399 Park Ave., headquarters of both NorthStar companies, which will merge with Colony Capital.

NEW YORK CITY and LOS ANGELES—The would-be merger partners in what will be called Colony Northstar Inc. said Monday they had amended their agreement to incorporate changes to the governance structure. The move by NorthStar Asset Management Group Inc., Colony Capital Inc. and NorthStar Realty Finance Corp. follows calls for changes by activist investor Jonathan Litt, who has threatened to vote against the tripartite merger.

As part of the amended agreement, the new REIT's board will be reduced from the 13 directors originally proposed to 10. It will include two new independent directors, Jon A. Fosheim and Douglas Crocker II, among five jointly selected by NSAM and NRF. Colony Capital will also select five directors.

The board will stand for election on annual basis under the amended agreement. The merged entity will opt out of all of the provisions of the Maryland Unsolicited Takeover Act that would have permitted Colony NorthStar's board to adopt, without stockholder approval, a classified board structure and other anti-takeover provisions. And David Hamamoto, executive chairman of NSAM, has agreed to step down from the Colony NorthStar board if his equity investment falls below 50% of his equity interest as of the closing of the transaction.