Exhibit 10.24
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998 (the
"Agreement") by and between Xxxxxx X. Xxxxxxx (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of
business at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Employer").
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the
Employment and Noncompetition Agreement, dated June 2, 1995, between the
Employer and the Executive and in any amendment to or restatement of such
agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and
the Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
I. Employment and Noncompetition Agreement. This Agreement is
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supplementary to and, except as explicitly set forth herein, does not limit
or alter any of the terms and conditions established under the Employment
Agreement.
II. Term. The term and duration of this Agreement shall be identical
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to the term of the Employment Agreement, provided, however, that if a Change-
in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is thirty-six
months beyond the end of the calendar year in which the Change-in-Control
occurs. Section 1 of the Employment Agreement is hereby amended in
accordance with the foregoing.
III. Termination and Severance Payments. Sections 7(a), (b) and (c) of
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the Employment Agreement are hereby superseded in their entirety by this
Section 3.
A. At-Will Employment. Executive's employment pursuant to the
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Employment Agreement is "at will" and may be terminated by the Employer at
any time with or without Good Reason, by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
B. Termination by Executive. The Employment Period and
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Executive's employment under the Employment Agreement may be terminated
effective immediately by Executive by written notice to the Board of
Directors of the Employer (i) within 30 days of the occurrence of a failure
of the Board of Directors of the Employer to elect Executive to offices with
the same or substantially the same duties and responsibilities as set forth
in Section 2 of the Employment Agreement, (ii) within 30 days of the
occurrence of a material failure by the Employer to comply with the
provisions of Section 3 of the Employment Agreement or a material breach by
the Employer of any other provision of the Employment Agreement, or (iii) at
any time during the 30 day period beginning on the effective date of a Change
in Control and the 30 day period beginning one year after the effective date
of a Change-in-Control.
C. Certain Benefits upon Termination by Executive. Except as
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specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation
and benefits to Executive under the Employment Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 3(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
1. The Employer shall pay the Executive (x) his or her
full Base Salary though the date of termination at the rate in effect on
such date, (y) compensation for accrued but unused vacation time, plus
(z) a pro rata portion of the Executive's incentive compensation for the
calendar year in which the event of termination occurs, assuming that
the Executive would have received incentive compensation for such full
calendar year equal to the product of (A) the Base Salary that would be
payable to the Executive pursuant to subsection 3(a) of the Employment
Agreement for such full calendar year and (B) the greater of (a) 1/2 or
(b) a percentage equal to the percentage of the Executive's Base Salary
for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive
compensation, and including shares of Common Stock) for the immediately
preceding fiscal year, expressed as a percentage (the greater of clauses
(a) and (b) being herein referred to as the "Deemed Bonus Percentage");
2. The Employer shall pay as severance to the Executive, not
later than the tenth day following the date of termination, a lump sum
severance payment (the "Severance Payment") equal to the aggregate of
all compensation due to the Executive hereunder had his or her
employment not been so terminated (without duplication of subsection
3(c)(i) above), including, without limitation, all incentive
compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of
this Agreement (as such Agreement may continue in effect under Section 2
hereof in the event of a Change-in-Control) assuming that the Executive
would have received incentive compensation for each calendar year
through the expiration of this Agreement (as such Agreement may continue
in effect under Section 2 hereof in the event of a Change-in-Control)
equal to the product of (A) the Base Salary payable to the Executive
pursuant to subsection 3(a) of the Employment Agreement for each such
calendar year and (B) the Deemed Bonus Percentage; provided, however,
that such Severance Payment shall not be payable to the Executive until
(x) the Executive has executed and delivered to the Employer a general
release in a form to be determined by the Employer in good faith, and
(y) any applicable revocation period with respect to such release has
expired. For purposes of determining Executive's annual compensation in
the preceding sentence, compensation payable to the Executive by the
Employer shall include every type and form of compensation includible in
the Executive's gross income in respect of his or her employment by the
Employer (including, without limitation, all income reported on an
Internal Revenue Service Form W-2), compensation income recognized as a
result of the Executive's exercise of stock options or sale of the stock
so acquired and including, without limitation, any annual incentive
compensation paid in cash or securities to such Executive;
3. An amount equal to the Additional Amount pursuant to
Section 5 below;
4. For the remaining term of the Employment Agreement,
Executive shall continue to receive all benefits described in Section 3
of the Employment Agreement existing on the date of termination and any
other benefits then provided by Employer to Executive in addition to
those described in Section 3 of the Employment Agreement, including, but
not limited to, the life insurance coverage provided by Employer to
Executive and the automobile provided by Employer to Executive and
automobile insurance and maintenance in respect of such automobile. For
purposes of the application of such benefits, Executive shall be treated
as if he or she had remained in the employ of the Employer with a Base
Salary at the rate in effect on the date of termination;
5. For purposes of any stock option plan of the Employer,
(x) any stock options or other awards (including restricted stock
grants) of the Executive under such plan shall vest and become
exercisable upon any such termination, and (y) Executive shall be
treated as if he or she had remained in the employ of the Employer for
the remaining term of the Employment Agreement after the date of
Executive's termination so that Executive shall be entitled to exercise
any exercisable options or other rights;
6. For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if he
or she had remained in the employ of the Employer for the remaining term
of the Employment Agreement after the date of Executive's termination so
that Executive may continue to receive all matching contributions as
provided by the Employer in connection with such plan or any other
contributions by Employer in connection with such plan as in effect
immediately prior to such termination;
7. The amount of any outstanding loans made by the Employer
to the Executive to acquire shares of Common Stock or units of limited
partnership interest in Reckson Operating Partnership, L.P., together
with any interest accrued on any such loans, and any related "tax" loans
made by the Employer to the Executive in respect of tax liabilities
owing as the result of the forgiveness of such loans (including
forgiveness pursuant to the terms of this Section 3(c)(vii)), together
with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect
thereof;
8. If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer may
not be paid or provided under such plan or program to Executive, or to
Executive's dependents, beneficiaries or estate, because Executive is no
longer considered to be an employee of the Employer, the Employer shall
pay or provide for payment of such benefits and service credits to
Executive, or to Executive's dependents, beneficiaries or estate, for
the remaining term of the Employment Agreement; and
9. Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will not
serve to reduce in any way the amounts and benefits payable in
accordance herewith.
IV. Expenses. Section 3(e) of the Employment Agreement is hereby
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amended by this Section 4. In addition to the expenses referred to in
Section 3(e) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer
against the Executive, unless and until such time that a final judgement has
been rendered in favor of the Employer and all appeals related to any such
action have been exhausted; provided however, that the circumstances set
forth above occurred on or after a Change-in-Control.
V. Additional Amount. Whether or not Section 3 is applicable, if in
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the opinion of tax counsel selected by the Executive and reasonably
acceptable to the Employer, the Executive has or will receive any
compensation or recognize any income (whether or not pursuant to this
Agreement, the Employment Agreement or any plan or other arrangement of the
Employer and whether or not the Employment Period or the Executive's
employment with the Employer has terminated) which will constitute an "excess
parachute payment" within the meaning of Section 280G(b)(1) of the Code (or
for which a tax is otherwise payable under Section 4999 of the Code), then
the Employer shall pay the Executive an additional amount (the "Additional
Amount") equal to the sum of (i) all taxes payable by the Executive under
Section 4999 of the Code with respect to all such excess parachute payments
and any such Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to any such Additional Amount. Any
amounts payable pursuant to this Section 4 shall be paid by the Employer to
the Executive within 30 days of each written request therefor made by the
Executive.
VI. Income Tax Payment. Whether or not Section 3 is applicable, if (i)
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the Executive has or will receive any compensation or recognize any income
(whether or not pursuant to this Agreement, the Employment Agreement or any
plan or other arrangement of the Employer and whether or not the Employment
Period or the Executive's employment with the Employer has terminated) in
connection with a "Change-in-Control" (as that term may be interpreted in
this Agreement, the Employment Agreement or any plan or other arrangement of
the Employer), and (ii) such compensation or income represents non-cash
compensation or income (including, without limitation, non-cash compensation
or income attributable to the vesting or exercise of stock options and other
awards (including restricted stock grants) under any stock option plan of the
Employer), then the Employer shall pay the Executive in cash an amount (the
"Income Tax Payment") equal to all federal, state and local income taxes
payable by Executive with respect to such non-cash compensation or income.
The Income Tax Payment shall be paid by the Employer to the Executive within
30 days of the written request therefor made by the Executive.
VII. Notices. Any notice required or permitted hereunder shall be in
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writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
VIII. Miscellaneous. This Agreement (i) may not be assigned by
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Executive without the prior written consent of the Employer and (ii) may be
assigned by the Employer and shall be binding upon, and inure to the benefit
of, the Employer's successors and assigns. Headings herein are for
convenience of reference only and shall not define, limit or interpret the
contents hereof.
IX. Amendment. This Agreement may be amended, modified or supplemented
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by the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
X. Severability. If a court of competent jurisdiction adjudicates any
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one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent)
to the extent necessary so that it shall be valid, legal and enforceable. If
it shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein,
and the parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
XI. Governing Law. This Agreement shall be construed and governed by
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the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
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Name:
Title:
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Xxxxxx X. Xxxxxxx
