EXHIBIT 10.14
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is made as
of the 16th day of July, 2001 by and between X.X. Xxxx III ("Executive") and
Reckson Associates Realty Corp., a Maryland corporation with a principal place
of business at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Employer").
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the third anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided therein. The Original Term may be extended for such
period or periods, if any, as agreed to by Executive and the Employer (each a
"Renewal Term"). The period of Executive's employment hereunder consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in
the business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Senior Vice President
and Chief Information Officer of the Employer. Executive's duties and authority
shall be as set forth in the By-laws of the Employer and as otherwise
established by the Board of Directors of the Employer, and shall be commensurate
with his titles and positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that nothing herein shall be interpreted to preclude Executive from holding and
transferring investments or from investing his assets as a passive investor in
other entities or business ventures, provided that he performs no management or
similar role with respect to such other entities or ventures and such investment
does not violate Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be
available for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York, Fairfield County, Connecticut or Northeastern New Jersey.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $262,500 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and local
taxes. Base Salary shall be payable in
accordance with the Employer's normal business practices, but in no event less
frequently than monthly. Executive's Base Salary shall be reviewed no less
frequently than annually by the Employer and may be increased, but not
decreased, by the Employer during the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to similarly situated officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time to
time for the benefit of similarly situated officers and other employees of the
Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors, or a
committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of similarly situated officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
Notwithstanding the previous sentence, the benefits to which the Executive and
the Executive's immediate family are entitled under this Section 3(e) shall not
at any time during the Employment Period be decreased below the level of such
benefits to which the Executive and Executive's immediately family are entitled
on the effective date of this Agreement, unless such decrease results from or is
attributable to a decrease in benefits under all of the Employer's medical and
dental benefit plans which applies generally to all participants in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and at
the same levels in effect with respect to similarly situated officers of the
Employer. Notwithstanding the previous sentence, the benefits to which the
Executive is entitled under this Section 3(f) shall not at any time during the
Employment Period be decreased below the level of such benefits to which the
Executive is entitled on the effective date of this Agreement, unless such
decrease results from or is
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attributable to a decrease in benefits under all of the Employer's life
insurance and disability plans which applies generally to all participants in
such plans.
(g) Vacations. Executive shall be entitled to periods of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing similarly situated officers.
(h) Other Benefits. During the Employment Period, the Employer
shall provide to Executive such other benefits, including sick leave and the
right to participate in retirement or pension plans, as are made generally
available to similarly situated officers and employees of the Employer from time
to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with
the rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the Employer's
Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar
documents obtained, reviewed or compiled by Executive in the course of the
performance by him of services for the Employer, whether or not confidential
information or trade secrets, shall be the exclusive property of the Employer.
Executive shall have no rights in such documents upon any termination of this
Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and responsibilities hereunder), or use for his own
benefit or gain, any confidential information of the Employer obtained by him
incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's non-observance
of his obligations hereunder. This paragraph shall survive the termination of
this Agreement.
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7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by the Chief Executive Officer,
President or Chief Operating Officer of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, (ii) a material adverse change by
the Employer in Executive's duties, responsibilities or title, (iii) a material
failure by the Employer to comply with the provisions of Section 3, or (iv) a
material breach by the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 7(b) or if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive his Base
Salary and cash incentive compensation for the remaining term of this
Agreement after the date of Executive's termination (but not less than
18 months), at the rate of Base Salary in effect on the date of his
termination, at the percentage of cash incentive compensation paid for
the immediately preceding year and on the same periodic payment dates
as payment would have been made to Executive had the Employment Period
not been terminated;
(ii) For the remaining term of this Agreement (but not less
than 18 months), Executive shall continue to receive all benefits
described in Section 3 existing immediately prior to the date of
termination, without taking into account any changes in such benefits
effected in violation of this Agreement. For purposes of the
application of such benefits, Executive shall be treated as if he had
remained in the employ of the Employer with a Base Salary at the rate
in effect on the date of termination;
(iii) For purposes of any equity compensation plan of the
Employer, Executive shall be treated as if he had remained in the
employ of the Employer for the remaining term of this Agreement after
the date of Executive's termination so that (x) any stock options or
other awards (including restricted stock grants) of the Executive under
such plan shall continue to vest and become exercisable, and (y)
Executive shall be entitled to exercise any exercisable options or
other rights;
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(iv) The amount of any outstanding loans made by the Employer
to the Executive, together with any interest accrued on any such loans,
together with any interest accrued on any such tax loans, shall be
deemed forgiven and Executive shall have no further liability to the
Employer in respect thereof;
(v) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer may
not be paid or provided under such plan or program to Executive, or to
Executive's dependents, beneficiaries or estate, because Executive is
no longer considered to be an employee of the Employer, the Employer
shall pay or provide for payment of such benefits and service credits
to Executive, or to Executive's dependents, beneficiaries or estate,
for the remaining term of this Agreement; and
(vi) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will not
serve to reduce in any way the amounts and benefits payable in
accordance herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive
is terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination Date and any outstanding stock options held by Executive shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.
(e) Definition of Good Reason. "Good Reason" shall mean a finding
by the Employer's Board of Directors that Executive has (i) acted with gross
negligence or willful misconduct in connection with the performance of his
material duties hereunder; (ii) defaulted in the performance of his material
duties hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (iii) willfully acted against the best interests of the
Employer, which act has had a material and adverse impact on the financial
affairs of the Employer; or (iv) been convicted of a felony or committed a
material act of common law fraud against the Employer or its employees and such
act or conviction has had, or the Employer's Board of Directors reasonably
determines will have, a material adverse effect on the interests of the
Employer; provided, however, that a finding of Good Reason shall not become
effective unless and until the Board of Directors provides the Executive notice
that it is considering making such finding and a reasonable opportunity to be
heard by the Board of Directors.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of twelve (12) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by
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Executive in writing prior to his death. For purposes of any equity compensation
plan of the Employer, Executive shall be treated as if he had remained in the
employ of the Employer for the remaining term of this Agreement after the date
of Executive's termination by reason of death so that (x) any stock options or
other awards (including restricted stock grants) of the Executive under such
plan shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights.
(g) Termination by Reason of Disability. In the event that
Executive shall become unable to efficiently perform his duties hereunder
because of any physical or mental disability or illness, Executive shall be
entitled to be paid his Base Salary until the earlier of such time when (i) the
period of disability or illness (whether or not the same disability or illness)
shall exceed 180 consecutive days during the Employment Period and (ii)
Executive becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. In the event that the
Executive is so terminated by the Employer by reason of disability (x) the
Employer shall pay Executive's Base Salary for a period of twelve (12) months
from the date of such termination; (y) Executive shall continue to receive, for
a period of (12) months from the date of such termination, all benefits
described in Section 3 existing immediately prior to the date of termination
(without taking into account any changes in such benefits effected in violation
of this Agreement), and Executive shall be treated for this purpose as if he had
remained in the employ of the Employer with a Base Salary at the rate in effect
on the date of termination; and (z) for purposes of any equity compensation plan
of the Employer, Executive shall be treated as if he had remained in the employ
of the Employer for twelve (12) months after the date of Executive's termination
so that (1) any stock options or other awards (including restricted stock
grants) of the Executive under such plan shall continue to vest and become
exercisable, and (2) Executive shall be entitled to exercise any exercisable
options or other rights.
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance payments and benefits specified in Paragraph 7(c), the costs of
arbitration, and Executive's attorneys' fees. If the arbitrator finds that
Executive was terminated for Good Reason, the arbitrator will be without
authority to award Executive anything, the parties will each be responsible for
their own attorneys' fees, and the costs of arbitration will be paid 50% by
Executive and 50% by the Employer.
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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 (i) during the Employment Period and (ii) in
the event that this Agreement is terminated by the Employer for Good Reason or
by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, 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.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's employment
under this Agreement and ending on the first anniversary of the date of
termination of Executive's employment under this Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) engaging in any Permitted
Activities or (ii) 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. For purposes
of this Section 8(c), Permitted Activities shall mean (A) taking any actions in
Executive's capacity as a trustee or executor for the estate of Xxxx Xxxx or
X.X. Xxxx Xx., provided that such actions do not unreasonably interfere with the
Executive's duties set forth in this Agreement and (B) making investments in:
(v) Highridge Park Associates LLC; (w) Stamford Town Center LLC; (x) Eighth
Standard New Urban Corp.; (y) X.X. Xxxx Company, Inc. or (z) X.X. Parking,
provided that Executive performs no management or similar role with respect to
any such entities.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in
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conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement (i) constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes any and
all prior agreements or understandings, (ii) may not be assigned by Executive
without the prior written consent of the Employer, and (iii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
12. Amendment. This 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.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer may be irreparably damaged and there may be no adequate remedy
at law for Executive's breach of Sections 6 and 8 of this Agreement and further
acknowledge that the Employer may seek entry of a temporary restraining order or
preliminary injunction, in addition to any other remedies available at law or in
equity, to enforce the provisions thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity,
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify such invalid, illegal or unenforceable provision, this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein, and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the purpose and intent of the provision originally
contained herein.
15. Governing Law. This Agreement shall be construed and governed by
the laws of the State of New York.
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IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Xxxxx Xxxxxxx
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Name:
Title:
/s/ X.X. Xxxx
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X.X. Xxxx III
