EXHIBIT 10.46
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of April 19,
2007, by and between Vornado Realty Trust (the
“Company”) and Mitchell N. Schear
(“Employee”).
WHEREAS, the Company wishes to
secure the continued services of Employee to the Company in
accordance with the terms hereof, and
WHEREAS, Employee wishes to provide
services to the Company in accordance with the terms
hereof;
NOW THEREFORE, in consideration of
the premises and the mutual covenants set forth below, the parties
hereby agree as follows:
1.
Employment
. The Company hereby agrees to
employ Employee as President of Vornado/Charles E. Smith Washington
DC Office Division (or such other name as in use for such division,
the “Smith Division”) and Employee hereby accepts such
employment, on the terms and conditions hereinafter set
forth.
2.
Term . The period of employment of Employee by the Company
hereunder (the “Employment Period”) shall commence as
of the date first set forth above (the “Commencement
Date”), and shall continue until the fifth anniversary
thereof; provided that commencing on the fifth anniversary of the
Commencement Date, and upon each subsequent anniversary of the
Commencement Date, the Employment Period shall be automatically
extended for one (1) additional year unless either party gives
written notice not to extend this Agreement prior to three (3)
months before such extension would otherwise be effectuated.
Notwithstanding the foregoing or anything to the contrary set forth
herein, in the event Employee’s employment earlier terminates
in accordance with Section 6, the Employment Period shall end upon
such earlier termination.
3.
Duties and Responsibilities . During the Employment Period,
Employee will serve as President of the Smith Division in charge of
the Company’s Washington, D.C. metropolitan area office
division, will perform other executive duties on behalf of the
Company consistent with his position and shall report to the
President or Chief Executive Officer of the Company. Employee shall
devote substantially all of his working time, attention and
energies during normal business hours (other than absences due to
illness or vacation) to the performance of his duties for the
Company. Notwithstanding the foregoing or anything to the contrary
set forth herein, Employee shall, during the term of this
Agreement, have the right to engage in Items 6 and 7 on the list of
“Excluded Activities” provided in Attachment A hereto,
provided that such activities do not impair Employee’s
ability to perform services to the Company as set forth
herein.
4.
Place of Performance . The principal place of employment of
Employee shall be at the Smith Division’s offices in
Arlington, Virginia.
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5.
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Compensation and Related Matters
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(a) Base Salary and Bonus .
During the Employment Period the Company shall pay Employee a base
salary at the rate of not less than $1,000,000 per year
(“Base Salary”). Employee’s Base Salary shall be
paid in approximately equal installments in accordance with the
Company’s customary payroll practices. If Employee’s
Base Salary is increased by the Company, such increased Base Salary
shall then constitute the Base Salary for all purposes under this
Agreement. In addition to Base Salary, the Employee (i) may be
entitled to an annual incentive bonus (“Bonus”) each
fiscal year (at a target of 50% of Base Salary) at the sole
discretion of the Company, to be payable at the same time as
bonuses are paid to the senior executive officers of the Company
listed on Schedule 1 hereto (the “Senior Executive
Officers”); and (ii) shall be entitled to participate in
extraordinary bonus plans and programs of the Company along with
other Senior Executive Officers eligible to participate in such
programs.
(b) Share Options . Employee
shall be granted share options to purchase 200,000 common shares of
beneficial interest (“Stock”) of the Company pursuant
to the terms of the Company’s 2002 Omnibus Share Plan, as
amended (the “2002 Plan”) at a purchase price per share
equal to the fair market value of the Stock on the date the options
are granted (the “Options”). Such Options shall be
granted on the Commencement Date, and shall be subject to the
general terms of the 2002 Plan and the share option agreement
thereunder in the form attached hereto as Exhibit A. The Options
shall become exercisable at a rate of one-third (33-1/3 %) after
the third anniversary of the date of grant, and an additional
one-third (33-1/3 %) on each of the fourth and fifth anniversaries
of such date, provided Employee remains an employee of the Company
on such respective dates. Notwithstanding the foregoing, the
Options will accelerate and become fully exercisable if (i)
Employee is terminated pursuant to Sections 6(e) or 6(f), or (ii)
upon the sale or change in control of the Company (collectively, a
“Sale”). Any future share option grants shall be made
to Employee on comparable terms as such grants are made to other
Senior Executive Officers. In addition, upon a Reporting
Termination (as hereinafter defined), the Options will be deemed to
vest or have vested ratably over five years from the date of grant
and there shall be no other acceleration of vesting of the Options
due as a result of such termination.
(c) Benefit Plans . Employee
shall be entitled to participate in such retirement, pension,
insurance, health, or other benefit plan or program, fringe benefit
or other perquisite that generally is provided by the Company for
other Senior Executive Officers of the Company, or which it may
adopt from time to time for its Senior Executive Officers, in
accordance with the eligibility requirements for participation
therein. Nothing herein shall be construed so as to prevent the
Company from modifying or terminating any employee benefit plans or
programs, or employee fringe benefits, it may adopt from time to
time. Notwithstanding the foregoing, to the extent that the health
benefits provided to the Employee by the Company hereunder are not
economically equivalent to those provided to Employee by his former
employer immediately prior to the date hereof (as a result of new
or increased co-pay arrangements, increased deductibles, or the
like), the Company shall make a monthly cash payment to Employee to
compensate him for any reduction in such benefits, provided
, however , that the total of all such monthly cash payments
shall not exceed $10,000 per year.
(d) Vacation . Employee shall
be entitled to the normal and customary amount of paid vacation
provided to the Company’s Senior Executive Officers, but in
no event less than four (4) weeks annually, beginning on the
Commencement Date. In addition, Employee shall be
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entitled to the same sick leave and
holidays provided to other Senior Executive Officers of the
Company.
(e) Expenses . The Company
shall promptly reimburse Employee for all reasonable business
expenses upon the presentation of reasonably itemized statements of
such expenses in accordance with the Company’s policies and
procedures now in force or as such policies and procedures may be
modified with respect to all Senior Executive Officers, of the
Company.
(f) Automobile . The Company
shall pay Employee a car allowance equal to $1875 per
month.
6.
Termination. Employee’s employment hereunder shall be
terminated upon the earliest of:
(a) Expiration. The
expiration of the Employment Period.
(b) Death . The death of
Employee.
(c) Disability. If, Employee
shall be Disabled for a period of six (6) consecutive months and
within thirty (30) days after written Notice of Termination is
given by the Company after such six (6) month period, Employee
shall not have returned to the substantial performance of his
duties on a full-time basis, the Company shall have the right to
terminate Employee’s employment hereunder for
“Disability”. For purposes of this Agreement,
“Disability” or “Disabled” shall mean
“Total Disability” or “Totally Disabled” or
such similar term as may be defined in the Company’s long
term disability plan; provided , that , if no such
plan exists, “Disability” or “Disabled”
shall have the meaning provided in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended.
(d) Cause . The Company
terminates Employee for Cause. For purposes of this Agreement, the
Company shall have “Cause” to terminate
Employee’s employment upon Employee’s (i) willful and
continued failure to substantially perform his duties with the
Company (other than any such failure resulting from his incapacity
due to physical or mental illness) which has not been cured within
thirty (30) days after delivery to Employee of a written notice
that identifies the manner in which the Company believes that
Employee has willfully not substantially performed his duties, (ii)
willful misconduct which is economically injurious to the Company
or to any entity in control of, controlled by or under common
control with the Company (an “Affiliate”), including,
but not limited to, any breach of Sections 9 and 10 hereof which
has not been cured within thirty (30) days after delivery to
Employee of a written notice that identifies the manner in which
the Company believes that Employee has willfully engaged in
misconduct that has economically injured the Company or an
Affiliate, or (iii) the conviction of, or plea of guilty or
nolo contendere to, a felony, or (iv) habitual drug
or alcohol abuse which materially impairs Employee’s ability
to perform his duties hereunder.
(e) Material Breach .
Employee terminates his employment for a material breach of this
Agreement by the Company. For purposes of this Agreement, a
“material breach” shall be deemed to occur upon (i) a
failure by the Company to comply with any material provision of
this Agreement or (ii) a relocation by the Company of
Employee’s principal place of employment to outside the
Washington, D.C. metropolitan area, which, in the case of clauses
(i), and (ii) of this
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Section 6(e) has not been reasonably
cured within thirty (30) days after written notice of such event
has been given by Employee to the Company. For the purposes of
clarification and without limitation, it will be deemed a material
breach as referred to in clause (i) of this Section 6(e) if,
without the prior written consent of Employee, (1) the Employee is
asked to report to any person other than the President or Chief
Executive Officer of the Company, and (2) after not less than six
months of reporting to such new person, Employee delivers to the
Company a notice of termination of his employment and actually
terminates such employment following the expiration of the 30-day
cure period referred to above (such event, a “Reporting
Termination”).
(f) Without Cause . The
Company terminates his employment hereunder without Cause by
providing Employee with a Notice of Termination.
(g) Voluntary Termination .
Employee terminates this Agreement and Employee’s employment
hereunder at any time upon ninety (90) days prior written notice to
the Company.
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7.
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Termination Procedure .
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(a) Notice of Termination .
Any termination of Employee by the Company or by Employee (other
than termination pursuant to (i) Section 6(a) (which shall require
the notice specified in Section 2) or (ii) Section 6(b) hereof)
shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 13. For purposes of this
Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for ‘
termination of Employee under the provisions so
indicated.
(b) Date of Termination .
“Date of Termination” shall mean (i) if
Employee’s employment is terminated by the expiration of this
Agreement, the date of expiration, (ii) if Employee’s
employment is terminated by his death, the date of his death, (iii)
if Employee’s employment is terminated pursuant to Section
6(c) hereof, thirty (30) days after Notice of Termination is given
(provided that Employee shall not have again become available for
service on a regular basis during such thirty (30) day period),
(iv) if Employee’s employment is terminated pu
