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Exhibit 10.65
CORPORATE PROPERTY INVESTORS
EXECUTIVE SEVERANCE POLICY
As Amended and Restated Effective as of August 11, 1998 1/
PREAMBLE
Corporate Property Investors establishes this Corporate Property
Investors Executive Severance Policy (the "Policy") as of February 18, 1998, in
order to provide severance benefits to selected executives on their Termination
(as defined below).
Said Policy is intended to be an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees as described in Section 201(2) of
the Employee Retirement Income Security Act of 1974, as amended.
SECTION 1. Definitions. As used in this Policy,
the following terms have the following meanings:
"Annual Compensation" of an Employee shall mean the sum of (i)
such Employee's annualized base salary for the year in which the Termination
occurs and (ii) the highest annual bonus paid or awarded to such Employee by the
Company with respect to any of the three calendar years preceding the Employee's
Termination (regardless of the year in which actually paid).
"Cause" shall mean (i) the willful and continued failure of an
Employee to perform substantially the Employee's duties owed to the Company
after a written demand for substantial performance is delivered to the Employee
which specifically identifies the nature of such non-performance, (ii) the
willful engaging by the Employee
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1/ This Policy has been amended and restated to reflect the elimination of
the cutback in benefits to avoid the excise tax imposed on excess parachute
payments pursuant to Sections 280G and 4999 of the Internal Revenue Code of
1986, as amended. This elimination of the cutback was approved by at least 75%
of CPI's shareholders on August 10, 1998.
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in gross misconduct significantly and demonstrably injurious to the Company or
(iii) conduct by the Employee 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.
"Class 1 Employee" shall mean an Employee who is an officer of
Company with the title of Chairman, President, Senior Vice President, Vice
President or Treasurer.
"Class 2 Employee" shall mean an Employee who is not a Class I
Employee with the title of Assistant Controller, Assistant Secretary, Assistant
Treasurer, Chief Information Officer, Director of Development, Executive
Director of Leasing, Regional Marketing Manager or Regional
Property Manager.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Company" shall mean Corporate Property Investors
and its successors and affiliates.
"Employee" shall mean a non-probationary salaried employee of
the Company expected to work at least 30 hours per week in the normal work-week.
"Policy" means this Corporate Property Investors Executive
Severance Policy as in effect from time to time.
"Service" of an Employee shall mean the number of
anniversaries that have occurred since the date of initial hire of such
Employee, as a salaried employee expected to work at least 30 hours per week in
a normal work-week for the Company, plus one. For purposes of the foregoing,
employment by Pembrook Management, Inc. shall be deemed to constitute employment
by the Company.
"Termination" shall mean the termination of an Employee's
employment with the Company other than (i) as the result of such Employee's
death or disability (in the case of disability, to the extent such termination
shall occur in accordance with the Company's Policy Regarding Absences from the
Workplace as in effect on the date hereof, and as described in a memorandum
dated June 8, 1995), (ii) as the result of such Employee's resignation, unless
such resignation (A) shall have been requested by the Company, (B) shall have
followed a reduction in such Employee's annualized base salary or (C) if such
Employee's principal workplace is the Company's New York City headquarters,
shall have followed the Company's requirement that such Employee
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relocate such Employee's principal workplace to a location outside of the
Borough of Manhattan, New York or (iii) for Cause.
SECTION 2. Severance Payments Generally. An Employee shall not
be entitled to receive any severance or other payments or benefits from the
Company in connection with the Termination of such Employee's employment, except
for:
(i) payment of vested and accrued pension, savings and
vacation benefits, including payment for unused vacation days in accordance with
the Company's vacation policy on the date hereof, and continuation of health
insurance benefits to the extent required by applicable law;
(ii) payments pursuant to written contracts signed by such
Employee and the Company; and
(iii) the payments described in this Policy, but only if such
Employee executes a general release in the form of Exhibit A.
SECTION 3. Payments to Class 1 Employees. A Class 1 Employee
with respect to whom Termination has occurred shall receive a cash payment as
soon as practicable following such Termination equal to three times such
Employee's Annual Compensation.
SECTION 4. Payments to Class 2 Employees. A Class 2 Employee
with respect to whom Termination has occurred shall receive a cash payment as
soon as practicable following such Termination equal to two times such
Employee's Annual Compensation; provided, however, that if such Employee's
Service is less than three, such Employee shall instead receive a cash payment
equal to such Employee's Annual Compensation.
SECTION 5. Amendment and Termination. The Company may
terminate or amend this Policy at any time and from time to time, for any reason
or no reason; provided, however, that any such termination or amendment of this
Policy that is adverse to the interests of any Employee under this Policy shall
be effective only (i) as to any Employee first becoming an Employee after the
date of such amendment or termination or (ii) as to any other Employee, as of
February 18, 2001.
SECTION 6. Coordination with Written Contracts or other
Plans. If at any time an Employee shall be entitled to payments in connection
with the Termination of such
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Employee both under this Policy and (i) under a written contract between such
Employee and the Company, then the terms of such contract, and not this Policy,
shall apply, unless such contract expressly refers to this Section of this
Policy and provides for a different result or (ii) another severance plan or
policy established by the Company, then the terms of this Policy shall apply.
SECTION 7. Payment of Benefits. Severance Payments due under
this Policy will be automatically paid following an Employee's Termination. If
an Employee believes he is entitled to Severance Payments but does not receive
such Severance Payments hereunder or he contests the amount of such payment, he
or she may file a claim with the Company. If such claim is denied, the Employee
will receive a full written explanation of such denial. The Employee may file an
appeal of such denial with the Company within 60 days of receipt of the denial
of the original claim. Within 60 days of receipt of the appeal, the Company will
review the claim, and if it denies the appeal, will provide written notice of
the denial within 60 days of the Company's receipt of the appeal. The Company
shall have complete discretion to determine eligibility for Severance Payments
hereunder and its decision will be binding.
SECTION 8. Statement of Company's Rights. An Employee's
eligibility for benefits under this Policy shall not be considered a guarantee
of continued or lifetime employment with the Company and shall not change the
fact that an Employee shall be considered an Employee at will. An Employee's
employment by the Company may be terminated by the Company whenever the Company,
in its sole discretion, considers that to be in its best interest, subject to
applicable law.
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SECTION 9. Enforceability. This Policy is intended to have
binding legal effect on the Company, and an Employee's continued service as an
Employee of the Company after the date hereof shall be deemed to be in reliance
on this Policy and shall constitute consideration for this Policy. This Policy
shall be construed in accordance with, and governed by, the laws of the State of
New York.
IN WITNESS WHEREOF, this Policy has been adopted by the
Company as of February 18, 1998.
CORPORATE PROPERTY INVESTORS
By: _________________________
President and Chief
Operating Officer
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EXHIBIT A
WAIVER AND RELEASE AGREEMENT
This Agreement ("Agreement") is between Corporate Property
Investors (the "Company") and ____________________ (the "Employee"). In
consideration for the Severance Payments described in the attached Policy, the
Employee hereby agrees as follows:
a. Employee's resignation will be effective on his date of
Termination. Employee acknowledges that effective as of such date, any right or
authority on Employee's part to act as an agent or employee of the Company, in
any manner whatsoever, shall be terminated.
b. Employee agrees to release and discharge the Company and
any related company, and their respective agents, employees, directors and
officers from any and all actions, causes of action, claims, awards, damages,
demands or suits, at law or in equity, or liabilities of any kind or nature
whatsoever, which Employee now has or hereafter may have against the Company or
such other entities or individuals at any time in the past and at any time
through his date of Termination. This release and discharge is specifically
understood to apply to, but is not limited to, claims of wrongful discharge,
claims of discriminatory treatment based upon any one or combination of the
factors of sex, race, religion, sexual orientation, handicap, national origin
and any and all other claims arising under federal, state or local law, whether
such claims arise due to common law (whether arising in tort or contract) or by
constitution, statute or ordinance. This release and discharge also includes a
waiver of any rights or claims which Employee may have under the Age
Discrimination in Employment Act, as amended, arising on or prior to the date of
execution of this Agreement but does not include any such rights or claims
arising after the date of this Agreement.
c. Employee acknowledges that he is entering into this
Agreement voluntarily and of his own free will.
The parties hereto agree that this Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
parties further agree that should any part or provision of this Agreement be
held unenforceable or in conflict with controlling law, the validity of the
remaining parts and provisions shall be unaffected.
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Employee acknowledges that he was provided a copy of this
Agreement on [ ], and that he has until [ ], to sign and return it to the
Company. Employee shall have seven days from the date this Agreement is executed
by the Employee to revoke this Agreement. It is agreed that this Agreement shall
become effective and enforceable at end of the seven-day revocation period
unless the Employee exercises his right to revoke this Agreement within such
period. Employee is advised to consult with an attorney prior to executing this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year written below.
[EMPLOYEE] CORPORATE PROPERTY INVESTORS
By:__________________________ By:_______________________________
__________________________ _______________________________
(Date) (Date)