Exhibit 10.4
AGREEMENT TO AMEND EMPLOYMENT
AND NONCOMPETITION AGREEMENT AND SEVERANCE AGREEMENT
This Agreement to Amend the Amendment and Restatement of Employment
and Noncompetition Agreement and the Amendment and Restatement of Severance
Agreement (the "Amendment Agreement") is entered into this 3rd day of August,
2006, by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Executive") and Reckson Associates
Realty Corp. (the "Employer").
WHEREAS, the Executive and the Employer are parties to (a) the
Amendment and Restatement of Employment and Noncompetition Agreement (the
"Original Agreement"), dated as of August 15, 2000, by and between the Executive
and the Employer as amended by the Agreement for Extension of Employment and
Noncompetition Agreement (the "Initial Extension Agreement"), dated September
27, 2005, by and between the Executive and the Employer, the Agreement for
Extension of Employment and Noncompetition Agreement (the "Second Extension
Agreement"), dated December 6, 2005 and the Agreement for Extension of
Employment and Noncompetition Agreement (the "Third Extension Agreement" and,
together with the Initial Extension Agreement and the Second Extension
Agreement, the "Extension Agreements"), dated February 14, 2006 (the Original
Agreement as amended by the Extension Agreements, the "Employment Agreement")
and (b) the Amendment and Restatement of Severance Agreement dated as of August
15, 2000 (the "Severance Agreement");
WHEREAS, the Executive and the Employer wish to amend the Employment
Agreement to extend the term in all respects through and including April 30,
2007; and
WHEREAS, in connection with the transactions contemplated by the
Agreement and Plan of Merger by and among Spirit, Wyoming Acquisition Corp.,
Wyoming Acquisition GP, Wyoming Acquisition Partnership LP, RRR and RRR
Operating Partnership, L.P. dated as of the date herewith (the "Merger
Agreement"), the Executive and Employer wish to amend the Employment Agreement
and the Severance Agreement in certain other respects, provided, that in the
event the Merger Agreement (and the transactions contemplated by the Merger
Agreement) terminates pursuant to Section 7.1 of the Merger Agreement (a
"Termination Event"), certain amendments set forth herein automatically will be
deemed to be of no force and effect and will be void ab initio.
NOW, THEREFORE, the Executive and the Employer hereby agree as
follows:
1. The term of the Employment Agreement is hereby extended through
and including April 30, 2007. The Employment Agreement shall terminate on May 1,
2007 unless extended for such period or periods, if any, as agreed to by the
Executive and the Employer (subject to earlier termination as provided therein).
In accordance with the foregoing, all rights, duties and obligations set forth
under the Employment Agreement shall be in full force and effect through and
including April 30, 2007, unless sooner terminated by the Executive and the
Employer.
2. Section 8 of the Employment Agreement is hereby amended and
restated in its entirety to read as follows:
"8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are
essential and because Executive has access to the Employer's
confidential information, Executive covenants and agrees that
commencing on the date hereof until the earlier to occur of (i) August
3, 2007 and (ii) the six-month anniversary of the Closing Date (as
defined in the Merger Agreement), the Executive will not:
(A) engage, participate or assist, as an owner,
partner, director, officer, trustee or agent, in any business
that primarily engages or attempts to engage in, directly or
indirectly, the acquisition, operation or management of any
office real estate property in any of the submarkets in the
borough of Manhattan, New York, or
(B) intentionally interfere with, disrupt or
attempt to disrupt the relationship, contractual or otherwise,
between the Employer or its affiliates and any tenant,
supplier, contractor, lender, employee or governmental agency
or authority in connection with any office real estate
property in the borough of Manhattan, New York.
(b) Notwithstanding anything contained herein to the
contrary, Executive is not prohibited by this Section 8 from (i) making
investments in any entity that engages, directly or indirectly, in the
acquisition, development, construction, operation, management or
leasing of industrial or office real estate properties, regardless of
where they are located, if the shares or other ownership interests of
such entity are publicly traded and Executive's aggregate investment in
such entity constitutes less than five percent (5%) of the equity
ownership of such entity, or (ii) providing services to FrontLine and
its affiliates.
(c) The provisions of this Section 8 shall survive the
termination of this Agreement."
Notwithstanding the foregoing, in the event a Termination Event
occurs, the amendments set forth herein to Section 8 of the Employment Agreement
automatically will be deemed to be of no force and effect and will be void ab
initio, and the original provisions of Section 8 of the Employment Agreement
will remain in effect.
3. Section 2 of the Severance Agreement is hereby amended and
restated in its entirety to read as follows:
"2. Term. The term and duration of this Agreement shall be identical
to the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of
this Agreement, the Employment Agreement and the Employment Period
shall continue in effect until the later of (i) the date on which the
term of the Employment Agreement otherwise would have ended or (ii) the
date which is thirty-six months beyond the end of the calendar year in
which the Change-in-Control occurs. Section 1 of the Employment
Agreement is hereby amended in accordance with the foregoing."
4. Section 3 of the Severance Agreement is hereby amended to include
the addition of the following Section 3(d):
"(d) Cap on Payments. The Executive acknowledges and agrees that the
maximum amount of the Severance Payment and other payments to be paid
to him under Sections 3(c)(i) (other than accrued base salary and
vacation), 3(c)(ii), 3(c)(iv), 3(c)(vi) and 3(c)(viii) of the Severance
Agreement will not exceed $8,456,620. In addition, the Executive hereby
waives the vesting and payment and any other rights with respect to
those unvested LTIP OP Units as set forth on Schedule I (as defined in
the Merger Agreement).
For purposes of clarification, the parties agree that nothing herein is
intended to limit (1) any payments that may be due to the Executive
under Sections 3(c)(iii), 3(c)(v), 3(c)(vii), 4, 5 or 6 of the
Severance Agreement, (2) payment of the Special Outperformance LTIP or
(3) non-cash benefits (other than as provided above) such as the
vesting or exercise of restricted stock or other stock rights, stock
loan forgiveness, profits interests in the operating partnership,
partnership units and assignment of split dollar life insurance
policies.
The Executive agrees that the Employer may in its discretion pay, in
cash or a note, the Severance Payments during calendar year 2006."
Notwithstanding the foregoing, in the event a Termination Event
occurs, the amendment set forth herein to Section 3 of the Severance Agreement
automatically will be deemed to be of no force and effect and will be void ab
initio, and the original provisions of Section 3 of the Severance Agreement will
remain in effect.
5. Section 5 of the Severance Agreement is hereby amended to include
the addition of the following sentence:
"Notwithstanding anything else to the contrary set forth herein, in
the event tax counsel selected by the Executive and reasonably
acceptable to the Employer determines that the aggregate amount of all
Payments the Executive will receive would equal or exceed 105% of the
Reduced Amount, the Severance Amount will be reduced by the amount
necessary so that the Payments are equal to the Reduced Amount.
For purposes of this Section 5, a "Payment" shall mean any payment or
distribution in the nature of compensation to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or
otherwise; "Present Value" shall mean such value as determined in
accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code;
and "Reduced Amount" shall mean an amount expressed in Present Value
that maximizes the aggregate Present Value of Payments without causing
any Payment to be taxable under Section 4999 of the Code."
Notwithstanding the foregoing, in the event a Termination Event
occurs, the amendment set forth herein to Section 5 of the Severance Agreement
automatically will be deemed to be of no force and effect and will be void ab
initio, and the original provisions of Section 5 of the Severance Agreement will
remain in effect.
6. The provisions of Sections 4, 5 and 6 of the Severance Agreement
will survive any termination of the Employment Agreement and the Severance
Agreement.
7. This Amendment Agreement may be amended, modified or supplemented
by the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
8. This Amendment Agreement shall be construed and governed by the
laws of the State of New York.
* * * * *
IN WITNESS WHEREOF, this Amendment Agreement is entered into as of
the date first set forth above.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Lead Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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