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EXHIBIT 10.3
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered
into as of the 15th day of April, 1997, by and among Vornado Realty Trust, a
Maryland real estate investment trust (the "Company"), The Mendik Company, L.P.,
a Delaware limited partnership (which intends to change its name to Vornado
Realty L.P.) (the "Operating Partnership"), and Xxxxxxx X. Xxxxxx (the
"Executive").
WHEREAS, the Company serves as general partner of the Operating
Partnership and, through the Operating Partnership, is engaged in, among other
things, the acquisition, ownership, management, leasing, renovation and
redevelopment of commercial real estate in the United States;
WHEREAS, the Company, within the Company and through the Operating
Partnership, has formed the Mendik Division, which is engaged in the
acquisition, ownership, management, leasing, renovation and redevelopment of the
Company's office properties in Manhattan;
WHEREAS, the Company acknowledges that it will benefit from the
application of Executive's particular and unique skill, experience, and
background to the management and operation of the Company, and will employ
Executive as Co-Chair of the Company and as Chairman of the Mendik Division and
Chief Executive Officer of the Mendik Division of the Company ("CEO") and, as
Chairman and
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CEO, Executive will manage the Mendik Division of the Operating Partnership on
behalf of the Company (collectively the "Mendik Division" unless otherwise
specifically indicated);
WHEREAS, Executive has received stock options in the Company pursuant
to a share option agreement and will be entering into an indemnification
agreement with the Company in the form of Exhibit A hereto (the "Indemnification
Agreement"); and
WHEREAS, the Executive acknowledges that he will be employed by the
Company in a capacity in which his employment by the Company creates a
relationship of confidence and trust and he will obtain confidential information
with regard to the business of the Company and its affiliates and their clients;
WHEREAS, the Executive acknowledges that, as a result of his obtaining
confidential information as to the Company and its affiliates, the Company and
its affiliates will suffer substantial damage, which would be difficult to
ascertain, if the Executive enters into competition with the Company or any
affiliate and that it is necessary for the Company to be protected by the
prohibition against competition and the confidentiality restrictions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein set forth, and for other good and valuable consideration, the
Company, the Operating Partnership and Executive agree as follows:
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1. Noncompetition.
1(a) Noncompetition. Executive agrees that while Executive is
employed by the Company or is a director of the Company and for a period of one
(1) year following the later of the date Executive ceases to be an employee or
director of the Company (other than if the Executive's employment ends as a
result of a termination pursuant to a termination by the Company without Cause
(as defined on Exhibit B hereto), a termination due to Disability (as defined on
Exhibit B hereto) or a termination for Good Reason (as defined on Exhibit B
hereto), Executive shall not engage in any way, directly or indirectly, in the
acquisition, operation, development, management, leasing or disposition of any
primarily commercial office real estate property (mixed properties being
determined primarily commercial office real estate property or other by the
relative square footage of each) or any improvements thereof located in the
Restricted Area (as defined below), other than in his capacity as an employee,
director, trustee, officer or equity owner of the Company; provided, however,
that this Section 1(a) shall not apply to (i) Executive's activities with
respect to any property or entity listed in Exhibit C attached hereto, provided
that such activities are reasonably necessary to avoid a breach of Executive's
or the general partner's fiduciary or other duty to the owner or other owners of
such property (Executive agrees that the activities prohibited by Section 1(c)
are not reasonably necessary to avoid a breach of such duties), (ii) the
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acquisition, operation, development, management, leasing or disposition of any
property by any entity in which Executive owns or acquires an equity interest as
a minority passive investor (including, but not limited to as a limited partner
or a non-operating member of a limited liability company, but not including as a
general partner) having no managerial or similar role with respect to such
property, (iii) Executive's or his spouse's or issue's acquisition of any
property or any interest in any property by inheritance, (iv) Executive
providing advice or financial assistance to any of his children with regard to
projects initiated by such child, provided that (x) the financial assistance
shall not exceed $10,000,000 unless Executive holds no more than a minority
interest in such project, (y) at the time such child initially approaches
Executive, Executive has no knowledge (following appropriate due diligence) that
the Company is involved in or considering such a project and (z) if Executive
thereafter obtains knowledge that the Company is considering such project,
Executive shall promptly inform the Company of his involvement with his child
and excuse himself from any involvement with such project on behalf of the
Company or (v) Executive's performance of management company services for other
entities while employed by the Company which performance by Executive is
authorized by an agreement between the Company and such other entity or between
the Company and Executive. For purposes of this Agreement, the "Restricted Area"
is any location within fifty (50) miles of any commercial office building
managed by the Mendik Management Company, Inc. at the time of any action
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by Executive during his employment or directorship or at the later of the dates
of the Executive's termination of employment or directorship in the event of any
action by Executive following his termination of employment and directorship.
1(b) Reasonable and Necessary Restrictions. Executive
acknowledges that the restrictions, prohibitions and other provisions of this
Section 1 are reasonable, fair and equitable in scope, terms and duration, are
necessary to protect the legitimate business interests of the Company, and are a
material inducement to the Company's employment of Executive.
1(c) Non-Solicitation. Executive agrees that while Executive
is employed by the Company or is a director of the Company (i) and for a period
of two (2) years following the later of the date Executive ceases to be an
employee or a director of the Company, Executive will not solicit any of the
Company's or its affiliate's (within the meaning of Rule 12(b)-2 of the
Securities Exchange Act of 1934, but only if in addition such entity would be
classified as a parent or subsidiary of the Company or a parent, all within the
meaning of Section 424(e) or Section 424(f) of the Internal Revenue Code of
1986, as amended, if twenty-five percent (25%) were substituted for fifty
percent (50%) therein) (an "Affiliate") non-clerical employees, agents or
independent contractors to end their relationship with the Company, its
Subsidiaries or its Affiliates provided that the provision of this Section 1(c)
shall not apply to the giving of references (ii) and for a period of one (1)
year following the
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later of the date of termination of Executive's employment or directorship,
pursue or attempt to develop or to direct to any other entity any project known
to Executive which the Company is or was pursuing, developing or attempting to
develop during the period of his employment or directorship or interfere or
otherwise compete (other than in connection with performing services for the
Company or its Subsidiaries with regard to other properties managed by the
Company or its Subsidiaries or for other management companies where Executive is
performing services with the consent of the Company) with any active lease
negotiations of the Mendik Division which the Executive is or was actively
involved in conducting or strategizing on behalf of the Company or its
Subsidiaries (in each case, a "Project"), unless such Project has been inactive
for over nine (9) months. Notwithstanding the foregoing, in the event of a
Change in Control and the Executive's employment terminating within one hundred
twenty (120) days thereafter, the determination of projects being "pursued,
developed or attempted to be developed" shall be limited to projects the Company
was pursuing, developing or attempting to develop prior to the Change in Control
plus any project that Executive becomes materially involved in on behalf of the
Company after the Change in Control.
1(d) Confidential Information. Executive shall hold in a
fiduciary capacity for the benefit of the Company all trade secrets and
confidential information, knowledge or data relating to the Company and its
business and investments, which shall have
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been obtained by Executive during Executive's employment by the Company and
which is not generally available public knowledge (other than by acts by
Executive in violation of this Agreement). Except as the Executive in good faith
believes may be required, appropriate or desirable in connection with his
carrying out his duties as CEO of the Mendik Division of the Company, Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or any legal process, or as is necessary in connection with
any adversarial proceeding against the Company (in which case Executive shall
cooperate with the Company, at the Company's expense, in the Company seeking to
obtain a protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company or on behalf of the Company in furtherance of its business or to perform
duties hereunder.
1(e) Removal of Documents. All records, files, drawings,
documents, models, equipment, and the like relating to the Company's business,
which Executive has control over shall not be removed from the Company's
premises without its written consent, unless such removal is in the furtherance
of the Company's business or is in connection with Executive's carrying out his
duties as CEO of the Mendik Division of the Company and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment, or
otherwise promptly
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after removal if such removal occurs following termination of employment.
Executive's rolodex, telephone directory and similar type items, and furniture,
art work and property owned by Executive or otherwise not owned by the Company
shall not be deemed Company property and shall not be covered by this Section
1(e). The Company shall be the owner of all trade secrets and other products
relating to the Company's business developed by Executive alone or in
conjunction with others as part of his employment with the Company.
1(f) Specific Performance. Executive acknowledges that the
Company likely will have no adequate remedy at law if Executive shall fail to
perform any of his obligations hereunder, and the Executive therefore confirms
that the right of the Company to specific performance of the terms of this
Section 1 is essential to protect the rights and interests of the Company.
Accordingly, in addition to any other remedies that the Company may have at law
or in equity, the Company shall have the right to have all obligations,
agreements and other provisions of this Section 1 specifically performed by
Executive, and the Company shall have the right to obtain preliminary injunctive
relief to secure specific performance and to prevent a breach of this Section 1
by Executive.
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2. Miscellaneous.
2(a) Integration; Amendment. This Agreement supersedes and
renders of no force and effect all prior understandings and agreements with
respect to the matters set forth herein. No amendments or additions to this
Agreement shall be binding unless in writing and signed by all of the parties.
2(b) Assignment. No rights or obligations of the Company under
this Agreement may be assigned or transferred, except in connection with a
merger, consolidation or sale of all or substantially all of the assets of the
Company or the Mendik Division where the Company's successor expressly assumes
and agrees to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place; provided that the foregoing shall not serve as a release of the Company.
As used in this Agreement, "Company" shall mean the Company as herein before
defined and any successor to its business and/or assets or the Mendik Division's
business and/or assets, as the case may be, which executes and delivers the
agreement provided for in this Section 2(b) or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law and any
assignment in accordance with the first sentence of this Section 2(b) shall not
be deemed a termination without Cause by the Company. Executive may not assign
this Agreement or any right or interest therein, whether by operation of law or
otherwise, without the prior written consent of the Company.
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2(c) Severability. If any provision of this Agreement shall be
deemed invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed and enforced as if it had never contained such invalid or
unenforceable provision. In addition, in place of such invalid or unenforceable
provision, there shall automatically be added hereto a provision as similar to
such invalid or unenforceable provision as may be possible and still be valid
and enforceable.
2(d) Waivers. The failure or delay of any party at any time to
require performance by any other party of any provision of this Agreement, even
if known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power, or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power, or
remedy under this Agreement. No notice to or demand on any party in any case
shall, of itself, entitle such party to other or further notice or demand in
similar or other circumstances.
2(e) Power and Authority. The Company represents and warrants
to Executive that it has the requisite corporate power to enter into this
Agreement and its obligations hereunder; that the execution, delivery and
performance of this Agreement by it has been duly authorized by all appropriate
partnership or
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corporate action, as applicable; and that this Agreement represents a valid and
legally binding obligation with respect to it and its enforceable against it in
accordance with its terms.
2(f) Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 2(b) above, assigns.
2(g) Legal Fees and Expenses. If any contest or dispute shall
arise between the Company and Executive regarding any provision of this
Agreement, the Indemnification Agreement or any equity grant or other agreement
or compensation arrangement related to his employment, the Company shall
reimburse Executive for all legal fees and expenses reasonably incurred by
Executive in connection with such contest or dispute, but only if Executive is
successful in respect of substantially all of Executive's claims brought and
pursued in connection with such contest or dispute. Such reimbursement shall be
made as soon as practicable following the resolution of such contest or dispute
(whether or not appealed) to the extent the Company receives reasonable written
evidence of such fees and expenses.
2(h) Governing Law; Headings. This Agreement and its
construction, performance, and enforceability shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to provisions of conflict of
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laws. Headings and titles herein are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this Agreement.
2(i) Notices. All notices called for under this Agreement
shall be in writing and shall be deemed to be sufficient if contained in a
written instrument delivered (i) in person, (ii) by first class registered or
certified mail, postage prepaid and return receipt requested, (iii) by overnight
delivery by a recognized courier service providing a receipt, or (iv) by
facsimile transmission confirmed by transmission report, addressed to the
intended recipient at the address set forth on the signature page hereof (or at
such other address for a party as shall be specified by like notice). Any notice
delivered to the party hereto to whom it is addressed shall be deemed to have
been given on the day it was received; provided, however, that if such day is
not a business day, then the notice shall be deemed to have been given and
received on the business day next following such day. If the other party is
aware that the intended recipient is not at the notice location, either
permanently or temporarily, notice also shall be sent to such location as the
notifying party becomes aware (after reasonable inquiry) that the intended
recipient is then located.
2(j) Counterparts. This Agreement may be executed in one or
more counterparts, each of which counterparts shall be deemed to be an original,
and all such counterparts shall constitute one and the same instrument.
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2(k) Type of Termination. The classification of a type of
termination of employment with the Company shall apply for purposes of
classifying the type of termination of employment with a subsidiary of the
Company and a termination of employment with the Company shall automatically
cause a termination of employment with all subsidiaries of the Company.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as of
the date first above written.
VORNADO REALTY TRUST
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Vornado Realty Trust
Park 00 Xxxx, Xxxxx XX
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
THE MENDIK COMPANY, L.P.
By: Vornado Realty Trust,
a general partner
By: /s/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Vornado Realty Trust
Park 00 Xxxx, Xxxxx XX
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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EXHIBIT A
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into as of the day of , 1997, by and between Vornado Realty
Trust, a Maryland real estate investment trust (the "Company") and Xxxxxxx X.
Xxxxxx (the "Executive").
WHEREAS, Executive has agreed to serve, at the request of the Company
as an executive and officer of the Company and, if elected, a director of the
Company; and
WHEREAS, Executive is willing to serve on behalf of the Company on the
condition that he be indemnified as set forth herein.
NOW, THEREFORE, in consideration of Executive's agreement to serve the
Company as set forth above, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. General. The Company agrees that if Executive is made a party or
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that Executive is or was a trustee, director, officer or employee of the
Company or any subsidiary or division of the Company or is or was serving at the
request of the Company or any subsidiary or division of the Company as a
trustee, fiduciary, director,
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officer, member, employee or agent of another corporation or a partnership,
joint venture, trust or other enterprise, including, without limitation, service
with respect to employee benefit plans, whether or not the basis of such
Proceeding is alleged action in an official capacity as a trustee, fiduciary,
director, officer, member, employee or agent while serving as a trustee,
fiduciary, director, officer, member, employee or agent, Executive shall be
indemnified and held harmless by the Company to the fullest extent authorized by
the law of the State of Maryland, as the same exists or may hereafter be
amended, against all Expenses incurred or suffered by Executive in connection
therewith, and such indemnification shall continue as to Executive even if
Executive has ceased to be an officer, director, trustee, fiduciary or agent, or
is no longer employed by the Company and shall inure to the benefit of his
heirs, executors and administrators. The indemnification hereunder shall not
extend to cover any Expenses arising out of (i) Executive's activities prior to
the date hereof or (ii) Executive's actions after the date hereof to the extent
such actions are with respect to matters that are covered by the indemnification
obligations of FW/Mendik REIT, L.L.C. and certain of its affiliates under the
indemnification agreement attached to the Merger Agreement as Exhibit R.
2. Expenses. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes,
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settlements, and costs, attorneys' fees, accountants' fees, and disbursements
and costs of attachment or similar bonds, investigations and any expenses of
establishing a right to indemnification under this Agreement.
3. Enforcement. If a claim or request under this Agreement is not paid
by the Company or on its behalf, within thirty (30) days after a written claim
or request has been received by the Company, Executive may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or request and if successful in whole or in part, Executive shall be
entitled to be paid also the expenses of prosecuting such suit. All obligations
for indemnification hereunder shall be subject to, and paid in accordance with,
the laws of the State of Maryland.
4. Partial Indemnification. If Executive is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses, but not however, for the total amount thereof, the
Company shall nevertheless indemnify Executive for the portion of such Expenses
to which Executive is entitled.
5. Advances of Expenses. Expenses incurred by Executive in connection
with any Proceeding shall be paid by the Company in advance upon request of
Executive that the Company pay such Expenses; but, only in the event that
Executive shall have delivered in writing to the Company (i) an undertaking to
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reimburse the Company for Expenses with respect to which Executive is not
entitled to indemnification and (ii) an affirmation of his good faith belief
that the standard of conduct necessary for indemnification by the Company has
been met.
6. Notice of Claim. Executive shall give to the Company notice of any
claim against him for which indemnification will or could be sought under this
Agreement at the address set forth on the signature page of this Agreement (or
such other address as provided by notice given as aforesaid). In addition,
Executive shall give the Company such information and cooperation as it may
reasonably require and as shall be within Executive's power and at such times
and places as are convenient for Executive.
7. Defense of Claim. With respect to any Proceeding as to which
Executive notifies the Company of the commencement thereof:
(a) The Company will be entitled to participate at its own
expense; and
(b) Except as otherwise provided below, to the extent that it
may wish, the Company will be entitled to assume the defense thereof,
with counsel reasonably satisfactory to Executive, which the Company's
sole discretion may be regular counsel to the Company and may be
counsel to other officers and directors of the Company or any
subsidiary. Executive also shall have the right to employ his own
counsel in such action, suit or proceeding if
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he reasonably concludes that failure to do so would involve a conflict
of interest between the Company and Executive, and under such
circumstances the fees and expenses of such counsel shall be at the
expense of the Company.
(c) The Company shall not be liable to indemnify Executive
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not
settle any action or claim in any manner which would impose any penalty
or limitation on Executive without Executive's written consent. Neither
the Company nor Executive will unreasonably withhold or delay their
consent to any proposed settlement.
8. Non-exclusivity. The right to indemnification and the
payment of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Agreement shall not be exclusive of any other
right which Executive may have or hereafter may acquire under any statute,
provision of the declaration of trust or certificate of incorporation or by-laws
of the Company or any subsidiary or any agreement, vote of shareholder or
disinterested directors or trustees or otherwise. In particular, Executive shall
be a third party beneficiary of the indemnity provided in Section 7.7 of the
Partnership Agreement creating The Mendik Company, L.P., a Delaware limited
partnership.
9. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the
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parties hereto and their respective successors, assigns (including any direct or
indirect successor by merger or consolidation), heirs, executors and
administrators.
10. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed, and governed by and in
accordance with the laws of the State of Maryland, except for the last sentence
of Section 8 which shall be construed under the law that applies to the
Partnership Agreement forming The Mendik Company, L.P., a Delaware limited
partnership.
11. Amendment. No Amendments or additions to that Agreement
shall be binding unless in writing and signed by all of the parties.
12. Waiver of Breach. The failure or delay of either party at
any time to require performance by the other party of any provision of this
Agreement, even if known, shall not affect the right of such party to require
performance of that provision or to exercise any right, power, or remedy
hereunder, and any waiver by any party of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself, or a waiver of any
right, power, or remedy under this Agreement. No notice to or demand on any
party in any case shall, of itself, entitle such party to other or further
notice or demand in similar or other circumstances.
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13. Severability. The Company and Executive agree that the
agreements and provisions contained in this Agreement are severable and
divisible, that each such agreement and provision does not depend upon any other
provision or agreement for its enforceability, and that each such agreement and
provision set forth herein constitutes an enforceable obligation between the
Company and Executive. Consequently, the parties hereto agree that neither the
invalidity nor the unenforceability of any provision of this Agreement shall
affect the other provisions hereof, and this Agreement shall remain in full
force and effect and be construed in all respects as if such invalid or
unenforceable provision were omitted.
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IN WITNESS WHEREOF, the parties hereto have entered into this agreement
as of the date first above written.
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
[CORPORATE SEAL] VORNADO REALTY TRUST
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Agreed as to the last
sentence of Section 8:
The Mendik Company, L.P., a Delaware limited partnership, which will change its
name to Vornado Realty L.P.
By: Vornado Realty Trust, a general partner
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
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EXHIBIT B
DEFINITIONS
Part I - Cause.
For purposes of this Agreement, a termination for Cause shall only mean
a termination as a result of (i) Executive's willful misconduct with regard to
the Company or its Subsidiaries that is materially economically injurious to the
Company or to the Mendik Division, provided that in no event will willful
misconduct include the exceptions to noncompetition set forth in Section 1(a)
hereof (but the foregoing proviso does not permit Executive's willful misconduct
that is beyond the scope of what is reasonably necessary to satisfy or perform
the Section 1(a) exceptions), (ii) Executive's conviction of, or pleading guilty
or nolo contendere to, a felony (other than a traffic violation), (iii)
Executive's willful and continued failure to use reasonable business efforts to
attempt to substantially perform his duties as Co-Chair of the Company and
Chairman and Chief Executive Officer ("CEO") of the Mendik Division of the
Company (other than such failure resulting from Executive's incapacity due to a
physical or mental illness or subsequent to the issuance of a notice of
termination by Executive for Good Reason) after demand for substantial
performance is delivered by the Company in writing that specifically identifies
the manner in which the Company believes Executive has not used reasonable
business efforts to attempt to substantially perform his duties or (iv)
Executive's willful breach of Section 1 hereof that is materially
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economically injurious either to the Company or the Mendik Division. Executive's
absence from the office shall not solely by itself be a basis for asserting a
violation of (iii) if he continues to use reasonable business efforts to
substantially perform his duties.
For purposes of this Agreement, in addition to the other legal requirements
to be "willful," no act, or failure to act, by Executive shall be considered
"willful" unless committed in bad faith and without a reasonable belief that the
act or omission was in the best interests of the Company. In addition, no action
or inaction shall give rise to a right of the Company to terminate Executive's
employment for Cause for purposes of the meaning of the preceding paragraph
unless and until the Company has delivered to Executive a copy of a resolution
duly adopted by a majority of the Board of Trustees of the Company (the "Board")
at a meeting of the Board called and held for such purpose (after reasonable
(but in no event less than thirty (30) days) notice to Executive and an
opportunity for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of any conduct set forth in the preceding paragraph and specifying the
particulars thereof in detail. This Agreement shall not prevent Executive from
challenging in any court of competent jurisdiction the Board's determination
that Cause exists or that Executive has failed to cure any act (or failure to
act) that purportedly formed the basis for the Board's determination.
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Part II - Good Reason.
For purposes of this Agreement, a termination for Good Reason shall
mean a termination by the Executive as a result of (unless otherwise consented
to in writing by Executive) (i) the failure to appoint Executive as CEO and
Chairman of the Mendik Division of the Company or Co-Chair of the Company or
elect Executive as a director of the Company, the assignment to Executive,
without his consent, of more than incidental duties outside of the Mendik
Division, the alteration of the duties, responsibilities and authority of
Executive as CEO and Chairman of the Mendik Division of the Company in a manner
that is materially and adversely inconsistent with such duties,
responsibilities or authority or a change in Executive's positions or titles
(provided that the foregoing shall not apply to removal of, or failure to
reelect, Executive as Co-Chair after April 30, 2000 or as a director after
April 30, 2003, or in either case, upon his (A) consent to such action, (B)
termination of employment for Disability or Cause, (C) total and permanent
disability in a manner that would prevent him from functioning as a director,
(D) death or (E) voluntary retirement); (ii) the initial base salary is less
than $200,000, or the Company reduces the Executive's base salary to below
$200,000 or fails to pay Executive's base salary or other earned compensation
when due or to substantially provide the benefits, fringes, perquisites,
payroll practices or equity or incentive opportunities in effect with respect
to senior executive officers of the Company (other than the Chief Executive
Officer of the Company, the President of
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the Company, any other officer of the Company on an individual basis because of
special circumstances, any individual(s) who become employed by the Company
pursuant to an acquisition (with regard to levels of programs or arrangement
committed to at such time), or to any individual(s) pursuant to an agreement
for new hire (with regard to levels of programs or arrangements committed to at
such time)) at a level commensurate with his position (provided that in making
such determination as to future equity grants, the equity grants given
initially in connection with the hiring of Executive shall be disregarded);
(iii) the relocation of the Mendik Division's principal executive offices to a
location other than Manhattan, New York City or relocation of Executive's own
office location from that of the principal offices; (iv) any purported
termination of Executive's employment for Cause which is not effected pursuant
to the procedures of Part I of Exhibit B (and for purposes of this Agreement,
no such purported termination shall be effective); (v) the Company's material
breach of any material term contained in this Agreement or the grant set forth
in Exhibit C or to provide, in all material respects, the indemnification set
forth in the Indemnification Agreement; (vi) the performance, directly or
indirectly, of management, leasing, redevelopment or similar services with
respect to any commercial office property in Manhattan in which the Company has
a direct or indirect interest, other than through the Mendik Division (except
that the foregoing shall not apply to properties currently owned or hereafter
acquired by the Company where there is a preexisting management
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or leasing agreement in place, provided that the Mendik Division shall have
general oversight over such management or leasing operations on behalf of the
Operating Partnership); (vii) a Change in Control (as defined below); (viii) a
material breach by the Company or its subsidiaries of the Master Property
Services Agreement (wholly owned properties) dated as of the same date hereof
or the Master Property Services Agreement (partially owned properties) dated as
of the same date hereof or any of the service agreements contemplated by either
such agreement (the "Cleaning Agreements") or the licensing agreement with
regard to Executive's last name, or (ix) any requirement that Executive report
to anyone other than the Board or the Chief Executive Officer of the Company.
Executive's right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
For purposes of this Agreement, no action or inaction shall give rise
to the right of Executive to terminate his employment with the Company for Good
Reason unless a written notice is given by Executive to the Company within one
hundred twenty (120) days after Executive has actual knowledge of the
occurrence of the event giving rise to Executive's right to terminate pursuant
to this Agreement, and such event has not been cured within thirty (30) days
after such notice. Executive's continued employment during the one hundred and
twenty (120) day period referred to above in this Agreement shall not constitute
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consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of any one of the following:
(i) individuals who, on the Commencement Date, constitute the Board
(the "Incumbent Trustees") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a trustee subsequent
to the Commencement Date whose election or nomination for election was approved
by a vote of at least two-thirds of the Incumbent Trustees then on the Board
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for trustee, without objection to
such nomination) shall be an Incumbent Trustee, provided, however, that no
individual initially elected or nominated as a trustee of the Company as a
result of an actual or threatened election contest with respect to trustees or
as a result of any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board shall be an Incumbent Trustee;
(ii) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the execution
of this Agreement, a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
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Company representing 30% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the Board (the
"Company Voting Securities"), provided, however, that an event described in this
paragraph (ii) shall not be deemed to be a Change in Control if any of the
following becomes such a beneficial owner: (A) the Company or any majority-owned
subsidiary (provided, that this exclusion applies solely to the ownership levels
of the Company or the majority-owned subsidiary), (B) any tax-qualified,
broad-based employee benefit plan sponsored or maintained by the Company or any
majority-owned subsidiary, (C) any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) any person pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii)), (E) Executive or any
group of persons including Executive (or any entity controlled by Executive or
any group of persons including Executive); or (F)(i) any of the partners (as of
the Commencement Date) in Interstate Properties ("Interstate") including
immediate family members and family trusts or family-only partnerships and any
charitable foundation of such partners (the "Interstate Partners"), (ii) any
entities the majority of the voting interests of which are beneficially owned by
the Interstate Partners, or (iii) any "group" (as described in Rule 13d-5(b)(i)
under the Exchange Act) including the Interstate Partners, provided, that the
Interstate Partners beneficially own a majority of the Company Voting Securities
beneficially owned by such group (the person in (i), (ii) and (iii) shall be
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individually and collectively referred to herein as, "Interstate Holders");
(iii) the consummation of a merger, consolidation, share
exchange or similar form of transaction involving the Company or any of its
subsidiaries, or the sale or other disposition of all or substantially all of
the Company's assets or the assets of the Mendik Division of the Operating
Partnership (a "Business Transaction"), unless immediately following such
Business Transaction (y) more than fifty percent (50%) of the total voting
power of the entity resulting from such Business Transaction or the entity
acquiring the Company's assets in such Business Transaction (the "Surviving
Corporation") is beneficially owned, directly or indirectly, by the Interstate
Holders or the Company's shareholders immediately prior to any such Business
Transaction, and (z) no person (other than the persons set forth in clauses (A),
(B), (C), or (F) of paragraph (ii) above or any tax-qualified, broad-based
employee benefit plan of the Surviving Corporation or its Affiliates)
beneficially owns, directly or indirectly, 30% or more of the total voting power
of the Surviving Corporation (a "Non-Qualifying Transaction"); or
(iv) Board approval of a liquidation or dissolution of the
Company, unless the voting common equity interests of an ongoing entity (other
than a liquidating trust) are beneficially owned, directly or indirectly, by the
Company's shareholders in substantially the same proportions as such
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shareholders owned the Company's outstanding voting common equity interests
immediately prior to such liquidation and such ongoing entity assumes all
existing obligations of the Company to Executive under this Agreement, any
Cleaning Agreement, the Share Option Agreement, the Indemnification Agreement
and any other equity grants.
Part III - Disability.
For purposes of this Agreement, a termination due to Disability shall
mean a termination of Executive's employment by the Company, upon at least
thirty (30) days' prior written notice, to Executive if Executive is
substantially unable to perform Executive's duties as CEO of the Mendik
Division of the Company for a period of one hundred eighty (180) consecutive
days due to illness, physical or mental disability or other incapacity,
provided that Executive does not return to the substantial performance of his
duties on a full-time basis within thirty (30) days after receiving notice of
termination from the Company.
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EXHIBIT C
Arden-Esquire Realty Company
(689 Fifth Avenue and 0000-00 Xxxxxxx Xxxx, Xxxxxxxxxxx Xxxxxxx, Xxxxxx)
Eleven Penn Plaza Company
E-M New York Properties L.P.
(100 Church Street)
Mendik Real Estate Limited Partnership
Mendik RELP Corp.
Two Park Company
909 Third Company
330 Madison Company
00 Xxxxx Xxxxxx Company
Broad 20 L.P.
Westport Office Company (55 Xxxxxx Xxxxx Xxxx, Xxxxxxxx, XX)
BMS Vail Limited Partnerships I and II
Silver Towers Associates
Great Neck Terrace Associates
M Newtown Associates
Mendik Realty Company, Inc.
Building Maintenance Service LLC
BMDG, Inc.
The Mendik Partnership, X.X.
Xxxxxx Facilities Group, LLC
Guard Management Services Corp.
Building Maintenance Services Corp.
Chatby Associates
Jayby Associates
Xxxxx Associates
Sonby Associates
00 Xxxx 00xx Xxxxxx Associates
Wyby Associates
Stamford Xxxxxxxx Associates
000 Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
References to partnerships and other entities are also deemed to include
constituent partners or entities.
