; TERMINATION UPON DEATH

            (i)     If the Executive becomes totally and permanently disabled
during the Employment Period so that he is unable to perform his obligations
hereunder by reasons involving physical or mental illness or physical injury (A)
for a period of ninety (90) consecutive days during the Employment Period, or
(B) for an aggregate of ninety (90) days during any period of twelve (12)
consecutive months during the Employment Period ("Disability"), then the
Executive's employment hereunder and the Employment Period may be terminated by
the Company within sixty (60) days after the expiration of said

                                       -5-
<Page>

ninety (90) day period (whether consecutive or in the aggregate, as the case may
be), said termination to be effective ten (10) days after written notice to the
Executive. In the event the Company shall give a notice of termination under
this Section 5(b)(i), then the Company may reassign the Executive's duties
hereunder to another person or other persons. Such reassignment shall not reduce
the Company's obligations hereunder to make salary, bonus and other payments to
the Executive and to provide other benefits to him, during the remainder of his
employment and, if applicable, following the termination of employment.

            (ii)    During any period that the Executive is totally disabled
such that he is unable to perform his obligations hereunder by reason involving
physical or mental illness or physical injury, as determined by a physician
chosen by the Company and reasonably acceptable to the Executive (or his legal
representative), the Company may reassign the Executive's duties hereunder to
another person or other persons, provided if the Executive shall again be able
to perform his obligations hereunder prior to the Company's termination of the
Executive's employment hereunder and the Employment Period in accordance with
the terms of this Agreement, all such duties shall again be the Executive's
duties. The cost of any examination by such physician shall be borne by the
Company. Notwithstanding the foregoing, if the Executive has been unable to
perform his obligations hereunder by reasons involving physical or mental
illness or physical injury for a period of ninety (90) consecutive days during
the Employment Period or an aggregate of ninety (90) days during any period of
twelve (12) consecutive months during the Employment Period, then a
determination by a physician of disability will not be required prior to any
such reassignment. Any such reassignment shall not be a termination of
employment and in no event shall such reassignment reduce the Company's
obligation to make salary, bonus and other payments to the Executive and to
provide other benefits to him under this Agreement during his employment or, if
applicable, following a termination of employment.

            (iii)   The Executive's employment hereunder and the Employment
Period shall automatically terminate immediately upon the death of the
Executive.

     (c)    TERMINATION BY EXECUTIVE. The Executive's employment hereunder and
the Employment Period may be terminated by the Executive by giving written
notice to the Company as follows: (i) at any time for any reason other than Good
Reason (including, without limitation, by giving the Company a Non-Renewal
Notice pursuant to Section 1(a) hereof) by notice of at least ninety (90) days
(provided that, in the event the Executive gives the Company a Non-Renewal
Notice pursuant to Section 1(a) hereof, only the 90-day notice period therein
provided shall be required); or (ii) at any time for Good Reason, effective upon
giving notice of such. In the event of a termination by the Executive of his
employment, the Company may reassign the Executive's duties hereunder to another
person or other persons.

     As used herein, a "GOOD REASON" shall mean any of the following:

     (1)    Failure of the Board to elect the Executive as Executive Vice
President - M&A and International of the Company, or removal from the office of
Executive Vice President - M&A and International of the Company provided that
such failure or removal is not in connection with a termination of the
Executive's employment hereunder by the Company for Cause (in accordance with
Section 5(a) hereof), for Disability (in accordance

                                       -6-
<Page>

with Section 5(b) hereof) or other than for Cause or Disability (in accordance
with Section 5(a) hereof and including, without limitation, by giving the
Executive a Non-Renewal Notice pursuant to Section 1(a) hereof), and provided
further that any notice of termination hereunder shall be given by the Executive
within ninety (90) days of such failure or removal; or

     (2)    Material change by the Company in the Executive's authority,
functions, duties or responsibilities as Executive Vice President - M&A and
International of the Company (including without limitation material changes in
the control or structure of the Company) which would cause his position with the
Company to become of materially less responsibility, importance, scope or
dignity than his position as of the Commencement Date (including, without
limitation, requiring Executive to report to someone other than the Board, the
Chief Executive Officer or the President of the Company), provided that such
material change is not in connection with a termination of Executive's
employment hereunder by the Company for Cause (in accordance with Section 5(a)
hereof), for Disability (in accordance with Section 5(b) hereof) or other than
for Cause or Disability (in accordance with Section 5(a) hereof) (including,
without limitation, by giving the Executive a Non-Renewal Notice pursuant to
Section 1(a) hereof), or is otherwise permitted by Section 5(b)(ii) hereof; and
provided, further, that any notice of termination hereunder shall be given by
the Executive within ninety (90) days of when he becomes aware of such change;
or

     (3)    Failure by the Company to comply with any provision of Section 1(d),
2 or 4 of this Agreement, which has not been cured within fifteen (15) days
after notice of such noncompliance has been given by the Executive to the
Company, provided any notice of termination hereunder shall be given by the
Executive within ninety (90) days after the end of such fifteen (15) day period;
or

     (4)    Failure by the Company to obtain an assumption of this Agreement (by
operation of law or in writing) by a successor in accordance with Section 16
hereof unless payment or provision for payment and provision for continuation of
benefits under this Agreement have been made as required by Section 16 hereof;
or

     (5)    Any purported termination by the Company of the Executive's
employment which is not effected in accordance with the terms of this Agreement,
including without limitation pursuant to a notice of termination not satisfying
the requirements set forth herein (and for purposes of this Agreement no such
purported termination by the Company shall be effective), which has not been
cured within ten (10) days after notice of such non-conformance has been given
by the Executive to the Company, provided any notice of termination hereunder
shall be given by the Executive within thirty (30) days of receipt of notice of
such purported termination; or

     (6)    At the Executive's election at any time following, but prior to the
first anniversary of, a Change in Control (as defined below), effective upon
giving such notice; or

     (7)    If the Executive gives notice to the Company not less than ninety
(90) days prior to the date Executive desires to have his employment by the
Company hereunder terminate, such termination to become effective on the date
identified in such notice.

                                       -7-
<Page>

     As used herein, the term "CHANGE IN CONTROL" shall have the meaning
ascribed to such term in Exhibit B hereto.

     (d)    SEVERANCE COMPENSATION.

            (i)     TERMINATION FOR GOOD REASON OR OTHER THAN FOR CAUSE. In the
event the Executive's employment hereunder is terminated (A) by the Executive
for Good Reason or (B) by the Company other than for Cause or Disability
(including, without limitation, by giving the Executive a Non-Renewal Notice
pursuant to Section 1(a) hereof), the Executive shall be entitled, in addition
to the other compensation and benefits herein provided for, to severance
compensation in an aggregate amount equal to three (3) times his Base Salary at
the rate in effect on the termination date, payable in thirty-six (36)
substantially equal monthly installments commencing at the end of the calendar
month in which the termination date occurs; provided, however, that if the
Executive's employment is terminated within one (1) year following a Change in
Control (other than a termination because of the Executive's death) or is
terminated by the Company other than for Cause or Disability (including, without
limitation, by giving the Executive a Non-Renewal Notice pursuant to Section
1(a) hereof) in anticipation of a Change in Control, the severance compensation
payable to the Executive (i) shall be increased by an amount equal to three (3)
times the average annual total bonuses paid by the Company to the Executive
during the three-year period (or such shorter period as the Executive may have
been employed by the Company) preceding the date on which the notice of
termination is given and (ii) shall be payable in one lump sum on the effective
date of such termination; and provided, further, that if the Executive's
employment is terminated within one (1) year following a Change in Control for
Disability, the Executive must return to the Company any disability insurance
proceeds actually paid to the Executive or for his benefit during the three-year
period following the effective date of such termination (but only those proceeds
from disability insurance provided by the Company to the Executive pursuant to
Section 4(a) hereof).

            (ii)    TERMINATION FOLLOWING DISABILITY. In the event the
Executive's employment should be terminated by the Company as a result of
Disability in accordance with Section 5(b) hereof, then the Executive shall be
entitled, in addition to the other compensation and benefits herein provided
for, to severance compensation in an aggregate amount equal to three (3) times
his Base Salary at the rate in effect on the termination date, payable in
thirty-six (36) substantially equal monthly installments commencing at the end
of the calendar month in which the termination date occurs, reduced by the
amount of any disability insurance proceeds actually paid to the Executive or
for his benefit during the said time period (but only those proceeds from
disability insurance provided by the Company to the Executive pursuant to
Section 4(a) hereof).

            (iii)   CHANGE IN CONTROL FOLLOWING TERMINATION. In the event there
is a Change in Control after Executive's employment is terminated and while
Executive is entitled to severance compensation as described above, any such
severance compensation which remains unpaid as of the Change in Control shall be
paid in one lump sum as of the Change in Control.

            (iv)    TERMINATION FOR DEATH. In the event of the executive's death
during the Employment Period, the Executive's estate shall not be entitled to
any severance compensation.

                                       -8-
<Page>

     (e)    EFFECT OF TERMINATION OR CHANGE IN CONTROL UPON EQUITY COMPENSATION.

            (i)     In the event the Executive's employment hereunder is
terminated by the Company for any reason other than for Cause or Disability
(including, without limitation, by giving the Executive a Non-Renewal Notice
pursuant to Section 1(a) hereof), or in the event the Executive should terminate
his employment for Good Reason, then, unless the provisions of Section 5(e)(iv)
hereof shall apply, any restricted stock or options held by the Executive
entitling the Executive to retain or purchase securities of the Company which
have not vested prior to the effective date of such termination shall
immediately vest and shall remain exercisable in accordance with the terms and
provisions of the plan and/or agreement under which they were awarded; PROVIDED,
HOWEVER, that any such restricted stock or options that are Extended Equity
Incentives shall remain exercisable until the earlier to occur of (x) the third
anniversary of the effective date of such termination and (y) the final stated
expiration date of the option or restricted stock. In addition, in the event of
such a termination, any options or restricted stock held by the Executive
entitling the Executive to retain or purchase securities of the Company which
have vested prior to the effective date of such termination and (x) which
constitute Extended Equity Incentives shall remain exercisable until the earlier
to occur of (1) the third anniversary of the effective date of such termination
and (2) the final stated expiration date of the option or restricted stock and
(y) which do not constitute Extended Equity Incentives shall remain exercisable
in accordance with the terms and provisions of the plan and/or agreement under
which they were awarded. As used herein, the term "EXTENDED EQUITY INCENTIVES"
shall mean options or restricted stock held by the Executive entitling the
Executive to retain or purchase securities of the Company which either (A) have
been granted (or, under generally accepted accounting principles as in effect
from time to time and as applied in the financial statements of the Company,
have been renewed, extended or otherwise modified such that they are accounted
for as if they had been granted, including without limitation by virtue of
accelerated vesting upon termination of the Executive's employment hereunder) on
or after the date of this Agreement or (B) are not described in the immediately
preceding clause (A) and have a purchase or exercise price equal to at least
$7.00 per share as of the date of this Agreement.

            (ii)    In the event the Executive's employment hereunder is
terminated by the Company for Cause or is terminated by the Executive other than
for Good Reason (including, without limitation, by giving the Company a
Non-Renewal Notice pursuant to Section 1(a) hereof), then effective upon the
date such termination is effective, any restricted stock or options which have
not vested prior to the effective date of such termination shall be forfeited.
Any options or restricted stock held by the Executive entitling the Executive to
retain or purchase securities of the Company which have vested prior to the
effective date of such termination shall remain subject to the terms and
provisions of the plan and/or the agreement under which they were awarded.

            (iii)   In the event of the Executive's death while employed by the
Company or in the event that the Executive's employment should terminate as a
result of Disability, then, unless the provisions of Section 5(e)(iv) hereof
shall apply, any restricted stock or options held by the Executive entitling the
Executive to retain or purchase securities of the Company which have not vested
prior to the effective date of such termination shall immediately vest and shall
also remain exercisable until the earlier to occur of (x) the third

                                       -9-
<Page>

anniversary of the death of the Executive or the effective date of such
termination and (y) the final stated expiration date of the option or restricted
stock. In addition, in the event of such death or such a termination, any
options or restricted stock held by the Executive entitling the Executive to
retain or purchase securities of the Company which have vested prior to the
effective date of such death or termination and (x) which constitute Extended
Equity Incentives shall remain exercisable until the earlier to occur of (1) the
third anniversary of the effective date of such death or termination and (2) the
final stated expiration date of the option or restricted stock and (y) which do
not constitute Extended Equity Incentives shall remain exercisable in accordance
with the terms and provisions of the plan and/or agreement under which they were
awarded.

            (iv)    In the event of a Change in Control while the Executive is
employed by the Company, then as of the date immediately prior to the date such
Change in Control shall occur, any restricted stock or options held by the
Executive entitling the Executive to retain or purchase securities of the
Company which have not vested prior to such date shall immediately vest and all
restricted stock and options held by the Executive shall remain exercisable in
accordance with the terms and provisions governing such restricted stock or
options; provided, however, that if the Executive's employment is terminated for
any reason within one (1) year following a Change in Control, all restricted
stock and options held by the Executive shall remain exercisable until their
respective final stated expiration dates. In the event that the Executive's
employment is terminated by the Company other than for Cause or Disability
(including, without limitation, by giving the Executive a Non-Renewal Notice
pursuant to Section 1(a) hereof) in anticipation of a Change in Control, then as
of the date immediately prior to the date on which notice of such termination is
given, any restricted stock or options held by the Executive entitling the
Executive to retain or purchase securities of the Company which have not vested
prior to such date shall immediately vest and all restricted stock and options
held by the Executive shall remain exercisable until their respective final
stated expiration dates.

            (v)     In the event of a conflict between the terms and provisions
of this Section 5(e) and any other terms and provisions governing any restricted
stock or options held (now or in the future) by the Executive entitling the
Executive to retain or purchase securities of the Company (including without
limitation the terms and provisions contained in the agreements and/or plans
pursuant to which such restricted stock or options were (or will in the future
be) granted), the terms and provisions of this Section 5(e) shall control.

     (f)    CONTINUATION OF BENEFITS.

            (i)     Subject to Section 5(f)(ii) hereof, in the event that
Executive's employment hereunder is terminated by the Executive for Good Reason
or by the Company for Disability or other than for Cause (including, without
limitation, by giving the Executive a Non-Renewal Notice pursuant to Section
1(a) hereof) and not as a result of the death of the Executive, the Executive
shall continue to be entitled to the benefits that the Executive was receiving
or to which the Executive was entitled as of the date immediately preceding the
applicable termination date pursuant to Section 4 hereof (other than the
benefits provided under Section 4(b)hereof) at the Company's expense for a
period of time following the termination date ending on the first to occur of
(I) the third anniversary of the termination date or (II) the date on which the
Executive commences full-

                                      -10-
<Page>

time employment with another employer, but only if and to the extent the
Executive is eligible to receive through such other employer benefits which are
at least equivalent on an aggregate basis to those benefits the Executive was
receiving or to which the Executive was entitled under Section 4 hereof as of
the day immediately preceding the applicable termination date. If because of
limitations required by third parties or imposed by law, the Executive cannot be
provided such benefits through the Company's plans, then the Company will
provide the Executive with substantially equivalent benefits, on an aggregate
basis, at the Company's expense. For purposes of the determination of any
benefits which require a particular period of employment by the Company and/or
the attainment of a particular age while employed by the Company in order to be
payable, the Executive shall be treated as having continued in the employment of
the Company during such period of time as the Executive is entitled to receive
benefits under this Section 5(f). At such time as the Company is no longer
required to provide the Executive with life and/or disability insurance, as the
case may be, the Executive shall be entitled, at the Executive's expense, to
convert such life and disability insurance, as the case may be, into
individually owned policies, except if and to the extent such conversion is not
available from the provider of such insurance.

            (ii)    In the event the Executive's employment hereunder is
terminated by the Company within one (1) year of a Change in Control (other than
a termination because of the Executive's death) or is terminated by the Company
other than for Cause in anticipation of a Change in Control, the Company shall
pay to the Executive, in lieu of providing the benefits contemplated by Section
5(f)(i) above, an amount in cash equal to the aggregate reasonable expenses that
the Company would incur if it were to provide such benefits for a period of time
following the termination date ending on the third anniversary of the
termination date, which amount shall be paid in one lump sum on the date of such
termination.

            (iii)   In the event the Executive's employment hereunder is
terminated by reason of death, the Executive's spouse and her dependents shall
be entitled for a period of thirty-six months to receive coverage at the
Company's expense under the Company's group medical and dental plans at least
equivalent to the coverage the Executive was receiving as of the day immediately
preceding his death.

     (g)    ACCRUED COMPENSATION. In the event of any termination of the
Executive's employment for any reason, the Executive (or his estate) shall be
paid (i) any unpaid portion of his Base Salary through the effective termination
date, (ii) for any accrued but unused vacation (payable in an amount equal to
the Base Salary divided by 255 and multiplied by the number of accrued but
unused vacation days), (iii) any prior fiscal year bonus earned but not paid,
(iv) provided that the Executive's employment was not terminated by the Company
for Cause or was terminated by the Executive Good Reason, a pro-rata portion
(based upon the number of days of employment during the fiscal year) of any
bonus for the current fiscal year, so long as (A) the performance goals required
to be achieved in order to earn such bonus had been established and (B) it is
reasonably likely that such goals would have been achieved had the Executive
remained employed with the Company for the remainder of the fiscal year, (v) any
amounts for expense reimbursement and similar items which have been properly
incurred in accordance with the provisions hereof prior to termination and have
not yet been paid, including without limitation any

                                      -11-
<Page>

sums due under Sections 2(c), 4(c), 4(d) and 4(f) hereof, and (vi) any Gross-Up
Payment which may become due under the terms of Section 5(i) hereof. Such
amounts shall be paid within ten (10) days of the termination date.

     (h)    RESIGNATION. If the Executive's employment hereunder shall be
terminated by him or by the Company in accordance with the terms set forth
herein, then effective upon the date such termination is effective, he will be
deemed to have resigned from all positions as an officer and director of the
Company and of any of its Subsidiaries, except as the parties may otherwise
agree.

     (i)    CERTAIN TAX CONSEQUENCES.

            (i)     Whether or not the Executive becomes entitled to the
payments and benefits described in this Section 5, if any of the payments or
benefits received or to be received by the Executive in connection with a change
in ownership or control of the Company, as defined in section 280G of the Code
(a "Statutory Change in Control"), or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a Statutory
Change in Control or any person affiliated with the Company or such person)
(collectively, the "Severance Benefits") will be subject to any excise tax (the
"Excise Tax") imposed under section 4999 of the Code, the Company shall pay to
the Executive an additional amount equal to the Excise Tax, plus any amount
necessary to "gross up" the Executive for additional taxes resulting from the
payments to the Executive by the Company under this Section 5(i)(i) (the "Excise
Tax Payment"). Each Excise Tax Payment shall be made not less than five (5)
business days prior to the due date for payment of the Excise Tax.

            (ii)    For purposes of determining whether any of the Severance
Benefits will be subject to the Excise Tax and the amount of such Excise Tax:

            (A)     all of the Severance Benefits shall be treated as "parachute
     payments" within the meaning of Code section 280G(b)(2) if the aggregate
     present value (determined as provided in Code Section 280G(d)(4)) of such
     Severance Benefits equals or exceeds three times the Executive's "Base
     Amount" (within the meaning of Code Section 280G(b)(3)), and all "excess
     parachute payments" within the meaning of Code section 280G(b)(1) shall be
     treated as subject to the Excise Tax, unless the Executive receives a
     written opinion from Ropes & Gray or other tax counsel selected by Ropes &
     Gray and reasonably acceptable to the Executive or in the event Ropes &
     Gray is unable or unwilling to make such selection, by other tax counsel
     selected by the Company and reasonably acceptable to the Executive, that
     such other payments or benefits (in whole or in part) do not constitute
     parachute payments, including by reason of Code section 280G(b)(4)(A), or
     such excess parachute payments (in whole or in part) represent reasonable
     compensation for services actually rendered, within the meaning of Code
     section 280G(b)(4)(B), in excess of the "Base Amount" as defined in Code
     section 280G(b)(3) allocable to such reasonable compensation, or are
     otherwise not subject to the Excise Tax; and

                                      -12-
<Page>

            (B)     the value of any non-cash benefits or any deferred payment
     or benefit shall be determined by a certified public accountant or
     appraisal company of recognized national standing selected by Ropes & Gray
     and reasonably acceptable to the Executive, or in the event that Ropes &
     Gray is unable or unwilling to make such selection, such selection shall be
     made by such other certified public accountant or appraisal company of
     recognized national standing as is selected by the Company and is
     reasonably acceptable to the Executive, in accordance with the principles
     of Code section 280G(d)(3) and (4).

            (iii)   In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined (the "Reduced Excise Tax"), an amount (the "Gross-Up
Repayment") equal to the sum of (A) the difference of the Excise Tax Payment and
the Reduced Excise Tax PLUS (B) an amount representing the difference between
(1) the amount paid by the Company to the Executive to "gross up" the Executive
for taxes on payments made by the Company to the Executive in respect of the
Excise Tax and (2) the amount which should have been paid to the Executive by
the Company to "gross up" the Executive for taxes on payments made by the
Company to the Executive in respect of the Reduced Excise Tax; provided,
however, that in no event shall the Gross-Up Repayment exceed the actual
aggregate cash refunds of, or cash reductions in, taxes paid by the Executive by
virtue of paying the Gross-Up Repayment; and provided, further, that if such
refunds or reductions are realized from time to time, the Executive shall make a
repayment to the Company at the time of each such realization equal to the
excess of the Gross-Up Repayment due after giving effect to such realization
over the Gross-Up Repayment due immediately prior to giving effect to such
realization. The Executive shall (1) take such actions with respect to taxes and
tax returns as the Company may from time to time request in order to obtain such
refunds and reductions, including, without limitation, by taking positions on
tax returns and filing amended tax returns, (2) provide the Company with copies
of all tax returns filed by the Executive which reflect such refunds or
reductions or are otherwise requested by the Company in order to determine the
Executive's compliance with the immediately preceding clause (1), (3) permit the
Company to participate in any proceedings relating to such refunds and
reductions and (4) take all such other actions as may be reasonably requested by
the Company from time to time in connection with the realization of such refunds
or reductions, including, without limitation, borrowing money from the Company
(on terms and conditions reasonably satisfactory to the Executive and the
Company, including, without limitation, having the Company make the Executive
whole, on an after-tax basis, for any interest costs) so that the payments made
from time to time by the Executive to the Company hereunder maximize (to the
extent reasonably possible) such refunds and reductions, the aggregate amount of
such payments by the Executive not to exceed the Gross-Up Repayment (computed
without regard to the provisos to the first sentence of this Section 5(i)(iii));
provided, however, that the Company shall bear and directly pay, or shall
promptly reimburse the Executive for, all costs and expenses (including any
additional penalties and interest) incurred by the Executive in connection with
any actions taken or omitted by the Executive in accordance with instructions
from the Company pursuant to this sentence, and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including any additional penalties and interest) imposed as a result of the
Company's payment of such costs and

                                      -13-
<Page>

expenses. In the event that the Excise Tax is subsequently determined to exceed
the amount taken into account hereunder (including by reason of any payment the
existence or amount of which could not be determined at the time of the Excise
Tax Payment), the Company shall make an additional Excise Tax Payment in respect
of such excess (together with any interest or penalties payable by the Executive
with respect to such excess) at the time that the amount of such excess if
finally determined, plus any additional taxes resulting from the payment to the
Executive by the Company for such excess and the interest and penalties thereon.
The Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Severance
Benefits.

            (iv)    The Executive shall give the Company written notice of any
determination by the Executive, or any claim by any taxing authority, that he
owes Excise Tax on any Severance Benefit. Such notice shall be given as soon as
practicable but no later than ten (10) business days after the Executive makes
such determination or is informed of such claim, and shall, to the extent
Executive has or may reasonably obtain such information, apprise the Company of
the amount of such Excise Tax and the date on which it is required to be paid.
If the Company gives the Executive written notice at least thirty (30) days
prior to the due date for payment of such Excise Tax, or within ten (10)
business days of having received the foregoing notice from the Executive
(whichever is later), that it disagrees with or wishes to contest the amount of
the Excise Tax, the Company and the Executive shall consult with each other and
their respective tax advisors regarding the amount and payment of any Excise
Tax. In the event there is a contest with any taxing authority regarding the
amount of the Excise Tax, the Company shall bear and pay directly all costs and
expenses (including additional interest, penalties and legal fees) incurred in
connection with any such contest, and shall indemnify and hold the Executive
harmless, on an after-tax basis, to the extent not otherwise paid hereunder, on
(x) the Excise Tax Payment (including any interest and penalties with respect
thereto) and (y) the Company's payment of the Executive's costs and expenses
hereunder.

            (v)     As used herein, any reference to "Ropes & Gray" shall
include any successor firm thereto.

6.   LIMITATION ON COMPETITION.

     During the Employment Period, and for such period thereafter (A) as the
Executive is entitled to receive severance compensation under this Agreement, or
(B) in the event payment of the Executive's severance compensation is
accelerated due to a Change in Control, for a period of three (3) years
following the end of the Employment Period, or (C) in the event the Executive's
employment is terminated by the Company for Cause or the Executive terminates
his employment for any reason other than Good Reason (including, without
limitation, by giving the Company a Non-Renewal Notice pursuant to Section 1(a)
hereof), for a period of twelve months following the Employment Period:

     (a)    the Executive shall not, directly or indirectly, without the
            Company's prior written consent, participate or engage in, whether
            as a director, officer, employee, advisor, consultant, investor,
            lender, stockholder, partner, joint venturer, owner or in any other
            capacity, any Competitive Business (as

                                      -14-
<Page>

            defined below) conducted in any Competitive Market Area (as defined
            below) in which such business is such a Competitive Business;
            provided, however, that the Executive shall not be deemed to be
            participating or engaging in any such business solely by virtue of
            (i) his ownership of not more than five percent of any class of
            stock or other securities which is publicly traded on a national
            securities exchange or in a recognized over-the-counter market or
            (ii) a relationship with a banking or an investment banking firm
            with clients that engage in such business provided that the
            Executive does not directly or indirectly, represent, render
            services to or otherwise advise such clients;

     (b)    the Executive shall not, without the Company's prior written
            consent, (i) solicit (other than by way of generalized employment
            advertising undertaken in the ordinary course of business) the
            service of or employ any management employee of the Company for the
            Executive's own benefit or for the benefit of any person or entity
            other than the Company, (ii) induce any such employee to leave
            employment with the Company, or (iii) employ or cause any other
            person or entity other than the Company to employ any former
            management employee of the Company whose termination of employment
            with the Company occurred less than six (6) months prior to such
            employment by the Executive or such other person or entity; and

     (c)    the Executive shall not, without the Company's prior written
            consent, in each case if the Executive knows or reasonably should
            know that there is a material risk that the specified effect could
            occur: (i) induce or attempt to induce any customer, or any material
            supplier or contractor, of the Company to terminate or breach any
            agreement or arrangement with the Company or otherwise to cease or
            materially reduce doing business with the Company, or (ii) induce or
            attempt to induce any customer, or any material supplier or
            contractor, of the Company (including any prospective customer, or
            any prospective material supplier or contractor, which the Company
            is actively pursuing prior to the Executive's termination of
            employment), not to enter into any agreement or arrangement with the
            Company or not to do business with the Company.

As used herein, the term "COMPETITIVE BUSINESS" shall mean any business: (1)
that is competitive with any business (A) which was conducted by the Company or
any subsidiary of the Company during the Employment Period or on the date of
termination of Executive's employment hereunder or (B) which, on the date of
such termination or during the twelve months immediately preceding such
termination, the Company or any subsidiary of the Company was actively
investigating with a view to conducting or was actively pursuing a plan to
conduct; and (2) from which the Company and its subsidiaries derive (or
reasonably expect to derive) annual revenues of not less than $1,000,000. As
used herein, the term "COMPETITIVE MARKET AREA" shall mean any geographic market
area (1) if the Company or any subsidiary of the Company conducted business in
such geographic market area during the Employment Period or on the date of
termination of Executive's employment hereunder, or (2) if, on the date of such
termination or during the twelve months immediately preceding such termination,
the Company or any subsidiary of the

                                      -15-
<Page>

Company was actively investigating with a view to conducting business in such
geographic market area or was actively pursuing a plan to conduct business in
such geographic market area.

     The Executive agrees and acknowledges that a portion of the consideration
to be paid by the Company to the Executive pursuant to this Agreement is in
consideration of the covenants under this Section 6 and that such consideration
is fair and adequate, even though the Executive will not receive any severance
compensation in the event he terminates his employment with the Company other
than for Good Reason or the Company terminates his employment for Cause. The
Executive acknowledges and agrees that any breach or anticipatory breach by him
of any of the provisions of this Section 6 would cause the Company irreparable
injury not compensable by monetary damages alone and that, accordingly, in any
such event, the Company shall be entitled to injunctions, both preliminary and
permanent, enjoining or restraining such breach or anticipatory breach without
the necessity of showing irreparable injury (and the Executive hereby consents
to the issuance thereof without bond by a court of competent jurisdiction).

7.   CONFIDENTIAL INFORMATION.

     The Executive acknowledges that during the course of his employment with
the Company he will have access to trade secrets, confidential and proprietary
information and know-how of the Company ("Confidential Information"). Except in
the ordinary course of properly performing his duties for the Company, the
Executive shall not at any time, without the Company's prior written consent
while employed or after termination of his employment, disclose, communicate or
divulge, or use for the benefit of himself or of any third party, any of the
Confidential Information of the Company. In the event the Executive learns
during his employment with the Company any trade secrets, confidential or
proprietary information or know-how of any customer, supplier or contractor of
the Company, the Executive shall maintain the confidence of such information.

8.   RETURN OF MATERIALS.

     Upon termination of the Executive's employment for any reason, the
Executive shall promptly deliver to the Company or, with the Company's consent,
destroy all documents and other materials in the Executive's possession or
custody (whether prepared by the Executive or others) that the Executive
obtained from the Company or a customer, supplier or contractor of the Company
during the Employment Period and which relate to the past, present or
anticipated business and affairs of the Company, including without limitation,
any Confidential Information.

9.   ENFORCEABILITY.

     If any provision of this Agreement shall be deemed invalid or unenforceable
as written, this Agreement shall be construed, to the greatest extent possible,
or modified, to the extent allowable by law, in a manner which shall render it
valid and enforceable and any limitation on the scope or duration of any such
provision necessary to make it valid and enforceable shall be deemed to be a
part thereof. No invalidity or unenforceability of any provision contained
herein shall affect any other portion of this Agreement unless the provision
deemed to be so invalid or unenforceable is a material element of this
Agreement, taken as a whole.

                                      -16-
<Page>

10.  LEGAL EXPENSES.

     The Company shall pay the Executive's reasonable fees for legal and other
related expenses associated with any disputes arising hereunder or under any
other agreements, arrangements or understandings regarding Executive's
employment with the Company (including, without limitation, all agreements,
arrangements and understandings regarding bonuses, stock options, employee
benefits or other compensation issues) if either a court of competent
jurisdiction or an arbitrator shall render a final judgement or an arbitrator's
final decision in favor of the Executive on the issues in such dispute, from
which there is no further right of appeal. If it shall be determined in such
judicial adjudication or arbitration that the Executive is successful on some of
the issues in such dispute, but not all, then the Executive shall be entitled to
receive a portion of such legal fees and other expenses as shall be
appropriately prorated. In addition, the Company shall reimburse the Executive
for up to $12,000 of legal fees incurred by him in connection with the
negotiation of this Agreement.

11.  NOTICES.

     All notices which the Company is required or permitted to give to the
Executive shall be given by registered or certified mail or overnight courier,
with a receipt obtained, addressed to the Executive at his primary residence, or
at such other place as the Executive may from time to time designate in writing,
or by personal delivery to the Executive, or by facsimile to the Executive with
oral confirmation of his receipt and with a copy immediately sent to the
Executive by first class U.S. Mail, and to counsel for the Executive as may be
requested in writing by the Executive from time to time. All notices which the
Executive is required or permitted to give to the Company shall be given by
registered or certified mail or overnight courier, with a receipt obtained,
addressed to the Company at the address set forth above, or at such other
address as the Company may from time to time designate in writing, or by
personal delivery to the Chief Executive Officer of the Company, or by facsimile
to the Chief Executive Officer with oral confirmation of his receipt and with a
copy immediately sent to the Chief Executive Officer by first class U.S. Mail,
and to counsel for the Company as may be requested in writing by the Company. A
notice will be deemed given upon personal delivery, the mailing thereof or
delivery to an overnight courier for delivery the next business day, or the oral
confirmation of receipt by facsimile, except for a notice of change of address,
which will not be effective until receipt, and except as otherwise provided in
Section 5(a) hereof.

12.  WAIVERS.

     No waiver by either party of any breach or nonperformance of any provision
or obligation of this Agreement shall be deemed to be a waiver of any preceding
or succeeding breach of the same or any other provision of this Agreement. Any
waiver of any provision of this Agreement must be in writing and signed by the
party granting the waiver.

13.  HEADINGS; OTHER LANGUAGE.

     The headings contained in this Agreement are for reference purposes only
and shall in no way affect the meaning or interpretation of this Agreement. In
this Agreement, as the context may require, the singular includes the plural and
the singular, the masculine

                                      -17-
<Page>

gender includes both male and female reference, the word "or" is used in the
inclusive sense and the words "including", "includes", and "included" shall not
be limiting.

14.  COUNTERPARTS.

     This Agreement may be executed in duplicate counterparts, each of which
shall be deemed to be an original and all of which, taken together, shall
constitute one agreement.

15.  AGREEMENT COMPLETE; AMENDMENTS.

     Effective as of the Commencement Date, this Agreement, together with the
Exhibits hereto, the agreements referred to herein, the instruments and
agreements pursuant to which any restricted stock or options held (now or in the
future) by the Executive entitling the Executive to retain or purchase
securities of the Company and the Demand Note dated August 3, 1999 executed by
the Executive in favor of the Company and the related letter agreement dated
July 1, 2000, constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior agreements, written or oral, with
respect thereto. This Agreement may not be amended, supplemented, canceled or
discharged except by a written instrument executed by both of the parties
hereto, provided, however, that the immediately foregoing provision shall not
prohibit the termination of rights and obligations under this Agreement which
termination is made in accordance with the terms of this Agreement.

16.  BENEFIT OF THE SUCCESSORS AND PERMITTED ASSIGNS OF THE RESPECTIVE PARTIES
HERETO.

     This Agreement and the rights and obligations hereunder are personal to the
Company and the Executive and are not assignable or transferable to any other
person, firm or corporation without the consent of the other party, except as
contemplated hereby; provided, however, in the event of the sale, merger or
consolidation of the Company, whether or not the Company is the surviving or
resulting corporation, the transfer of all or substantially all of the assets of
the Company, or the voluntary or involuntary dissolution of the Company, then
the surviving or resulting corporation or the transferee or transferees of the
Company's assets shall be bound by this Agreement and the Company shall take all
actions necessary to insure that such corporation, transferee or transferees are
bound by the provisions of this Agreement; and provided, further, this Agreement
shall inure to the benefit of the Executive's estate, heirs, executors,
administrators, personal and legal representatives, distributees, devisees, and
legatees. Notwithstanding the foregoing provisions of this Section 16, the
Company shall not be required to take all actions necessary to insure that a
buyer, survivor, transferee or transferees of the Company's assets
("Transferee") are bound by the provisions of this Agreement and such Transferee
shall not be bound by the obligations of the Company under this Agreement if the
Company shall have (a) paid to the Executive or made provision satisfactory to
the Executive for payment to him of all amounts which are or may become payable
to him hereunder in accordance with the terms hereof and (b) made provision
satisfactory to the Executive for the continuance of all benefits required to be
provided to him in accordance with the terms hereof, in each case as if the
Executive had been terminated without Cause in anticipation of a Change in
Control.

17.  GOVERNING LAW.

                                      -18-
<Page>

     This Agreement will be governed and construed in accordance with the laws
of Pennsylvania applicable to agreements made and to be performed entirely
within such state, without giving effect to any choice or conflicts of laws
principles which would cause the application of the domestic substantive laws of
any other jurisdiction.

18.  SURVIVAL.

     The covenants, agreements, representations, warranties and provisions
contained in this Agreement that are intended to survive the termination of the
Executive's employment hereunder and the termination of the Employment Period
shall so survive such termination.

19.  INTERPRETATION.

     The Company and the Executive each acknowledge and agree that this
Agreement has been reviewed and negotiated by such party and its or his counsel,
who have contributed to its revision, and the normal rule of construction, to
the effect that any ambiguities are resolved against the drafting party, shall
not be employed in the interpretation of it.

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

                                       KEY ENERGY SERVICES, INC.

                                       By:   /s/ Francis D. John
                                          -----------------------------------
                                                 Francis D. John
                                       President and Chief Executive Officer

/s/ THOMAS K GRUNDMAN
----------------------------------------
THOMAS K GRUNDMAN

                                      -19-
<Page>

                                    EXHIBIT A

                             COMPANY PAID COVERAGES

1.   Life Insurance. $2,000,000 payable to beneficiary designated by the
Executive.

2.   Long Term Disability Insurance. Salary continuation benefit for total
disability. Benefit commences with ninetieth day of disability and continues to
a maximum of age sixty-five. Annual maximum benefit shall be 60% of the Base
Salary.

3.   Medical and Dental Plan. Comprehensive medical and dental plans available
to the Company's senior management, pursuant to which all medical and dental
expenses incurred by the Executive, his spouse and his children will be
reimbursed by the Company, through insurance or, in the absence of insurance,
directly by the Company, so that the Executive has no out-of-pocket cost with
respect to such expenses.

4.   Director and Officer Liability Insurance.

5.   Voluntary annual physicals at the Executive's option, with a report by the
examining physician to the Board regarding the Executive's ability to perform
job related functions.

                                      -20-
<Page>

                                    EXHIBIT B

                        DEFINITION OF "CHANGE IN CONTROL"

     The occurrence of any of the following shall constitute a "Change in
Control" of the Company:

            (a)     If any person (as defined in Section 3(a)(9) of the
     Securities Exchange Act of 1934, as from time to time in effect (the
     "Exchange Act"), or any successor provision), other than the Company,
     becomes the beneficial owner directly or indirectly of more than
     twenty-five percent (25%) of the outstanding Common Stock of the Company,
     determined in accordance with Rule 13d-3 under the Exchange Act (or any
     successor provision), or otherwise becomes entitled to vote more than
     twenty-five percent (25%) of the voting power entitled to be cast at
     elections for directors ("Voting Power") of the Company;

            (b)     If the Company is subject to the reporting requirements of
     Section 13 or 15(d) (or any successor provision) of the Exchange Act, and
     any person (as defined in Section 3(a)(9) of the Exchange Act, or any
     successor provision), other than the Company, purchases shares pursuant to
     a tender offer or exchange offer to acquire Common Stock of the Company (or
     securities convertible into or exchangeable for or exercisable for Common
     Stock) for cash, securities or any other consideration, if after
     consummation of the offer, the person in question is the beneficial owner,
     directly or indirectly, of more than twenty-five percent (25%) of the
     outstanding Common Stock of the Company, determined in accordance with Rule
     13d-3 under the Exchange Act (or any successor provision);

            (c)     If the stockholders or the Board of Directors of the Company
     (the "Board") approve any consolidation or merger of the Company (i) in
     which the Company is not the continuing or surviving corporation unless
     such merger is with a subsidiary of the Company (a "Subsidiary") at least
     eighty percent (80%) of the Voting Power of which is held by the Company or
     (ii) pursuant to which the holders of the Company's shares of Common Stock
     immediately prior to such merger or consolidation would not be the holders
     immediately after such merger or consolidation of at least a majority of
     the Voting Power of the Company;

            (d)     The stockholders or the Board shall have approved any sale,
     lease, exchange or other transfer (in one transaction or a series of
     transactions) of all or substantially all of the assets of the Company; or

            (e)     Upon the election of one or more new directors of the
     Company, a majority of the directors holding office, including the newly
     elected directors, were not nominated as candidates by a majority of the
     directors in office immediately before such election.

     As used in this definition of "Change in Control", "Common Stock" means the
Common Stock, or if changed, the capital stock of the Company as it shall be
constituted

                                      -21-
<Page>

from time to time entitling the holders thereof to share generally in the
distribution of all assets available for distribution to the Company's
stockholders after the distribution to any holders of capital stock with
preferential rights.

     Notwithstanding the occurrence of any of the events described in the
immediately preceding clauses (a) and (b) which would otherwise result in a
Change in Control pursuant to said clause (a) or (b), the Board may determine in
its discretion, if it deems it to be in the best interest of the Company, that
an event or events otherwise constituting a Change in Control pursuant to said
clause (a) or (b) but which would not constitute such a Change in Control if the
phrase "fifty percent (50%)" were to be substituted for the phrase "twenty-five
percent (25%)" each place it appears therein shall not be considered such a
Change in Control; provided, however, that such determination shall not affect
any accelerated vesting of any stock options or restricted stock purchase rights
or any extensions of the term of exercisability of such options or rights which
would otherwise have occurred by virtue of such events; and provided, further,
that such determination shall not be effective hereunder unless the Company
shall have at least one other executive officer who has a provision similar to
this paragraph in such executive officer's employment agreement with the Company
and the Board shall make such determination with respect to all executive
officers of the Company who have a provision similar to this paragraph in such
executive officers' employment agreements with the Company. Such determination
shall be effective only if it is made by the Board prior to the occurrence of an
event that otherwise would be or probably would lead to such a Change in
Control; or within thirty (30) days after such event if made by the Board a
majority of which is composed of directors who were members of the Board
immediately prior to the event that otherwise would be or probably would lead to
such a Change in Control.

                                      -22-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]