Exhibit 10.3
RECKSON ASSOCIATES REALTY CORP.
CHANGE-IN-CONTROL BONUS AGREEMENT
WHEREAS, Xxxxx X. Xxxxxxx (the "Executive") is an executive officer or
key employee of Reckson Associates Realty Corp. (the "Company") or one of its
Affiliates;
WHEREAS, the Executive has received an award of LTIP OP Units (the
"LTIP OP Units") pursuant to the Long-Term Incentive Plan OP Unit Award
Agreement, dated as of April 4, 2006 between Executive, the Company and Reckson
Operating Partnership, L.P. (the "LTIP Award Agreement"); and
WHEREAS, the Company desires to provide the Executive with an
additional incentive in the event that a Change-in-Control occurs prior to the
Termination Date (as defined herein) and prior to the complete book-up of the
LTIP OP Units, under the circumstances described herein, which would adversely
affect the Executive by denying him the intended benefit of the LTIP OP Units
awarded.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Change-in-Control Bonus:
(a) In the event the LTIP OP Units held by the Executive are
redeemed or otherwise cashed-out in connection with the occurrence of a
Change-in-Control, the Executive shall be entitled to receive from the Company a
cash bonus determined as follow:
A = (B minus C), multiplied by D, where:
A equals the amount of the cash bonus to be paid to the
Executive by the Company;
B equals the per OPU consideration received by a holder of an
OPU in connection with the Change-in-Control;
C equals the per vested LTIP OP Unit consideration received by
the Executive in connection with the Change-in-Control (but in
no event shall C be greater than B); and
D equals the number of vested LTIP OP Units held by the
Executive (including LTIP OP Units that become vested as a
result of the Change-in-Control in accordance with the LTIP
Award Agreement) that are redeemed or otherwise cashed-out in
connection with the Change-in-Control.
For example, if Executive holds 100 LTIP OP Units, all 100 LTIP OP
Units are vested or become vested in connection with the
Change-in-Control, such LTIP OP Units are cashed-out in connection with
a Change-in-Control for $5 per LTIP OP Unit as a result of a
less-than-complete book-up thereof, and the OPU are cashed-out for $7
per OPU, then Executive will be entitled to receive a cash bonus of
$200 hereunder ($7 minus $5, multiplied by 100).
(b) Said amount shall be payable in a lump sum no later than 31 days
following the date or dates the vested LTIP OP Units held by the Executive are
redeemed or otherwise cashed-out in connection with the Change-in-Control.
(c) Amounts payable pursuant to this Agreement are intended to
supplement the Executive's change-in-control and other compensation under the
circumstances described herein.
2. Term. This Agreement shall terminate upon the earlier of (a) the
date on which the Executive no longer holds LTIP OP Units, other than as a
result of the redemption or other cash-out of such LTIP OP Units in connection
with the occurrence of a Change-in-Control, or (b) the payment of all amounts
owed hereunder to the Executive, or (c) the sixth anniversary of the date of
this Agreement (the "Termination Date").
3. Governing Law. This Agreement is made under, and will be construed
in accordance with, the laws of the State of New York, without giving effect to
the principle of conflict of laws of such State.
4. Transferability. This Agreement is personal to the Executive, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.
5. Amendment. The Executive acknowledges that this Agreement may be
amended or canceled by the Company for the purpose of satisfying changes in law
or for any other lawful purpose, provided that no such action shall adversely
affect the Executive's rights under this Agreement without the Executive's
written consent.
6. No Obligation to Continue Employment. Neither the Company nor any
Affiliate is obligated by or as a result of this Agreement to continue the
Executive in employment and this Agreement shall not interfere in any way with
the right of the Company or any Affiliate to terminate the employment of the
Executive at any time.
7. Withholding and Taxes. No later than the date as of which an amount
first becomes includible in the gross income of the Executive for income tax
purposes or subject to Federal Insurance Contributions Act withholding with
respect to any award under this Agreement, such Executive will pay to the
Company or, if appropriate, any of its Affiliates, or make arrangements
satisfactory to the Company's Board of Directors regarding the payment of, any
United States federal, state or local or foreign taxes of any kind required by
law to be withheld with respect to such amount. The obligations of the Company
under this Agreement will be conditional on such payment or arrangements, and
the Company and its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the Executive.
8. Successors and Assigns. This Agreement shall be binding upon the
Company's successors and assigns, whether or not this Agreement is expressly
assumed.
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9. Definitions. Capitalized terms used but not otherwise defined herein
shall have the respective meanings ascribed to such terms in the LTIP Award
Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Senior Executive Vice President--
Corporate Initiatives and General
Counsel
/s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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