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EXHIBIT 10.48
EXECUTIVE AGREEMENT dated as of August 7, 1997, between
CORPORATE PROPERTY INVESTORS, a Massachusetts business trust
("the Company"), and XXXXXXX X. XXXXXXX (the "Executive").
The Company and the Executive agree as follows:
SECTION 1. Definitions. As used in this Agreement:
(a) "Accrued Obligations" means the sum of the amounts described in
Section 6(a)(i)(A) and Section 6(a)(ii)(A).
(b) "Annual Base Salary" means the Executive's salary at a rate not
less than the Executive's annualized salary in effect immediately prior to the
Operative Date or the date that is six months prior to the Operative Date
(whichever date results in a larger salary).
(c) "Annual Bonus" means the Executive's annual bonus in an amount
that is not less than the highest annual bonus paid to the Executive with
respect to the three years preceding the Operative Date.
(d) "Board" means the Board of Trustees of the Company.
(e) "Cause" means (i) the wilful and continued failure of the
Executive to perform substantially the Executive's duties owed to the Company
after a written demand for substantial performance is delivered to the Executive
which specifically identifies the nature of such non-performance, (ii) the
wilful engaging by the Executive in gross misconduct significantly and
demonstrably injurious to the Company, or (iii) conduct by the Executive in the
course of his or her employment which is a felony or fraud that results in
material harm to the Company or a third party. No act or omission on the part of
the Executive shall be considered "wilful" unless it is done or omitted in bad
faith or without reasonable belief that the action or omission was in the best
interests of the Company. Notwithstanding the foregoing, the Executive shall not
be deemed to have been terminated for Cause without (1) reasonable notice to the
Executive setting forth the reasons for the Company's intention to terminate for
Cause, (2) an opportunity for the Executive, together with his counsel, to be
heard before the Board, and (3) delivery to the Executive of a Notice of
Termination from the Board
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finding that in the good faith opinion of three-quarters (3/4) of the Board the
Executive was guilty of conduct set forth in clause (i) or (ii) above and
specifying the particulars thereof in detail.
(f) A "Change in Control" shall be deemed to occur upon the
consummation of any transaction involving the Company, such as a merger,
consolidation or similar transaction involving the outstanding voting securities
of the Company, the sale of voting securities of the Company (other than through
an underwritten public offering), the sale of assets of the Company or the
acquisition of assets by the Company, pursuant to which the shareholders of the
Company immediately prior to such transaction would, after giving effect to such
transaction, cease to beneficially own 70% or more of the outstanding voting
securities of the Company or its successor. For purposes of the foregoing
definition, the dissolution of the Telephone Real Estate Equity Trust, of which
State Street Bank and Trust Company is the Trustee, and the resulting
distribution of any of the Company's voting securities to the entities that are
the beneficial owners thereof on the date hereof shall not be deemed a
transaction involving a Change in Control.
(g) "Common Shares" means Series A Common Shares of Beneficial
Interest of the Company.
(h) "Date of Termination" means: (i) if the Executive's employment
is terminated by the Company for Cause or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be, (ii) if the Executive's employment is terminated by
the Company other than for Cause or Incapacity, the Date of Termination shall
be the date on which the Company notifies the Executive of such termination, and
(iii) if the Executive's employment is terminated by reason of death or
Incapacity, the Date of Termination shall be the date of death of the Executive
or the Incapacity Effective Date, as the case may be.
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(i) "Dependents", as of any date, means the members of the
Executive's family who under the eligibility rules (as in effect on a date that
is six months prior to the Operative Date) of the plans or programs of the
Company (or any successor) which provide medical benefits, would, by virtue of
such status as family members, be eligible for benefits under such plans or
programs on such date.
(j) "Good Reason" means:
(i) without the Executive's express written consent and excluding
for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive, (A) the assignment to
the Executive of any duties inconsistent in any respect with the
Executive's position, authority, duties or responsibilities as
contemplated by Section 4(a), (B) any other action by the Company which
results in a significant diminution in such position, authority, duties or
responsibilities, or (C) any failure by the Company to comply with any of
the provisions of Section 4(b);
(ii) without the Executive's express written consent, the Company's
requiring the Executive's work location to be other than in Manhattan
located in New York City;
(iii) any failure by the Company to comply with and satisfy Section
11(a); or
(iv) any breach by the Company of any other material provision of
this Agreement.
(k) "Incapacity" means any physical or mental illness or disability
of the Executive which continues for a period of six consecutive months or more
and which at any time after such six-month period the Board shall reasonably
determine renders the Executive incapable of performing his or her duties during
the remainder of the Term.
(l) "Incapacity Effective Date" means the date of determination by
the Board that the Incapacity of the Executive has occurred during the term of
this Agreement; provided, however, that if the Company's policy regarding
disability leaves of absence provides that the Executive's employment would
cease and terminate on a later date, then the Incapacity Effective Date shall be
such later date.
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(m) "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, (iii) in the case of termination by
the Company for Cause or for Incapacity, confirms that such termination is
pursuant to a resolution of the Board, and (iv) if the Date of Termination is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 calendar days after the giving) of such
notice.
(n) "Operative Date" means the date on which a Change in Control
shall have occurred.
(o) "Other Benefits" means any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company,
including earned but unpaid stock and similar compensation, that is in effect on
the date that is six months prior to the Operative Date.
(p) "SEPP" means the Corporate Property Investors Simplified
Employee Pension Plan as it now exists or may hereafter be amended prior to the
date six months prior to the Operative Date.
(q) "SERP" means the Supplemental Executive Retirement Plan of
Corporate Property Investors as it now exists or may hereafter be amended prior
to the date that is six months prior to the Operative Date.
(r) "Term" means the term of this Agreement which shall begin as of
the date first written above, and shall continue to and remain in effect until
the fourth anniversary of such date or, if later, two years following an
Operative Date occurring prior to the fourth anniversary of the date first
written above and shall include any extensions pursuant to Section 2.
SECTION 2. Extension of This Agreement. If no Operative Date shall
have occurred on or before the 60th calendar day preceding the date on which the
Term is then scheduled to expire, then the Term shall automatically be extended
for one year unless either party shall have given the other party written notice
of its intention not to extend the Term.
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SECTION 3. Terms of Employment Prior to Operative Date. Prior to the
Operative Date, the terms and conditions of the Executive's employment,
including the Executive's rights upon termination of the Executive's employment,
shall be the same as they would have been had this Agreement not been entered
into by the Executive and the Company.
SECTION 4. Terms of Employment on and After Operative Date. (a)
Position and Duties. (i) On and after the Operative Date and during the Term of
this Agreement, (A) the Executive's position (including status, offices, ,
authority, duties and responsibilities) shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned immediately prior to the Operative Date and (B) the Executive's work
location shall be based in Manhattan in New York City and the Company shall not
require the Executive to travel on Company business to a substantially greater
extent than required on the date that is six months prior to the Operative Date,
except for travel and temporary assignments which are reasonably required for
the full discharge of the Executive's responsibilities and which are consistent
with the Executive's being so based.
(ii) On and after the Operative Date and during the Term of this
Agreement, but excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive1s reasonable best efforts to perform
faithfully and efficiently such responsibilities.
(b) Compensation. (i) Salary and Bonus. On and after the Operative
Date and during the Term of this Agreement, the Executive will receive
compensation at an annual-rate equal to the sum of (A) his or her Annual Base
Salary plus (B) his or her Annual Bonus.
(ii) Stock Option, Savings and Supplemental Retirement Plans. On and
after the Operative Date and during the Term of this Agreement, the Executive
will be entitled to (A) continue to participate in all stock option, savings and
supplemental retirement plans and programs generally applicable to full-time
officers or employees of the Company, including, without limitation, the 1993
Share Option Plan of Corporate Property Investors, Corporate Property Investors
Employee 40l(k) Savings Plan, the SEPP, the SERP, and the Trustees' and
Executives' Deferred Remuneration Plan of Corporate Property Investors, or
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(B) participate in stock option, savings and retirement plans and programs of a
successor to the Company which have benefits that are not less favorable to the
Executive.
(iii) Welfare Benefit Plans. On and after the Operative Date and
during the Term of this Agreement, the Executive and/or persons who from time to
time thereafter are Dependents, as the case may be, shall be eligible to (A)
participate in and shall receive (or, in the case of life insurance, shall be
entitled to have the Executive's beneficiary receive) all benefits under welfare
benefit plans and programs generally applicable to full-time officers or
employees of the Company on a date that is six months prior to the Operative
Date, including, without limitation, medical, disability insurance (group and
individual), disability leaves of absence, group life, split dollar life,
accidental death and travel accident insurance plans and programs, or (B)
participate in welfare benefit plans and programs of a successor to the Company
which have benefits that are not less favorable to the Executive and the
Dependents.
(iv) Business Expenses. On and after the Operative Date and during
the Term of this Agreement, the Company shall, in accordance with policies in
effect with respect to the payment of such expenses immediately prior to the
Operative Date, pay or reimburse the Executive for all reasonable out-of-pocket
travel and other expenses (other than ordinary commuting expenses) incurred by
the Executive in performing services hereunder. All such expenses shall be
accounted for in such reasonable detail as the Company may require.
(v) Vacations. On and after the Operative Date and during the Term
of this Agreement, the Executive shall be entitled to periods of vacation not
less than those to which the Executive was entitled on the date that is six
months-prior to the Operative Date.
(vi) Other Benefits. On and after the Operative Date and during the
Term of this Agreement, the Executive shall be entitled to all Other Benefits
not specifically provided for in subsections (i), (ii), (iii), (iv) and (v) of
this Section 4(b).
SECTION 5. Termination of Employment. (a) Death or Incapacity. The
Executive's employment shall terminate automatically upon the Executive's death.
On and after the Operative Date, the Executive's employment shall also terminate
automatically on his or her Incapacity Effective Date during the Term of this
Agreement.
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(b) Cause. Prior to the Operative Date, the Company may terminate
the Executive's employment for any reason. On and after the Operative Date, the
Company may terminate the Executive's employment only for Cause, pursuant to the
Board passing a resolution that such Cause exists.
(c) Good Reason. Prior to the Operative Date, the Executive may
terminate his or her employment for any reason. On and after the Operative Date,
the Executive may terminate his or her employment for Good Reason.
(d) Notice of Termination. On and after the Operative Date and
during the Term of this Agreement, any termination by the Company for Cause or
Incapacity, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 13.
The failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason, Incapacity or Cause shall not serve to waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
SECTION 6. Obligations of the Company Upon Termination on or After
Operative Date. (a) Termination for Good Reason or for Reasons Other Than for
Cause, Death or Incapacity. If, on or after the Operative Date and during the
Term of this Agreement, (x) the Company shall terminate the Executive's
employment other than for Cause, death or Incapacity or (y) the Executive shall
terminate his or her employment for Good Reason, then:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 calendar days after the Date of Termination the aggregate of the
following amounts:
(A) the sum of (1) the Executive's then Annual Base Salary
through the Date of Termination to the extent not theretofore paid,
(2) the product of (x) an amount equal to his or her then Annual
Bonus times (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and
the denominator of which is 365 plus (3) any accrued vacation pay to
the extent not theretofore paid; and
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(B) the amount equal to the product of (1) three times (2) the
sum of (x) the Executive's then Annual Base Salary and (y) his or
her then Annual Bonus; and
(ii) the Company will contribute within 30 calendar days after the
Date of Termination an amount to the SERP equal to the sum of:
(A) the product of (1) 11% and (2) the sum of (x) the
Executive's then Annual Base Salary through the Date of Termination
plus (y) a portion of his Annual Bonus determined in accordance with
Section 6(a)(i)(A)(2); and
(B) the product of (1) three times (2) 11% of the sum of the
Annual Base Salary and the Annual Bonus;
(iii) for three years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue benefits to
the Executive and/or the persons who from time to time thereafter are
Dependents at least equal to those which would have been provided to them
in accordance with the plans, programs, practices and policies described
in Section 4(b)(iii) if the Executive's employment had not been terminated
or, if more favorable to the Executive and the Dependents, as in effect
generally at any time thereafter;
(iv) the Executive and the persons who from time to time thereafter
are Dependents shall continue to be eligible to participate in and shall
receive all benefits under any plan or program of the Company providing
medical benefits as are in effect on the date six months prior to the
Operative Date or under any plan or program of a successor to the Company
which provides medical benefits that are not less favorable to the
Executive and the Dependents than such plans or programs of the Company
until the date the Executive and the Dependents are all eligible for
Medicare benefits (by reason of attaining the minimum age for such
benefits without regard to whether an application has been made therefor);
provided, however, that (A) in no event will a Dependent be eligible for
benefits as described in this clause (iv) after the date he ceases to be a
Dependent and (B) at all times after the expiration of the three-year
period described in clause (iii) above, the Executive shall pay for such
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coverage at the same rate as is charged to other similarly situated
individuals electing continuation coverage under Section 4980B of the
Internal Revenue Code of 1986, as amended;
(v) all outstanding options granted to Executive to purchase Common
Shares under the 1993 Share Option Plan of Corporate Property Investors or
under any other option plan shall, to the extent not already vested,
become immediately fully vested and shall remain exercisable until the end
of the original term of such option without regard to Executive's
termination of employment;
(vi) the Company will continue to pay any premiums due on
split-dollar life insurance policies in effect on the life of the
Executive for three years following the Date of Termination after which
time the Company shall distribute such policy to the Executive without
requiring the Executive to repay any premiums paid by the Company;
(vii) notwithstanding any provisions to the contrary under any
outstanding recourse note issued under the Company's Employee Share
Purchase Plan or any other agreement providing for the acceleration or
prepayment of any such note payments under such note shall not be
accelerated as a result of Executive's termination of employment but shall
be due and payable in accordance with the terms of such note determined as
if Executive's employment had not terminated;
(viii) the Company will transfer any car made available to the
Executive for his use by the Company to the Executive for no consideration
provided that the Executive pays any and all transfer taxes and agrees to
be solely responsible for insurance and the cost of insurance after the
date of transfer; and
(ix) the Executive shall be entitled to keep any computer and/or
software provided to the Executive by the Company for home or travel use
for no consideration; and
(x) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive all Other Benefits to the
extent accrued on the Date of Termination and not specifically provided
for in subsections (i) through (ix) of this Section 6(a).
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(b) Death or Incapacity. If the Executive's employment is terminated
on or after the Operative Date by reason of the Executive's death or Incapacity,
this Agreement shall terminate without further obligations to the Executive or
the Executive's legal representatives under this Agreement, other than for (i)
timely payment of Accrued Obligations and (ii) provision by the Company of death
benefits or disability benefits for termination due to death or Incapacity,
respectively, in accordance with Sections 4(b)(iii) and 6(a)(vi) as in effect at
the Operative Date or, if more favorable to the Executive, at the Executive's
Date of Termination.
(c) Cause, Other than for Good Reason. If the Executive's employment
shall be terminated on or after the Operative Date for Cause, this Agreement
shall terminate without further obligations to the Executive other than timely
payment to the Executive of (x) the Executive's then Annual Base Salary through
the Date of Termination and (y) Other Benefits, but in each case only to the
extent theretofore unpaid as of the Date of Termination. If the Executive
voluntarily terminates employment during the Term of this Agreement, excluding a
termination for Good Reason on or after the Operative Date, this Agreement shall
terminate without further obligations to the Executive, other than for the
timely payment of Accrued Obligations and Other Benefits.
SECTION 7. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in
any plan, program, policy or practice provided by the Company and for which the
Executive may qualify, nor, subject to Section 15(c), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
SECTION 8. No Mitigation. The Company agrees that, if the
Executive's employment is terminated on or after the Operative Date and during
the Term of this Agreement for any reason, the Executive is not required to seek
other employment or to attempt in any way to reduce any amounts payable to the
Executive hereunder. Further, the amount of any payment or benefit provided
hereunder on or after the Operative Date shall not be reduced by any
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compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
SECTION 9. Full Settlement and Settlement of Disputes. (a) Subject
to full compliance by the Company with all its obligations under this Agreement,
this Agreement shall be deemed to constitute the settlement of such claims as
the Executive might otherwise be entitled to assert against the Company by
reason of the termination of the Executive's employment for any reason on or
after the Operative Date. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. The Company agrees to pay as incurred, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof.
(b) All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Board and shall be in writing. Any
denial by the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board shall afford a reasonable opportunity to the Executive for a review of the
decision denying a claim and shall further allow the Executive to appeal to the
Board a decision of the Board within 60 calendar days after notification by the
Board that the Executive's claim has been denied. Any dispute or controversy
arising under or in connection with the interpretation of the provisions of this
Agreement shall be settled exclusively by arbitration in New York City, New York
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of the Executive's right to be paid his Annual Base Salary
and medical benefits until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement. All
costs of litigation or arbitration shall be borne by the Company and shall be
paid as incurred.
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Any dispute or controversy arising from the circumstances under which the
Executive terminates employment shall be settled by litigation or arbitration as
the aggrieved party shall select.
SECTION 10. Partial Reduction in Payments. Anything in this
Agreement to the contrary notwithstanding, in the event that any payment or
benefit received or to be received by the Executive in connection with a Change
in Control or the termination of the Executive's employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement) (all
such payments and benefits, being hereinafter called "Total Payments") would be
subject (in whole or part), to the excise tax (the "Excise Tax") imposed under
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), then the payments or benefits to be made under Section 6 hereof (the
"Severance Payments") shall be reduced (in the manner determined by the
Executive or, if no such determination shall be made by the time such payments
or benefits are required to be paid or given, by the Company) to the extent
necessary so that no portion of the Total Payments is subject to the Excise Tax
(after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or agreement)
if (i) the net amount of such Total Payments, as so reduced (and after deduction
of the net amount of federal, state and local income tax and employment taxes to
which the Executive would be subject by virtue of his or her receipt of such
reduced Total Payments), is greater than (ii) the excess of (A) the net amount
of such Total Payments, without reduction (but after deduction of the net
amount of federal, state and local income and employment taxes to which the
Executive would be subject by virtue of his or her receipt of such Total
Payments), over (B) the amount of Excise Tax to which the Executive would be
subject in respect of such Total Payments.
SECTION 11. Successors; Binding Agreement. (a) The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by agreement, in form and substance satisfactory to the
Executive, expressly to assume 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 had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession will
be a breach of this Agreement and entitle the Executive to compensation from the
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Company in the same amount and on the same terms as the Executive would be
entitled to hereunder had the Company terminated the Executive for reason other
than Cause or Incapacity on the succession date. As used in this Agreement, "the
Company" means the Company as defined in the preamble to this Agreement and any
successor to its business or assets which executes and delivers the agreement
provided for in this Section 11 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law or otherwise.
(b) This Agreement shall be enforceable by the Executive's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
SECTION 12. Nonassignability. This Agreement is personal in nature
and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder, except
as provided in Section 11. Without limiting the foregoing, the Executive's right
to receive payments hereunder shall not be assignable or transferable, whether
by pledge, creation of a security interest or otherwise, other than a transfer
by his or her will or by the laws of descent or distribution, and, in the event
of any attempted assignment or transfer by the Executive contrary to this
Section 12, the Company shall have no liability to pay any amount so attempted
to be assigned or transferred.
SECTION 13. Notices. For the purpose of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
- If to the Executive -- at the address included on the signature
page.
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If to the Company:
Corporate Property Investors
Three Xxx Xxxxxxxxxxxx Plaza
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chairman of the Board and Chief
Executive Officer
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
SECTION 14. Governing Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York without reference to principles of conflict of laws.
SECTION 15. Miscellaneous. (a) This Agreement contains the entire
understanding with the Executive with respect to the subject matter hereof and
supersedes any and all prior agreements or understandings, written or oral,
relating to such subject matter. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing signed by the Executive and the Company.
(b) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(c) Except as provided herein, this Agreement shall not be construed
to affect in any way any rights or obligations in relation to the Executive's
employment by the Company prior to the Operative Date or subsequent to the end
of the Term.
(d) 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.
(e) The Company may withhold from any benefits payable under this
Agreement all Federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
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(f) The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
CORPORATE PROPERTY INVESTORS,
by /s/ [ILLEGIBLE]
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Name:
Title: CHAIRMAN/CEO
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
c/o CORPORATE PROPERTY INVESTORS
000 XXXX 00XX XX.
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(Address)
NEW YORK, N.Y. 10017
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(Address)
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Amendment to Executive Agreement
with Xxxxxxx X. Xxxxxxx
WHEREAS, Xxxxxxx X. Xxxxxxx and Corporate Property Investors (the
"Company") entered into an agreement dated as of August 7, 1997 (the
"Agreement"), setting forth the mutual agreement of the parties with respect to
the terms and conditions of his employment by the Company following a change in
control and his entitlement to various benefits from the Company in the event of
his termination of employment on or following a change in control (see Exhibit 1
hereto);
WHEREAS, it is desired to amend such Agreement as provided herein to
reflect the provisions contained in a Disclosure Letter referred to in the
Agreement and Plan of Merger dated February 18, 1998, by and among Xxxxx
XxXxxxxxx Group, the Company and Corporate Realty Consultants, Inc. (the "Merger
Agreement");
NOW THEREFORE, the Agreement be, and it hereby is, amended in the
following respects:
1. Each and every reference to the Operative Date and/or to the date
that is six months prior to the Operative Date shall be deemed to be a reference
to February 18, 1998.
2. The fourth sentence of Section 9(b) is amended to read as
follows:
"Except as provided in Section 10, any dispute or controversy
arising under or in connection with the interpretation of the provisions
of this Agreement shall be settled exclusively by arbitration in New York
City, New York in accordance with the rules of the American Arbitration
Association then in effect."
3. Section 10 is amended to read as follows:
"Certain Additional Payments by the Company. (a) Anything in this
Agreement to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would be subject to the excise tax imposed by Sections 280G and
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or
that
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any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, being hereinafter collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive an additional
payment (the "Net Gross-Up Payment") in an amount equal to the excess of
the Gross-Up Payment (as defined below) he would be entitled to receive
based on all Payments over the Excise Tax he would have incurred if his
only parachute payments (as defined in Code Section 280G(b)(2)) were the
payments contemplated by clause (ii) of Section 6.9.3 of the Merger
Agreement. The "Gross-Up Payment" is defined as an amount such that after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes and Excise Tax) imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Notwithstanding the provisions of Section 9(b), all
determinations required to be made under this Section 10, including
whether and when the Net Gross-Up Payment is required and the amount of
such Net Gross-Up Payment including any determination of the parachute
payments under Code Section 280G(b)(2), and the assumptions to be utilized
in arriving at such determinations shall be made by a nationally
recognized certified public accounting firm that is mutually selected by
the Executive and the Company (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Company. All fees, and expenses of the Accounting Firm shall be borne
solely by the Company. Any Net Gross-Up Payment shall be paid by the
Company to the Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the
Net Gross-Up Payment made will have been an amount less than the Company
should have paid pursuant to this Section 10 (the "Underpayment"). In the
event that the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment and any such Underpayment shall be
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promptly paid by the Company to or for the benefit of the Executive."
It is expressly understood that all other terms of the Agreement
remain in effect and are hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties have caused this Amendment to the
Agreement to be executed as of the 18th day of February, 1998.
CORPORATE PROPERTY INVESTORS,
by /s/ [ILLEGIBLE]
--------------------------------------
Name:
Title:
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx
