AMENDMENT TO AGREEMENT DATED DECEMBER 31, 2004
AMENDMENT
TO
AGREEMENT
DATED DECEMBER 31, 2004
THIS
AMENDMENT (this “Amendment”)
is
made this 1st day of January 2008 by and between Icahn Capital Management
LP
(“ICM”),
Icahn
Management LP, Icahn Capital LP (the “Employer”),
Icahn
Onshore LP (the “Onshore
GP”),
Icahn
Offshore LP (the “Offshore
GP”
and
together with the Onshore GP, the “Fund
GPs”),
Icahn
Enterprises L.P. (“IELP”),
the
Icahn Related Entities (as defined below) and Xxxxx Xxxxxxx residing at 000
Xxxx
00xx
Xxxxxx,
Xxx Xxxx, XX 00000 (“Employee”
or
“you”).
RECITALS:
Employee
executed an Agreement dated as of December 31, 2004 (as amended to date
including by this Amendment, the “Agreement”;
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement as amended)
with,
among others, Icahn Management LP, the Onshore GP, the Offshore GP and the
Icahn
Related Entities (as defined in the Agreement).
The
Agreement was assigned by Icahn Management LP to ICM on August 8,
2007.
Icahn
Management LP and ICM have provided administrative and back office services
to
Icahn Partners LP, Icahn Master Fund LP and certain other fund clients (the
“Funds”)
in
consideration of the payment of management fees by the Funds. The management
agreements providing for such management fees (the “Management
Agreements”)
were
terminated during the first day of January 2008.
The
limited partnership agreements of the Funds (the “Fund
LPAs”)
were
amended to provide that as of January 1, 2008 (the “Effective
Date”)
(i)
the Fund GPs will provide administrative and back office services to the
Funds
and (ii) the Fund GPs will receive Special Profits Interest Allocations (as
defined in the Fund LPAs).
Pursuant
to an Assignment dated January 1, 2008, the Employee has assigned,
transferred and conveyed to the Fund GPs, effective as of the Effective Date,
all his right, title and interest in and to his partnership interests in
ICM.
Each
of
ICM, the Onshore GP, the Offshore GP and the Employer is owned indirectly
by
IELP.
Under
the
Agreement, prior to the amendments contemplated herein, Employee is, generally
speaking, entitled to the following during the Term:
| a) |
a
1.5% interest in the net management fees paid during the Term by
the Funds
from and after January 1, 2006 (being the management fee net of expenses
of the Management Company), such amount to be distributed promptly
following each payment of such management fees to the Management
Company;
|
| b) |
a
2.5% interest in management fees earned between November 3, 2004 and
the last day of the Term (which amount will be calculated with respect
to
management fees for periods from and after January 1, 2006 net of
expenses
of the Management Company), vesting as set forth in the
Agreement;
|
| c) |
a
1.5% participation in the incentive allocations from the Funds made
during
the Term on and after December 31, 2006, such 1.5% to be distributed
promptly following each December 31 during the
Term:
|
| d) |
a
2.5% participation in the incentive allocations from the Funds made
between November 3, 2004 and the last day of the Term, vesting as set
forth in the Agreement.
|
Pursuant
to the various agreements contemplated above, the management agreement and
the
management fees are being terminated and the general partners of the Funds
are
going to be receiving Special Profits Interest Allocations from the Funds
(together, the “Termination
and Allocation”).
The parties are entering into this Amendment with the intent of maintaining
their economic rights and obligations under the Agreement, as generally
summarized above in paragraphs (a) through (d) taking into account the
Termination and Allocation and this Amendment should be interpreted to
maintain the substance of the rights and obligations set forth in such
paragraphs (it being understood by the parties however that under the
Agreement as amended hereby the 2.5% interest in management fees will instead
come only out of profits (through the Special Profits Interest Allocations)
earned by the Funds, if any.
The
parties wish the amendments to the Agreement effected hereby to be effective
as
of the Effective Date.
In
consideration of the premises, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, effective as
of the
Effective Date the parties agree as follows:
1. Management
Agreements Termination.
The
Employee agrees that although the Management Agreements were in effect for
a
portion of January 1, 2008 and were then terminated, he is not entitled to
any payment in respect of the management fees that were payable thereunder
prior
to termination for 2008 (or thereafter) inasmuch as the parties to the
Management Agreements have agreed that no management fees were accrued or
earned
thereunder after December 31, 2007.
2. Employment.
Icahn
Capital LP shall be an “Icahn Entity” for all purposes of the Agreement. All
references to “Employer” in the Agreement shall be references to Icahn Capital
LP.
3. Amendments
to Defined Terms.
For all
periods from and after January 1, 2008:
A. All
references in the Agreement to “the Management Company” shall be references to
“the Fund GPs”.
B. All
references in the Agreement to “Management Fees” shall be references to “the
Fund GPs’ Special Profits Interest Allocations” and all references to
“Management Fee Participation” shall be to “Employee’s Special Profits Interest
Allocation Participation”.
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C. “The
Fund
GPs’ Net Special Profits Interest Allocations” shall mean in respect of each
year of the Term commencing on or after the Effective Date, each of Onshore
GP’s
and Offshore GP’s Special Profits Interest Allocations in the Funds less the
smaller of: (a) the sum of (i) the costs and expenses borne directly or
indirectly by the Fund GPs and their affiliates in providing administrative
and
back office services to the Funds pursuant to the Fund LPAs (as reasonably
determined and, to the extent applicable, consistent with past practices
of the
Fund GPs and their affiliates) plus (ii) the amount of all Incentive Allocations
and Fund GPs’ Net Special Profit Interest Allocations allocated to Aegis Capital
Corp. (“Aegis”) pursuant to the agreement among, inter alia, Aegis and the Fund
GPs dated April 1, 2006 as amended and (b) the amount of the Annual Expense
Cap in effect with respect to such year pursuant to the Agreement (collectively,
the “Fund GP Expenses”). Without limiting the generality of the parenthetical
contained in clause (a)(i) above, no incremental cost, if any, that may be
incurred by the Fund GPs and that is attributable to the compensation, bonus
or
expenses of Xxxx X. Icahn under his employment agreement dated August 8,
2007,
as amended from time to time, with ICM and IELP or to the earn-out payable
to
Mr. Icahn and his Affiliates under the Contribution Agreement executed on
August
8, 2007 in connection therewith, or to any expenses incurred because the
Fund
GPs will be owned by IELP and its Affiliates (that is, dealing with IELP’s
accounting and reporting requirements), will diminish any amounts to be accrued
or paid to Employee pursuant to the Agreement.
4. Cash
Compensation.
For all
periods from and after January 1, 2008, Section 7 of the Agreement is hereby
amended to provide that the Employee shall be entitled to receive additional
Cash Compensation (that is, in addition to his base salary and Bonus as
presently provided pursuant to Section 7) each quarter during the Term,
commencing with January 1, 2008, equal to 1.5% of (a) minus (b) where (a)
equals
the aggregate Target Special Profits Interest Amounts (as defined in the
Fund
LPAs) of the limited partners in the Funds and (b) equals the Fund GP
Expenses for such quarter. Such additional Cash Compensation shall be paid
in
advance on the first business day of each quarter based on a good faith estimate
of the Fund GP Expenses that will be incurred by the Fund GPs during such
quarter. If, due to any miscalculation or mis-estimation of Fund GP Expenses
or
any other reason, the Employee shall have been paid in cash more or less
than he
is entitled to under the Agreement, then an appropriate adjustment shall
be
made.
5. Restatement.
For all
periods from and after January 1, 2008, Section 9 of the Agreement is hereby
amended and restated in its entirety as follows:
9. Profit
Participation.
i) Subject
to all of the terms and provisions of this Agreement (including, without
limitation, those relating to vesting and forfeiture) the Employee shall
be
entitled to receive 2.5% of the Fund GPs’ Net Special Profits Interest
Allocations and 4.0% (2.5% of which is subject to vesting and 1.5% of which
will
be paid annually as provided in paragraph 9(iv) below) of the Incentive
Allocations allocated to the Fund GPs during the period from January 1,
2008 through the last day of the Term. If, due to any miscalculation or any
other reason, the Employee shall have been allocated more or less than he
is
entitled to under the Agreement, then an appropriate adjustment shall be
made.
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ii) The
Employee’s participation in the Fund GPs’ Net Special Profits Interest
Allocations and Incentive Allocations for each year shall be reflected by
the
establishment of capital accounts (the “Employee Capital Accounts”) in the name
of Employee, as a limited partner, under the Partnership Agreements. As
contemplated by the Fund LPAs, all amounts credited to each Employee Capital
Account in respect of the Fund GPs’ Net Special Interest Allocations and
Incentive Allocations will be invested by the Onshore GP in the Onshore Fund
and
by the Offshore GP in Icahn Partners Master Fund LP, Icahn Partners Master
Fund
II LP and Icahn Partners Master Fund III LP (collectively, the “Offshore
Funds”), in each case for the benefit of the Employee Capital Account
established in the Onshore GP or Offshore GP, as the case may be. The right
of
the Employee to participate in each of the Fund GPs’ Net Special Profits
Interest Allocations (the “Employee’s Net Special Profits Interest Allocation
Participation”) and the Incentive Allocations (the “Employee’s Incentive
Allocation Participation”), subject to and in accordance with the terms of this
Agreement, and in any investment made in respect thereof in accordance with
the
terms of this Agreement and all returns, earnings and profits thereon, are
referred to collectively herein as the “Profit Participation”.
iii) Subject
to the final sentence of this paragraph 9(iii), Employee acknowledges and
agrees
that pursuant to the terms of this Agreement, Employee will only participate
in
the Fund GPs’ Net Special Profits Interest Allocations and Incentive Allocations
allocated from January 1, 2008 until he ceases to be employed hereunder and
that
if such employment ceases for any reason he will not accrue any further benefit
in respect of the Fund GPs’ Net Special Profits Interest Allocations or
Incentive Allocations allocated thereafter, nor will he have any ongoing
rights
or interest in respect of the Fund GPs’ Net Special Profits Interest Allocations
or Incentive Allocations allocated on or prior to the date such employment
ceases other than the right to Vested Amounts (as defined below) in respect
of
Fund GPs’ Net Special Profits Interest Allocations and Incentive Allocations
allocated on or prior to the date such employment ceases (and any investment
made in respect thereof, and all returns, earnings and profits thereon, made
in
accordance with the terms of this Agreement). Because the Fund GPs’ Net Special
Interest Allocations and Incentive Allocations are made as of year end (other
than in the event of dissolution, partner withdrawal or other events specified
in the Fund LPAs, in which event such allocations are made as of the date
prior
to year end specified in such agreement (the periods in respect of which
such
allocations are made, each a “Short Period”)), in the event that the employment
of Employee hereunder ceases, the Employee’s Net Special Profits Interest
Allocation Participation and Incentive Allocation Participation under this
Agreement will include a pro rated portion of 4.0% of the immediately following
Fund GPs’ Net Special Profits Interest Allocations and Incentive Allocations
(based upon the number of days elapsed in the one year period beginning on
January 1 of the year in which such employment ceases, divided by 365 (and
in
the case of a Short Period during which such employment ceases, the number
of
days elapsed from January 1 of the Short Period until such employment ceases,
divided by the total number of days in the Short Period).
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iv) Employee’s
1.5% share of the Incentive Allocations allocated to the Fund GPs during
the
period from January 1, 2008 through the last day of the Term pursuant to
paragraph 9(i) above shall be distributed to the Employee promptly following
each December 31 occurring during the Term.
6. Prior
Rights Undiminished.
The
parties agree and acknowledge that (i) except as provided in Section 7 below,
the Employee’s rights under the Agreement with respect to periods prior to the
Effective Date (including, without limitation, with respect to management
fees
and incentive allocations earned and allocated prior to such date) remain
intact
and are not amended, affected or diminished in any way by this Amendment
and
(ii) neither the Assignment nor this Amendment shall release the Other Parties
from their obligations under the Agreement, and the Other Parties will continue
to be responsible for the obligations under the Agreement, to the extent
they
are not performed by the Fund GPs, the Employer or their
affiliates.
7. Deferral
Termination Trigger. The
Agreement, including without limitation Section 10 and Section(b)(I) of Schedule
A thereof and Section 5 of the February 1, 2007 amendment thereof, is amended
pursuant to transition relief promulgated under Section 409A of the Internal
Revenue Code of 1986, as amended, and contained in Internal Revenue Service
Notices 2005-1, 2006-79 and 2007-86 and Section XI(C) of the preamble to
REG-158080-04, 2005-43 I.R.B. 786, dated October 4, 2005 (Application of
Section
409A to Nonqualified Deferred Compensation Plans), to delete all provisions
that
would permit or cause any portion of the deferred Management Fee Participation
owing by Icahn Management LP or ICM to Employee to be payable to the Employee
upon the termination of Management Agreements.
8. Change
in Character.
For all
periods from and after January 1, 2008, and after giving effect to Section
7
above, Sections 10 and 21(ix) and Section(b)(I) of Schedule A of the Agreement
and Section 5 of the February 1, 2007 amendment to the Agreement are
deleted in their entirety except with respect to the portions of the Management
Fee Participation that were properly deferred pursuant to the Agreement prior
to
January 1, 2008. For the avoidance of doubt and without limiting Section 6
above, such sections (exclusive of the third sentence of Section 5 of the
February 1, 2007 amendment to the Agreement which is deleted for all
purposes) shall continue to be applicable to the portions of the Management
Fee
Participation that were properly deferred pursuant to the Agreement in respect
of periods to January 1, 2008.
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9. Vesting.
Employee’s right to receive any amount or payments in respect of the Profit
Participation (other than his 1.5% share of Incentive Allocations payable
pursuant to Section 9(iv) of the Agreement) allocated from and after the
Effective Date shall vest in accordance with Section 11 of the Agreement,
taking
into account for such purpose Employee’s periods of service with Icahn
Management LP, ICM and the other Icahn Related Entities commencing January
1,
2005 through the date preceding the Effective Date, and Employee’s periods of
service with the Employer and the other Icahn Related Entities from and after
the Effective Date. For the avoidance of doubt, none of the Assignment, the
execution of this Amendment, the termination of the Management Agreements
or the
Employee’s ceasing to provide services to ICM as of the Effective Date shall
accelerate vesting of the Profit Participation payable by Icahn Management
LP or
ICM pursuant to Section 11 of the Agreement. Section 11(C) of the Agreement
is
amended to substitute “Employer” for the reference to “Management
Company”.
10. Withdrawal.
Sections 12(ii) and 13 of the Agreement are amended to delete the following
text
in both places where it appears: “(calculated in accordance with the methodology
set forth in the Partnership Agreement of the applicable Fund GP)”.
11. Governing
Law.
This
Amendment shall be governed by and construed in accordance with the laws
of the
State of New York applicable to agreements made and/or to be performed in
that
State, without regard to any choice of law provisions thereof. All disputes
arising out of or related to this Amendment shall be submitted to the state
and
federal courts of New York, and each party irrevocably consents to such personal
jurisdiction and waives all objections thereto, but does so only for the
purposes of this Amendment.
12. Agreement
in Force.
Except
as specifically amended by this Amendment, all terms and provisions of the
Agreement, shall remain and continue in full force and effect.
13. Responsibility
of IELP.
IELP
shall be jointly and severally responsible for the obligations of the Employer
and the Fund GPs under the Agreement.
[INTENTIONALLY
LEFT BLANK]
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
first written above.
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
ICAHN
CAPITAL MANAGEMENT LP
By:
/s/ Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Authorized Signatory
ICAHN
MANAGEMENT LP
By:
/s/ Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Authorized Signatory
ICAHN
CAPITAL LP
By:
IPH
GP LLC, its general partner
By:
Icahn
Enterprises Holding L.P.
By:
Icahn
Enterprises G.P. Inc.
By:
/s/ Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chief Financial Officer
ICAHN
ONSHORE LP
By:
/s/ Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Authorized Signatory
ICAHN
OFFSHORE LP
By: /s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Authorized Signatory
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By:
Icahn
Enterprises G.P. Inc., its general partner
By:
/s/ Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chief Financial Officer
ICAHN
RELATED ENTITIES
By:
/s/ Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title: Authorized
Signatory
8
