Exhibit 10.4
AGREEMENT
AGREEMENT, dated as of January 1, 2001, by and between VORNADO
REALTY TRUST, a Maryland unincorporated business trust and Vornado
Realty LP, a Delaware Operating Partnership (hereinafter referred
to as “Employer”) and JOSEPH MACNOW, an individual
(hereinafter referred to as “Employee”).
IN CONSIDERATION of the mutual covenants herein contained, and
other good and valuable consideration, the parties hereto agree as
follows:
1.
Employment .
Employer hereby agrees to employ Employee, and Employee agrees to
serve as Executive Vice President-Finance and Administration and
Chief Financial Officer of Employer during the Period of
employment, as defined in Section 2.
2.
Period of Employment .
The “Period of Employment” under this Agreement shall
commence on January 1, 2001 and, subject to the provisions of this
Agreement, shall continue through December 31, 2003; provided that
the Period of Employment shall automatically be extended commencing
on December 31, 2003 for successive additional one (1) year periods
unless either party gives written notice not to extend the Period
of Employment not less than ninety (90) days prior to the then next
upcoming expiration date.
3.
Duties During the Period of Employment .
Employee shall devote his full business time, attention and best
efforts to the affairs of Employer and its subsidiaries during the
Period of Employment; provided, however, that Employee may engage
in other activities, such as activities involving charitable,
educational, religious and similar types of organizations (all of
which are deemed to benefit Employer), speaking engagements,
membership on the board of directors of non-profit organizations,
and similar type activities to the extent that such other
activities do not materially impair the performance of his duties
under this Agreement, or inhibit or conflict in any material way
with the business of
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Employer and its
subsidiaries, and to the extent Employer does not object to such
other activities.
4.
Cash Compensation .
Employer shall pay to Employee during the first year of the Period
of Employment a salary (“Base Compensation”) at an
annual rate of $520,000.00, to be paid in equal biweekly
installments. Employer shall pay to Employee during the
second year of the Period of Employment a salary at an annual rate
equal to the salary paid Employee during the first year of the
Period of Employment, increased by a factor which is equal to 125%
of the percentage increase in the Consumer Price Index (as
hereafter defined) during the period from January 2001 through
December 2001, to be paid in equal biweekly installments.
Employer shall pay to Employee during the third year of the Period
of Employment a salary at an annual rate equal to the salary paid
Employee during the second year of the Period of Employment
increased by a factor which is equal to 125% of the percentage
increase in the Consumer Price Index during the period from January
2002 through December 2002, to be paid in equal biweekly
installments. For purposes of this Agreement, the
“Consumer Price Index” shall mean the Revised Consumer
Price Index for Urban Wage Earners and Clerical Workers - All Items
(CPI-W), Northeast Region, Class A, on the base 1982-84=100,
published by the Bureau of Labor Statistics of the U.S. Department
of Labor. Increases in Base Compensation resulting from the
above, if any, shall then constitute the Base Compensation for all
purposes of this Agreement. Employee’s Base
Compensation shall not be reduced during the term of this
Agreement.
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5.
Stock Options .
During each year in the Period of Employment, the Employer shall
grant Employee share options to purchase 75,000 shares of
Employer’s Common Shares of Beneficial Interest
(“Stock”) pursuant to the terms of the Employer’s
1993 Omnibus Share Plan at a purchase price per share equal to the
fair market value of the Stock on the date the options are
granted. Such options shall be granted at the discretion of
the Compensation Committee of the Board of Trustees of the
Employer, at the first meeting of the Committee in which options
are ordinarily granted. Employer shall take all necessary
actions to ensure that such options qualify, to the extent
permitted, as “incentive stock options” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, and successor provisions.
6.
Other Employee Benefits .
(a)
Vacation and Sick Leave .
Employee shall be entitled to paid annual vacation periods and to
sick leave in accordance with Employer’s policy.
(b)
Automobile .
Employer shall provide Employee with the use of an automobile of
the same quality as that provided to other corporate officers of
equal or similar position and pay all expenses incurred by Employee
in connection with the use of the automobile.
(c)
Regular Reimbursed Business Expenses .
Employer shall reimburse Employee for all expenses and
disbursements reasonably incurred by Employee in the performance of
his duties during the Period of Employment, and such other
facilities or services as Employer and Employee may, from time to
time, agree are reimbursable.
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(d)
Employee Benefit Plans or Arrangements .
In addition to the cash compensation provided for in Section 4
hereof and the stock options provided in Section 5 hereof,
Employee, subject to meeting eligibility provisions and to the
provisions of this Agreement, shall be entitled to participate in
all employee benefits plans of Employer, as presently in effect or
as they may be modified or added to by Employer from time to time,
including, without limitation, plans providing retirement benefits,
medical insurance, life insurance, disability insurance, and
accidental death or dismemberment insurance. Without limiting
the foregoing, Employee shall be entitled to tax preparation and
financial planning assistance of $15,000 per calendar year and upon
approval by an insurance carrier, a $3 million five-year renewal
term life insurance policy or at Employee’s election other
life insurance with a comparable cost to Employer.
7.
Termination and Termination Benefits .
The termination of Employee’s employment during the Period of
Employment by Employee or Employer shall not be treated as a breach
of this agreement.
(a)
Termination by the Employer Without Cause .
The Employer may terminate the Period of Employment and
Employee’s employment hereunder without “Cause”
upon written notice to Employee. For purposes of this Section
7(a), a termination of the Period of Employment by the Employer
without Cause shall include any termination or nonextension by the
Employer (other than a termination for Cause as defined in Section
7(b) below).
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(b)
Termination by the Employer for Cause .
Subject to the following paragraph, the Employer may terminate the
Period of Employment and Employee’s employment hereunder for
“Cause” upon written notice to Employee. For
purposes of this Section 7(b), a termination for Cause shall only
mean a termination as a result of (i) Employee’s willful
misconduct with regard to Employer or to any entity in control of,
controlled by or under common control with the Employer (an
“Affiliate”), including, but not limited to, any
preferred stock subsidiary of the Employer that is materially
economically injurious to Employer, (ii) Employee’s
conviction of, or plea of guilty or nolo contendere
to, a felony (other than a traffic violation) or (iii)
Employee’s willful and continued failure to use reasonable
business efforts to attempt to substantially perform his duties
hereunder (other than such failure resulting from Employee’s
incapacity due to a physical or mental illness or subsequent to the
issuance of a notice of termination by Employee for Good Reason)
after demand for substantial performance is delivered by Employer
in writing that specifically identifies the manner in which
Employer believes Employee has not used reasonable business efforts
to attempt to substantially perform his duties.
For purposes of this Section 7(b), in addition to the other legal
requirements to be “willful”, no act, or failure to
act, by Employee 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 Employer. In
addition, no action or inaction shall give rise to a right of
Employer to terminate this Agreement and Employee’s
employment hereunder for Cause pursuant to the preceding paragraph
unless and until Employer has delivered to Employee a copy of a
resolution duly adopted by a majority of the Board of Trustees
(“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 Employee and an opportunity for Employee,
together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board, Employee was guilty of
any conduct set forth in the preceding paragraph and specifying the
particulars thereof in detail. This Section 7(b) shall not
prevent Employee from challenging in any court of competent
jurisdiction the Board’s determination that Cause exists or
that Employee has failed to cure any act (or failure to act) that
purportedly formed
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the basis for the
Board’s determination.
(c)
Termination by Employer Due to Disability .
If, due to illness, physical or mental disability, or other
incapacity, Employee is substantially unable, for one hundred and
eighty (180) consecutive days, to perform his duties hereunder,
Employer may terminate the Period of Employment and his Employment
hereunder upon at least thirty (30) days’ prior written
notice to Employee given after one hundred eighty (180) days, and
provided Employee does not return to the substantial performance of
his duties on a full-time basis within such thirty (30) day
period.
(d)
Termination by Employee With Good Reason .
Subject to the following paragraph, Employee may terminate the
Period of Employment and his employment hereunder for “Good
Reason” upon written notice to Employer. For purposes
of this Section 7(d), a termination for Good Reason shall mean a
termination as a result of (unless otherwise consented to in
writing by Employee) (i) the failure to appoint Employee to the
positions set forth in Section 1, the alteration of the duties,
responsibilities and authority of Employee as set forth in Section
1 in a manner that is materially and adversely inconsistent with
such duties, and responsibilities or authority or a change to
Employee’s position or title; (ii) a failure by Employer to
pay when due any compensation to Employee or to substantially
provide any benefit to Employee; (iii) the relocation of
Employer’s principal
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executive offices to a
location other than the New York Metropolitan area or relocation of
Employee’s own office location from that of the principal
offices; (iv) any purported termination of Employee’s
employment for Cause which is not effected pursuant to the
procedures of Section 7(b) (and for purposes of this Agreement, no
such purported termination shall be effective); (v)
Employer’s material breach of any material term contained in
this Agreement; (vi) a Change in Control (as defined below), or
(vii) any requirement that Employee report to anyone other than the
Board, the President of Employer or the Chief Executive Officer of
Employer. Employee’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 Section 7(d), no action or inaction shall give
rise to the right of Employee to terminate the Period of Employment
and Employee’s employment hereunder for Good Reason unless a
written notice is given by Employee to the Employer within one
hundred twenty (120) days after Employee has actual knowledge of
the occurrence of the event giving rise to Employee’s right
to ter
