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 terminate pursuant to this Section 7(d), and such event has not been
cured within thirty (30) days after such notice.  Employee’s continued employment during the
one hundred and twenty (120) day period referred to above in this Section 7(d),
shall not constitute consent to, or a waiver of rights with respect to, any act
or failure to act constituting Good Reason hereunder.


 


                               For
purposes of this Section 7(d), “Change in Control” shall mean the occurrence of
any one of the following:


 


                                              (i)
individuals who, as of January 1, 2001, constitute the Board (the “Incumbent
Trustees”) cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a trustee subsequent to January 1, 2001 whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Trustees then on the Board (either by a specific
vote or by approval of the proxy statement of Employer in which such person is
named as a nominee for trustee, without objection to such nomination) shall be
an Incumbent Trustee, provided, however, that no individual initially elected
or nominated as a trustee of 


 


 


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Employer as a result of an actual or threatened
election contest with respect to trustees or as a result of any other actual or
threatened solicitation of proxies by or on behalf of any person other than the
Board shall be an Incumbent Trustee.


 


                                              (ii)
any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes, after January 1, 2001, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Employer representing 30% or more of the combined
voting power of Employer’s then outstanding securities eligible to vote for the
election of the Board (the “Employer’s Voting Securities”), provided, however,
that an event described in this paragraph (ii) shall not be deemed to be Change
in Control if any of the following becomes such a beneficial owner:  (A) Employer or any majority-owned subsidiary
(provided, that this exclusion applies solely to the ownership levels of
Employer or the majority-owned subsidiary), (B) any tax-qualified, broad-based
employee benefit plan sponsored or maintained by Employer or any majority-owned
subsidiary, (C) any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) any person pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)), (E) Employee or any group of
persons including Employee (or any entity controlled by Employee or any group
of persons including Employee) or (F) (i) any of the partners (as of January 1,
2001) in Interstate Properties (“Interstate”) including immediate family
members and family trusts or family-only partnerships and any charitable
foundations of such partners (the “Interstate Partners”), (ii) any entities the
majority of the voting interests of which are beneficially owned by the
Interstate Partners, or   (iii) any “group”
(as described in Rule 13d-5(b) (i) under the Exchange Act) including the
Interstate Partners, provided, that the Interstate Partners beneficially own a
majority of Employer’s Voting Securities beneficially owned by such group (the
persons in (i), (ii) and (iii) shall be individually and collectively referred
to herein as, “Interstate Holders”);


 


                                              (iii)
the consummation of a merger, consolidation, share exchange or similar form of
transaction involving Employer or any of its Subsidiaries, or the sale or other
disposition of 


 


 


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all or substantially all of Employer’s assets (a “Business
Transaction”), unless immediately following such Business Transaction (y) more
than fifty percent (50%) of the total voting power of the entity resulting from
such Business Transaction or the entity acquiring Employer’s assets of the
Operating Partnership in such Business Transaction (the “Surviving Corporation”)
is beneficially owned, directly or indirectly, by the Interstate Holders or
Employer’s shareholders immediately prior to any such Business Transaction, and
(z) no person (other than the persons set forth in clauses (A), (B), (C), or
(F) of paragraph (ii) above or any tax-qualified, broad-based employee benefit
plan of the Surviving Corporation or its Affiliates) beneficially owns,
directly or indirectly, 30% or more of the total voting power of the Surviving
Corporation (a “Non-Qualifying Transaction”); or


 


                                              (iv)
Board approval of a liquidation or dissolution of Employer, unless the voting
common equity interests of an ongoing entity (other than a liquidating trust)
are beneficially owned, directly or indirectly, by Employer’s shareholders in
substantially the same proportions as such shareholders owned Employer’s
outstanding voting common equity interests immediately prior to such
liquidation and such ongoing entity assumes all existing obligations of
Employer under this Agreement and any equity grant.


 


 


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                               (e)           Termination by Employee Other Than
Pursuant to Section 7(d).  Employee
may terminate this Agreement and Employee’s employment hereunder at any time,
for any reason upon ninety (90) days’ prior written notice to Employer.


 


                               (f)           Death Benefit.  Notwithstanding any other provision of this
Agreement, the Period of Employment shall terminate on the on the date of
Employee’s death.  In such event, (i)
Employee’s estate shall be paid the amount specified in Section 7(g)(i) below
and one (1) times Employee’s annual rate of Base Salary and (ii) Employer shall
provide Employee’s spouse and dependents with welfare benefits as provided in
Section 7(g)(ii) for one (1) year from the date of death.


 


                               (g)          Termination Compensation.  Upon the termination of the Period of
Employment and Employee’s employment hereunder (including any nonextension of
the Period of Employment), Employer shall provide Employee with the payments
and benefits set forth below.  Employee
acknowledges and agrees that the payments and benefits set forth in this
Section and elsewhere herein and in other written grants and agreements
constitute liquidated damages for termination of his employment hereunder
(including any nonextension of the Period of Employment).


 


                                              (i)  Upon a termination of the Period of
Employment and Employee’s employment hereunder, Employee shall be entitled to
promptly receive (A) his Base Compensation through the effective date of
termination, (B) if such termination is other than pursuant to Section 7(b)
hereof, any annual earned bonus for any completed fiscal year, (C) if such
termination is pursuant to Sections 7(a), 7(c) or 7(d) hereof, a pro rata share
of Employee’s annual target bonus for the fiscal year of termination, (D) the
benefits, fringes and perquisites, including without limitation accrued
vacation (provided that if the termination is pursuant to Section 7(b) or 7(e)
hereof, only such payment of accrued vacation as is required by law or Employer’s
vacation policy), provided pursuant to Section 6 hereof up to the effective
date of such termination and (E) any other amount due to Employee under any
other program or plan of Employer.


 


                                              (ii)
In the event of a termination of the Period of Employment and 


 


 


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Employee’s employment pursuant to Section 7(a)
(such reference shall include, without limitation, a nonextension by Employer
of this Agreement) or 7(d) hereof, Employee shall also be entitled to (A)
receive  an amount (the “Severance Amount”)
equal to the sum of (x) three times Employee’s annualized Base Compensation (as
in effect on the date of such termination or, if greater, immediately prior to
the Good Reason event, if any, based on which the termination of employment
occurs) and (y) three times Employee’s Bonus Severance Amount (as defined
herein).  The “Bonus Severance Amount”
shall mean an amount equal to the average of all annual bonuses earned by the
Employee from Employer in the two (2) fiscal years ending immediately prior to
Employee’s termination; provided, however, that if Employee’s termination
occurs during fiscal 2001, the “Bonus Severance Amount” shall be the higher of
Employee’s annual bonus amount for the 2000 fiscal year or Employee’s annual
target bonus for 2001 (the Severance Amount shall be payable in a lump sum
within thirty (30) days of such termination) and (B) Employee shall become
fully vested in any stock options granted to Employee by the Board.  In the event of a termination pursuant to
Section 7(a), 7(c) or 7(d) hereof, Employee (his spouse and his dependents, if
applicable) shall also be entitled to continue to participate in the medical,
dental, hospitalization and life insurance programs existing on the date of
termination (or any replacement plans for any such plans) with regard to senior
executive officers of a similar level (or their cash equivalents, and, if
Employer provides a cash payment in lieu of such benefits, it shall be
calculated on a grossed-up tax basis as if Employee had remained an employee)
for three (3) years from the date of termination; provided, that Employee shall
be obligated to make all employee contributions required to receive such
benefits under Employer’s programs and that such continued benefits shall
terminate on the date or dates Employee receives equivalent coverage and
benefits, without waiting period or pre-existing conditions limitations, under
the plans and programs of a subsequent employer (such coverage and benefits to
be determined on a coverage-by-coverage or benefit-by-benefit, basis).  Employee shall not be entitled to any
compensation or benefits pursuant to this Section 7(g)(ii) if his employment
hereunder is terminated pursuant to Section 7(b) or as a result of Employee’s
voluntary termination pursuant to Section 7(e).


 


 


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                               (h)          No Mitigation.  All amounts due hereunder shall be paid
without any obligation to mitigate and such amounts shall not be reduced by or
offset by any other amounts earned by Employee or any claims of Employer.


 


                               8.            Non-Competition and
Non-Disclosure.


 


                               In
consideration of the benefits to be provided to Employee hereunder, Employee
covenants that he will not, without the consent in writing of Employer, (a)
during the Period of Employment and the twelve (12) month period following his
termination of employment for any reason other than pursuant to Section 7(c)
hereof, Employee will not engage in any business otherwise competitive with
that of Employer or any of its subsidiaries in the States of New Jersey, New
York, Pennsylvania, Maryland, Massachusetts and Connecticut; and (b) upon
termination of the Period of Employment for any reason whatsoever, Employee
will not for a period of two years thereafter, (i) solicit or aid in soliciting
any employees of Employer or its subsidiaries to leave their employment, or
(ii) copy, remove from Employer or its subsidiaries, disclose or make any use
of, any client list, confidential business information with respect to clients,
material relating to the practices or procedures of Employer or its
subsidiaries, or any other proprietary information.  Employee acknowledges that the restrictions,
prohibitions and other provisions of this Section 8 are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of the Employer and are a material inducement to the
Employer to enter into this Agreement. 
It is the intention of the parties hereto that the restrictions
contained in this paragraph be enforceable to the fullest extent permitted by
applicable law.  Therefore, to the extent
any court of competent jurisdiction shall determine that any portion of the
foregoing restrictions is excessive, such provision shall not be entirely void,
but rather shall be limited or revised only to the extent necessary to make it
enforceable.  Should Employee engage in
or perform, directly or indirectly, any of the acts prohibited by Section 8
hereof, it is agreed that the Employer shall be entitled to full injunctive
relief, to be issued by any competent court of equity, enjoining and restraining
Employee and each and every other person, firm, organization, association, or
corporation concerned therein, from the continuance of such violative
acts.  The foregoing remedy available to
Employer shall not 


 


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be deemed to limit or prevent the exercise by the
Employer of any or all further rights and remedies which may be available to
the Employer hereunder or at law or in equity.


 


                               9.            Burden and Benefit.


 


                               This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, personal and legal representatives,
successors and assigns.  In the event of
the death of Employee at or after his termination, any amounts due hereunder
shall be paid to his estate unless he has designated a beneficiary.


 


                               10.          Legal Fees and Expenses.


 


                               If
any contest or dispute shall arise between Employer and Employee regarding any
provision of this Agreement or any equity grant or other agreement or
compensation arrangement specifically set forth or provided for herein,
Employer shall reimburse Employee for all legal fees and expenses reasonably
incurred by Employee in connection with such contest or dispute, but 


 


 


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only if Employee is successful in respect of
substantially all of the Employee’s claims brought and pursued in connection
with such contest or dispute.  Such
reimbursement shall be made as soon as practible following the resolution of
such contest or dispute (whether or not appealed) to the extent Employer
receives reasonable written evidence of such fees and expenses.


 


                               11.          Governing Law.


 


                               This
Agreement is governed by and is to be construed and enforced in accordance with
the laws of the State of New Jersey.  If
under such law any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation or ordinance, such
portion shall be deemed to be modified or altered to conform thereto or, if
that is not possible, to be omitted from this Agreement; and the invalidity of
any such portion shall not affect the force, effect and validity of the
remaining portion  hereof.


 


                               12.          Notices.


 


                               All
notices under this Agreement shall be in writing and shall be deemed effective when
delivered in person (in the Employer’s case to its Secretary) or twenty-four
(24) hours after deposit thereof in the U.S. mails, postage prepaid, for
delivery as registered or certified mail—addressed, in the case of Employee, to
him at his residential address, and in the case of Employer, to its corporate
headquarters, attention of the Secretary, or to such other address as  Employee or Employer may designate in writing
at any time or from time to time to the other party.  In lieu of notice by deposit in the U.S.
mail, a party may give notice by telegram or telex.


 


 


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                               13.          Amendment.


 


                               No
provisions of this Agreement may be amended, modified, or waived unless such
amendment or modification is agreed to in writing signed by Employee and by a
duly authorized officer of the Employer, and such waiver is set forth in
writing and signed by the party to be charged. 
No waiver by either party hereto at any time of any breach by the other
party hereto  of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.


 


                               14.          Survival.


 


                               The
respective obligations of, and benefits afforded to, Employee and Employer as
provided in Section 8 of this Agreement shall survive the termination of this
Agreement.


 


                               15.          No Conflict of Interest.


 


                               During
the Period of Employment, Employee shall not directly, or indirectly render
service, or undertake any employment or consulting agreement with another
entity without the express written consent of the Board of Trustees of the
Employer.


 


                               16.          Counterparts.


 


                               This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one of the
same instrument.


 


                               17.          Section Headings.


 


                               The
section headings in this Agreement are for convenience of reference only, and
they form no part of this Agreement and shall not affect its interpretation.


 


 


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                               18.          Miscellaneous.


 


                               This
Agreement constitutes the entire understanding between Employer and Employee
relating to employment of Employee by Employer and supersedes and cancels all
prior written and oral agreements and understandings with respect to the
subject matter of this Agreement.  Any
prior agreement of the parties hereto in respect of the subject matter
contained herein is hereby terminated and canceled.


 


                               IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year
and day first above written.


 


	
   

  	
  VORNADO REALTY TRUST and

  
	
   

  	
  VORNADO REALTY LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven Roth

  
	
   

  	
   

  	
  Steven Roth

  
	
   

  	
   

  	
  Title: Chairman of the Board of Trustees

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Joseph Macnow

  
	
   

  	
   

  	
  Joseph Macnow

  



 


 


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                    Amendment to
AGREEMENT, dated 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”).


 


The following paragraph
shall replace and supersede Paragraph 5 in its entirety.  In all other respects the Agreement dated as
of January 1, 2001 remains in full force and effect


 


5.                           Stock Options


                    During
each year in the Period of Employment that the Employer shall grant Executive
Vice Presidents of the Company stock options, the Employer shall grant Employee
share options to purchase not less than 75,000 shares of Employer’s Common
Shares of Beneficial Interest (“Stock”) pursuant to the terms of the Employer’s
2002 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.


 


                    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year
and day first above written.


	
   

  	
  VORNADO REALTY TRUST AND

  	
   

  
	
   

  	
  VORNADO REALTY LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Roth

  	
   

  
	
   

  	
   

  	
  Steven Roth

  	
   

  
	
   

  	
   

  	
  Title: Chairman of the Board of Trustees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Joseph Macnow

  	
   

  
	
   

  	
   

  	
  Joseph Macnow