Document:

Exhibit 10.3

 

EMPLOYMENT
AND SEVERANCE AGREEMENT

 

THIS EMPLOYMENT AND
SEVERANCE AGREEMENT  (the “AGREEMENT”) is
entered into as of the 1st day of July, 2005, by and between Rockford O.
Kottka (“EXECUTIVE”) and CENTERPOINT PROPERTIES TRUST, a Maryland business
trust (the “COMPANY”). Certain terms used herein are defined in SECTION 11.

 

RECITALS

 

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

 

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

 

WHEREAS, Executive has
performed and continues to perform services for the Company as an employee;

 

WHEREAS, the Prior
Agreement, which was extended through midnight on June 30, 2005,
previously set forth the terms and conditions of the employment relationship
between the Company and Executive;

 

WHEREAS, the Company
desires to continue to employ Executive and Executive desires to continue to
perform services for the Company, in each case upon the terms and subject to
the conditions hereinafter provided in this Agreement, which supersedes the
Prior Agreement;

 

WHEREAS, the Company
continues to recognize that the possibility of a change in control of the
Company may result in the departure or distraction of management to the
detriment of the Company and its share owners;

 

WHEREAS, the Company
wishes to assure Executive of certain benefits should Executive’s employment
terminate under certain circumstances following a change in control of the
Company.

 

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

 

1.                                       EMPLOYMENT. 
The Company hereby agrees to employ Executive under the terms and conditions
set forth in this Agreement and Executive hereby accepts such employment.

 

2.                                       DUTIES. 
Executive shall serve in the capacity listed on SCHEDULE A, with the
executive duties generally associated with such position, together with such
further and additional duties of an executive nature as from time to time may
be assigned to him by the person or body specified in SCHEDULE A, to whom
he is to report. 

 

 

	
  Employment Agreement

  	
   

  	
  July 1,
  2005

  
	
  Rockford O. Kottka

  	
   

  	
   

  

 

Executive
shall report directly to the person or body specified in SCHEDULE A.  During the term of this Agreement, Executive
will devote his best efforts and his full business time and attention
(exclusive of vacation periods, holidays or periods of illness or incapacity)
to the business of the Company and his duties hereunder; provided, however,
that Executive may devote a reasonable amount of his time to the management of
personal investments, and to industry, civic and community matters.

 

3.                                       TERM. 
Subject to earlier termination of Executive’s employment as provided in SECTION 4
of this Agreement, Executive’s employment shall continue on and after the
Effective Date but shall terminate on the fifth anniversary of the Effective
Date; provided, however, Executive’s employment shall automatically be extended
for additional one (1) year periods unless the Board provides Executive
with written notice before the beginning of any period that it has elected not
to extend Executive’s employment beyond the next following period.  If the Board elects not to extend Executive’s
employment beyond the next following period, then Executive’s employment shall
terminate at the end of the period that follows the period in which the Board
provides Executive the notice described in the preceding sentence.

 

4.                                       TERMINATION. 
Executive’s employment under this Agreement shall terminate before the end of
the term specified in SECTION 3 hereof:

 

(a)                                  if
Executive dies or if the Board determines based upon reasonable medical
evidence (to be provided by a mutually agreed upon physician) that he is no
longer able to adequately perform his duties (with or without reasonable
accommodation) due to disability;

 

(b)                                 (i) at
the Company’s election other than for Cause, upon delivery to Executive of 60
days’ advance written notice by the Company of its intent to terminate
Executive’s employment, (ii) at Executive’s election for Good Reason where
such termination is not a Qualifying Termination, upon delivery to the Company
of 60 days’ advance written notice by Executive of Executive’s intent to
voluntarily terminate for Good Reason, or (iii) at Executive’s election
for Good Reason where such termination is a Qualifying Termination, upon
delivery to the Company of 30 days’ advance written notice by Executive of
Executive’s intent to voluntarily terminate for Good Reason;

 

(c)                                  at
the Company’s election for Cause; and

 

(d)                                 at
Executive’s election other than for Good Reason, upon delivery to the Company
of three months’ advance written notice by Executive of Executive’s intent to
voluntarily terminate employment without Good Reason (except that such advance
notice shall not be required after a Change in Control).

 

5.                                       BASE
SALARY.  In consideration of the services rendered by Executive hereunder,
the Company agrees to pay to Executive a base salary (the “BASE 

 

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SALARY”)
payable in equal semi-monthly installments. 
The Base Salary shall be as provided in SCHEDULE A until the next
annual review thereof by the Board and thereafter shall be subject to annual
review and increase by the Board at its sole discretion.

 

6.                                       STOCK
AND BONUS PLANS.  Executive shall be
entitled to participate in the 2003 Incentive Plan and all other incentive,
stock, stock option, phantom stock and other equity-based, deferred
compensation and incentive cash bonus plans, practices, policies and programs
established by the Company for the general benefit of similarly-situated
executive and managerial employees.  Executive’s
bonus, stock option grant and/or restricted stock grant targets for fiscal year
2005 shall be as provided in SCHEDULE A hereto.  The Compensation Committee of the Board
shall, in its sole discretion, establish Executive’s bonus and stock option
targets for fiscal years after 2005 and shall communicate such targets to
Executive on or around the date that it communicates such targets to its other
executives.  Actual bonus awards and
option grants will be based on Executive’s performance and the results of the
Company with respect to annual goals, as determined by the Compensation
Committee of the Board and approved by the Board in its sole discretion.  The Company shall pay each annual bonus to
Executive in a single lump sum on or around the date that the Company pays the
annual bonuses to its other similarly-situated executives.

 

7.                                       OTHER
BENEFITS.  Executive shall be entitled to the following benefits, and
specific benefits listed in SCHEDULE A attached hereto:

 

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

 

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

 

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

 

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

 

(e)                                  recognizing
that business promotion and entertainment of clients and prospective clients
are important aspects of Executive’s job responsibilities, the Company will pay
club dues, membership fees and other related or similar club expenses, 

 

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including,
without limitation, initiation fees and entertainment expenses for memberships
in such professional or social clubs or other organizations (in addition to any
specified in SCHEDULE A) as the Compensation Committee, in its sole
discretion, deems appropriate;

 

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

 

(g)                                 reimbursement
for reasonable tax preparation costs; and

 

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

 

In addition to the
foregoing benefits, the Company will use its best efforts to obtain and
maintain directors’ and officers’ liability insurance for the benefit of
Executive and the other directors and officers of the Company.  Further, if and when the Company grants
Executive stock options or restricted stock, the Company shall use its best
efforts to provide in the grant agreements that such stock options and
restricted stock will fully vest upon a termination of employment pursuant to SECTION 4(a) and
4(b) and if the Board elects not to renew the term of this Agreement
pursuant to SECTION 3 and that any such stock options shall remain
exercisable until the earlier of 90 days after Executive’s termination date or
the end of the full term of the stock option.

 

8.                                       PAYMENTS
ON TERMINATION.  Except as otherwise
provided in SECTION 9 of this Agreement,

 

(a)                                  If
Executive’s employment is terminated for any reason, then the Company shall pay
to Executive that portion of Executive’s Base Salary payable through the
effective date of the termination plus the amount of any accrued but unused
vacation pay through the effective date of the termination and any expenses
described in SECTION 7 not previously reimbursed as of the effective date
of the termination, all of which will be paid to Executive in a lump sum in
cash within 30 days of the effective date of the termination.

 

(b)                                 If
Executive’s employment is terminated pursuant to SECTION 4(a) or
4(b), prior to the end of a year and such termination is not a Qualifying
Termination, then the Company shall pay to Executive a pro-rated incentive
equal to:

 

(i)                                     Executive’s
annual cash bonus for the prior year, multiplied by

 

(ii)                                  a
fraction, (A) the numerator of which is the number of calendar months
(counting a partial calendar month as a full month) that has elapsed (in the
calendar year in which Executive’s effective date of termination 

 

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occurs) prior to (x) in the
case of termination pursuant to SECTION 4(a), the date of Executive’s
death or disability or (y) in the case of termination pursuant to SECTION 4(b),
the effective date of termination, and (B) the denominator of which is 12.

 

(c)                                  Subject
to SECTION 17, if Executive’s employment is terminated pursuant to SECTION 4(b) and
such termination is not a Qualifying Termination or the Board elects not to
renew the term of this Agreement as provided in SECTION 3, then the
Company shall provide Executive the pay and benefits described in this SECTION 8(c).

 

(i)                                     Executive
shall be entitled to a monthly payment equal to his monthly salary in effect at
the time of termination plus one-twelfth of his prior year’s bonus.  This amount shall be payable for a 24-month
period if Executive terminates employment pursuant to SECTION 4(b) and
for a 12-month period if the Board elects not to renew the term of this
Agreement pursuant to SECTION 3. 
Payment shall begin on the date set forth in SECTION 8(e).

 

(ii)                                  The
Company shall provide Executive continued group health coverage in accordance
with this SECTION 8(c)(ii).

 

(A)                              If
the Company’s group health plan is insured on the date Executive terminates
employment, then the Company shall continue Executive’s active employee group
health plan coverage for six months following Executive’s termination of
employment under such insured group health plan.  Thereafter, Executive may elect COBRA
continuation coverage.  For no less than
18 months if Executive terminates employment pursuant to SECTION 4(b) or
for no less than six months if the Board elects not to renew the term of this
Agreement pursuant to SECTION 3, Executive’s cost for such continued
coverage (including the continued active employee and COBRA coverage) shall not
exceed the amount Executive would otherwise be required to pay if he or she
remained an active employee of the Company.

 

(B)                                If
the Company’s group health plan is self-insured on the date Executive
terminates employment, then Executive’s active employee group health plan
coverage shall cease on the date Executive terminates employment.  Thereafter, Executive may 

 

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elect COBRA continuation
coverage.  For no less than 24 months if
Executive terminates employment pursuant to SECTION 4(b) or for no
less than 12 months if the Board elects not to renew the term of this Agreement
pursuant to SECTION 3, Executive’s cost for such continued coverage
(including the continued active employee and COBRA coverage) shall not exceed
the amount Executive would otherwise be required to pay if he or she remained
an active employee of the Company.

 

(d)                                 If
Executive’s employment is terminated pursuant to SECTION 4(a) or 4(b) or
if the Board elects not to renew the term of this Agreement pursuant to SECTION 3
and to the extent not inconsistent with the terms and conditions of the 2003
Incentive Plan (or the applicable predecessor or successor plan) and the
underlying stock option agreement and/or restricted stock agreement, each stock
option and restricted stock award that is unvested on Executive’s termination
date shall fully vest on Executive’s termination date.  Further, each stock option that Executive
holds on Executive’s termination date shall remain exercisable until the
earlier of 90 days after Executive’s termination date or the end of the full
term the stock option, to the extent provided in the underlying stock option
agreement.

 

(e)                                  Notwithstanding
any provision in this Agreement to the contrary, if Executive terminates
employment pursuant to SECTION 4(b) or the Board elects not to renew
the term of this Agreement pursuant to SECTION 3 and Section 409A(a)(2)(B)(i) of
the Code applies to the payments described in SECTION 8(b) and 8(c) and
Executive is a “specified employee” thereunder, then the Company shall pay the
pro-rated incentive described in SECTION 8(b) and begin paying the
continued salary described in SECTION 8(c) no earlier than six (6) months
after Executive terminates employment or such other date as would be
permissible under such Section of the Code.  If Executive terminates employment pursuant
to SECTION 4(b) and or the Board elects not to renew the term of this
Agreement pursuant to SECTION 3 and Section 409A(a)(2)(B)(i) of
the Code does not apply to the payments described in SECTION 8(b) and
8(c) or Executive is not a “specified employee” thereunder, then the
Company shall pay the pro-rated incentive described in SECTION 8(b) and
begin paying the continued salary described in SECTION 8(c) as soon
as possible after Executive terminates employment but in no event later than 30
days after Executive’s termination of employment.

 

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9.                                       CHANGE
IN CONTROL PAYMENTS.

 

(a)                                  BENEFITS
PAYABLE.  Subject to SECTIONS 9(b) and
9(c) below, if Executive experiences a Qualifying Termination, then the
Company shall provide Executive all of the following severance benefits (“SEVERANCE
BENEFITS”):

 

(i)                                     The
Company shall pay to Executive each of the following:

 

(A)                              The
amounts specified in SECTION 8(a) and SECTION 8(b).

 

(B)                                Three
times Executive’s Base Salary in effect upon the date of the Qualifying
Termination or, if greater, three times Executive’s Base Salary in effect
immediately prior to the occurrence of the Change of Control.

 

(C)                                Three
times Executive’s highest annual cash bonus.

 

(D)                               Payment
or reimbursement (at Executive’s option) for outplacement services of a scope
and nature customary for executives holding comparable positions and provided
by a nationally-recognized outplacement firm of Executive’s selection, for a
period of up to two years commencing on the date of Executive’s Qualifying
Termination. Notwithstanding the foregoing, the aggregate amount of such
reimbursement shall not exceed 25% of Executive’s Base Salary as of the date of
the Qualifying Termination.

 

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

 

(ii)                                  Except
as otherwise provided in this SECTION 9(a)(ii), the Company shall continue
Executive’s group health plan coverage (at the same cost to Executive and at
the same coverage level in effect on the date of the Qualifying Termination)
for 36 months from the date of the Qualifying Termination (the “CONTINUATION
PERIOD”).  The maximum required period
under COBRA shall run concurrently with the Continuation Period.  If Executive becomes eligible for any other
substantially similar group health coverage during the Continuation Period,
then the continued group health plan coverage provided by 

 

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the Company pursuant to this SECTION 9(a)(ii) shall
terminate, to the extent COBRA permits such termination.

 

(iii)                               Subject
to the terms and conditions of the 2003 Incentive Plan (or the applicable
predecessor or successor plan) and subject to the terms and conditions of the
underlying stock option agreement and/or restricted stock agreement, each stock
option and restricted stock award that is unvested on Executive’s termination
date shall fully vest on Executive’s termination date.  Further, each stock option that Executive
holds on Executive’s termination date shall remain exercisable until the
earlier of 90 days after Executive’s termination date or the end of the full
term of the stock option, to the extent provided in the underlying stock option
agreement.

 

(iv)                              If Section 409A(a)(2)(B)(i) of
the Code applies to the Severance Benefits and Executive is a “specified
employee” thereunder, then all of the Severance Benefits described in SECTION 9(a)(i) shall
be paid in cash to Executive in a single lump sum no earlier than six (6) months
after the effective date of the Qualifying Termination or such other date as
would be permissible under such Section of the Code.  If Section 409A(a)(2)(B)(i) of the
Code does not apply to the Severance Benefits or Executive is not a “specified
employee” thereunder, then all of the Severance Benefits described in SECTION 9(a)(i) shall
be paid in cash to Executive in a single lump sum as soon as possible after the
effective date of the Qualifying Termination (but in no event more than 10 days
after such date).  Notwithstanding the
preceding two sentences to the contrary, the Severance Benefits described in SECTION 9(a)(i)(D) shall
be paid or reimbursed to Executive following the later of the applicable
payment date set forth in the preceding two sentences or the date Executive
promptly submits an invoice of the firm providing the outplacement services
described in such subsection. Executive shall not be obligated to seek other
employment or take any other action to mitigate the amounts payable to
Executive under this Agreement.

 

(b)                                 SEVERANCE
BENEFITS FOR NON-RENEWAL. 
Notwithstanding SECTION 9(a), if the Board’s election not to renew
the term of this Agreement as provided in SECTION 3 within 24 months
following a Change in Control causes Executive’s Qualifying Termination, then
Executive shall not be entitled to the amount specified in SECTION 8(b) and
the number “two” shall replace “three” in SECTIONS 9(a)(i)(B) and (C) and
“24 months” shall replace “36 months” in SECTION 9(a)(ii).

 

(c)                                  SEVERANCE
BENEFITS LIMIT.  Notwithstanding any provision of this Agreement to the
contrary, if the Severance Benefits would constitute a “parachute payment,” as
defined in Section 280G(b)(2) of the Code, Executive shall receive
the Severance Benefits unless the (i) after-tax amount that would be
retained by Executive (after taking into account all federal, state and local
income taxes payable by Executive 

 

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and the amount
of any excise taxes payable by Executive pursuant to Section 4999 of the
Code (the “Excise Taxes”)) if Executive were to receive the Severance Benefits
has a lesser aggregate value than (ii) the after-tax amount that would be
retained by Executive (after taking into account all federal, state and local
income taxes and Excise Taxes payable by Executive) if Executive were to
receive the maximum amount of the Severance Benefits that Executive could
receive without being subject to the Excise Tax (the “Reduced Payments”), in
which case the Executive shall be entitled only to the Reduced Payments.  The Company’s auditors shall determine the
application of Section 280G of the Code to the Severance Benefits and
shall perform the calculations necessary to determine the amounts and values
described in this SECTION 9(b).

 

10.                                 COMPETITION
AND CONFLICTS OF INTEREST.  In consideration of the benefits payable to
Executive under SECTION 8, Executive agrees, simultaneously with the
execution hereof to enter into a Non-Competition, Non-Solicitation and
Confidentiality Agreement in the form annexed hereto as EXHIBIT A.  The Non-Competition, Non-Solicitation and
Confidentiality Agreement attached hereto as EXHIBIT A replaces and
supersedes any prior or existing agreement by and between Executive and the
Company with respect to the subject matter therein.  Upon a termination of employment for any
reason following a Change in Control, the Non-Competition, Non-Solicitation and
Confidentiality Agreement shall terminate and be of no force or effect.

 

11.                                 DEFINITIONS.

 

“2003 INCENTIVE PLAN”
means the CenterPoint Properties Trust 2003 Omnibus Employee Retention and
Incentive Plan.

 

“BENEFICIARY” means,
except where otherwise required by the Employee Retirement Income Security Act
of 1974 or the terms of an applicable employee benefit plan, the person or
persons designated by Executive, in a writing provided to the Company prior to
Executive’s death, to receive amounts payable to Executive under this
Agreement. Subject to such exception, in the absence of such a written
beneficiary designation, the Beneficiary shall be Executive’s surviving spouse,
or if none, Executive’s estate.

 

“BOARD” means the Board
of Trustees of the Company.

 

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

 

(i)                                     Executive’s
commission of a felony;

 

(ii)                                  Executive’s
commission of fraud with respect to the Company or any Subsidiary;

 

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

 

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

 

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

 

(vi)                              any
other material breach of this Agreement by Executive, the Non-Competition,
Non-Solicitation and Confidentiality Agreement or any policy of the Company or
any Subsidiary, and which, if curable, has not been cured within 15 days’
written notice thereof from the Board.

 

“CHANGE IN CONTROL” means
the first to occur of any one or more of the following:

 

(i)                                     Any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “EXCHANGE
ACT”) (a “PERSON”) acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty-five (35%) or more of the then
outstanding voting securities of the Company; provided, however, that the
following acquisitions shall not constitute a Change in Control: (a) any
acquisition by a Person directly from the Company (excluding an acquisition by
virtue of the exercise of conversion rights), (b) any acquisition by the
Company, or (c) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company; or

 

(ii)                                  Individuals
who, as of the date hereof, constitute the Board of Trustees of the Company
(the “INCUMBENT BOARD”) cease for any reason to constitute at least a majority
of the Board of Trustees of the Company; provided, however, that any individual
becoming a director subsequent to the date hereof whose nomination for election
by the Company’s shareholders was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, unless such individual’s
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other 

 

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actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Board; or

 

(iii)                               The
shareholders of the Company approve a reorganization, merger or consolidation,
unless, following such reorganization, merger or consolidation, (a) more
than sixty percent (60%) of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and the
combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners of the outstanding Common Shares of
the Company immediately prior to such reorganization, merger or consolidation
in substantially the same proportions as their ownership, immediately prior to
such reorganization, merger or consolidation, of the outstanding Common Shares
of the Company, (b) no Person (excluding the Company, any employee benefit
plan or related trust of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, thirty-five percent (35%) or more of the Common Shares of the
Company) beneficially owns, directly or indirectly thirty-five percent (35%) or
more of the then outstanding shares of common shares of the company resulting
from such reorganization, merger or consolidation, and (c) at least a
majority of the members of the board of directors of the company resulting from
such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

 

(iv)                              The
Company ceases to qualify as a “real estate investment trust” under Section 856
of the Code; or

 

(v)                                 The
shareholders of the Company approve (a) a complete liquidation or
dissolution of the Company or (b) the sale or other disposition of all or
substantially all of the assets of the Company.

 

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

 

“CODE” means the Internal
Revenue Code of 1986, as amended.

 

“COMPANY” has the meaning
specified in the introductory paragraph of this Agreement.

 

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

 

“CONTINUATION PERIOD” has
the meaning specified in SECTION 9(a)(ii).

 

“EFFECTIVE DATE” means July 1,
2005.

 

“EXCESS PARACHUTE PAYMENT”
has the meaning specified in Section 280G of the Code.

 

“EXCHANGE ACT” means the
Securities Exchange Act of 1934.

 

“EXCISE TAX” has the
meaning specified in SECTION 9(b).

 

“EXECUTIVE” has the
meaning specified in the introductory paragraph of this Agreement.

 

“GOOD REASON” shall mean
the occurrence, without Executive’s prior written consent, of any one or more
of the following:

 

(vi)                              an
action by the Company that results in a material adverse change in Executive’s
position (including status, offices, titles, and reporting requirements), authority,
duties, or other responsibilities with the Company, and which, if curable, has
not been cured within 15 days’ written notice thereof from Executive;

 

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

 

(viii)                        a
reduction in Executive’s Base Salary;

 

(ix)                                a
material reduction in the benefits provided to Executive, except for
across-the-board reductions of such benefits for all senior management of the
Company;

 

(x)                                   a
material breach of this Agreement by the Company; or

 

(xi)                                a
reduction of Executive’s target bonus within 24 months of a Change in Control.

 

“INCLUDING” means
including without limitation.

 

“PRIOR AGREEMENT” means
the Employment and Severance Agreement effective March 12, 1999, by and
between the Company and Executive.

 

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“QUALIFYING TERMINATION”
means the occurrence of any one or more of the following:

 

(xii)                             The
Company’s termination of Executive’s employment other than for Cause within 24
months following a Change in Control;

 

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

 

(xiv)                         A
successor of the Company fails to assume expressly the Company’s entire
obligations under this Agreement prior to becoming such a successor as required
by SECTION 12(a)(ii); or

 

(xv)                            The
Board’s election not to renew the term of this Agreement as provided in SECTION 3
within 24 months following a Change in Control.

 

A Qualifying Termination
shall not include a termination of Executive’s employment by reason of death,
disability, Executive’s voluntary termination other than for Good Reason or the
Company’s termination of Executive’s employment for Cause. Notwithstanding the
foregoing, if Executive’s employment is terminated before a Change in Control
and Executive can reasonably demonstrate that the termination by the Company or
the actions constituting Good Reason for termination by the Executive were at
the request of a third party who had indicated an intention or taken steps
reasonably calculated to effect a Change in Control who then effects a Change
in Control, then the date of the Change in Control shall be deemed to be the
date immediately prior to Executive’s termination of employment.

 

“SECTION” shall, unless
the context otherwise requires, mean a section of this Agreement.

 

“SUBSIDIARY” means a
United States or foreign corporation with respect to which the Company owns,
directly or indirectly, 50% or more of the then outstanding common shares.

 

12.                                 ASSIGNMENT.

 

(a)                                  ASSIGNMENT
BY THE COMPANY.

 

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

 

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the assets of the Company.  Notwithstanding such assignment, the Company
shall remain, with such successor, jointly and severally liable for all its
obligations hereunder.  Without limiting
the generality of the foregoing, it is specifically agreed that an assignment
of this Agreement by the Company will not diminish Executive’s rights under
SECTIONS 9 and 10 hereof.

 

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

 

(iii)                               Except
as provided in this SECTION 12(a), this Agreement may not be assigned by
the Company.

 

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

 

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

 

CenterPoint Properties Trust

1808 Swift Road 

Oak Brook, IL 60523-1501

Facsimile: 630-586-8010

 

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

 

14.                                 ENTIRE
AGREEMENT.  This Agreement supersedes any prior agreements or
understandings, oral or written, between Executive and the Company, with
respect to the subject matter hereof and constitutes the entire agreement of
the parties with respect thereto.  The
captions of this Agreement are not part of the provisions hereof and shall be
of no effect.

 

15.                                 ENFORCEMENT. 
Following a Qualifying Termination on account of a Change in Control, the
Company shall reimburse Executive, on an after-tax basis, for the

 

14

 

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

 

16.                                 LATE
PAYMENTS.  Following a Qualifying
Termination on account of a Change in Control, if the Company fails to pay any
of the Severance Benefits when due, then the Company shall pay interest on such
amount at a rate equal to the highest rate of interest charged by the Company’s
principal lender plus 500 basis points.

 

17.                                 MITIGATION
AND OFFSET.  In no event shall Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable to
Executive under any provision of this Agreement.  If Executive’s employment terminates pursuant
to SECTION 4(b), such termination is not a Qualifying Termination and
Executive becomes entitled to receive compensation from a subsequent employer
before the 24-month or 12-month period, as applicable, described in
SECTION 8(b) ends, then the monthly amounts payable to Executive
pursuant to SECTION 8(c) shall be reduced by the monthly amount
Executive is entitled to receive from such subsequent employer.

 

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

 

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

 

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

 

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

 

*   *  
*   *   *

 

15

 

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

 

 

	
   

  	
     /s/ Rockford O. Kottka

  	
   

  
	
   

  	
  Rockford O. Kottka

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CENTERPOINT PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael M. Mullen

  	
   

  
	
   

  	
   

  	
   Michael M. Mullen

  	
   

  
	
   

  	
  Its:

  	
   Chief Executive Officer

  	
   

  

 

16

 

July 1, 2005

 

SCHEDULE A

 

	
  NAME:

  	
   

  	
  Rockford O. Kottka

  
	
   

  	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
  224 Crabapple Lane 

  

  Valparaiso, IN USA 46383

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
   

  	
  Executive Vice President and Chief
  Accounting Officer

  
	
   

  	
   

  	
   

  
	
  RESPONSIBILITIES:

  	
   

  	
  See Attached Job Description

  
	
   

  	
   

  	
   

  
	
  REPORTING RELATIONSHIP:

  	
   

  	
  Paul S. Fisher

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BASE SALARY:

  	
   

  	
  $257,500

  

 

CASH INCENTIVE TARGET
AWARD:

 

110%

 

STOCK OPTION PLAN TARGET
GRANT:

 

50,000

 

RESTRICTED SHARE GRANT TARGET AWARD:

 

$150,000

 

SPECIFIC BENEFITS:

 

Membership: Sand Creek Country Club

 

 

EXHIBIT A

 

NON-COMPETITION,
NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

 

THIS AGREEMENT is made
this 1st day of July, 2005 by and between Rockford O. Kottka (the “Executive”)
and CENTERPOINT PROPERTIES TRUST, a Maryland business trust (the “Company”).

 

RECITALS

 

WHEREAS, the Company is
engaged in the business of owning, managing, operating and leasing real estate,
primarily warehouse, airport and industrial property.

 

WHEREAS, the Executive
and the Company are entering into an Employment and Severance Agreement dated
of even date herewith (the “EMPLOYMENT AGREEMENT”) which provides that the
Executive will hold the position of Executive Vice President and Chief
Accounting Officer within the Company;

 

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

 

WHEREAS, as a condition
to the Company of entering into the Employment Agreement, in order to protect
the Company’s business relationships and good will, and to guard against
conflicts of interest the Executive is willing to enter into this Agreement;

 

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

 

1.                                       COVENANT
NOT TO COMPETE.  The Executive agrees
that during the term of his employment with the Company and for a period of one
year thereafter if the Executive’s employment terminates because the Board
elected not to renew the Executive’s employment and two years thereafter if the
Executive’s employment terminates for any other reason (the “NON-COMPETITION
PERIOD”), he will not directly or indirectly, in any market which is served by
the Company or which the Company is actively preparing to serve, engage or
participate (whether as an owner, officer, partner, principal, joint venturer,
shareholder, director, member, manager, investor, employee, independent
contractor, consultant, or otherwise) in any other company or entity primarily
engaged in the business of acquiring, owning, developing, operating, leasing,
and/or managing warehouse, airport, or industrial real estate for development
and investment purposes or any business which provides consulting, leasing,
management, or brokerage services to such businesses (the “Real Estate Business”),
subject to the following exceptions:

 

1

 

	
  Non-Competition, Non-Solicitation and

  	
   

  	
  July 1,
  2005

  
	
  Confidentiality Agreement

  	
   

  	
  Rockford O.
  Kottka

  

 

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

 

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

 

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

 

2.                                       NON-SOLICITATION. 
During the term of Executive’s employment with the Company and for a period of
three years thereafter (the “NON- SOLICITATION PERIOD”), the Executive shall
not (a) employ, retain, solicit for employment or retention, knowingly
assist in the employment or retention of, or seek to influence or induce to
leave the employment or service of the Company or any of its subsidiaries or
affiliates any person who is employed or otherwise engaged by the Company or
any of its subsidiaries or affiliates, or (b) induce or attempt to induce
any customer, supplier, licensee, or other business relation of the Company or
any of its subsidiaries or affiliates to cease doing business with the Company
or any of its subsidiaries or affiliates or otherwise interfere with the
relationship between the Company or any of its subsidiaries or affiliates and
such business relation.

 

3.                                       NONDISCLOSURE
AND NONUSE OF CONFIDENTIAL INFORMATION.

 

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

 

(b)                                 As
used in this Agreement, the term “Confidential Information” means information
that is not generally known to the public and that is used, developed or
obtained by the Company or its subsidiaries in connection with their
business.  Confidential Information shall
not include (i) any information that has been published in a form
generally available to the public prior to the date the Executive proposes to
disclose or use such information, and (ii) any information that Executive
is legally required to disclose. Information shall not be deemed to 

 

2

 

have been
published merely because individual portions of the information have been
separately published, but only if all material features comprising such
information have been published in combination.

 

4.                                       SPECIFIC
PERFORMANCE.  The parties agree that the Executive’s services are of a
special, unique and extraordinary character, that it would be extremely
difficult to quantify the money damages which would accrue to the Company by
reason of the Executive’s failure to perform any of his obligations under this
Agreement, that it would be extremely difficult to replace such services, and
that any violation of the provisions of this Agreement would be likely to be
highly injurious to the Company.  By
reason of the foregoing, the Executive consents and agrees that if he violates
any of the provisions of this Agreement the Company shall be entitled, in
addition to any other rights and remedies that it may have, including money
damages, to apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any continuing violation of the provisions hereof.  Therefore, if the Company shall institute any
action or proceeding to enforce the provisions of this Agreement against the
Executive, the Executive hereby waives the claim or defense that there is an
adequate remedy at law and agrees in any such action or proceeding not to
interpose the claim or defense that such remedy exists at law.  The parties hereby specifically affirm the
appropriateness of injunctive or other equitable relief in any such action.

 

5.                                       MODIFICATION. 
If in connection with any action taken by the Company to enforce the provisions
of this Agreement, a court shall hold that all or any portion of the
restrictions contained herein are unreasonable under the circumstances then
existing so as to render such restrictions invalid or unenforceable, the
parties agree that any court of competent jurisdiction may reform such
unreasonable restrictions to the extent necessary to make such restrictions
reasonable under the circumstances then existing so as to render such
restrictions both valid and enforceable.

 

6.                                       BREACH. 
In the event that the Company hereafter believes that the Executive has
breached any of the covenants of this Agreement, it shall notify the Executive
of such alleged breach, setting forth the substance of said alleged breach.
Within ten (10) days from receipt by the Executive of such notice, the
Executive either shall remedy said alleged breach or provide the Company with
evidence that the activity concerned was permitted by the provisions of this
Agreement.

 

7.                                       NOTICES. 
All notice required or permitted to be given under this Agreement shall be
sufficient if in writing and mailed by certified or registered mail, return
receipt requested and postage prepaid, addressed as follows or to such other
address as either party shall have notified the other.

 

3

 

If to the Executive:

 

Rockford O. Kottka

224 Crabapple Lane

Valparaiso, IN USA 46383

 

If to the Company:

 

CenterPoint Properties Trust

1808 Swift Road

Oak Brook, IL 60523-1501

Facsimile: 630-586-8010

 

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

 

9.                                       PARTIAL
INVALIDITY. If any provision of this Agreement shall be held invalid or
unenforceable, the remainder nevertheless shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it nevertheless shall remain in full force and effect
in all other circumstances.

 

10.                                 BENEFIT.
This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and assigns, and upon all persons, corporations or
entities which shall engage in the business herein contemplated under the
control and direction of the parties.

 

11.                                 ENTIRE
AGREEMENT. This Agreement and the documents incorporated herein by reference
supersede and replace the prior Non-Competition, Non-Solicitation and
Confidentiality Agreement dated March 12, 1999 by and between Executive
and the Company.  This Agreement and the
documents incorporated herein by reference contain the entire agreement and
understanding of the parties, and no representations, promises, agreements or
any understanding, written or oral, not contained herein shall be of any force
or effect.  Upon a termination of
employment for any reason following a Change in Control (as defined in SECTION 11
of the Employment Agreement), this Agreement shall terminate and be of no force
or effect.

 

12.                                 MODIFICATIONS
AND WAIVERS. No change, modification or waiver of any provision of this
Agreement shall be valid or binding unless it is in writing dated subsequent to
the date hereof, and signed by the party intended to be bound. No waiver of any
breach, term or condition of this Agreement by either party shall constitute a
subsequent waiver of the same or any other breach, term or condition.

 

*   *  
*   *   *

 

4

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Rockford O. Kottka

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CENTERPOINT PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Michael M. Mullen

  	
   

  
	
   

  	
  Its:

  	
   Chief Executive Officer

  	
   

  
					

 

5

 

EXECUTIVE
VICE PRESIDENT & CHIEF ACCOUNTING OFFICER

 

POSITION SUMMARY:

(a)                                 Formulates
and implements CenterPoint’s business strategies, including accounting, tax,
financial, budgeting and forecasting functions and related policies and
controls, to ensure the integrity of the Company’s internal and external
reporting.

 

RESPONSIBILITIES:  (include but are not
limited to)

 

•                  Directs the
accounting, tax and finance, and treasury functions related to all regulatory
reporting, tax filings and other company disclosure matters

•                  Directs
budgeting, forecasting, cash management, and variance analysis to provide
meaningful, timely and accurate information to management

•                  Prescribes and
enforces comprehensive internal controls to assure proper stewardship of assets
and to assure accuracy, and adequacy of, accounting records and documentation;
including appropriate procedures, manuals and standard practice instruction

•                  Structures and
participates in the execution of material investments, dispositions and capital
transactions to achieve intended financial and reporting objectives consistent
with GAAP and tax reporting policies

•                  Serves as the
Company’s Chief Administrative Officer and Human Resource Officer responsible
for providing overall human resources leadership fostering the development of
human resource initiatives throughout CenterPoint

•                  Serves as member
of the Investment Committee

•                  Management
liaison, and secretary to, the Audit and Compensation Committees of the Board
of Trustees

•                  Responsible for
the Company’s relationship with its independent and internal auditors

•                  Directs
and manages staff to effectively achieve objectives, goals and ZTU

•                  Promotes
the training and development of current employees

•                  Participates
in the establishment of personal goals to ensure direct alignment with
department goals

•                  Interviews
and recommends candidates for employment or termination and works directly with
the human resources department in both instances

•                  Conducts
performance evaluations and salary reviews for assigned staff annually

•                  Other
duties as assigned.

 

QUALIFICATIONS:

 

•         Bachelor’s degree in
accounting/finance with CPA and/or MBA degree with at least 15 years proven
expertise in financial management

•         Excellent verbal and
written communication skills

•         Analytical and technical
proficiency in all areas of finance and accounting

•         Ability to direct
accounting, legal and other professionals through complex transactions

 

1

 

	
  Job Description

  	
   

  	
  July 1,
  2005

  
	
  Executive Vice President and

  	
   

  	
   

  
	
   Chief Accounting Officer

  	
   

  	
   

  

 

•         Analytical and technical
proficiency in all aspects of finance, treasury and accounting

•         Comfortable with
computers and proficient in standard corporate operating systems and software

•         Ability to manage a
number of complex matters under a high degree of pressure

•         Ability to establish
working relationships with key internal and external customers

•         Proven acumen and
creativity in problem solving

•         Ability to perform
actions and make decisions with integrity and sound judgment

•         Strong leadership skills
in providing motivation and career development for the entire department

•         Good organizational
ability

 

DESIRED COMPETENCIES:

	
  Integrity and Trust

  	
   

  	
  Ability to Multi-Task

  
	
  Business Acumen

  	
   

  	
  Communicates Effectively

  
	
  Initiative/Self-Starter

  	
   

  	
  Adaptability/Flexibility

  
	
  Accountability

  	
   

  	
  Motivating Others

  
	
  Customer Driven

  	
   

  	
  Managerial Courage

  
	
  Peer Relationships

  	
   

  	
  Developing Direct Reports and Others

  

 

2Exhibit 10.4

 

EMPLOYMENT
AND SEVERANCE AGREEMENT

 

THIS EMPLOYMENT AND
SEVERANCE AGREEMENT  (the “AGREEMENT”) is
entered into as of the 1st day of July, 2005, by and between James N.
Clewlow (“EXECUTIVE”) and CENTERPOINT PROPERTIES TRUST, a Maryland business
trust (the “COMPANY”). Certain terms used herein are defined in SECTION 11.

 

RECITALS

 

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

 

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

 

WHEREAS, Executive has
performed and continues to perform services for the Company as an employee;

 

WHEREAS, the Company
desires to continue to employ Executive and Executive desires to continue to
perform services for the Company, in each case upon the terms and subject to
the conditions hereinafter provided in this Agreement; 

 

WHEREAS, the Company
continues to recognize that the possibility of a change in control of the
Company may result in the departure or distraction of management to the detriment
of the Company and its share owners;

 

WHEREAS, the Company
wishes to assure Executive of certain benefits should Executive’s employment
terminate under certain circumstances following a change in control of the
Company.

 

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

 

1.                                       EMPLOYMENT. 
The Company hereby agrees to employ Executive under the terms and conditions
set forth in this Agreement and Executive hereby accepts such employment.

 

2.                                       DUTIES. 
Executive shall serve in the capacity listed on SCHEDULE A, with the
executive duties generally associated with such position, together with such
further and additional duties of an executive nature as from time to time may
be assigned to him by the person or body specified in SCHEDULE A, to whom
he is to report. Executive shall report directly to the person or body
specified in SCHEDULE A.  During the
term of this Agreement, Executive will devote his best efforts and his full
business time and attention (exclusive of vacation periods, holidays or periods
of illness or incapacity) to the business of the Company and his duties hereunder;
provided, however, 

 

 

	
  Employment Agreement

  	
   

  	
  July 1,
  2005

  
	
  James N. Clewlow

  	
   

  	
   

  

 

that Executive
may devote a reasonable amount of his time to the management of personal
investments, and to industry, civic and community matters.

 

3.                                       TERM. 
Subject to earlier termination of Executive’s employment as provided in SECTION 4
of this Agreement, Executive’s employment shall continue on and after the
Effective Date but shall terminate on the fifth anniversary of the Effective
Date; provided, however, Executive’s employment shall automatically be extended
for additional one (1) year periods unless the Board provides Executive
with written notice before the beginning of any period that it has elected not
to extend Executive’s employment beyond the next following period.  If the Board elects not to extend Executive’s
employment beyond the next following period, then Executive’s employment shall
terminate at the end of the period that follows the period in which the Board
provides Executive the notice described in the preceding sentence.

 

4.                                       TERMINATION. 
Executive’s employment under this Agreement shall terminate before the end of
the term specified in SECTION 3 hereof:

 

(a)                                  if
Executive dies or if the Board determines based upon reasonable medical
evidence (to be provided by a mutually agreed upon physician) that he is no
longer able to adequately perform his duties (with or without reasonable
accommodation) due to disability;

 

(b)                                 (i) at
the Company’s election other than for Cause, upon delivery to Executive of 60
days’ advance written notice by the Company of its intent to terminate
Executive’s employment, (ii) at Executive’s election for Good Reason where
such termination is not a Qualifying Termination, upon delivery to the Company
of 60 days’ advance written notice by Executive of Executive’s intent to
voluntarily terminate for Good Reason, or (iii) at Executive’s election
for Good Reason where such termination is a Qualifying Termination, upon
delivery to the Company of 30 days’ advance written notice by Executive of
Executive’s intent to voluntarily terminate for Good Reason;

 

(c)                                  at
the Company’s election for Cause; and

 

(d)                                 at
Executive’s election other than for Good Reason, upon delivery to the Company
of three months’ advance written notice by Executive of Executive’s intent to
voluntarily terminate employment without Good Reason (except that such advance
notice shall not be required after a Change in Control).

 

5.                                       BASE
SALARY.  In consideration of the services rendered by Executive hereunder,
the Company agrees to pay to Executive a base salary (the “BASE SALARY”)
payable in equal semi-monthly installments. 
The Base Salary shall be as provided in SCHEDULE A until the next
annual review thereof by the Board and thereafter shall be subject to annual
review and increase by the Board at its sole discretion.

 

2

 

6.                                       STOCK
AND BONUS PLANS.  Executive shall be
entitled to participate in the 2003 Incentive Plan and all other incentive,
stock, stock option, phantom stock and other equity-based, deferred
compensation and incentive cash bonus plans, practices, policies and programs
established by the Company for the general benefit of similarly-situated
executive and managerial employees. 
Executive’s bonus, stock option grant and/or restricted stock grant
targets for fiscal year 2005 shall be as provided in SCHEDULE A
hereto.  The Compensation Committee of
the Board shall, in its sole discretion, establish Executive’s bonus and stock
option targets for fiscal years after 2005 and shall communicate such targets
to Executive on or around the date that it communicates such targets to its
other executives.  Actual bonus awards
and option grants will be based on Executive’s performance and the results of
the Company with respect to annual goals, as determined by the Compensation
Committee of the Board and approved by the Board in its sole discretion.  The Company shall pay each annual bonus to
Executive in a single lump sum on or around the date that the Company pays the
annual bonuses to its other similarly-situated executives.

 

7.                                       OTHER
BENEFITS.  Executive shall be entitled to the following benefits, and
specific benefits listed in SCHEDULE A attached hereto:

 

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

 

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

 

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

 

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

 

(e)                                  recognizing
that business promotion and entertainment of clients and prospective clients
are important aspects of Executive’s job responsibilities, the Company will pay
club dues, membership fees and other related or similar club expenses,
including, without limitation, initiation fees and entertainment expenses for
memberships in such professional or social clubs or other organizations (in
addition to any specified in SCHEDULE A) as the Compensation Committee, in
its sole discretion, deems appropriate;

 

3

 

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

 

(g)                                 reimbursement
for reasonable tax preparation costs; and

 

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

 

In addition to the
foregoing benefits, the Company will use its best efforts to obtain and
maintain directors’ and officers’ liability insurance for the benefit of
Executive and the other directors and officers of the Company.  Further, if and when the Company grants
Executive stock options or restricted stock, the Company shall use its best
efforts to provide in the grant agreements that such stock options and
restricted stock will fully vest upon a termination of employment pursuant to SECTION 4(a) and
4(b) and if the Board elects not to renew the term of this Agreement
pursuant to SECTION 3 and that any such stock options shall remain
exercisable until the earlier of 90 days after Executive’s termination date or
the end of the full term of the stock option.

 

8.                                       PAYMENTS
ON TERMINATION.  Except as otherwise
provided in SECTION 9 of this Agreement,

 

(a)                                  If
Executive’s employment is terminated for any reason, then the Company shall pay
to Executive that portion of Executive’s Base Salary payable through the
effective date of the termination plus the amount of any accrued but unused
vacation pay through the effective date of the termination and any expenses
described in SECTION 7 not previously reimbursed as of the effective date
of the termination, all of which will be paid to Executive in a lump sum in
cash within 30 days of the effective date of the termination.

 

(b)                                 If
Executive’s employment is terminated pursuant to SECTION 4(a) or
4(b), prior to the end of a year and such termination is not a Qualifying
Termination, then the Company shall pay to Executive a pro-rated incentive
equal to:

 

(i)                                     Executive’s
annual cash bonus for the prior year, multiplied by

 

(ii)                                  a
fraction, (A) the numerator of which is the number of calendar months
(counting a partial calendar month as a full month) that has elapsed (in the
calendar year in which Executive’s effective date of termination occurs) prior
to (x) in the case of termination pursuant to SECTION 4(a), the date of
Executive’s death or disability or (y) in the case of termination pursuant to SECTION 4(b),
the effective date of termination, and (B) the denominator of which is 12.

 

4

 

(c)                                  Subject
to SECTION 17, if Executive’s employment is terminated pursuant to SECTION 4(b) and
such termination is not a Qualifying Termination or the Board elects not to
renew the term of this Agreement as provided in SECTION 3, then the
Company shall provide Executive the pay and benefits described in this SECTION 8(c).

 

(i)                                     Executive
shall be entitled to a monthly payment equal to his monthly salary in effect at
the time of termination plus one-twelfth of his prior year’s bonus.  This amount shall be payable for a 24-month
period if Executive terminates employment pursuant to SECTION 4(b) and
for a 12-month period if the Board elects not to renew the term of this
Agreement pursuant to SECTION 3. 
Payment shall begin on the date set forth in SECTION 8(e).  

 

(ii)                                  The
Company shall provide Executive continued group health coverage in accordance
with this SECTION 8(c)(ii).

 

(A)                              If
the Company’s group health plan is insured on the date Executive terminates
employment, then the Company shall continue Executive’s active employee group
health plan coverage for six months following Executive’s termination of
employment under such insured group health plan.  Thereafter, Executive may elect COBRA
continuation coverage.  For no less than
18 months if Executive terminates employment pursuant to SECTION 4(b) or
for no less than six months if the Board elects not to renew the term of this
Agreement pursuant to SECTION 3, Executive’s cost for such continued
coverage (including the continued active employee and COBRA coverage) shall not
exceed the amount Executive would otherwise be required to pay if he or she
remained an active employee of the Company.

 

(B)                                If
the Company’s group health plan is self-insured on the date Executive
terminates employment, then Executive’s active employee group health plan
coverage shall cease on the date Executive terminates employment.  Thereafter, Executive may elect COBRA continuation
coverage.  For no less than 24 months if
Executive terminates employment pursuant to SECTION 4(b) or for no
less than 12 months if the Board elects not to renew the term of this Agreement
pursuant to SECTION 3, 

 

5

 

Executive’s cost for such
continued coverage (including the continued active employee and COBRA coverage)
shall not exceed the amount Executive would otherwise be required to pay if he
or she remained an active employee of the Company.

 

(d)                                 If
Executive’s employment is terminated pursuant to SECTION 4(a) or 4(b) or
if the Board elects not to renew the term of this Agreement pursuant to SECTION 3
and to the extent not inconsistent with the terms and conditions of the 2003
Incentive Plan (or the applicable predecessor or successor plan) and the
underlying stock option agreement and/or restricted stock agreement, each stock
option and restricted stock award that is unvested on Executive’s termination
date shall fully vest on Executive’s termination date.  Further, each stock option that Executive
holds on Executive’s termination date shall remain exercisable until the
earlier of 90 days after Executive’s termination date or the end of the full
term the stock option, to the extent provided in the underlying stock option
agreement.

 

(e)                                  Notwithstanding
any provision in this Agreement to the contrary, if Executive terminates
employment pursuant to SECTION 4(b) or the Board elects not to renew
the term of this Agreement pursuant to SECTION 3 and Section 409A(a)(2)(B)(i) of
the Code applies to the payments described in SECTION 8(b) and 8(c) and
Executive is a “specified employee” thereunder, then the Company shall pay the
pro-rated incentive described in SECTION 8(b) and begin paying the
continued salary described in SECTION 8(c) no earlier than six (6) months
after Executive terminates employment or such other date as would be
permissible under such Section of the Code.  If Executive terminates employment pursuant
to SECTION 4(b) and or the Board elects not to renew the term of this
Agreement pursuant to SECTION 3 and Section 409A(a)(2)(B)(i) of
the Code does not apply to the payments described in SECTION 8(b) and
8(c) or Executive is not a “specified employee” thereunder, then the
Company shall pay the pro-rated incentive described in SECTION 8(b) and
begin paying the continued salary described in SECTION 8(c) as soon
as possible after Executive terminates employment but in no event later than 30
days after Executive’s termination of employment.

 

9.                                       CHANGE
IN CONTROL PAYMENTS.

 

(a)                                  BENEFITS
PAYABLE.  Subject to SECTIONS 9(b) and
9(c) below, if Executive experiences a Qualifying Termination, then the
Company shall provide Executive all of the following severance benefits (“SEVERANCE
BENEFITS”):

 

(i)                                     The
Company shall pay to Executive each of the following:

 

(A)                              The
amounts specified in SECTION 8(a) and SECTION 8(b).

 

6

 

(B)                                Three
times Executive’s Base Salary in effect upon the date of the Qualifying
Termination or, if greater, three times Executive’s Base Salary in effect
immediately prior to the occurrence of the Change of Control.

 

(C)                                Three
times Executive’s highest annual cash bonus.

 

(D)                               Payment
or reimbursement (at Executive’s option) for outplacement services of a scope
and nature customary for executives holding comparable positions and provided
by a nationally-recognized outplacement firm of Executive’s selection, for a
period of up to two years commencing on the date of Executive’s Qualifying
Termination. Notwithstanding the foregoing, the aggregate amount of such
reimbursement shall not exceed 25% of Executive’s Base Salary as of the date of
the Qualifying Termination.

 

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

 

(ii)                                  Except
as otherwise provided in this SECTION 9(a)(ii), the Company shall continue
Executive’s group health plan coverage (at the same cost to Executive and at
the same coverage level in effect on the date of the Qualifying Termination)
for 36 months from the date of the Qualifying Termination (the “CONTINUATION
PERIOD”).  The maximum required period
under COBRA shall run concurrently with the Continuation Period.  If Executive becomes eligible for any other
substantially similar group health coverage during the Continuation Period,
then the continued group health plan coverage provided by the Company pursuant
to this SECTION 9(a)(ii) shall terminate, to the extent COBRA permits
such termination.

 

(iii)                               Subject
to the terms and conditions of the 2003 Incentive Plan (or the applicable
predecessor or successor plan) and subject to the terms and conditions of the
underlying stock option agreement and/or restricted stock agreement, each stock
option and restricted stock award that is unvested on Executive’s termination
date shall fully vest on Executive’s termination date.  Further, each stock option that Executive
holds on Executive’s termination date shall remain exercisable until the
earlier of 90 days after Executive’s termination 

 

7

 

date or the end of the full
term of the stock option, to the extent provided in the underlying stock option
agreement.

 

(iv)                              If Section 409A(a)(2)(B)(i) of
the Code applies to the Severance Benefits and Executive is a “specified
employee” thereunder, then all of the Severance Benefits described in SECTION 9(a)(i) shall
be paid in cash to Executive in a single lump sum no earlier than six (6) months
after the effective date of the Qualifying Termination or such other date as
would be permissible under such Section of the Code.  If Section 409A(a)(2)(B)(i) of the
Code does not apply to the Severance Benefits or Executive is not a “specified
employee” thereunder, then all of the Severance Benefits described in SECTION 9(a)(i) shall
be paid in cash to Executive in a single lump sum as soon as possible after the
effective date of the Qualifying Termination (but in no event more than 10 days
after such date).  Notwithstanding the
preceding two sentences to the contrary, the Severance Benefits described in SECTION 9(a)(i)(D) shall
be paid or reimbursed to Executive following the later of the applicable payment
date set forth in the preceding two sentences or the date Executive promptly
submits an invoice of the firm providing the outplacement services described in
such subsection. Executive shall not be obligated to seek other employment or
take any other action to mitigate the amounts payable to Executive under this
Agreement.

 

(b)                                 SEVERANCE
BENEFITS FOR NON-RENEWAL. 
Notwithstanding SECTION 9(a), if the Board’s election not to renew
the term of this Agreement as provided in SECTION 3 within 24 months
following a Change in Control causes Executive’s Qualifying Termination, then
Executive shall not be entitled to the amount specified in SECTION 8(b) and
the number “two” shall replace “three” in SECTIONS 9(a)(i)(B) and (C) and
“24 months” shall replace “36 months” in SECTION 9(a)(ii).

 

(c)                                  SEVERANCE
BENEFITS LIMIT.  Notwithstanding any provision of this Agreement to the
contrary, if the Severance Benefits would constitute a “parachute payment,” as
defined in Section 280G(b)(2) of the Code, Executive shall receive
the Severance Benefits unless the (i) after-tax amount that would be
retained by Executive (after taking into account all federal, state and local
income taxes payable by Executive and the amount of any excise taxes payable by
Executive pursuant to Section 4999 of the Code (the “Excise Taxes”)) if
Executive were to receive the Severance Benefits has a lesser aggregate value
than (ii) the after-tax amount that would be retained by Executive (after
taking into account all federal, state and local income taxes and Excise Taxes
payable by Executive) if Executive were to receive the maximum amount of the
Severance Benefits that Executive could receive without being subject to the
Excise Tax (the “Reduced Payments”), in which case the Executive shall be
entitled only to the Reduced Payments. 
The Company’s auditors shall determine the application of Section 280G
of the Code to the Severance Benefits and shall perform the calculations
necessary to determine the amounts and values described in this SECTION 9(b).

 

8

 

10.                                 COMPETITION
AND CONFLICTS OF INTEREST.  In consideration of the benefits payable to
Executive under SECTION 8, Executive agrees, simultaneously with the
execution hereof to enter into a Non-Competition, Non-Solicitation and
Confidentiality Agreement in the form annexed hereto as EXHIBIT A.  The Non-Competition, Non-Solicitation and
Confidentiality Agreement attached hereto as EXHIBIT A replaces and
supersedes any prior or existing agreement by and between Executive and the
Company with respect to the subject matter therein.  Upon a termination of employment for any
reason following a Change in Control, the Non-Competition, Non-Solicitation and
Confidentiality Agreement shall terminate and be of no force or effect.

 

11.                                 DEFINITIONS.

 

“2003 INCENTIVE PLAN”
means the CenterPoint Properties Trust 2003 Omnibus Employee Retention and
Incentive Plan.

 

“BENEFICIARY” means,
except where otherwise required by the Employee Retirement Income Security Act
of 1974 or the terms of an applicable employee benefit plan, the person or
persons designated by Executive, in a writing provided to the Company prior to
Executive’s death, to receive amounts payable to Executive under this
Agreement. Subject to such exception, in the absence of such a written
beneficiary designation, the Beneficiary shall be Executive’s surviving spouse,
or if none, Executive’s estate.

 

“BOARD” means the Board
of Trustees of the Company.

 

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

 

(i)                                     Executive’s
commission of a felony;

 

(ii)                                  Executive’s
commission of fraud with respect to the Company or any Subsidiary; 

 

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

 

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

 

9

 

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

 

(vi)                              any
other material breach of this Agreement by Executive, the Non-Competition,
Non-Solicitation and Confidentiality Agreement or any policy of the Company or
any Subsidiary, and which, if curable, has not been cured within 15 days’
written notice thereof from the Board.

 

“CHANGE IN CONTROL” means
the first to occur of any one or more of the following:

 

(i)                                     Any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “EXCHANGE
ACT”) (a “PERSON”) acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty-five (35%) or more of the then
outstanding voting securities of the Company; provided, however, that the
following acquisitions shall not constitute a Change in Control: (a) any
acquisition by a Person directly from the Company (excluding an acquisition by
virtue of the exercise of conversion rights), (b) any acquisition by the
Company, or (c) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company; or

 

(ii)                                  Individuals
who, as of the date hereof, constitute the Board of Trustees of the Company
(the “INCUMBENT BOARD”) cease for any reason to constitute at least a majority
of the Board of Trustees of the Company; provided, however, that any individual
becoming a director subsequent to the date hereof whose nomination for election
by the Company’s shareholders was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, unless such individual’s
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board; or

 

(iii)                               The
shareholders of the Company approve a reorganization, merger or consolidation,
unless, following such reorganization, merger or consolidation, (a) more
than sixty percent (60%) of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners of the outstanding 

 

10

 

Common Shares of the Company
immediately prior to such reorganization, merger or consolidation in
substantially the same proportions as their ownership, immediately prior to
such reorganization, merger or consolidation, of the outstanding Common Shares
of the Company, (b) no Person (excluding the Company, any employee benefit
plan or related trust of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, thirty-five percent (35%) or more of the Common Shares of the
Company) beneficially owns, directly or indirectly thirty-five percent (35%) or
more of the then outstanding shares of common shares of the company resulting
from such reorganization, merger or consolidation, and (c) at least a
majority of the members of the board of directors of the company resulting from
such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

 

(iv)                              The
Company ceases to qualify as a “real estate investment trust” under Section 856
of the Code; or

 

(v)                                 The
shareholders of the Company approve (a) a complete liquidation or
dissolution of the Company or (b) the sale or other disposition of all or
substantially all of the assets of the Company.

 

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

 

“CODE” means the Internal
Revenue Code of 1986, as amended.

 

“COMPANY” has the meaning
specified in the introductory paragraph of this Agreement.

 

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

 

“CONTINUATION PERIOD” has
the meaning specified in SECTION 9(a)(ii).

 

“EFFECTIVE DATE” means July 1,
2005.

 

“EXCESS PARACHUTE PAYMENT”
has the meaning specified in Section 280G of the Code.

 

“EXCHANGE ACT” means the
Securities Exchange Act of 1934. 

 

“EXCISE TAX” has the
meaning specified in SECTION 9(b).

 

11

 

“EXECUTIVE” has the
meaning specified in the introductory paragraph of this Agreement.

 

“GOOD REASON” shall mean
the occurrence, without Executive’s prior written consent, of any one or more
of the following:

 

(vi)                              an
action by the Company that results in a material adverse change in Executive’s
position (including status, offices, titles, and reporting requirements),
authority, duties, or other responsibilities with the Company, and which, if
curable, has not been cured within 15 days’ written notice thereof from
Executive;

 

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

 

(viii)                        a
reduction in Executive’s Base Salary; 

 

(ix)                                a
material reduction in the benefits provided to Executive, except for
across-the-board reductions of such benefits for all senior management of the Company;

 

(x)                                   a
material breach of this Agreement by the Company; or

 

(xi)                                a
reduction of Executive’s target bonus within 24 months of a Change in Control.

 

“INCLUDING” means
including without limitation.

 

 “QUALIFYING TERMINATION” means the occurrence
of any one or more of the following:

 

(xii)                             The
Company’s termination of Executive’s employment other than for Cause within 24
months following a Change in Control;

 

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

 

(xiv)                         A
successor of the Company fails to assume expressly the Company’s entire
obligations under this Agreement prior to becoming such a successor as required
by SECTION 12(a)(ii); or

 

(xv)                            The
Board’s election not to renew the term of this Agreement as provided in SECTION 3
within 24 months following a Change in Control.

 

12

 

A Qualifying Termination
shall not include a termination of Executive’s employment by reason of death,
disability, Executive’s voluntary termination other than for Good Reason or the
Company’s termination of Executive’s employment for Cause. Notwithstanding the
foregoing, if Executive’s employment is terminated before a Change in Control
and Executive can reasonably demonstrate that the termination by the Company or
the actions constituting Good Reason for termination by the Executive were at
the request of a third party who had indicated an intention or taken steps
reasonably calculated to effect a Change in Control who then effects a Change
in Control, then the date of the Change in Control shall be deemed to be the
date immediately prior to Executive’s termination of employment.

 

“SECTION” shall, unless
the context otherwise requires, mean a section of this Agreement.

 

“SUBSIDIARY” means a
United States or foreign corporation with respect to which the Company owns,
directly or indirectly, 50% or more of the then outstanding common shares.

 

12.                                 ASSIGNMENT.

 

(a)                                  ASSIGNMENT
BY THE COMPANY.

 

(i)                                     This
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors.  Any such successor
shall be deemed to be the Company for all purposes of this Agreement.  As used in this Agreement, the term “successor”
shall mean any surviving corporation in a merger or consolidation, or any
person, corporation, partnership, or other business entity which, whether by
purchase or otherwise, acquires all or substantially all of the assets of the
Company.  Notwithstanding such
assignment, the Company shall remain, with such successor, jointly and
severally liable for all its obligations hereunder.  Without limiting the generality of the
foregoing, it is specifically agreed that an assignment of this Agreement by
the Company will not diminish Executive’s rights under SECTIONS 9 and 10
hereof.

 

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

 

(iii)                               Except
as provided in this SECTION 12(a), this Agreement may not be assigned by
the Company.

 

(b)                                 EXECUTIVE’S
SUCCESSORS. This Agreement shall inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, executors, and administrators,
successors, heirs, distributes, devisees, and legatees. If Executive 

 

13

 

should die
while any amounts payable to Executive under this Agreement remain outstanding,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Beneficiary.

 

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

 

CenterPoint Properties Trust

1808 Swift Road 

Oak Brook, IL 60523-1501

Facsimile: 630-586-8010

 

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

 

14.                                 ENTIRE
AGREEMENT.  This Agreement supersedes any prior agreements or
understandings, oral or written, between Executive and the Company, with
respect to the subject matter hereof and constitutes the entire agreement of
the parties with respect thereto.  The
captions of this Agreement are not part of the provisions hereof and shall be
of no effect.  

 

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

 

16.                                 LATE
PAYMENTS.  Following a Qualifying
Termination on account of a Change in Control, if the Company fails to pay any
of the Severance Benefits when due, 

 

14

 

then the
Company shall pay interest on such amount at a rate equal to the highest rate
of interest charged by the Company’s principal lender plus 500 basis points.

 

17.                                 MITIGATION
AND OFFSET.  In no event shall Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable to
Executive under any provision of this Agreement.  If Executive’s employment terminates pursuant
to SECTION 4(b), such termination is not a Qualifying Termination and
Executive becomes entitled to receive compensation from a subsequent employer
before the 24-month or 12-month period, as applicable, described in
SECTION 8(b) ends, then the monthly amounts payable to Executive
pursuant to SECTION 8(c) shall be reduced by the monthly amount
Executive is entitled to receive from such subsequent employer.

 

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

 

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

 

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

 

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

 

*   *  
*   *   *

 

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

 

	
   

  	
     /s/ James N. Clewlow

  	
   

  	
   

  
	
   

  	
  James N. Clewlow

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CENTERPOINT PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Michael M. Mullen

  	
   

  
	
   

  	
   

  	
    Michael
  M. Mullen

  	
   

  
	
   

  	
  Its:

  	
    Chief
  Executive Officer

  	
   

  

 

15

 

July 1,
2005

 

SCHEDULE A

 

	
  NAME:

  	
   

  	
  James N. Clewlow

  
	
   

  	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
  571 Beverly Place 

  

  Lake Forest, IL USA 60045

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
   

  	
  Executive Vice President and Chief
  Investment Officer

  
	
   

  	
   

  	
   

  
	
  RESPONSIBILITIES:

  	
   

  	
  See Attached Job Description

  
	
   

  	
   

  	
   

  
	
  REPORTING RELATIONSHIP:

  	
   

  	
  Michael M. Mullen

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BASE SALARY:

  	
   

  	
  $280,000

  

 

CASH INCENTIVE TARGET
AWARD:

 

85%

 

STOCK OPTION PLAN TARGET
GRANT:

 

58,333

 

RESTRICTED SHARE GRANT TARGET AWARD:

 

$175,000

 

SPECIFIC BENEFITS:

 

Membership: Exmoor Country Club

 

 

                                

 

EXHIBIT A

 

NON-COMPETITION,
NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

 

THIS AGREEMENT is made
this 1st day of July, 2005 by and between James N. Clewlow (the “Executive”)
and CENTERPOINT PROPERTIES TRUST, a Maryland business trust (the “Company”).

 

RECITALS

 

WHEREAS, the Company is
engaged in the business of owning, managing, operating and leasing real estate,
primarily warehouse, airport and industrial property.

 

WHEREAS, the Executive
and the Company are entering into an Employment and Severance Agreement dated
of even date herewith (the “EMPLOYMENT AGREEMENT”) which provides that the
Executive will hold the position of Executive Vice President and Chief
Investment Officer within the Company;

 

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

 

WHEREAS, as a condition
to the Company of entering into the Employment Agreement, in order to protect
the Company’s business relationships and good will, and to guard against
conflicts of interest the Executive is willing to enter into this Agreement;

 

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

 

1.                                       COVENANT
NOT TO COMPETE.  The Executive agrees
that during the term of his employment with the Company and for a period of one
year thereafter if the Executive’s employment terminates because the Board
elected not to renew the Executive’s employment and two years thereafter if the
Executive’s employment terminates for any other reason (the “NON-COMPETITION
PERIOD”), he will not directly or indirectly, in any market which is served by
the Company or which the Company is actively preparing to serve, engage or
participate (whether as an owner, officer, partner, principal, joint venturer,
shareholder, director, member, manager, investor, employee, independent contractor,
consultant, or otherwise) in any other company or entity primarily engaged in
the business of acquiring, owning, developing, operating, leasing, and/or
managing warehouse, airport, or industrial real estate for development and
investment purposes or any business which provides consulting, leasing,
management, or brokerage services to such businesses (the “Real Estate Business”),
subject to the following exceptions:

 

 

	
  Non-Competition, Non-Solicitation and

  	
   

  	
  July 1,
  2005

  
	
  Confidentiality Agreement

  	
   

  	
  James N. Clewlow

  

 

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

 

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

 

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

 

2.                                       NON-SOLICITATION. 
During the term of Executive’s employment with the Company and for a period of
three years thereafter (the “NON- SOLICITATION PERIOD”), the Executive shall
not (a) employ, retain, solicit for employment or retention, knowingly
assist in the employment or retention of, or seek to influence or induce to
leave the employment or service of the Company or any of its subsidiaries or
affiliates any person who is employed or otherwise engaged by the Company or
any of its subsidiaries or affiliates, or (b) induce or attempt to induce
any customer, supplier, licensee, or other business relation of the Company or
any of its subsidiaries or affiliates to cease doing business with the Company
or any of its subsidiaries or affiliates or otherwise interfere with the
relationship between the Company or any of its subsidiaries or affiliates and
such business relation.

 

3.                                       NONDISCLOSURE
AND NONUSE OF CONFIDENTIAL INFORMATION.

 

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

 

(b)                                 As
used in this Agreement, the term “Confidential Information” means information
that is not generally known to the public and that is used, developed or
obtained by the Company or its subsidiaries in connection with their
business.  Confidential Information shall
not include (i) any information that has been published in a form
generally available to the public prior to the date the Executive proposes to
disclose or use such information, and (ii) any information that Executive
is legally required to disclose. Information shall not be deemed to 

 

2

 

have been
published merely because individual portions of the information have been
separately published, but only if all material features comprising such
information have been published in combination.

 

4.                                       SPECIFIC
PERFORMANCE.  The parties agree that the Executive’s services are of a
special, unique and extraordinary character, that it would be extremely
difficult to quantify the money damages which would accrue to the Company by
reason of the Executive’s failure to perform any of his obligations under this
Agreement, that it would be extremely difficult to replace such services, and
that any violation of the provisions of this Agreement would be likely to be
highly injurious to the Company.  By
reason of the foregoing, the Executive consents and agrees that if he violates
any of the provisions of this Agreement the Company shall be entitled, in
addition to any other rights and remedies that it may have, including money
damages, to apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any continuing violation of the provisions hereof.  Therefore, if the Company shall institute any
action or proceeding to enforce the provisions of this Agreement against the
Executive, the Executive hereby waives the claim or defense that there is an
adequate remedy at law and agrees in any such action or proceeding not to
interpose the claim or defense that such remedy exists at law.  The parties hereby specifically affirm the
appropriateness of injunctive or other equitable relief in any such action.

 

5.                                       MODIFICATION. 
If in connection with any action taken by the Company to enforce the provisions
of this Agreement, a court shall hold that all or any portion of the
restrictions contained herein are unreasonable under the circumstances then
existing so as to render such restrictions invalid or unenforceable, the
parties agree that any court of competent jurisdiction may reform such
unreasonable restrictions to the extent necessary to make such restrictions
reasonable under the circumstances then existing so as to render such
restrictions both valid and enforceable.

 

6.                                       BREACH. 
In the event that the Company hereafter believes that the Executive has
breached any of the covenants of this Agreement, it shall notify the Executive
of such alleged breach, setting forth the substance of said alleged breach.
Within ten (10) days from receipt by the Executive of such notice, the
Executive either shall remedy said alleged breach or provide the Company with
evidence that the activity concerned was permitted by the provisions of this
Agreement.

 

7.                                       NOTICES. 
All notice required or permitted to be given under this Agreement shall be
sufficient if in writing and mailed by certified or registered mail, return
receipt requested and postage prepaid, addressed as follows or to such other
address as either party shall have notified the other.

 

3

 

If to the Executive:

James N. Clewlow

571 Beverly Place 

Lake Forest, IL USA 60045

If to the Company:

CenterPoint Properties Trust

1808 Swift Road

Oak Brook, IL 60523-1501

Facsimile: 630-586-8010

 

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

 

9.                                       PARTIAL
INVALIDITY. If any provision of this Agreement shall be held invalid or
unenforceable, the remainder nevertheless shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it nevertheless shall remain in full force and effect
in all other circumstances.

 

10.                                 BENEFIT.
This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and assigns, and upon all persons, corporations or
entities which shall engage in the business herein contemplated under the
control and direction of the parties.

 

11.                                 ENTIRE
AGREEMENT. This Agreement and the documents incorporated herein by reference
contain the entire agreement and understanding of the parties, and no
representations, promises, agreements or any understanding, written or oral,
not contained herein shall be of any force or effect.  Upon a termination of employment for any
reason following a Change in Control (as defined in SECTION 11 of the
Employment Agreement), this Agreement shall terminate and be of no force or
effect.

 

12.                                 MODIFICATIONS
AND WAIVERS. No change, modification or waiver of any provision of this
Agreement shall be valid or binding unless it is in writing dated subsequent to
the date hereof, and signed by the party intended to be bound. No waiver of any
breach, term or condition of this Agreement by either party shall constitute a
subsequent waiver of the same or any other breach, term or condition.

 

*   *  
*   *   *

 

4

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
  James N. Clewlow

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CENTERPOINT PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Michael M. Mullen

  	
   

  
	
   

  	
  Its:

  	
   Chief Executive Officer

  	
   

  

 

5

 

EXECUTIVE VICE PRESIDENT &
CHIEF INVESTMENT OFFICER

 

POSITION SUMMARY:

Formulates,
recommends and implements investment and disposition strategy for the company. Directs
and coordinates broad activities toward achieving organizational objectives in
accordance with policies established by the CEO and Board of Directors.  Responsible for the effective operation of
their business unit.

 

RESPONSIBILITIES:

•                  Manages
coordinates and oversees the execution of acquisition transactions through
sourcing, qualifying, negotiating, coordinating and closing the sale and
acquisition of industrial properties. 
Sourcing includes all opportunities provided through the company,
brokers, and any other conduits.

•                  Manages,
coordinates and oversees the identification of real estate acquisition and
disposition opportunities, utilizing networks and prospects through direct
contact with tenants, property owners, brokers, developers and other real
estate related professionals.

•                  Prepares
short and long-range plans for investment and disposition objectives of the
company.

•                  Hires
and monitors efforts of brokers to assist in opportunity creation and
transaction closure.

•                  Networks
and prospects for investment opportunities through direct contact with the
tenant, competitor, brokerage, and development communities

•                  Structures
deals that are in line with the Company’s strategic policies, operating
guidelines and standards for property selections, acquisitions and dispositions

•                  Coordinating
transactions including monitoring of due diligence and approval processes of
the company.

•                  Oral
and written presentations of investment and disposition transactions before the
Investment and Asset Allocation Committees and the Board.

•                  Communicates
investment and disposition objectives of the company during all company
meetings.

•                  Manages,
screens, underwrites and structures acquisition deals that meet CenterPoint
investment objectives

•                  Manages
transition process of the investment asset to property operations

•                  Completes
work consistent with corporate processes and policies

•                  Directs
and manages staff to effectively achieve objectives, goals and ZTU

•                  Promotes
the training and development of current employees

•                  Participates
in the establishment of personal goals to ensure direct alignment with
department goals.

•                  Interviews
and recommends candidates for employment or termination and works directly with
the human resources department in both instances.

•                  Responsible
for recruiting and hiring new investment personnel, including SVP of
Investments; VP, Investments; Investment Officer; VP of Investment Analysis;
Senior Financial Analyst; Financial Analyst; Investment Coordinator; and
Investment Assistant.

•                  Conducts
performance evaluations and salary reviews for assigned staff annually

•                  Other
duties as assigned.

 

 

	
  Job Description

  	
   

  	
  July 1,
  2005

  
	
  Executive Vice President and

  	
   

  	
   

  
	
   Chief Investment Officer

  	
   

  	
   

  

 

QUALIFICATIONS:

•                  Bachelor’s
degree in related field required; Master’s degree strongly preferred; 20 years
of established real estate transactional experience and technical
commercial/industrial real estate knowledge

•                  Minimum
of 1,000 transactions completed over span of career

•                  Strong
leadership and management skills in providing motivation and career development
for the department

•                  Strong
reputation with the broker community and well respected in the industry is
essential

•                  Excellent
sales, negotiation, and presentation skills required

•                  Strong
organizational skills and ability to multi-task is a must

•                  Comfortable
with computers and proficient in standard corporate operating systems and
software

•                  Strong
business acumen, understands industrial real estate

•                  Must
possess excellent communication and interpersonal skills, with the ability to
build strong relationships with peers, executives, customers and brokers.

•                  Ability
to perform actions and make decisions with integrity and sound judgment

•                  Displays
the self initiative and dedication necessary for successful work completion;
proactivity is a must

•                  Analytical
and technical proficiency in all aspects of investment acquisitions and deal
making

•                  Ability
to work in highly competitive and stressful environment.

 

DESIRED COMPETENCIES:

	
  ý

  	
   

  	
  Integrity and Trust

  	
   

  	
  ý

  	
   

  	
  Ability to Multi-Task

  
	
  ý

  	
   

  	
  Business Acumen

  	
   

  	
  ý

  	
   

  	
  Communicates Effectively

  
	
  ý

  	
   

  	
  Initiative/Self-Starter

  	
   

  	
  ý

  	
   

  	
  Adaptability/Flexibility

  
	
  ý

  	
   

  	
  Accountability

  	
   

  	
  ý

  	
   

  	
  Motivating Others

  
	
  ý

  	
   

  	
  Customer Driven

  	
   

  	
  ý

  	
   

  	
  Managerial Courage

  
	
  ý

  	
   

  	
  Peer Relationships

  	
   

  	
  ý

  	
   

  	
  Developing Direct Reports and Others

  

 

2

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