Document:

Exhibit

Exhibit 10.23

GENERAL RELEASE AND WAIVER

		
	1.
	This General Release and Waiver (“General Release”) is given by Peter Sachse  (“Executive”) to the Released Parties as defined below in this paragraph 1.  This General Release will also be binding on Executive’s heirs, successors, assigns, agents, executors, and administrators.  This General Release releases Macy’s, Inc. (“Macy’s”), all of its predecessors, successors, and assigns, divisions, subsidiaries, facilities, related or affiliated entities, (collectively referred to as “the Company”), and all of their respective current and former officers, directors, shareholders, employees, insurers, agents, and counsel, including, without limitation, any and all current and former management and supervisory employees (hereinafter collectively referred to as the “Released Parties”).

		
	2. 
	The Company advises Executive to consult with an attorney prior to executing this General Release.  Executive acknowledges that Executive has been advised by the Company, in writing, to consult with legal counsel of Executive’s choosing and that Executive has had the opportunity to consult counsel, if Executive chose to do so.  Executive acknowledges that Executive is responsible for any costs and fees resulting from Executive’s attorney or any other advisor reviewing this General Release.

		
	3. 
	The Company hereby advises Executive that Executive will not be eligible to receive benefits under any other severance plan if Executive elects to receive benefits under the MACY’S, INC. EXECUTIVE SEVERANCE PLAN (the “Plan”) by signing this General Release.

		
	4.
	To the extent applicable, it is intended that the payments under the Plan be in full compliance with Section 409A.  The Company will not make any payments which it believes will violate Section 409A. The Company may at any time amend or terminate the benefits under the Plan to comply with Section 409A of the Internal Revenue Code.  No amendment or termination may be made or effected if it would cause the Plan to fail to comply.  Executive’s termination of employment shall be treated as an involuntary separation from service for purposes of 409A of the Internal Revenue Code of 1986, as amended. 

		
	5.
	As consideration for Executive’s promises set forth in this General Release, the Company has agreed to provide the Executive with the benefits under the Plan. Employee acknowledges that the benefits provided under the Plan are more than the Company is otherwise obliged to provide to Executive.  Executive acknowledges and agrees that Company has paid Executive any outstanding amounts owed to Executive.

		
	6. 
	In consideration for the payment of benefits provided to Executive upon Executive’s separation from employment, as described in the Plan, and pursuant to the terms of this General Release, Executive releases and discharges forever the Released Parties of and from all actions, causes of action, claims, demands, costs, and expenses for damages, known or unknown, which Executive had or now has or may have against the Company or any of the Released Parties.  This release includes, but is not limited to:  (a) any claim of age discrimination under the Age Discrimination in Employment Act, as amended, or under any other state or local statute, ordinance, order, or law; (b) any claim of discrimination on any other basis, including, without limitation, race, color, national origin, sex, sexual orientation, gender identity, religion, age, disability, military status, veteran status, marital status, political affiliation, appearance, or any other characteristic (including but not limited to status as a “whistleblower”), under any federal, state, or local statute, ordinance, order, or law, including but not limited to the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Older Worker’s Benefit Protection Act of 1990, the Family and Medical Leave Act, the Equal Pay Act, the Lilly Ledbetter Fair Pay Act of 2009, the Pregnancy Discrimination Act of 1978, and the laws in the state in which Executive worked for the Company, all as the same may have been from time-to-time amended; (c) any other claim relating to Executive’s employment, the termination of Executive’s employment, or the Released Parties’ failure to reemploy the Executive, under any federal, state, or local statute, law, or ordinance, as amended, and the Worker Adjustment and Retraining Notification Act; (d) any claim under any contract, tort, or any other state, local, or federal statutory or common law, including but not limited to any claim that the Released Parties, jointly or severally, breached any contract or promise, express or implied, or any term or condition of Executive’s employment, and any claim for promissory estoppel or wrongful discharge arising out of Executive’s employment with the Company or any of the Released Parties and/or the termination of such employment; (e) any claim arising under the Company’s internal dispute resolution 

program, Solutions InSTORE; and (f) any claim for severance benefits except as provided by the Plan.  Except as provided in paragraph 7 hereof, this General Release is intended to cover all possible legal and/or equitable relief, including, but not limited to, reinstatement, wages, back pay, front pay, benefits, perquisites, compensatory damages, punitive damages, liquidated damages, damages for pain or suffering, damages for emotional distress, damages for loss of consortium, and attorneys’ fees.  Executive further agrees not to file any lawsuit against the Released Parties that Executive has released in this General Release.  Notwithstanding the foregoing and while Executive acknowledges and understands that by this General Release Executive foregoes, among other things, any and all past and present rights to recover money damages arising out of Executive’s employment and termination, the parties agree that this General Release shall not preclude Executive from filing any charge with the EEOC (or other governmental agency) or from in any way participating in any investigation, hearing, or proceeding of the EEOC (or other governmental agency).  

7.    This General Release does not waive any claims that cannot be lawfully waived.  
		
	a.
	This General Release does not waive or release any rights or claims that Executive may have under the Age Discrimination in Employment Act, as amended, that arise after the date that Executive executes this General Release.  

		
	b.
	Nor shall this General Release have any effect on Executive’s rights, if any: (i) accrued and vested prior to the employment termination date under the Company's ERISA benefit plans; (ii) brought pursuant to the terms of an ERISA plan; or (iii) arising under the provisions of Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as the same have been amended, to continue coverage after the employment termination date under the Company's health plans.

		
	8.
	If and only if, Executive is a California based employee, Executive acknowledges and agrees that all rights Executive enjoys pursuant to Section 1542 of the California Civil Code are hereby expressly waived by Executive.  Said Section reads as follows:

“Section 1542.  [Certain claims not affected by general release.]  A general release does not extend to claims which [you do] not know or suspect to exist in [your] favor at the time of execution of the release, which if known to [you] must have materially affected [your] settlement with [us].”

Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of all claims, Executive expressly acknowledges that this General Release is intended to include in its effect, without limitation, all claims which Executive does not know or suspect to exist in Executive’s favor against the Released Parties at the time of execution hereof, and that the benefits provided to Executive pursuant to paragraph 5 above, contemplates the extinguishment of any such claim or claims with respect to Executive’s employment with Company.

		
	9.
	Executive agrees that he or she has terminated or will terminate employment with the Company and that his or her last day of employment will be a date decided upon by the Company (the “Release Date”).  The Executive will return (or has returned) all property of the Company, including but not limited to any Company electronic devices such as laptops, cell phones, smart phones, PDAs, security ID tokens, keys, identification, and any Company business or proprietary information in his or her possession, by no later than his or her Release Date.

		
	10.
	Executive acknowledges that the provision of the consideration referenced in the Plan above is conditioned upon the promises in this General Release and is not normally available under Company policy or any other plan or program of the Released Parties.  Executive further acknowledges that such payment does not constitute an admission by the Company or any of the Released Parties of liability or of violation of any applicable law or regulation.  The Company and the other Released Parties expressly deny any such liability or such alleged violation and state that payment has been made solely for the purpose of compromising any and all claims of the Executive without the cost and burden of litigation.

		
	11.
	Executive agrees that all provisions, terms and conditions of this General Release are and shall remain confidential and shall not be disclosed to any person not a party hereto under any circumstances, except as required by court order or other compulsory legal process.  Neither Executive nor anyone on Executive’s behalf shall communicate, either orally or in writing, with any print or broadcast media about any matter arising out of Executive’s employment with the Company and/or Executive’s involuntary termination from the Company.  Notwithstanding the foregoing, the parties hereto expressly agree that Executive may disclose the provisions, terms and conditions of this General Release to Executive’s immediate family, attorney(s), and/or financial advisor(s).

		
	12.
	Executive agrees that this General Release reflects the complete agreement between the parties hereto and that there are no written or oral understandings, promises, or agreements related to this General Release that have been made to Executive except those contained in this General Release.  Executive further agrees that the General Release fully supersedes any and all prior agreements or understandings concerning the subject matter of this release, to the extent that any such prior agreements or understandings exist.

		
	13.
	Executive hereby agrees:

		
	a.
	Pending or threatened litigation:  to make himself or herself available upon reasonable notice to discuss with Macy’s and its counsel, issues related to litigation or potential litigation, to appear without subpoena for deposition or testimony, to meet with Macy’s attorneys for deposition preparation and trial preparation and to submit receipts for actual expenses, if any, for reimbursement in accordance with the Company’s expense reimbursement policy. 

		
	b.
	No-solicit:  during a period of two years  beginning on the Executive’s Release Date (the “No-recruit period”), that the Executive will not actively, in personal conversation or by telephone, in writing (including but not limited to via electronic communications) or by any other medium, either directly or indirectly, without written permission from the Company, solicit any person that Executive knows or should reasonably know to be an employee of the Company or any of its subsidiaries, divisions, or affiliates (whether such employees are now or hereafter through the No-recruit period so employed or engaged) to terminate their employment with the Company or any of its subsidiaries, divisions, or affiliates, and commence employment at, or provide services to, any other business enterprise.  

		
	c.
	Confidential and Proprietary Information: that Executive will not disclose any confidential or proprietary information belonging to the Company and obtained by Executive or to be obtained by Executive in the course of employment with the Company. The Company specifically acknowledges that since Executive has been involuntarily terminated, Executive shall be free to work for a Competing Business, as that term is defined in the Plan.

		
	d.
	Non-disparagement:  that Executive will take no action which is intended to, or would reasonably be expected to, harm the Released Parties, impair their reputations, or lead to unwarranted or unfavorable publicity regarding the Released Parties.  The prohibition in this paragraph 13.d does not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process. In the event of such government inquiry or compulsory legal process requiring comments about any Released Party, Executive agrees to promptly notify the Company in advance of any such disclosures and provide the details of the government inquiry or compulsory legal process in order to enable the Company to consider objecting to any such disclosure.

		
	14.
	The Company hereby informs Executive that the consideration recited in this General Release is being offered as part of the MACY’S, INC. EXECUTIVE SEVERANCE PLAN.  The Company further informs Executive of the following:

		
	a.
	As specified in the Plan: (i) The amount of the severance benefit payable under the Plan is equal to twenty four times Executive’s monthly base salary rate in effect at the time of Executive’s termination of employment; and (ii) The severance benefit will not be provided to an Executive who is otherwise entitled to benefits under the Plan if the Executive is offered a substantially equivalent position by, or accepts any position with, a Macy’s, Inc. division, subsidiary, facility, or related or affiliated entity prior to the employee’s receipt of severance benefits hereunder.  For purposes of this provision, a newly offered position is considered substantially equivalent to the Executive’s former position if the work site of the new position is within twenty-five (25) miles, one way, of the work site of the former position, the new position does not require a reclassification from full-time to part-time status, and the annual base salary for the new and former positions are substantially comparable. 

		
	b.
	In order to accept the Offer, an eligible employee must execute and return to the Company (and not revoke) this General Release within twenty-one (21) days as set forth in paragraph 15 below.

		
	c.
	If an Executive who is entitled to benefits under the Plan dies following Executive’s termination from employment, but prior to receipt of the severance payment provided under the Plan, payment shall be made to Executive’s estate, provided, however, if Executive dies before having signed the Release, payment shall be made to Executive's estate if and only if, no later than 70 days after the Executive’s termination of 

employment, the estate representative shall have signed the Release and such Release shall have become irrevocable.
    
		
	15.
	Executive acknowledges that Executive has twenty-one (21) calendar days from the date that this General Release was first given to Executive to read and consider it before executing it, although Executive could have executed it at any time within those twenty-one (21) calendar days.  Executive agrees that any changes to this General Release do not restart the twenty-one (21) day consideration period.  Executive agrees that Executive has carefully read this General Release and knows and understands its contents, and that Executive signs this General Release knowingly and voluntarily.  This General Release was voluntarily entered into without fraud, duress, or coercion, and with full understanding of its significance, effects, and consequences, and Executive fully intends to be bound by its terms.

		
	16.
	The Executive may revoke and cancel this General Release by providing notice of revocation to the Company in writing at any time within seven (7) calendar days after his or her execution of this General Release.  The written notice of revocation must be personally delivered or sent by first class mail, postage prepaid, or by certified mail to William Tompkins, Senior Vice President, Human Resources, located at 7 West Seventh Street, Cincinnati, OH 45202, within seven (7) calendar days after Executive’s execution of this General Release.  If mailed, the date of the postmark or certification will be used to determine the date of revocation.  If Executive does so revoke by personal delivery or mail, this General Release will be null and void and the Company shall have no obligation whatsoever pursuant to this General Release to provide the consideration referenced in paragraph 5.  This General Release shall not become effective and enforceable until after the expiration of this seven (7) day revocation period; after such time, if there has been no revocation, the General Release shall be fully effective, enforceable, and irrevocable.

		
	17.
	If any provision of this General Release is declared invalid or unenforceable, the remaining portions of the General Release shall not be affected thereby and shall be enforced, provided, however, if the Executive’s obligations as set forth in paragraphs 6 and 8 (or any part of it) is declared invalid, the General Release is nullified in its entirety and Company is not obligated to make any payment to Executive

		
	18.
	This General Release shall be governed by the laws of the State of Ohio, without regard to conflict of laws principles. 

The undersigned,      Peter R. Sachse     , has executed this General Release and Waiver on this    9th    day of      January     , 2017.

PLEASE CONSULT WITH AN ATTORNEY AND READ CAREFULLY BEFORE SIGNING.  THIS DOCUMENT CONTAINS A RELEASE AND WAIVER OF ALL KNOWN AND UNKNOWN CLAIMS AND RIGHTS.

    /s/  PETER R. SACHSE     
Executive’s Signature

    
        Peter R. Sachse              
Print Name 

ADDENDUM TO GENERAL RELEASE AND WAIVER

In addition to the consideration being provided pursuant to the provisions of the MACY’S, INC. EXECUTIVE SEVERANCE PLAN (the “Plan”) and Executive’s acknowledgement in paragraph 5 above that the benefits provided under the Plan and in this Addendum are more than the Company is otherwise obliged to provide to Executive, the Company and Executive hereby agree that:

		
	A)
	In connection with Executive’s employment by Macy’s, Executive has been:

		
	i.
	exposed to trade secrets and confidential business and technical information and strategies that provide Macy’s with a legitimate competitive advantage in the conduct of its business; and 

		
	ii.
	brought into contact with existing and potential Customers, suppliers and vendors of Macy’s. In addition, the business of Macy’s is highly competitive.  Macy’s devotes a substantial amount of time, effort and money to the development and maintenance of its Confidential Information and Customers and Macy’s Confidential Information and Customer information constitute valuable assets of Macy’s.

		
	1)
	“Customer” means any person or entity which at the time of Executive’s cessation of employment with Macy’s is, or was within two years prior to such cessation of employment, a prospective or existing customer of Macy’s.

		
	2)
	“Confidential Information” means any data or information that is material to Macy’s and not generally known to the public, including, without limitation:  (i) price, cost, and sales data; (ii) the identities and locations of vendors and consultants furnishing materials and services to Macy’s and the terms of vendor or consultant contracts or arrangements; (iii) lists and other information regarding Customers and suppliers; (iv) financial information that has not been released to the public; (v) future business plans, marketing or licensing strategies, and advertising campaigns; or (vi)  information about Macy’s employees and executives, as well as Macy’s talent strategies including but not limited to compensation, retention and recruiting initiatives.

		
	B)
	In exchange for the additional remuneration detailed in this Addendum, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Executive agrees that for the thirty-six (36) month period beginning on the date that Executive’s employment with Macy’s ceases, Executive shall not act in any capacity (whether as an employee, agent, consultant, advisor, independent contractor, proprietor, partner, officer, director, manager, owner, financer, joint venturer or otherwise), for:

		
	i.
	any of the following named companies, or any other business into which such company is merged, consolidated, or otherwise combined: Abercrombie & Fitch; Bed, Bath & Beyond; Belk’s; Burlington Coat Factory; Bon-Ton Stores; Dillard’s; The Gap; J.C. Penney; Kohl’s; Limited Brands; Nordstrom; Neiman-Marcus; Ross Stores; Saks; Sears; Target; TJX; and Walmart, and the subsidiaries, affiliates and successors of each such company; or

		
	ii.
	a Restricted Business.  A “Restricted Business” means any business or enterprise engaged in the business of retail sales that had annual revenues for its most recently completed fiscal year of at least $2.5 billion; and both (i) offers a category or categories of merchandise (e.g., Fine Jewelry, Cosmetics, Kids, Big Ticket, Housewares, Men’s, Dresses), any of which are offered by Macy’s, and (ii) the revenue derived by such other retailer during such retailer’s most recently ended fiscal year from such category or categories of merchandise represent(s), in the aggregate, more than 50% of Macy’s total revenues for the most recently completed 

fiscal year derived from the same category or categories of merchandise. The determination of whether a business meets the definition of “restricted business” shall occur at the time Executive begins employment and not thereafter should the revenues grow to exceed 2.5 billion.

It is acknowledged and understood that passive investment elections and holdings that are part of mutual funds and other similar investments are not subject to the noncompetition restrictions contained herein. Similarly, direct ownership by Executive of less than 1% of any publically traded company or private equity entity is not subject to the noncompetition restrictions contained herein so long as such ownership interest is a purely passive investment and Executive provides no advice, counsel, direction or assistance regarding any entity as described in the noncompetition restrictions contained herein. 

		
	C)
	upon the Executive’s termination of employment, the Company shall pay to Executive a lump sum of Two Million Seven Hundred Thousand Dollars and No Cents ($2,700,000.00), less withholding for applicable taxes. For the avoidance of doubt, Executive’s Release Date as set forth in Paragraph 9 of the General Release is January 30, 2017.  This payment will be made at the same time as the payment pursuant to paragraph 14a of the General Release is made;

		
	D)
	on the date bonuses under the Company’s Senior Executive Incentive Compensation Plan are normally paid to employees, but no later than April 15, 2017, the Company shall pay to Executive a lump sum payment, less withholdings for applicable taxes, equivalent to the amount, if any, that would have been paid to Executive under the Company’s Senior Executive Incentive Compensation Plan for fiscal 2016 (the “2016 Bonus Amount”), it being acknowledged and agreed that for purposes of calculating the 2016 Bonus Amount Executive shall be: (i) deemed to have remained employed with the Company through March 2017 (or such later date as is required to receive such 2016 Bonus Amount), and (ii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company.  Executive agrees and acknowledges no other annual bonus awards or payments are due or owing to Executive under any bonus or incentive plan of the Company (other than as specifically set forth herein or as otherwise vested under such plans);

		
	E)
	Executive shall receive the shares of Common Stock payable with respect to Performance Restricted Stock Units (“PRSUs”) granted in 2014, 2015 and 2016 under the Amended and Restated 2009 Omnibus Incentive Compensation Plan, less withholdings for applicable taxes, as set forth below.  The shares of Common Stock shall be paid to the Executive on the date such shares normally would be paid to employees under the Amended and Restated 2009 Omnibus Incentive Compensation Plan: 

		
	i.
	with respect to the 2014 – 2016 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2017 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company and (iv) the Compensation and Management Development Committee of the Macy’s, Inc. Board of Directors certifies performance results related to such performance period and PRSUs and authorizes such PRSU payouts at its February 2017 meeting; 

		
	ii.
	with respect to the 2015 – 2017 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2018 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive 

shall be treated no less favorably than other similarly situated senior executive officers of the Company and (iv) the Compensation and Management Development Committee of the Macy’s, Inc. Board of Directors certifies performance results related to such performance period and PRSUs and authorizes such PRSU payouts at its February 2018 meeting; and
		
	iii.
	with respect to the 2016 – 2018 performance period, it being acknowledged and agreed that (i) Executive shall be deemed to have remained employed with the Company through the February 2019 vesting date (or such later vesting date as is required in order to receive full vesting), (ii) there are no individual goals and/or targets required to be achieved by Executive in order to receive full vesting shall be deemed to have been achieved in full, (iii) Executive shall be treated no less favorably than other similarly situated senior executive officers of the Company and (iv) the Compensation and Management Development Committee of the Macy’s, Inc. Board of Directors certifies performance results related to such performance period and PRSUs and authorizes such PRSU payouts at its February 2018 meeting.

		
	F)
	all unvested stock option awards will continue to vest on the anniversary of their grant dates through March 31, 2019, as if Executive remained employed with the Company through such date.  All stock options that are vested as of March 31, 2019 shall be exercisable by Executive for the full term of each such stock option as if Executive remained in the continuous employ of the Company.  Any stock option that is not vested as of  March 31, 2019, shall be forfeited;

		
	G)
	within 30 days after the Executive’s execution of this General Release, the Company shall reimburse Executive for attorneys’ fees incurred in connection with Executive’s termination up to a maximum of Ten Thousand Dollars and No Cents ($10,000.00); and

		
	H)
	if Executive is eligible for and elects either COBRA health care continuation coverage or retiree health care benefits, the Company will pay the entire premium (both the employer and employee portions and any administrative fee applicable to COBRA recipients) for an eighteen (18) month period.  If applicable, this Company-paid eighteen (18) month period shall count towards the maximum eighteen (18) month period of COBRA health care continuation coverage.  This subsidy will apply only if Executive elects such coverage, completes and submits the applicable paperwork, remains eligible for this coverage during the applicable period, and does not become enrolled in other health care coverage.  Executive may elect COBRA health care continuation coverage or retiree health care benefits, but not both; 

		
	I)
	upon the Executive’s termination of employment, the Company shall reimburse Executive up to a maximum of Twenty-five Thousand Dollars and No Cents ($25,000.00), for outplacement services provided by a third-party selected by Executive.  Such expenses shall be reimbursed by the Company as soon as practical after receiving proof of the expenses from the Executive, but in no event shall such services be utilized later than December 31, 2017;

		
	J)
	For the avoidance of doubt, Executive may retain his Company issued smart phone and Executive is permitted to maintain his personal contacts without violating the restrictions in paragraph 9 of the General Release so long as Executive has not stored any confidential Company information on such device; 

		
	K)
	For the avoidance of doubt, the matters subject to the obligations set forth in paragraph 13a relate to matters that occurred during Executive’s employment tenure with the Company;.

		
	L)
	For the avoidance of doubt, the restrictions in paragraph 13b do not apply to general advertisements not targeted at the Company’s employees and requests for references by the Company’s employees;

		
	M)
	Notwithstanding the provisions in paragraph 13c of the General Release, the prohibitions expire ten (10) years from Executive’s Release Date and do not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process. In the event of such government inquiry or compulsory legal process requiring comments about any party or Released Party, Executive agrees to promptly notify the Company in advance of any such disclosures and provide the details of the government inquiry or compulsory legal process in order to enable the Company to consider objecting to any such disclosure.  In addition, the Company’s senior executives will not make disparaging remarks about or in any other way condone or seek by word or act to harm or impair Executive’s reputation, provided that the prohibition in this paragraph expire ten (10) years from Executive’s Release Date and does not apply to communications with administrative or other governmental authorities or in response to valid compulsory legal process, including, but not limited to a subpoena. In the event of such government inquiry or compulsory legal process requiring comments about Executive, the Company shall promptly notify Executive in advance of any such disclosures and provide Executive the details of the government inquiry or compulsory legal process in order to enable Executive to consider objecting to any such disclosure; and

		
	N)
	This General Release and Addendum does not waive or release any rights to:  (i) any indemnification rights under the Company’s by-laws, charters, Directors and Officers liability insurance policies or any other documents or instruments relating to indemnification or otherwise under the law; (ii); payment of five (5) weeks of retiree Paid Time Off in accordance with Company policy; and (iii) enforce this General Release and Addendum.

 

This Addendum shall not become effective and enforceable until after the expiration of the seven (7) day revocation period set forth in paragraph 16 above; after such time, if there has been no revocation, the Addendum shall be fully effective, enforceable, and irrevocable.

Executive and the Company have read the foregoing Addendum and indicate knowing and voluntary agreement to its terms.

	
				
	           January 9, 2017     
	 
	       /s/  SHERRY HOLLOCK                              
	 

	Date
	 
	Sherry Hollock
	 

	 
	 
	Chief Human Resources Officer
	 

	 
	 
	Macy’s, Inc.
	 

	 
	 
	7 West Seventh Street
	 

	 
	 
	Cincinnati, OH 45202
	 

	 
	 
	 
	 

	 
	 
	 
	 

	     1/9/2017                     
	 
	       /s/  PETER R. SACHSE                             
	 

	Date
	 
	Peter SachseExhibit

Exhibit 10.12

SECOND AMENDMENT TO OFFICE LEASE AGREEMENT
THIS SECOND AMENDMENT TO THE OFFICE LEASE AGREEMENT (the “Second Amendment”) is dated December 12, 2016 and is between FRIT SAN JOSE TOWN AND COUNTRY VILLAGE, LLC, a California limited liability company, by its managing member, STREET RETAIL, INC., a Maryland corporation (“Landlord”), and SPLUNK INC., a Delaware corporation (“Tenant”).  
R E C I T A L S
A.Landlord and Tenant are parties to that certain Office Lease Agreement dated August 24, 2015 (the “Lease”) pursuant to which Tenant leased the entire first through sixth floors of the office building to be constructed at 3090 Olsen Drive (500 Santana Row), San Jose, California (the “Building”), consisting of approximately 234,622 square feet of Floor Area (as defined in the Lease), the Locker Room (as defined in the Lease) and the Exclusive Elevator Lobbies (as defined in the Lease).

B.As part of the Lease, the parties entered into a Work Agreement, which was attached to the Lease as Exhibit B and made a part of the Lease.

C.The parties now wish to amend the Lease and the Work Agreement to correct and update certain information and to obligate Landlord to pay Tenant’s contractor directly for the Tenant Work, as that term is defined in the Work Agreement, in an amount not to exceed the amount of the Available Allowance, as that term is defined in the Work Agreement, as amended by this Second Amendment.
THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.Capitalized Terms.  All initially capitalized defined terms used in this Second Amendment shall have the same meanings as are given such terms in the Lease unless expressly superseded by the terms of this Second Amendment.

2.Term Commencement Date and Rent Commencement Date.  Notwithstanding anything to the contrary contained in the Lease, Landlord and Tenant acknowledge and agree that the “Term Commencement Date” and the “Rent Commencement Date” shall each be December 12, 2016. 

3.Building Address.  The parties hereby delete the reference to “3090 Olsen Drive” in the first sentence of Section 1.01(J) of the Lease and replace it with “3098 Olsen Drive.”

4.Substantial Completion of Premises.  Tenant acknowledges and agrees that Substantial Completion of the Landlord’s Work occurred on October 4, 2016.

5.Definition of Operating Costs.  The parties hereby delete subsection (25) of the last paragraph of Section 6.03.C(25) and replace it with the following:  “(25) costs associated exclusively with the retail portions of the Commercial Property other than the retail portions located on the first floor of the Leased Premises, if any (the Operating Costs of which shall be included in the calculation of Operating Costs for the Leased Premises).”

6.Utilities.  The parties hereby delete the fourth (4th) sentence of Section 7.03 of the Lease and replace it with the following new fourth (4th) sentence of Section 7.03:

Notwithstanding anything to the contrary in this Lease,  utilities for the retail portions located on the first floor of the Leased Premises shall be metered at Landlord’s sole cost and expense in accordance with the Building Plans described in Exhibit B-2 of the Work Agreement and (ii) if the Building includes facilities such as elevators for access to the retail areas of the Project that are excluded from the calculation of Floor Area for the purposes hereof, all such areas and/or facilities will be separately metered at Landlord’s sole cost and expense to the extent required by the Final Plans.   

7.Cabling; Rooftop Installations.  The parties hereby delete Section 9.08(B) of the Lease in its entirety and replace it with the following new Section 9.08(B):

Subject to the terms and conditions of this Lease including, without limitation, the Rooftop Rules and Regulations (as defined below), Tenant may during the Term, at no additional charge to Tenant, install, operate, maintain and repair on a location of the roof of the Building designated by Landlord, solely in connection with the conduct of Tenant’s business in the Leased Premises, the Rooftop Equipment (as defined below) (collectively, “Rooftop Installations”).  All costs associated with the design, fabrication, engineering, permitting, installation, screening, maintenance, repair, operation, use and removal of the Rooftop Installations shall be borne solely by Tenant except to the extent that the Rooftop Installations are part of the Tenant Work and are paid for out of the Tenant Work Allowance or Additional Allowance.  For purposes of this Lease, “Rooftop Equipment” shall mean (i) telecommunications antennae, microwave dishes and other communications and information technology equipment to serve Tenant’s business in the Leased Premises, (ii) connections for such equipment for electrical wiring to the Building’s existing electrical supply and cable (including the Tenant Lines) or similar connections necessary to connect the Rooftop Equipment with Tenant’s related equipment located in the Leased Premises.

8.Repairs and Maintenance by Tenant; Janitorial; Tenant Capital Repairs.  The parties hereby delete Section 10.02.A(d)(ii), but not the “or” that follows, and renumber Section 10.02A(d)(iii) to Section 10.02A(d)(ii).

9.Floor Area.  The parties hereby delete the number “236,622” in the first paragraph of the Work Agreement and replace it with “234,622”. 

10.Tenant’s Agent.  The parties hereby delete the name “Per Johanson” in Section 4 of the Work Agreement and replace it with “Ken Tinsley”.

11.Construction of the Tenant Work.  The parties hereby delete Section 6 of the Work Agreement in its entirety and replace it with the following new Section 6: 

(A)The Plans shall be conclusive as to the entire scope of Tenant Work to be performed by Tenant. Tenant agrees to provide and install the Tenant Work shown on the Plans in a good and workmanlike manner in accordance with the Plans approved by Landlord.  Tenant shall pay the cost of all Tenant Work, including all architectural, engineering and other design and construction costs attributable to Change Orders, defined below, subject to application of the Tenant Work Allowance and the Additional Allowance, as set forth in Section 6 and Section 9 hereof.  

(B)No material changes or modifications to the Plans shall be made unless by written change order (“Change Order”) signed by Landlord and Tenant, provided that Landlord shall have five (5) Business Days to review and notify Tenant of Landlord’s approval or disregard of such proposed changes or modifications, and provided further Landlord will not unreasonably withhold approval of any Change Order. Tenant shall deliver to Landlord any such revised Plans approved and dated by Tenant in writing.  Any such changes and/or additions shall be subject to Landlord’s prior written approval of the Plans depicting such changes and/or additions.

(C)Tenant shall pay an administrative fee to compensate Landlord for reviewing the Plans and monitoring the Tenant Work, equal to two percent (2%) of the so-called “hard cost” of Tenant Work.  Landlord shall invoice Tenant for such administrative fee based on the total “hard costs” of construction set forth in each Application for Payment (as defined below) that is submitted by Tenant’s contractor to Tenant in accordance with Section 9(C) (with the last invoice for the administrative fee balanced to reflect final, actual hard costs).  Tenant shall pay each such invoice, as Additional Rent, no later than ten (10) business days after its receipt thereof.  Notwithstanding the foregoing, Tenant expressly acknowledges and agrees that Landlord has no responsibility for, and shall not be obligated to provide, any construction management services in connection with the Tenant Work Any construction management services shall be provided by Tenant at its sole cost and expense.

(D)Tenant shall pay the cost of all Tenant Work, subject to application of the Available Allowance and Additional Allowance as set forth in Section 6 and Section 9 hereof.  Any costs payable to Landlord under this Work Agreement that are not paid from the Available Allowance and not paid from the Additional Allowance shall be payable as Additional Rent by Tenant to Landlord within ten (10) calendar days after receipt of an invoice therefor from Landlord,

12.Tenant Work Allowance.  The parties hereby delete Section 9(B) of the Work Agreement in its entirety and replace it with the following new Section 9(B):

(B) Provided no Default exists under the Lease that is not cured by Tenant, Landlord agrees to provide Tenant with an allowance (“Tenant Work Allowance”) in the amount of $12,904,210, which is equal to $55.00 per square foot of Floor 

Area in the Leased Premises.  Subject to the terms and conditions hereof, the Tenant Work Allowance shall be applied against the actual out-of-pocket third party costs and expenses incurred in connection with the design and construction of the Tenant Work.  Landlord further agrees that if Landlord is able to obtain an exemption from or a reduction in the City of San Jose’s (the “City”) Building and Structure Construction Tax (S.J. Municipal Code Section 4.46.010 et seq.) (the “Construction Tax”) in connection with the construction of the Landlord Work as a result of Tenant’s status as an “office and/or research and development user”, then Landlord shall pay the actual amount of such reduction or exemption (the “Additional Allowance”) to Tenant,.  Landlord agrees to use commercially reasonable efforts to expeditiously obtain the Additional Allowance through any exemption and/or reduction of the Construction Tax; provided, however, that Tenant expressly acknowledges and agrees that (i) neither Landlord nor any of its employees and/or agents have made any representations and/or warranties to Tenant that Landlord will obtain any such reduction and/or exemption from the Construction Tax; and (ii) Landlord’s  failure to obtain any reduction and/or exemption from the Construction Tax shall neither constitute a default hereunder nor otherwise affect Tenant’s obligations hereunder.  Tenant agrees to fully cooperate with Landlord in connection with Landlord’s efforts to seek a reduction and/or exemption from the Construction Tax.  The Tenant Work Allowance and the Additional Allowance shall not be applied to the costs of any furniture, computers, equipment, personal property, or for any other costs other than as provided above.  Tenant shall pay all costs in excess of the Tenant Work Allowance and any Additional Allowance for the design and construction of the Tenant Work.  Tenant acknowledges and agrees that (a) the Additional Allowance is estimated to be $2,128,693.00, (b) the City has informed Landlord that it intends to pay such amount in three (3) installments (each without interest) in accordance with the following schedule: a first installment of $728,693.00 to be paid no later than December 31, 2016, a second installment of $700,000 to be paid no later than December 31, 2017, and a third installment of $700,000 to be paid no later than December 31, 2018, (c) the second and third installments are subject  to the City’s City Council (the “City Council”) appropriating such funds in the City’s  fiscal years 2017-2018 and 2018-2019, respectively, (d) if the City Council does not appropriate such funds, then the City shall not be required to pay such amounts, and (e) neither Landlord nor any of its employees or agents have made any representations, warranties or provided any other assurances to Tenant that the City Council will appropriate such funds or that such funds will be paid in a timely manner, if at all.  Subject to the foregoing, Landlord agrees that it shall pay each installment of the Additional Allowance it actually receives from the City to Tenant within ten (10) business day of its receipt of the same. Further,   Landlord will keep Tenant reasonably apprised of the progress of its efforts to obtain the Additional Allowance, and will, promptly after any relevant exemption or reduction is obtained, provide Tenant with written evidence of such exemption or reduction.  Any amount of the Tenant Work Allowance that has not been used in accordance with the foregoing or this Work Agreement within five hundred forty-eight (548) days after Substantial Completion shall be retained by Landlord and Tenant shall have no rights whatsoever with respect thereto.
13.Disbursement of Available Allowance.  The parties hereby delete Section 9(C) of the Work Agreement in its entirety and replace it with the following new Section 9(C):

(C) As used herein, “Available Allowance” means the Tenant Work Allowance, less any amount paid for the preparation of the Plans.  Provided that this Lease is then in full force and effect and Tenant is not in Default of any of its obligations under the Lease, including this Exhibit B,  then Landlord shall pay the Available Allowance as follows:
(i)Subject to the terms and conditions of this Lease, Landlord will disburse the Available Allowance not more frequently than monthly based on the applications for payment (each an “Application for Payment”) submitted in accordance herewith, until the Available Allowance, less Tenant’s payments of the administration fee, is completely used.  Each such Application for Payment will be based on the actual “soft costs” of construction incurred during the month and on the percentage completion of the “hard costs” of construction at the end of the month, and will include a retainage equal to 10% of the billed “hard costs” (the “Retainage”).  Subject to the terms and conditions hereof, Landlord shall pay the amount set forth in each Application for Payment (less the Retainage) no later than thirty (30) days after receipt thereof.  Each Application for Payment shall (a) be accompanied by (I) a certification of Tenant’s architect that the Tenant Work has been completed to a specified percentage completion, (II) an affidavit or other certification from Tenant listing all contractors and suppliers with whom Tenant has contracted with in connection with the Tenant Work, together with the cost of each contract, (III) an affidavit or other certification from Tenant’s general contractor listing all subcontractors and suppliers whom the general contractor has contracted with in connection with  Tenant’s Work, together with the cost of each contract, and (IV) conditional lien waivers in a form satisfactory to Landlord from Tenant’s general contractor, all subcontractors and material suppliers involved in the Tenant Work with contracts having a value in excess of $25,000.00 and related to the initial progress payment (conditioned only on payment), and with respect to any payments other than the Landlord’s first payment, copies of partial, unconditional lien waivers in a form satisfactory to Landlord from all contractors, subcontractors and material suppliers covering all work and materials under with contracts having a value in excess of $25,000.00 which were the subject of the immediately previous progress payment by Landlord.  Tenant hereby instructs Landlord that, upon delivery of an Application for Payment and receipt of the foregoing supporting 

materials, Landlord shall pay eighty percent (80%) of the amount due under such Application for Payment (not to exceed, in the aggregate, the Available Allowance) directly to Tenant’s general contractor, Devcon Construction, Inc., (“Tenant’s GC”).  In connection with the foregoing, Tenant expressly acknowledges and agrees as follows: (1) Landlord shall continue to pay such amounts to Tenant’s GC unless and until Landlord receives written notice from Tenant’s Agent instructing Landlord to discontinue such direct payments, (2) Landlord shall receive a dollar-for-dollar credit against the total amount of the Available Allowance for all amounts directly paid to Tenant’s GC, (3) Tenant shall remain solely responsible to Tenant’s GC for the performance of its obligations under its contract(s) with Tenant’s GC, and (4) Landlord’s payment of any amounts of the Available Allowance shall not be deemed a representation, warranty or guaranty by Landlord to Tenant as to any aspect of the Tenant Work including, without limitation, that the Tenant Work has been completed in accordance with the terms and conditions of the Lease.

(ii)Subject to the terms of this Section 9(c), the Retainage shall be held back until completion of all of the Tenant Work and shall be disbursed directly to Tenant’s contractor within thirty (30) days after satisfaction of each of the following conditions: (a) receipt by Landlord of an occupancy permit for the entire Leased Premise; (b) Tenant’s execution and delivery to Landlord of any required certificate agreements required under the Lease to specify or confirming the Term Commencement Date and Termination Date; (c) receipt by Landlord of appropriate paid receipts or invoices and final lien waivers from all contractor and subcontractors performing any Tenant Work with contracts having a value in excess of $25,000.00 in connection with the Tenant Work, in a form satisfactory to Landlord, (d) Tenant’s architect delivers to Landlord AIA Form G704, certifying that the construction of all of the Tenant Work has been substantially completed, (e) Tenant delivers to Landlord “as-built” drawings in CAD format showing the Tenant Work (updated by Tenant’s architect as necessary to reflect all changes made to the Plans during the course of construction; provided, however, that the foregoing shall not permit Tenant to make changes to the Plan except as otherwise expressly provided in this Exhibit B), (f) Landlord’s receipt of copies of all permits, licenses, certificates and other governmental authorizations and approvals in connection with, and indicating final approval of, the last Phase of the Tenant Work, and which will be necessary for the operation of Tenant’s business within the Leased Premises , (g) Landlord’s receipt from Tenant of a conformed copy of the a Notice of Completion recorded in the office of the Recorder of the County of Santa Clara, in accordance with California Civil Code Section 3093 or any successor statute, and (h) receipt by Landlord of copies of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Leased Premises installed as part of Tenant’s Work.  

Notwithstanding the foregoing, Landlord shall have the right, without the obligation, to apply all or any portion of the undisbursed Tenant Work Allowance or the Additional Allowance to remedy any monetary Default by Tenant occurring hereunder; provided, however, it is expressly covenanted and agreed that such remedy by Landlord shall not be deemed to waive, or release, the monetary Default of Tenant.  The foregoing remedy of Landlord is in addition to, and not in substitution for, all other rights and remedies of Landlord in the event of a Tenant Default under the Lease. 
If Landlord fails to pay any portion of the Tenant Improvement Allowance or the Additional Allowance when due pursuant to the terms of this Exhibit B after submission of all required documents and satisfaction of each of the foregoing conditions, and such failure continues for more than fifteen (15) Business Days following a second notice from Tenant to Landlord of Landlord’s delinquency, which notice shall specifically refer to the offset right herein provided, then, subject to the Offset Limit (as defined below), Tenant shall be entitled to deduct from Minimum Monthly Rent payable by Tenant under this Lease the amount of the unpaid portion of the Tenant Improvement Allowance commencing with the Minimum Monthly Rent first due and payable after the expiration of such fifteen (15) day period.  Notwithstanding the foregoing, in no event shall Tenant have the right to deduct from Minimum Monthly Rent payable by Tenant under this Lease if Tenant has received written notice of a Default hereunder, and such Default remains uncured. Notwithstanding anything to the contrary contained herein, Tenant agrees that during any period that Tenant is entitled to deduct sums from Minimum Monthly Rent (or any portion thereof) pursuant to this Section, then Tenant’s offset right shall be limited such that Tenant pays each month at least fifty percent (50%) of each successive installment of Minimum Monthly Rent (the “Offset Limit”).  

14.Change Orders.  Attached hereto as Exhibit A is a list of Change Orders approved by Landlord and Tenant as of the date hereof.  Tenant agrees that Tenant shall pay Landlord the sum of $92,433.79 in connection with such approved Change Orders.  Tenant shall pay, as Additional Rent, such amount, either in immediately available funds or by authorizing Landlord in writing to deduct such amount from the Available Allowance, no later than ten (10) business days after the mutual execution and delivery of this Amendment.

15.No Further Modification; Conflict.  Except as set forth in this Second Amendment, all of the terms and provisions of the Lease shall remain unmodified and in full force and effect.  All references in the Lease to the terms such as "this Lease", "this Agreement", "herein" or "hereof" shall refer to the Lease as amended by this Second Amendment.  When used in 

this Second Amendment, the term "Lease" refers to the Lease as amended by this Second Amendment. In the event of any conflict between the terms and conditions of the Lease and the terms and conditions of this Second Amendment, the terms and conditions of this Second Amendment shall prevail.

16.Interpretation.  Both Landlord and Tenant have been represented in the preparation and negotiation of this Second Amendment by legal counsel. As a result, this Second Amendment reflects the joint efforts of the parties and has been jointly prepared by the parties.  This Second Amendment supersedes all prior discussions, writings, amendments or correspondence concerned the matters addressed in this Second Amendment.  This Second Amendment shall be construed in accordance with this plain meaning and without regard to any rule of construction that would result in the Second Amendment being construed in a manner more or less favorable to either party to this Second Amendment.

17.Successors and Assigns. This Second Amendment shall be binding upon and inure to the benefit of Landlord and Tenant and their respective successors and permitted assigns.

18.Counterparts.  This Second Amendment may be executed in duplicate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.  Any e-mail transmittal of original signature versions of this Second Amendment shall be considered to have the same legal effect as execution and delivery of the original document and shall be treated in all manner and respects as the original document.  The parties also agree to promptly exchange counterparts with original signatures upon the request of either party.

[Signature page to follow.]

IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have executed this Second Amendment under their respective hands and seals as of the day and year first above written.
LANDLORD:    FRIT SAN JOSE TOWN AND COUNTRY VILLAGE, LLC, a California limited liability company, by its managing member, STREET RETAIL, INC., a Maryland corporation

By:    ________________________________
Name:    ________________________________
Title:    ________________________________

TENANT:    SPLUNK INC., a Delaware corporation
        
By:    ________________________________
Name:    Timothy C. Emanuelson
Title:    VP Worldwide Controller

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