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Exhibit 10.18
RETIREMENT BENEFITS AGREEMENT
THIS RETIREMENT BENEFITS AGREEMENT ("Agreement") is entered into this
18th day of October, 2001 by and between EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust ("ERPT"), and SAMUEL ZELL ("the
Executive").
RECITALS
WHEREAS, Executive has served as Chairman of Company's Board of
Trustees since 1993; and
WHEREAS, in recognition of the extraordinary services previously
rendered by Executive and to give Executive incentive to continue rendering such
services, Company wishes to enter into this Agreement; and
WHEREAS, Executive also wishes to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
considerations contained herein and for other good and valuable consideration,
the payment and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. RETIREMENT BENEFITS.
(a) TERMINATION OF EMPLOYMENT. In the event that the
Executive's employment as Chairman is terminated for any reason
whatsoever other than the reasons set forth in paragraph 1(b)
hereunder, the Company shall pay the Executive retirement compensation
for a ten (10) year period, commencing on the date of termination of
employment, in an annual amount equal to the Annual Retirement Benefit
(as defined below) in effect for the calendar year in which the
termination of employment occurs. Such annual compensation shall be
payable in equal bi-monthly installments. In the event of the
Executive's death either prior to Executive's termination of employment
or during the ten (10) year period in which he is paid annual
retirement compensation, such Annual Retirement Benefits shall then be
paid to the estate or any other designee of the Executive.
(b) TERMINATION WITH CAUSE OR RESIGNATION WITHOUT GOOD
REASON. In the event that the Executive's employment as Chairman
hereunder is terminated with Cause by ERPT; or (ii) the Executive
resigns as Chairman without Good Reason on or before age 62, the
Executive shall not be entitled to receive any retirement compensation
hereunder.
(c) ANNUAL RETIREMENT BENEFIT. "Annual Retirement
Benefit" shall mean an amount equal to Five Hundred Thousand Dollars
($500,000.00) for calendar year 2001 and 2002, which sum shall be
increased (but only during Executive's period of employment) as of
January 1, 2003 and as of the first day of January of each year
thereafter to an amount equal to the Annual Retirement Benefit in
effect for the immediately preceding calendar year increased by a
percentage equal to the
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percentage increase in the CPI (as defined below) during the
immediately preceding calendar year over the prior calendar year.
(d) CPI. The term "CPI" shall mean the Revised Consumer
Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, for United States
City Average, All Items (1982-84 = 100). If the manner in which the CPI
is calculated shall be substantially revised ERPT and the Executive
shall select a means to adjust such revised Index, which would produce
results equivalent, as practicable, to those, which would have been
obtained if the CPI has not been so revised. If the 1982-84 average
shall no longer be used as an index of 100, such change shall
constitute a substantial revision. If the CPI shall become unavailable
to the public because publication is discontinued, or otherwise, ERPT
and the Executive shall select a comparable substitute index based upon
changes in the cost of living or purchasing power of the consumer
dollar published by any other governmental agency, or, if no such index
shall then be available, a comparable index published by a major bank
or other financial institution or by a university or a recognized
financial publication. In the event that the U.S. Department of Labor,
Bureau of Labor Statistics, changes the publication frequency of the
CPI so that a CPI is not available to make an adjustment for the period
in question, the adjustment shall be based on the percentage increase
in the CPI for the twelve (12) month period beginning with the closest
month preceding the period in question for which a CPI is available.
(e) CAUSE. For purposes of this Agreement, a termination
of employment is for "Cause" if the Executive has been convicted of a
felony involving fraud or dishonesty or the termination is evidenced by
a resolution adopted in good faith by at least two-thirds of the Board
of Trustees that the Executive: (i) intentionally and continually
failed substantially to perform his reasonably assigned duties with the
Company (other than a failure resulting from the Executive's incapacity
due to physical or mental illness or from the Executive's assignment of
duties that would constitute "Good Reason" as hereinafter defined)
which failure continued for a period of at least thirty (30) days after
a written notice of demand for substantial performance has been
delivered to the Executive specifying the manner in which the Executive
has failed substantially to perform or (ii) intentionally engaged in
conduct which is demonstrably and materially injurious to the Company;
PROVIDED, HOWEVER, that no termination of the Executive's employment
shall be for Cause as set forth in clause (ii) above until (x) there
shall have been delivered to the Executive a copy of a written notice
setting forth that the Executive was guilty of the conduct set forth in
clause (ii) and specifying the particulars thereof in detail and (y)
the Executive shall have been provided an opportunity to be heard in
person by the Board (with the assistance of the Executive's counsel if
the Executive so desires). Neither an act nor a failure to act, on the
Executive's part shall be considered "intentional" unless the Executive
has acted or failed to act with a lack of good faith and with a lack of
reasonable belief that the Executive's action or failure to act was in
the best interest of the Company.
(f) GOOD REASON. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the events or conditions
described below:
(i) any failure to pay the Executive any
compensation or benefits to which he is entitled within thirty
(30) days of written notice thereof;
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(ii) the Company's requiring the Executive to be
based at any location other than Executive's then principal
location for his other business activities;
(iii) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy of the
Company, which petition is not dismissed within sixty (60)
days; or
(iv) any material breach by the Company of any
provision of this Agreement.
2. ARBITRATION. Except as otherwise specifically provided herein,
any controversy or claim arising out of, or relating to this Agreement, or the
breach thereof, shall be settled by arbitration in Chicago, Illinois in
accordance with the rules of the American Arbitration Association, and judgment
upon any award so rendered may be entered in any court having jurisdiction
thereof.
3. NOTICES. Any notice or other communication required or
permitted to be transmitted under this Agreement shall be in writing, and
personally delivered or mailed, return receipt requested, postage prepaid,
addressed to the parties hereto at their addresses following their signatures
below, or at such other addresses as may be hereafter designated by a party by
notice delivered in accordance herewith. Any notice delivered personally shall
be effective on the date of delivery and any notice mailed, as aforesaid, shall
be effective on the second day following posting.
4. WAIVER OF BREACH. The waiver by one party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by the one party.
5. ASSIGNMENT. The rights and obligations of ERPT and Executive
under this Agreement shall inure to the benefit of, and shall be binding upon,
ERPT and its successors and assigns and Executive and his heirs and personal
representatives.
6. ENTIRE AGREEMENT. This instrument contains the entire
agreement between the parties. It may not be changed orally but only by
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
7. GOVERNING LAW; SEVERABILITY. This Agreement shall be construed
and enforced, and all questions concerning compliance by any person with its
terms shall be determined under the laws of the State of Illinois. All
provisions of this Agreement are severable and this Agreement shall be
interpreted and enforced as if all completely invalid or unenforceable
provisions were not contained herein, and partially valid and enforceable
provisions shall be enforced to the extent valid and enforceable.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ERPT:
EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By: /s/ Douglas Crocker II
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Douglas Crocker II, President & CEO
Address:
Two North Riverside Plaza
Chicago, Illinois 60606
EXECUTIVE
/s/ Samuel Zell
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SAMUEL ZELL
Address:
Two North Riverside Plaza
Chicago, Illinois 60606