Exhibit
99.4
EXECUTIVE EMPLOYMENT AND
NON-COMPETITION AGREEMENT
This Executive
Employment and Non-Competition Agreement (the “
Agreement ”) by and between Richard J. McCready
(“ Executive ”) and NorthStar Realty Finance
Corp. (the “ Company ”), is dated as of October
4, 2007 (the “ Effective Date ”).
WHEREAS, on
March 14, 2006, Executive and the Company entered into an
executive employment agreement which superceded and replaced
Executive’s employment agreement dated October 22, 2004
(the “ Previous Employment Agreement
”).
WHEREAS, Executive
and the Company desire to memorialize the terms and conditions
related to Executive’s continued employment by the Company
herein.
NOW THEREFORE, in
consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1.
Agreements Between the Parties . This Agreement is
intended to memorialize all of the terms and conditions of
Executive’s employment by the Company and to supersede and
replace the Previous Employment Agreement.
2.
Employment .
(a)
Term . The Company shall employ Executive, and
Executive agrees to be employed with the Company, upon the terms
and conditions set forth in this Agreement, for the period
beginning on the Effective Date and ending on the third anniversary
of the Effective Date (the “ Employment Period
”); provided , however , that commencing on the
third anniversary of the Effective Date and on each subsequent
anniversary of the Effective Date (each such anniversary, a “
Renewal Date ”), the Employment Period shall
automatically be extended for one additional year unless, not later
than ninety (90) days prior to such Renewal Date, the Company or
Executive shall have given written notice not to extend the
Employment Period; provided , further ,
however , that the Employment Period shall be subject to
earlier termination as provided in Section 5(b) hereof (the
“ Term ”).
(b)
Base Salary . Executive’s initial base salary
shall be $400,000 per annum (pro-rated for partial calendar years),
payable in equal bi-monthly installments (as in effect from time to
time, the “ Base Salary ”). In subsequent
years of the Term, the Base Salary shall be subject to annual
review and adjustment from time to time by the compensation
committee of the Company’s board of directors (the “
Compensation Committee ”), taking into account such
factors as the Compensation Committee deems appropriate, including
but not limited to the amount of Executive’s business time
devoted to the affairs of the Company and the salaries of executive
officers having similar titles and performing similar functions as
Executive at comparable companies.
(c)
Annual Cash Bonus . For fiscal years during
Executive’s employment with the Company, Executive shall
participate in an annual cash incentive compensation plan as
adopted and approved by the board of directors of the Company or a
committee thereof acting pursuant to the authority of the board of
directors of the
Company (the “ Board ”) from
time to time, with applicable corporate and individual performance
targets and maximum award amounts determined by the Board upon
recommendation of the Company’s Chief Executive Officer (the
“ Annual Cash Bonus ”). Any Annual Cash
Bonus payable to Executive will be paid at the time the Company
normally pays such bonuses to its senior executives, but in no
event later than 90 days following the end of the applicable fiscal
year, and will be subject to the terms and conditions of the
applicable annual cash incentive compensation plan.
(d)
Long Term Incentive Plan . During Executive’s
employment with the Company, Executive shall be eligible to receive
long term equity incentive compensation awards (which may consist
of restricted stock, stock options, stock appreciation rights or
other types of equity or cash bonus awards, as determined by the
Board in its discretion) pursuant to the Company’s equity
incentive compensation plans and programs in effect from time to
time including, without limitation, the Company’s 2004
Omnibus Stock Incentive Plan and the 2006 Outperformance
Plan. These awards shall be granted in the discretion of the
Board and shall include such terms and conditions (including
performance objectives) as the Board deems appropriate.
(e)
Vacation . Executive shall be eligible for four weeks
of annual vacation to be accrued and payable in accordance with the
Company’s policy with respect to senior executives.
(f)
Indemnification . To the fullest extent permitted by
law, the Company will indemnify Executive against any actual or
threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, arising by reason of
Executive’s status as a current or former director, officer,
employee and/or agent of the Company, any subsidiary or affiliate
of the Company or any other entity to which the Company appoints
Executive to serve as a director or officer. Executive shall
be covered under any director and officer insurance policy obtained
by the Company, if any, and shall be entitled to benefit from any
officer indemnification arrangements adopted by the Company, if
any, to the same extent as other directors or senior executive
officers of the Company (including the right to such coverage or
benefit following Executive’s employment to the extent
liability continues to exist). However, Executive agrees to
repay any expenses paid or reimbursed by the Company if it is
ultimately determined that Executive is not legally entitled to be
indemnified by the Company.
(g)
Other Benefits . In addition, Executive will be
eligible to participate in all fringe benefit plans and retirement
plans of the Company, as are generally available to the other
senior management employees of the Company, such as health
insurance plans, disability insurance plans, life insurance plans,
expense reimbursement and the Company’s 401(k) retirement
plan.
3.
Duties of Executive .
(a)
Duties of Position . During the Employment Period,
Executive shall serve as Executive Vice President and Chief
Operating Officer of the Company. Notwithstanding the
foregoing, Executive’s title(s) may be modified by the
Chief
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Executive Officer, provided that in the
event of any such modification Executive’s new title(s),
duties and authority shall be consistent with those of a senior
executive officer of the Company at such time, and Executive shall,
in any event, report directly to the Chief Executive Officer or
Board of Directors. Executive’s duties shall include,
without limitation, such duties and responsibilities, consistent
with Executive’s title (as may be modified from time to time
in accordance with this Agreement), training and experience, as are
from time to time reasonably assigned to Executive by the Board or
the Company’s Chief Executive Officer. Executive agrees
to devote substantially all of Executive’s business time,
attention and energies to the performance of the duties assigned to
Executive hereunder, and to perform such duties faithfully,
diligently and to the best of Executive’s abilities and
subject to such laws, rules, regulations and policies from time to
time applicable to the Company’s employees. The Company
may assign all or a portion of its rights and obligations under
this agreement to any of its affiliates or enter into an agreement
with any of its affiliates that provides that Executive will
perform services on behalf of such affiliate and Executive agrees
to provide such services, as directed by the Company.
(b)
Confidential Information . Executive shall hold in
confidence for the benefit of the Company all of the information
(other than information concerning corporate opportunities) and
business secrets in respect of the Company and all of its
affiliates, including, but not limited to, all information and data
relating to or concerned with the business, finances, pending
transactions and other affairs of the Company and all of its
affiliates, and Executive shall not at any time before or after
Executive’s employment by the Company is terminated for any
reason, or Executive resigns for any reason, willfully use or
disclose or divulge any such information or data to any other
Person (as defined below) except (i) with the prior written
consent of the Company, (ii) to the extent necessary to comply
with applicable law or the valid order of a court of competent
jurisdiction, in which event Executive shall notify the Company as
promptly as reasonably practicable (and, if possible, prior to
making such disclosure) and (iii) in the performance of
Executive’s duties hereunder. With respect to
information concerning corporate opportunities of the Company and
all of its affiliates that are developed, initiated or become known
to Executive during his employment with the Company, Executive
shall hold in confidence for the benefit of the Company all of such
information in respect of the Company and all of its affiliates,
including, but not limited to, all information and data relating to
or concerned with such opportunities of the Company and all of its
affiliates, and Executive shall not at any time before or within
one (1) year after Executive’s employment by the Company is
terminated for any reason, or Executive resigns for any reason,
willfully use or disclose or divulge any information relating to
any such corporate opportunities to or for the benefit of Executive
or any other Person (as defined below) except (i) with the
prior written consent of the Company, (ii) to the extent
necessary to comply with applicable law or the valid order of a
court of competent jurisdiction, in which event Executive shall
notify the Company as promptly as reasonably practicable (and, if
possible, prior to making such disclosure) and (iii) in the
performance of Executive’s duties hereunder. The
foregoing provisions of this Section 3(b) shall not apply to
any information or data which has been previously disclosed to the
public or is otherwise in the public domain in each case other than
as a result of the breach by Executive of his obligations under
this Section 3(b). For purposes
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of
this Agreement, “Person” means an individual,
corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization, other entity or
“group” (as defined in the Securities Exchange Act of
1934).
4.
Termination of Employment . Executive’s
employment hereunder may be terminated in accordance with this
Section 4.
(a)
Death . Executive’s employment hereunder shall
terminate upon his death.
(b)
Disability . If, as a result of Executive’s
incapacity due to physical or mental illness, Executive shall have
been absent from the full-time performance of his duties hereunder
for the entire period of six consecutive months, and within thirty
(30) days after written Notice of Termination (as defined in
Section 5(a)) is given shall not have returned to the
performance of his duties hereunder on a full-time basis, the
Company may terminate Executive’s employment hereunder for
“Disability.”
(c)
Cause . The Company may terminate Executive’s
employment hereunder for Cause. For purposes of this
Agreement, the Company shall have “Cause” to terminate
Executive’s employment hereunder upon the occurrence of any
of the following events:
(i)
the conviction of, or a plea of nolo contendere by, Executive for
the commission of a felony;
(ii)
continuing willful failure for ten (10) business days to
substantially perform his duties hereunder (other than such failure
resulting from Executive’s incapacity due to 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 substantially performed his duties; or
(iii)
willful misconduct by Executive (including, but not limited to,
breach by Executive of the provisions of Section 7) that is
demonstrably and materially injurious to the Company or its
subsidiaries.
(d)
Good Reason . Executive may terminate his employment
hereunder for “Good Reason” within thirty (30) days
after the occurrence, without his written consent, of one of the
following events that has not been cured within ten (10) business
days after written notice thereof has been given by Executive to
the Company:
(i)
the assignment to Executive of duties materially inconsistent with
his status as a senior executive officer of the Company or the
Executive is directed to directly report to other than the Board or
the Company’s Chief Executive Officer (or the board of
directors or chief executive officer of the Successor Person
following a Change of Control pursuant to clause (i), (ii) or (iv)
of the definition thereof);
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(ii)
following a Change of Control pursuant to clause (i), (ii) or (iv)
of the definition thereof, the assignment to Executive of duties
with the Successor Person inconsistent with Executive’s
title, position, status, reporting relationships, authority, duties
or responsibilities to the Company as contemplated by
Section 3(a) (including, without limitation, if Executive is
not an Executive Vice President of the Successor Person), or any
other action by the Successor Person which results in a diminution
in Executive’s title, position, status, reporting
relationships, authority, duties or responsibilities, other than
insubstantial or inadvertent actions not taken in bad faith which
are remedied by the Successor Person or the Company promptly after
receipt of notice thereof given by Executive;
(iii)
a reduction by the Company in Executive’s Base Salary or a
failure by the Company to pay any Base Salary or contractually
committed cash bonus payment amounts when due;
(iv)
the requirement by the Company that the principal place of
performance of Executive’s services be at a location more
than fifty (50) miles from the greater New York City metropolitan
area;
(v)
any purported termination of Executive’s employment which is
not effected pursuant to a Notice of Termination satisfying the
requirements of Section 5(a);
(vi)
a material failure by the Company to comply with any other material
provision of this Agreement.
(e)
Change of Control . For the purposes hereof, a
“Change of Control” of the Company shall be deemed to
have occurred if an event set forth in any one of the following
paragraphs (i) - (v) shall have occurred:
(i)
any Person is or becomes Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing
thirty-five percent (35%) or more of the combined voting power of
the then outstanding securities of the Company, excluding
(A) any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (x) of
paragraph (ii) below, and (B) any Person who becomes such
a Beneficial Owner through the issuance of such securities with
respect to purchases made directly from the Company; or
(ii)
the consummation of a merger or consolidation of the Company with
any other Person or the issuance of voting securities of the
Company in connection with a merger or consolidation of the Company
(or any direct or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than (x) a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) fifty
5
percent (50%) or more of the combined voting
power of the securities of the Company or such surviving entity or
any parent thereof outstanding immediately after such merger or
consolidation, or (y) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
thirty-five percent (35%) or more of the combined voting power of
the then outstanding securities of the Company;
(iii)
the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company;
(iv)
the stockholders of the Company approve an agreement for the sale
or disposition by the Company of all or substantially all of the
assets of the Company; or
(v)
individuals who, on the Effective Date, constitute the Board (the
“ Incumbent Directors ”) cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the Effective Date, whose
election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of
t
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