Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) In accordance with a CFO transition plan previously announced in a Current
Report on Form 8-K filed on September 1, 2022 (the "9-1-2022 Form 8-K") by CBL &
Associates Properties, Inc. (herein the "Company" or "CBL"), effective as of
11:59 p.m. Eastern Time on December 31, 2022, Farzana Khaleel, ceased to serve
as Executive Vice President - Chief Financial Officer and Treasurer of CBL.
Benjamin W. Jaenicke, who originally was appointed Executive Vice President -
Finance of CBL effective September 1, 2022, assumed the duties of Executive Vice
President - Chief Financial Officer and Treasurer of the Company, effective
January 1, 2023.
A description of Mr. Jaenicke's professional experience prior to joining CBL is
set forth in the 9-1-2022 Form 8-K and is incorporated herein by reference .
A description of the terms of the Employment Agreement that the Company entered
into with Mr. Jaenicke, as well as a related relocation allowance, also was set
forth in the 9-1-2022 Form 8-K and is incorporated herein by reference . Mr.
Jaenicke will continue to be compensated as Chief Financial Officer pursuant to
the terms of his previously disclosed Employment Agreement.
The Company also previously announced in the 9-1-2022 Form 8-K that it expected
to enter into a consulting arrangement with Ms. Khaleel to continue to provide
certain advisory services in order to complete a smooth transition.
Effective as of December 31, 2022, the Company and Ms. Khaleel entered into the
two agreements described below to formalize and document the terms of these
arrangements.
Consulting Agreement
The terms of the Consulting Agreement the Company entered into with Ms. Khaleel
may be summarized as follows:
•
Ms. Khaleel will be available, on reasonable notice, to consult with the Company
and its personnel regarding the matters formerly under her oversight as an
executive and Chief Financial Officer, to assist with the transition of such
matters to other Company personnel and to provide related information and
advice.
•
The Consulting Agreement will extend through June 30, 2023 (the "Extended
Term"). The Company may terminate the Consulting Agreement as of March 31, 2023
(the "Initial Term") by notice given on or before the last day of the Initial
Term. Otherwise, the Consulting Agreement will continue through the Extended
Term.
•
Ms. Khaleel shall receive the following compensation under the Consulting
Agreement: (i) base compensation of $225,000, payable in three $75,000 monthly
installments, for services rendered during the Initial Term; (ii) an Initial
Term Incentive of $150,000 payable on April 17, 2023; (iii) base compensation of
$225,000, payable in three $75,000 monthly installments, for services rendered
during the Extended Term; and (iv) an Extended Term Incentive of $150,000
payable on July 17, 2023. The Company may elect to forego payment of the Initial
Term Incentive and/or the Extended Term Incentive, subject to advance notice to
Ms. Khaleel as provided in the agreement.
•
The Consulting Agreement includes customary covenants pursuant to which Ms.
Khaleel agrees to protect the confidentiality of the Company's proprietary
information to which she will have continued access while performing services
under the agreement.
•
The Consulting Agreement is subject to early termination by the Company in the
event of Ms. Khaleel's death or disability, in which event (except as the
Company may otherwise determine with respect to the Initial Term Incentive or
the Extended Term Incentive as described above), all remaining compensation
payable under the agreement would be paid to Ms. Khaleel or her estate, as
applicable.
•
The Company may terminate the Consulting Agreement at any time for Cause, in
which case all remaining unpaid amounts provided for in the agreement would be
forfeited. "Cause" for this purpose means: (i) fraud, theft, embezzlement or
willful malfeasance by Ms. Khaleel with respect to the Company, its assets or
personnel; (ii) Ms. Khaleel's willful and continued refusal to substantially
perform her duties under the agreement, after written notice by the Company and
her failure or refusal to take reasonable steps to cure any such failure within
10 days of receipt of such notice; or (iii) any breach by Ms. Khaleel of the
covenants designed to protect the Company's confidential information.
•
Ms. Khaleel will continue to be entitled to indemnification by the Company in
her performance of services under the Consulting Agreement pursuant to the terms
of her existing executive Indemnification Agreement.
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Separation and General Release Agreement
The Company also entered into a Separation and General Release Agreement with
Ms. Khaleel, which includes customary releases by the Company for the benefit of
Ms. Khaleel and by Ms. Khaleel for the benefit of the Company, and also
reiterates that Ms. Khaleel will remain entitled to receive the following:
•
a severance benefit (totaling $1,671,584) in connection with her termination
without cause and continuation of health insurance benefits for 18 months
following termination, both of which are pursuant to the terms of her existing
Amended and Restated Executive Employment Agreement as described in the proxy
statement for the Company's 2022 Annual Meeting under the heading "Executive
Compensation - Additional Information Concerning Executive Compensation";
•
any additional compensation determined by the Compensation Committee to have
been earned pursuant to the Company's 2022 Annual Incentive Compensation Plan
(AIP) as described in the Company's Current Report on Form 8-K filed March 29,
2022, and in the Company's proxy statement for its 2022 Annual Meeting;
•
any Common Stock determined by the Compensation Committee to have been earned
for the Year 1 Performance Period ended December 31, 2022 pursuant to the terms
of the Performance Stock Units (PSUs) granted in February 2022 as described in
the Company's Current Report on Form 8-K filed February 23, 2022 and in the
Compensation Discussion and Analysis section of the Company's proxy statement
for its 2022 Annual Meeting; and
•
in connection with her termination without cause and pursuant to the terms of
Ms. Khaleel's existing Restricted Stock Award dated December 15, 2021, 50%
(22,500 shares) of the shares of restricted stock that remained unvested
pursuant to such award on December 31, 2022 were vested as of such date, with
the remaining 50% (22,500 shares) being forfeited.
The foregoing summary of the terms of Ms. Khaleel's Consulting Agreement and
Separation and General Release Agreement is qualified by reference to the full
terms of such documents, which are filed as Exhibits 10.3 and 10.4 to this
report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
Number
10.1 Employment Agreement for Benjamin W. Jaenicke, dated September 1,
2022 (incorporated by reference to the Company's Current Report on Form
8-K, filed September 1, 2022).
10.2 Relocation Allowance Commitment with Benjamin W. Jaenicke, dated
September 1, 2022 (incorporated by reference to the Company's Current
Report on Form 8-K filed September 1, 2022).
10.3 Consulting Agreement with Farzana Khaleel, effective as of December
31, 2022.
10.4 Separation and General Release Agreement with Farzana Khaleel,
effective as of December 31, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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