Exhibit 10.11
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, entered into as of February 26, 1998, is made by
and between RSVP Holdings, LLC, a Delaware limited liability company (the
"Company"), and Xxxxxx X. Xxxxxxxx (the "Executive"). Capitalized terms used
herein but not defined herein shall have the meanings as defined in the
Limited Liability Operating Agreement of the Company dated as of February 20,
1998 (the "Company Operating Agreement").
WHEREAS, the Company is owned and controlled by (i) RSI Fund
Management LLC, a Delaware limited liability company ("RSI Management"),
wholly owned by Reckson Services Industries Inc. ("Reckson Services"), and
(ii) New World Realty, LLC, a Delaware limited liability company ("S/S"); and
WHEREAS, the Company and Xxxxx Xxxxxx Real Estate Securities Inc.
propose to form Reckson Strategic Venture Partners, LLC, a Delaware limited
liability company (the "Fund") to acquire and invest in real estate and real
estate-related operating companies in selected segments of the real estate
industry; and
WHEREAS, the Company is proposed to be the Managing Member of the
Fund; and
WHEREAS, the Company desires to obtain the services of the
Executive to perform certain services, including to manage the operations of
the Fund or such other vehicle as may be formed in lieu of the Fund, and the
Executive is willing to render such services, in accordance with the terms
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Company and the Executive agree as follows:
ARTICLE I
Term of Agreement
I.1 Term. The term of employment under this Agreement shall be
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for the period commencing on March 5, 1998, or such later date within 5 days
thereafter as is requested by the Executive ( the "Effective Date") and
ending on the day prior to the seventh anniversary of the Effective Date (the
"Term"); provided, however, that the Term may be earlier terminated after the
fifth anniversary of the Effective Date as a result of (a) the end of the
term (unless extended) of the Fund, or (b) as otherwise provided in this
Agreement. The parties' respective obligations hereunder shall commence and
continue from and after the date of this Agreement, notwithstanding any delay
or failure to consummate the formation, organization or funding of the Fund,
provided, however, that if the Executive does not
commence performance of his duties on or before the Effective Date for any
reason, and the Company has provided written notice thereof to the Executive
and the Executive has not commenced performance within 30 days of the date of
the receipt of written notice, his failure to do so shall be deemed a
voluntary termination of employment by Executive, as of the Effective Date,
pursuant to the terms of Section 5.5 of this Agreement (except that Section
7.1 of this Agreement shall not apply to such termination).
ARTICLE II
Position and Duties
II.1 Position. The Executive shall be employed as one of two
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Managing Directors of the Fund, a non-member manager of the Company and one
of four members of the Management Committee, all subject to the terms of this
Agreement.
II.2 Duties. The Executive agrees to (a) supervise and direct the
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Fund including the day to day management of the Fund, and (b) from time to
time advise RA on strategic corporate decisions and major acquisitions as RA
may request ("RA Advisory Services"), provided the RA Advisory Services do
not interfere with the performance of the Executive's other duties hereunder,
and further provided the Executive is indemnified and held harmless by RA and
the Operating Partnership from and against all Damages arising out of or
relating thereto, other than for wilful misconduct on the part of the
Executive. The Executive shall be located in Long Island, New York. The
Executive shall report directly to the Management Committee. Excluding
periods of vacation and sick leave to which the Executive is entitled
pursuant to the terms of this Agreement, the Executive agrees that during the
Term he shall devote substantial and sufficient time and attention to the
performance of his duties and responsibilities hereunder. Notwithstanding
the foregoing, the Executive may (i) with the written consent of Reckson
Services or RSI Management, such consent not to be unreasonably withheld,
serve as a director of any public or private company, which does not directly
compete with a Fund Platform Investment or with RSI or its affiliates;
(ii) serve on civic or charitable boards or committees or engage in other
charitable activities; (iii) engage in residential mortgage lending in the
U.S. and abroad and in vehicle financing and sales; and (iv) engage in any
passive investment activities (the foregoing activities, collectively,
"Permitted Outside Activities"), so long as all such Permitted Outside
Activities in the aggregate do not (x) materially interfere with the
performance of the Executive's duties with respect to the Fund or (y) exceed
an average of five hours per week during regular business hours in any
calendar year.
ARTICLE III
Compensation
III.1 Base Salary. The Company agrees to pay or cause to be paid
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to the Executive during the Term a base salary at the rate of $500,000 per
annum during the first five years of the Term, and $1,100,000 per annum
during the sixth and seventh year of the Term, or such larger amount as RSI
Management may from time to time determine (hereinafter referred to as the
"Base Salary"). Such Base Salary shall be payable in accordance with RA's
customary practices applicable to its senior executives, but not less
frequently than monthly. During the Term, the Base Salary shall be
automatically, without further action by the Company, increased, by an amount
equal to 50% of the maximum amount of S/S Transaction Fees which may be
payable to S/S (calculated as if both Managing Directors of the Company were
still Managing Directors, but increased by 100% of any Retained S/S
Transaction Fees) (as defined in Section 5.8(e) of this Agreement) and not
received by S/S as provided in Section 9.02(d) of the Company Operating
Agreement, but such increase shall not exceed $500,000 per annum during the
Term. The Company and RSI Management shall not be entitled to any additional
or greater defenses, rights or remedies than they would otherwise have had,
nor shall the Executive be deemed to waive or release any rights he would
otherwise have had, were the amounts payable to S/S as S/S Transaction Fees
instead payable to the Executive as additional stated Base Salary.
III.2 Deferred Compensation. The Executive will be provided, at the
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beginning of the Term and on an annual basis, the opportunity to defer all or
a portion of Base Salary into a grantor trust established by the Company for
the benefit of Executive. The deferred Base Salary shall be deposited with
the trustee of the grantor trust at such times as the deferred Base Salary
would have been paid to Executive. Executive shall select the investment
vehicle(s) for amounts held by the trustee and all such amounts shall be
actually invested in such investments. All deferred Base Salary plus
investment gains and minus investment losses thereon (the "Deferred
Compensation") will be paid to Executive within seven business days of
Executive's termination of employment for any reason. All expenses of the
grantor trust shall be paid from the grantor trust.
ARTICLE IV
Other Benefits
IV.1 Executive Benefits. The Executive will be covered under all
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retirement, medical, dental and vision care, short-term and long-term
disability, life insurance, accident insurance and other benefit plans
maintained from time to time by RA for its senior executives.
IV.2 Vacation and Sick Leave. The Executive shall be entitled to
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annual vacation in accordance with the policies as periodically established
by RA for its senior executives, which shall in no event be less than five
weeks per year. The Executive shall be entitled to carryover up to 2.5
unused weeks of vacation from year to year, provided that no more than eight
weeks of vacation is taken in any one calendar year. The Executive shall be
entitled to sick leave (without loss of pay) in accordance with RA's policies
for its senior executives as in effect from time to time.
IV.3 Expenses. The Company shall reimburse the Executive for all
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reasonable travel, entertainment and other business expenses incurred by him
in connection with the performance of the Executive's duties under this
Agreement.
ARTICLE V
Termination of Employment
V.1 Permitted Termination: The Executive's employment hereunder
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may not be terminated by the Company or RSI Management except (a) for Cause
(as defined in Section 5.8(b)), (b) as a result of Executive's death or
Disability (as defined in Section 5.8(c)); (c) upon an Adverse Valuation
Determination, or (d) after the fifth anniversary of the Effective Date, as a
result of the end of the term (unless otherwise extended) of the Fund.
V.2 Termination for Cause or Certain Resignation.
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(a) Except as otherwise set forth in this Section 5.2, all
obligations of the Company under this Agreement shall cease if, during the
Term, the Company or RSI Management terminates the Executive for Cause (and
if the Executive is terminated for Cause, he will be deemed to have
withdrawn, as of the Termination Date, as a member of S/S and will not be
entitled to receive any distributions not actually distributed as of the
Termination Date unless previously required to have been paid or distributed
to the Executive or S/S prior to the Termination Date). Upon such
termination the Executive shall receive in a lump sum cash payment as soon as
practicable after the Termination Date, but in no event more than seven
business days thereafter, an amount equal to the sum of: (i) the portion of
the Executive's then current Base Salary accrued to the Termination Date but
unpaid as of the Termination Date (the "Unpaid Salary"); (ii) 50% of S/S
Transaction Fees (calculated as if both Managing Directors of the Company
were still Managing Directors, but increased by 100% of any Retained S/S
Transaction Fees) accrued to the Termination Date but unpaid as of the
Termination Date (the "Unpaid Additional Compensation"); (iii) payment in
respect of Executive's accrued but unused vacation ("Unused Accrued
Vacation"); (iv) Deferred Compensation (as provided in Section 3.2); and
(v) payment in respect of accrued but unpaid or unused Executive Benefits
("Accrued Executive Benefits").
(b) If the Company or RSI Management seeks to terminate the
Executive for Cause and the Executive contests such termination, then at RSI
Management's or the Executive's election, the issue shall be submitted for
judicial determination with expedited discovery, no priorities in discovery,
a three-month cutoff to all discovery and trial as soon thereafter as a court
will allow, in federal (or if that venue is unavailable, state) court in New
York County (but the court may only determine the issue of whether Cause
exists). The Executive's rights to payment of Base Salary, 50% of S/S
Transaction Fees (calculated as if both Managing Directors of the Company
were still Managing Directors, but increased by 100% of any Retained S/S
Transaction Fees) and other benefits shall continue unimpeded while such
proceeding is pending unless and until there is an initial finding in such
proceeding on a motion for summary judgment or at trial that Cause exists.
If Cause is found to have occurred:
(i) the Executive's employment shall be terminated for Cause as of
the date the Company or RSI Management first requested such action be
taken;
(ii) the Executive shall promptly receive the amounts set forth in
Section 5.2(a), but in no event more than seven business days
thereafter; and
(iii) simultaneously with such payment to the Executive, the
Company shall be repaid, with statutory interest, any payments made to
the Executive pursuant to this Section 5.2(b) from and after the date
the Company or RSI Management first requested termination for Cause.
If Cause is not found to have occurred, the Executive may elect,
provided notice of such election is given to the Company and RSI Management
within 15 business days of final adjudication, to terminate employment and
all governance rights in S/S effective as of the date of such notice and,
upon Executive's execution in favor of the Company, the other Managing
Director, RSI Management, Reckson Services, S/S and their respective
Affiliates of a waiver and release of all claims relating to the attempted
termination for Cause, shall simultaneously receive a lump sum cash payment
equal to the sum of: (i) Base Salary through the end of an assumed six-year
Term; (ii) 50% of S/S Transaction Fees through the end of an assumed six-year
Term (calculated as if both Managing Directors of the Company were still
Managing Directors, but increased by 100% of any Retained S/S Transaction
Fees); (iii) Unpaid Salary through the date of termination of employment by
the Executive (to the extent not previously paid pursuant to Section 5.2(a)),
(iv) Unpaid Additional Compensation through the date of termination of
employment by the Executive (to the extent not previously paid pursuant to
Section 5.2(a)); (v) all Unused Accrued Vacation through the date of
termination of employment by the Executive (to the extent not previously paid
pursuant to Section 5.2(a)); (vi) Deferred Compensation (as provided in
Section 3.2); and (vii) Accrued Executive Benefits through the date of
termination of employment by the Executive (to the extent not previously paid
pursuant to Section 5.2(a)), provided, however, that all of clauses (i) -
(vii) are subject to the provisions of Section 7.1, including the financial
remedies of the Company in Section 7.1(b). If such election is not made by the
Executive, the Executive (i) may continue employment and (ii) shall retain
his rights and remedies at law or in equity with respect to the attempted
termination for Cause.
V.3 Termination in the Event of Death or Disability. If, during
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the Term, the Company terminates the Executive's employment due to the
Executive's death or Disability, the Executive or his Beneficiary (as defined
in Section 5.8(a)) shall receive in a lump sum cash payment as soon as
practicable after the Termination Date, but in no event more than seven
business days thereafter, an amount equal to the sum of: (i) Unpaid Salary,
if any; (ii) Unpaid Additional Compensation, if any; (iii) Unused Accrued
Vacation, if any; and (iv) Accrued Executive Benefits, if any. In addition,
Executive (or his Beneficiary) shall continue to receive, subject, however,
to the provisions of Section 7.1, including the financial remedies of the
Company in Section 7.1(b), Base Salary, plus 50% of S/S Transaction Fees
(calculated as if both Managing Directors of the Company were still Managing
Directors, but increased by 100% of any Retained S/S Transaction Fees), from
the Termination Date through the end of an assumed six-year Term. Such
continued Base Salary plus 50% of S/S Transaction Fees (calculated as if both
Managing Directors of the Company were still Managing Directors, but
increased by 100% of any Retained S/S Transaction Fees) through the end of an
assumed six-year Term may be provided, in whole or in part, through a Company
purchased policy or plan the costs and premiums for which are the sole
expense of the Company, provided, however the Company is primarily liable to
pay the entire amount to Executive (or his Beneficiary).
V.4 Termination in the Event of an Adverse Valuation
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Determination. The Company or RSI Management may terminate Executive's
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employment upon declaring an Adverse Valuation Determination in accordance
with the applicable provisions of the Company Operating Agreement. If,
during the Term, the Company or RSI Management terminates Executive's
employment due to an Adverse Valuation Determination, the Executive, as a
condition precedent to the effectiveness of that termination, shall receive
in a lump sum cash payment no later than the Termination Date an amount equal
to the sum of: (i) Unpaid Salary; (ii) Unpaid Additional Compensation;
(iii) Unused Accrued Vacation; (iv) Accrued Executive Benefits; and (v) 50%
of Base Salary, plus 25% of S/S Transaction Fees (calculated as if both
Managing Directors of the Company were still Managing Directors but increased
by 50% of any Retained S/S Transaction Fees), from the Termination Date
through the end of an assumed six-year Term. Executive shall also receive,
subject, however, to the provisions of Section 7.1, including the financial
remedies of the Company in Section 7.1(b), on the last day of the Non-Compete
Period (as defined in Section 7.1), in a lump sum cash payment, an amount
equal to 50% of Base Salary, plus 25% of S/S Transaction Fees (calculated as
if both Managing Directors of the Company were still Managing Directors, but
increased by 50% of any Retained S/S Transaction Fees), from the Termination
Date through the end of an assumed six-year Term.
V.5 Voluntary Resignation of the Executive. If, during the Term,
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the Executive voluntarily terminates his employment (other than pursuant to
Section 5.2(b)), provided such voluntary termination is not the result of
acts or omissions by the Company or
RSI Management (after written notice to the Company and RSI Management and a
reasonable time period and opportunity to cure such breach if such breach is
capable of being cured, provided that such time period shall be extended for
a reasonable time period if at the time it was otherwise to expire, such
breach was then capable of being cured and such cure was being diligently
pursued by the Company and RSI Management) constituting constructive
termination (which constructive termination is not a permitted method of
termination), Executive shall receive payments as if his employment were
terminated by the Company for Cause. Upon such voluntary termination, the
Executive will be deemed to have withdrawn as a member of S/S and will not be
entitled to receive any distributions not actually distributed as of the
Termination Date unless previously required to have been paid or distributed
to the Executive or S/S prior to the Termination Date.
V.6 Change in Control Event, Default or Fundamental Failure. Upon
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the occurrence of (i) a Change in Control Event provided S/S has made an
election in accordance with Section 10.04(c) of the Company Operating
Agreement within six months of the occurrence of the Change in Control Event,
(ii) a Default which is not cured in accordance with the provisions of the
Company Operating Agreement (and S/S has not received, inclusive of all
amounts previously distributed to S/S pursuant to Article VII of the Company
Operating Agreement, $7.5 million of the Subordinated Preference Amount), or
(iii) Fundamental Failure, the Executive may require (provided the Executive
gives notice of such requirement within six months of the Change of Control
Event) the Company to immediately pay all amounts that would be paid to the
Executive pursuant to Section 5.4 (including all amounts that would otherwise
have been payable on the last day of the Non-Compete Period), if the
Executive's employment had been terminated upon an Adverse Valuation
Determination. Upon the occurrence of a Fundamental Failure, all obligations
of the Executive to the Company under this Agreement shall terminate in their
entirety.
V.7 Payments upon the Executive's Termination. The foregoing
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payments upon the Executive's termination shall constitute the exclusive
payments due the Executive upon termination of his employment with the
Company under this Agreement; provided, however, that except as stated above,
such payments shall have no effect on (i) any benefits which may be payable
to the Executive under any plan of the Company which provides benefits after
termination of employment, or (ii) any right to receive current or future
distributions from the Company pursuant to the Company Operating Agreement.
The Executive shall not be required to mitigate the amount of any payment by
seeking other employment or otherwise, nor shall the amount of any such
payment be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Termination Date.
V.8 Certain Definitions.
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(a) "Beneficiary" means the person or trust designated in writing
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by the Executive to receive any payments due under this Agreement in the
event of the Executive's death and if no such person or trust is designated,
the Executive's estate.
(b) "Cause" shall mean and be limited to (i) gross negligence,
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(ii) willful misconduct (including an act of fraud or embezzlement or
material breach of the fiduciary duty of loyalty to the Company or the Fund,
but not including any exercise by the Executive of his right to propose,
oppose, or vote in favor of or against any Major Decision or any other
decision, as set forth in Section 4.04(b) of the Company Operating
Agreement), (iii) an intentional act or omission constituting a material
breach of the Company Operating Agreement or of the Employment Agreement
(including the refusal, failure or neglect of the Executive to perform his
duties under the Company Operating Agreement or the Employment Agreement)
after written notice of, and a reasonable time period and opportunity to cure
such breach if such breach is capable of being cured, provided that such time
period shall be extended for a reasonable time period if at the time it was
otherwise to expire, such breach was then capable of being cured and such
cure was being diligently pursued by the Executive), (iv) conviction of, or
pleading guilty to, a felony, or (v) the excessive and continued use, after
written notice, of alcohol or illegal drugs interfering with the performance
of the Executive's duties.
(c) "Disability" shall mean that the Executive has been physically
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or mentally incapable of performing the essential functions of his job for a
period of more than 120 consecutive days, or for more than 180 days in any
18-month period, as determined by a board-certified physician selected by the
Company's primary disability insurer and reasonably acceptable to the other
Managing Director of the Fund and to RSI Management.
(d) "Termination Date" means the date as of which the Executive's
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employment with the Company is terminated by the Company, RSI Management or
by the Executive for any reason which, except in the event of the Executive's
death, shall be specified in a written notice of termination received by
either party from the other, provided, however, that if Section 5.8(b)(iii)
applies, it shall mean the date notice to cure was first given to the
Executive.
(e) "Retained S/S Transaction Fees" means the S/S Transaction Fees
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allocated to the Executive pursuant to the last sentence of Section 6.1(b) of
this Agreement.
(f) "Fundamental Failure" shall mean that the Fund (or any other
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investment vehicle capable, legally and operationally, of pursuing the
investment objectives of the Fund, subject in all respects, including scope
and nature of the investment objectives, to the constraints on real estate
investment trust income imposed by the Code, and with the Managing Directors
and S/S having no less economic remuneration, including rights to
disbursements and fees, managerial control and autonomy as provided under the
Company Operating Agreement), has not been organized and capitalized with at
least $300 million of legally binding equity capital commitments from
institutional investors and/or Reckson Services, RA, the Operating
Partnership, or their Affiliates, prior to the first anniversary of the
Effective Date.
ARTICLE VI
VI.1 Successor Managing Director.
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(a) Upon termination of the other Managing Director's employment,
RSI Management shall have the right to propose a successor who is not
otherwise an affiliate of the Company, RSI Management or Reckson Services,
subject to approval, not to be unreasonably withheld, by the Executive (an
"Approved Successor"). Such withholding of approval shall be deemed
reasonable if it is based on assessment of the proposed successor's business
expertise or experience, and/or compatibility with the Executive's management
style, methods of operation and business and investment objectives.
(b) RSI Management may make available or cause the Company to make
available to an Approved Successor (i) the interest in the Company
transferred to RSI Management by S/S (i.e., 50 percent of S/S's interest in
the Company) in connection with the resignation of the other Managing
Director as provided in Section 7.04 of the Company Operating Agreement, (ii)
an amount equal to the Base Salary and all benefits of the terminated
Managing Director, (iii) 50% of the S/S Transaction Fees, and (iv) 50% of the
asset management fees previously payable to S/S. Any part of such (i)
interest in the Company, (ii) Base Salary amounts and benefits, (iii) S/S
Transaction Fees, and/or (iv) asset management fees not required to be made
available to an Approved Successor in order to obtain the services of the
Approved Successor shall be divided equally between (x) RSI Management and
(y) the Executive and/or S/S.
ARTICLE VII
VII.1 Executive Covenants.
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(a) Non-Compete. Following termination of employment, the
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Executive may engage without restriction (except as set forth below) in real
estate and real estate-related investment, acquisition, management, leasing,
disposition, workout and financing activities ("Activities"), except that, in
consideration of the payments to be made to the Executive following
termination of employment pursuant to Article V of this Agreement, the
Executive agrees that, during the Non-Compete Period (as defined herein), the
Executive will not without the prior written consent of the Company, engage
in Activities (other than Permitted Outside Activities and financing
activities) that provide material benefits to any entity which directly
competes with a Fund Platform Investment which was a Fund Platform Investment
prior to the Termination Date or which was being actively negotiated or
reviewed and, at the Termination Date, was then being actively negotiated or
reviewed as a possible Fund Platform Investment in the form of term sheet
negotiations and/or due diligence investigations (including, if not closed, a
substitute company in the same Platform which is within three months
thereafter identified and is being actively pursued). For purposes of this
Agreement, the "Non-Compete Period" shall be the two-year period following
the Termination Date of the Executive's employment; provided, however, such
period shall be reduced to one year (i) following an Adverse Valuation
Determination if the Subordinated Preference Amount has not been paid in full
and the Executive waives his rights to the distributions described in Article
VII of the Company Operating Agreement, or (ii) if Cause is alleged and not
found to have occurred as described in Section 5.2(b) hereof and if the
Executive has terminated his employment in accordance with Section 5.2(b),
and, provided, further, that there shall be no Non-Compete Period following
(I) a Change in Control Event, if the Executive waives his rights to all
compensation under this Agreement and to all distributions described in
Article VII of the Company Operating Agreement, other than any amounts
required to be paid or distributed to the Executive or S/S on or prior to the
last to occur of (i) the Change in Control Event or (ii) Termination Date; or
(II) a Fundamental Failure.
(b) Effect of Breach. The Executive acknowledges that the
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payments to be made to the Executive following termination of employment
pursuant to Article V of this Agreement will be made in consideration of his
obligations under this Agreement not to compete, and the Executive agrees
that in the event of a breach of Section 7.1(a) by the Executive, the
Company and RSI Management shall be entitled to an injunction (including a
temporary restraining order or preliminary injunction) to prevent
continuation of such breach by the Executive. The Company and Executive
agree that in the event the Executive breaches this Section 7.1, the
Company's sole financial remedies shall be as follows: (i) the Company shall
not be obligated to, and shall not, make any further payments to the
Executive under this Agreement, including, without limitation, Section 5.4
(excluding any amounts required to be paid or distributed to the Executive or
S/S on or prior to the Termination Date); (ii) the Executive shall not be
entitled to receive any distributions not actually distributed unless
required to be paid or distributed to the Executive or S/S on or prior to the
Termination Date, and (iii) the Company or RSI Management may recover, up to
the amount of the Company's actual damages, all amounts actually paid to the
Executive after the Termination Date as compensation (other than Deferred
Compensation), distributions or otherwise (excluding any amounts required to
be paid or distributed to the Executive or S/S on or prior to the Termination
Date). In the event the Executrovisions of Section 7.1(a), RSI Management
shall (i) in accordance with Section 9.1(a), reimburse the Executive for all
legal fees and related expenses incurred in any action to obtain such
determination, and (ii) pay Executive an amount equal to 200% of the
compensation and distributions withheld by reason of an alleged breach by the
Executive of the non-compete provisions.
ARTICLE VIII
Taxes
VIII.1 Taxes. Any amounts payable to the Executive hereunder shall
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be paid to the Executive subject to all applicable taxes required to be
withheld by the Company pursuant to federal, state or local law. The
Executive or his Beneficiary, if applicable, shall be solely responsible for
all taxes imposed on the Executive or his Beneficiary by reason of his
receipt of any amounts of compensation or benefits payable to the Executive
hereunder.
VIII.2 Excise Tax Payments. In the event that any payment or benefit
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(within the meaning of Section 280G(b)(2) of the Internal Revenue Code of
1986, as amended (the "Code")) to the Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of, his employment
with the Company and in connection with a Change in Control Event, other than
any payments of the Subordinated Preference Amount, would be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the
Executive will be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes,
including, but not limited to, Excise Tax, income and employment tax, imposed
on the Gross-Up Payment, and taking into account any tax benefit derived from
the deductibility of any of such items, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. All
determinations as to amounts payable to the Executive under this Section 8.2
shall be made in accordance with Sections 280G and 4999 of the Code and any
rulings and regulations promulgated thereunder and shall be made within
thirty (30) days after the Termination Date by an independent auditor
selected by the Company and the Executive, whose determination shall be
binding on the Executive and the Company.
ARTICLE IX
Miscellaneous
IX.1 Fees, Expenses and Indemnification.
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(a) In any action between the Executive and the Company, the
prevailing party's legal fees and related expenses shall be paid by the other
party.
(b) The Company shall indemnify the Executive and advance or
reimburse legal fees in connection with any litigation or proceeding relating
to the Fund in accordance with the Operating Agreement of the Fund.
IX.2 Confidentiality. Executive and the Company shall keep
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confidential, and shall not disclose publicly, or to any third party, either
the existence of, or the terms and conditions of this Agreement, except as
mutually agreed by, and with the prior approval of, each of S/S, the Managing
Directors, and RSI Management, except for professionals (including, but not
limited to, bankers and underwriters) with a need to know and except as
required by law, regulation or court order.
IX.3 Assignment; Succession. This Agreement shall be binding upon
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the Company and its successors and assigns and the Executive and his
Beneficiary and permitted assigns.
IX.4 Severability. If all or any part of this Agreement is
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declared by any court or governmental authority to be unlawful or invalid,
such unlawfulness or invalidity shall not serve to invalidate any portion of
this Agreement not declared to be unlawful or invalid. Any paragraph or part
of a paragraph so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such paragraph
or part of a paragraph to the fullest extent possible while remaining lawful
and valid.
IX.5 Amendment and Waiver. This Agreement shall not be altered,
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amended or modified except by written instrument executed by the Company and
the Executive. A waiver of any term, covenant, agreement or condition
contained in this Agreement shall not be deemed a waiver of any other term,
covenant, agreement or condition, and any waiver of any default in any such
term, covenant, agreement or condition shall not be deemed a waiver of any
later default thereof or of any other term, covenant, agreement or condition.
IX.6 Notices. All notices and other communications required
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hereunder shall be in writing and delivered by hand, with confirmation of
receipt, or overnight courier service, with confirmation of receipt,
addressed as follows:
If to the Company: RSVP Holdings, LLC
c/o Reckson Services Industries, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Managing Director
with a copy to S/S and each other Managing Director of the Company.
If to RSI Management: c/o Reckson Services Industries Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
If to the Executive: 00 Xxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to S/S.
Any party may from time to time designate a new address by notice given in
accordance with this Paragraph. Notice and communications to any Person
shall be effective upon personal delivery to that Person.
IX.7 Counterpart Originals. This Agreement may be executed in
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several counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
IX.8 Entire Agreement. This Agreement forms the entire agreement
----------------
between the parties hereto with respect to the subject matter contained in
this Agreement.
IX.9 Applicable Law. This Agreement and the rights and obligations
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of the parties hereto shall be governed by and construed and enforced in
accordance with the laws of the State of New York without giving effect to
the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
RSVP HOLDINGS, LLC
By RSI Fund Management LLC,
its Managing Member
By:________________________________
EXECUTIVE
___________________________________
Xxxxxx X. Xxxxxxxx
