Exhibit 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 15th day of August, 1998, by and between Capital Trust, a trust organized
under the laws of the State of California and established under a Declaration of
Trust dated September 15, 1966, as amended from time to time (such trust and any
successors thereto being hereinafter referred to as "Capital Trust"), and
Xxxxxxx Xxxxxx ("Executive"). Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in Part Five hereof.
RECITALS
WHEREAS, Capital Trust desires to employ Executive as the Chief
Operating Officer of Capital Trust; and
WHEREAS, Executive desires to be employed by Capital Trust at the
salary and benefits provided for herein; and
WHEREAS, Executive acknowledges and understands that during the course
of his employment, Executive will develop certain strategic business
relationships and become familiar with certain confidential information of
Capital Trust which are exceptionally valuable to Capital Trust and vital to the
success of Capital Trust's business; and
WHEREAS, Capital Trust and Executive desire to protect such business
relationships and such confidential information from use to the detriment of
Capital Trust or disclosure to third parties.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto acknowledge
and agree as follows:
TERMS
PART ONE
NATURE AND TERM OF EMPLOYMENT
1.01 Employment. Capital Trust hereby agrees to employ Executive, and
Executive hereby accepts such employment, as the Chief Operating Officer of
Capital Trust.
1.02 Term of Employment. The original term of Executive's employment
hereunder shall commence as of the date of this Agreement and expire at 12:00
midnight on January 2, 2002 (the "Original Term").
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1.03 Term Extension. Immediately as of the expiration of the Original
Term, this Agreement will automatically renew and extend for a single 363 day
period ending on December 31, 2002 (the "Renewal Period"), unless Capital Trust
or Executive shall have delivered to the other written notice of non-renewal no
later than April 7, 2001 (the "Notice Deadline"), in which case the Employment
Period (as hereinafter defined) shall expire effective as of the last day of the
Original Term; provided, further, however, Executive agrees to deliver a written
notice to Capital Trust reminding Capital Trust of the Notice Deadline and
referencing this Section 1.03 ("Executive's Reminder Notice") no earlier than
February 6, 2001, nor later than March 8, 2001, and, solely for purpose of
Capital Trust's right to deliver written notice of non-renewal to Executive
under this Section 1.03, if Executive fails to deliver Executive's Reminder
Notice to Capital Trust on a timely basis, the Notice Deadline shall be extended
to a date thirty (30) days after the date of Capital Trust's receipt of
Executive's Reminder Notice. The period during which Executive shall be employed
by Capital Trust hereunder (meaning the Original Term and, if applicable, the
Renewal Period) shall be referred to herein as the "Employment Period."
Notwithstanding anything to the contrary contained herein, the Original Term and
the Renewal Period are each subject to termination pursuant to Part Four below.
1.04 Duties. The duties of Executive shall be as determined by the
Board of Trustees of Capital Trust (the "Board") consistent with Executive's
title and position with Capital Trust, and Executive shall report directly to
Capital Trust's Vice Chairman and Chief Executive Officer and Capital Trust's
Vice Chairman and Chairman of the Executive Committee and shall be subject to
their direction and control. Without limiting the generality of the foregoing,
Executive shall manage on a day-to-day basis, and shall report to and advise the
Vice Chairmen regarding the management and operation of Capital Trust's revenue
generating businesses, as constituted from time to time, including, without
limitation, Capital Trust's balance sheet lending business and investment
banking and advisory businesses, as constituted from time to time. All
executives of Capital Trust in Executive's area of responsibility (other than
Capital Trust's Vice Chairman and Chief Executive Officer and Capital Trust's
Vice Chairman and Chairman of the Executive Committee) shall be subordinate to
Executive and shall report directly or indirectly to Executive. Executive agrees
to devote his full business time attention and energies to the diligent
performance of his duties hereunder and will not, during the Employment Period,
engage in, accept employment from or provide services to any other Person;
provided, however, that subject to Section 3.04 hereof, Executive may (a) devote
a reasonable amount of time to civic activities, (b) maintain not more than one
outside board position with a company which does not compete with Capital Trust,
subject to the prior consent of the Board, which consent shall not be
unreasonably withheld, and (c) manage his own investments, provided that such
activities do not conflict with or detract from Executive's diligent performance
of Executive's duties hereunder.
PART TWO
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COMPENSATION AND BENEFITS
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2.01 Salary. During the Employment Period, Executive shall receive a
base salary at the rate of $350,000 per annum (the "Base Salary"), payable in
regular installments in accordance
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with Capital Trust's general payroll practices for salaried employees. During
the Employment Period, the Base Salary for each calendar year commencing on or
after January 1, 2000 shall be increased as of January 1 of said calendar year
by a percentage amount not less than any percentage increase in the Consumer
Price Index for the previous calendar year and may be further increased at the
discretion of the Board.
2.02 Annual Incentive Bonus. Subject to Part Four of this Agreement, in
addition to his Base Salary, for calendar years 1999, 2000, 2001 and 2002
(unless, with respect to calendar year 2002 only, the Employment Period is not
extended for the Renewal Period in accordance with Section 1.03), Executive
shall receive an annual incentive cash bonus in an amount determined by the
Board based upon Executive's performance and the profitability of Capital Trust
during such period, provided that the minimum amount of each of said three
annual incentive bonuses shall be no less than $750,000 (the "Minimum Bonus"),
which amount shall be payable in one lump sum no later than the January 31
immediately following the close of the calendar year to which the payment
pertains. Subject to Part Four of this Agreement, Capital Trust's obligation to
pay Executive the Minimum Bonus for any applicable calendar year shall survive
the expiration of the Original Term or the Renewal Term.
2.03 Special 1999 Cash Payments. Subject to Part Four of this
Agreement, in addition to the Base Salary and the Minimum Bonus, during calendar
year 1999 only, Executive shall receive a special cash payment of $100,000 per
calendar month, payable on the first day of each calendar month during calendar
year 1999 (collectively, the "Special 1999 Cash Payments"); provided, however,
that, except as otherwise provided in Section 4.01 or Section 4.02 [Handwritten
Insert I. See Appendix I], Executive shall not be entitled to receive any
installment of the Special 1999 Cash Payments if he is not employed under this
Agreement on the date such installment otherwise would be payable.
2.04 Benefits. During the Term of this Agreement, Capital Trust agrees
to provide to Executive such benefits as are provided generally to other
employees of Capital Trust from time to time, including but not limited to, any
health, disability, life, deferred compensation, profit-sharing, pension, or
other employee benefit policies, programs or plans which Capital Trust provides
to its employees generally (collectively, the "Employee Benefits"), all at
levels determined by the Board and commensurate with Executive's position.
2.05 Expenses. During the Term of this Agreement, Executive shall be
reimbursed by Capital Trust for all ordinary and necessary out-of-pocket
expenses for travel, lodging, meals, entertainment expenses, or any other
similar reasonable expenses incurred by Executive in performing services for
Capital Trust in accordance with the policies established by the Board.
2.06 Vacations. Executive shall be entitled to a paid vacation of four
(4) weeks during each twelve month period during the Employment Period,
provided, however, that Executive's vacation shall be in accordance with
policies established by the Board.
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2.07 Vested Options. Capital Trust shall issue and grant to Executive,
as of the date of this Agreement, pursuant to the Share Plan, options to acquire
100,000 Common Shares at an exercise price of $9.00 per Common Share, all of
which options shall be vested immediately and shall be immediately exercisable
as of the date of this Agreement (collectively, the "Vested Options"),
notwithstanding anything to the contrary in the Share Plan.
2.08 Grant Shares. Subject to Part Four of this Agreement, Capital
Trust shall issue and grant to Executive, pursuant to the Share Plan, the number
of Common Shares on the dates specified below (collectively, the "Grant
Shares"), all of which Grant Shares shall be fully vested as of their respective
grant dates, notwithstanding anything to the contrary in the Share Plan.
Grant Date Number of Common Shares
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January 1, 1999 50,000
January 1, 2000 100,000
January 1, 2001 100,000
January 1, 2002 100,000
2.09 Life Insurance. During the Employment Period, provided Executive
passes any necessary health examination and such coverage is purchasable at
commercially reasonable rates, Capital Trust shall provide Executive with term
life insurance coverage providing a death benefit equal to not less than
$1,500,000, the beneficiary of which shall be designated by Executive. Capital
Trust agrees to pay all of the premiums required to provide the aforesaid term
life insurance coverage to Executive.
2.10 Disability Insurance. During the Employment Period, provided
Executive passes any necessary health examination and such coverage is
purchasable at commercially reasonable rates, Capital Trust shall provide
Executive with disability insurance coverage equal to sixty percent (60%) of his
Base Salary.
2.11 Withholding. Any amounts payable to Executive hereunder shall be
paid to Executive subject to all applicable taxes required to be withheld by
Capital Trust pursuant to federal, state or local law. Executive or his
beneficiary, if applicable, shall be solely responsible for all taxes imposed on
Executive or his beneficiary by reason of his receipt of any amount of
compensation or benefits payable to Executive hereunder.
PART THREE
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CONFIDENTIAL INFORMATION AND COMPETITION
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3.01 Definition of Confidential Information. For the purposes of this
Agreement, the term "Confidential Information" shall mean all information and
all documents and other tangible items which record information which is
non-public, confidential or proprietary in nature with
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respect to Capital Trust or its customers, clients or investors and shall
include, but shall not be limited to: (a) all information, which at the time or
times concerned is protectible as a trade secret under applicable law; (b)
business and investment plans and strategies; (c) marketing plans and
strategies; and (d) proprietary software and business records. Capital Trust and
Executive acknowledge and agree that the Confidential Information is extremely
valuable to Capital Trust and the information referred to in subparagraphs (b)
through (d) inclusive of this Section 3.01 is especially sensitive and valuable.
3.02 Non-Disclosure of Confidential Information. Executive will not
during, or for a period of two (2) years after termination of Executive's
employment for any or no reason, in any form or manner, directly or indirectly,
divulge, disclose or communicate to any Person (other than Capital Trust and its
representatives), or utilize for Executive's personal benefit of for the benefit
of any Person (other than Capital Trust), any Confidential Information.
3.03 Delivery Upon Termination. Upon termination of Executive's
employment with Capital Trust for any or no reason, Executive will promptly
deliver to Capital Trust all correspondence, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents, or any other documents
or media (including electronic media) concerning Capital Trust and/or which
contains Confidential Information.
3.04 Restriction Against Soliciting Employees and Clients of Capital
Trust. Executive will not during the Employment Period, and, in the event
Executive's employment is terminated by Capital Trust for Cause or by Executive
voluntarily other than for Good Reason or Special Reason [Handwritten Insert II.
See Appendix I], for a period of one (1) year following termination of
Executive's employment, in any form or manner, on his own behalf or in
combination with others, directly or indirectly, whether individually, as a
director, stockholder, partner, member, owner, employee or agent of any
business, or in any other capacity: (a) solicit for employment or engagement any
person who is employed or otherwise engaged by Capital Trust or its subsidiaries
within 180 days prior to such termination of Executive; or (b) solicit any
client of Capital Trust or its subsidiaries which has been a client of Capital
Trust or its subsidiaries within the three (3) years prior to such termination
of Executive, to purchase from any source other than Capital Trust or its
subsidiaries any service or product which could be supplied by Capital Trust or
its subsidiaries.
3.05 Continuing Obligation. The obligations, duties and liabilities of
Executive pursuant to Part Three of this Agreement are continuing, absolute and
unconditional and shall remain in full force and effect as provided therein
despite any termination of Executive's employment with Capital Trust for any or
no reason, including, but not limited to, the expiration of the Employment
Period.
3.06 Executive Acknowledgment/Injunctive Relief. Executive acknowledges
and agrees that the covenants set forth in Part Three hereof are reasonable and
necessary for the protection of Capital Trust's business interests, that such
covenants will not result in undue economic hardship to Executive, that
irreparable injury will result to Capital Trust if Executive breaches any
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of the terms of said covenants, and that in the event of Executive's actual or
threatened breach of any such covenants, Capital Trust will have no adequate
remedy at law. Executive accordingly agrees that in the event of any actual or
threatened breach by him of any of said covenants, Capital Trust shall be
entitled to immediate injunctive and other equitable relief, without bond and
without the necessity of showing any actual monetary damages.
PART FOUR
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TERMINATION
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4.01 Involuntary Termination other than for Cause or Disability and
Voluntary Termination for Good Reason.
(a) Either Capital Trust or Executive may terminate Executive's
employment as provided in this Section 4.01 during the Employment Period by
delivery to the other party of a written notice (the "Termination Notice")
indicating the date Executive's employment is terminated (the "Termination
Date").
(b) If (i) Capital Trust terminates Executive's employment other than
for Cause or Disability or (ii) if Executive terminates his employment with
Capital Trust for Good Reason and such termination by Executive takes place
within ninety (90) days of the later of (A) the latest occurrence of events or
omissions comprising Good Reason and (B) the discovery by Executive of the
grounds for Good Reason, Capital Trust and Executive shall have the rights and
obligations provided in this Section 4.01.
(c) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive only (i) Executive's Base Salary, if
any, accrued and unpaid up to the Termination Date, and (ii) upon execution and
delivery by Executive of the form of Release attached hereto as Exhibit A (the
"Release"), and the expiration of the seven day revocation period provided in
the Release without revocation of the Release by Executive, the Severance
Payment (as hereinafter defined) and the other benefits and/or compensation
referred to in paragraphs (f), (g) and (h) of this Section 4.01.
(d) Subject to Section 4.01(c)(ii), the Severance Payment shall be
payable over a period of time equal to the greater of (A) the remainder of the
Employment Period had Executive not been so terminated and (B) one (1) year, in
either case, beginning on the Termination Date and in regular installments in
accordance with Capital Trust's general payroll practices for salaried
employees.
(e) For purposes of this Section 4.01, "Severance Payment" shall mean
an aggregate amount equal to the sum of:
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(i) greater of (A) the Base Salary payable to Executive over
the remainder of the Employment Period had Executive not been so
terminated and (B) the amount of the Base Salary as of the Termination
Date for one (1) full calendar year; plus
(ii) to the extent, if any, not already paid to Executive, the
Minimum Bonus for each of calendar years 1999, 2000 and 2001; plus
(iii) to the extent, if any, not already paid to Executive,
the Minimum Bonus for calendar year 2002, unless the Original Term
expires without renewal for the Renewal Period as provided in Section
1.03, in which event Executive shall not be entitled to receive any
part of the Minimum Bonus for calendar year 2002.
(f) Subject to Section 4.01(c)(ii), any Special 1999 Cash Payments
which are unpaid at the Termination Date.
(g) Subject to Section 4.01(c)(ii), Capital Trust shall be required to
maintain for Executive and his spouse and children under the age of 21 medical
insurance coverage to which Executive and his spouse and children under the age
of 21 were entitled immediately preceding the date of Executive's termination
until the earlier of (i) the two (2) year period expiring on the second
anniversary of the Termination Date or (ii) such time as Executive shall obtain
employment or other engagement offering comparable or better medical insurance
coverage.
(h) Subject to Section 4.01(c)(ii), Capital Trust shall issue and grant
to Executive any Grant Shares not yet issued and granted to Executive,
regardless of the grant date specified therefor in Section 2.08.
(i) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) one year from the Termination Date.
(j) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.01, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.02 Voluntary Termination for Special Reason.
(a) Executive may terminate Executive's employment as provided in this
Section 4.02 during the Employment Period by delivery to the other party of a
written notice (the "Termination Notice") indicating the date Executive's
employment is terminated (the "Termination Date").
(b) If Executive terminates his employment with Capital Trust for
Special Reason and such termination by Executive takes place within ninety (90)
days of the later of (A) the latest occurrence of events or omissions comprising
Special Reason and (B) the discovery by Executive
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of the grounds for Special Reason, Capital Trust and Executive shall have the
rights and obligations provided in this Section 4.02.
(c) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive only (i) Executive's Base Salary, if
any, accrued and unpaid up to the Termination Date, and (ii) upon execution and
delivery by Executive of the Release, and the expiration of the seven day
revocation period provided in the Release without revocation of the Release by
Executive, the Special Severance Payment (as hereinafter defined) and the other
benefits and/or compensation referred to in paragraphs (f) and (h) of this
Section 4.02.
(d) Subject to Section 4.02(c)(ii), the Special Severance Payment shall
be payable over a period of time equal to the greater of (A) the remainder of
the Employment Period had Executive not been so terminated and (B) one (1) year,
in either case, beginning on the Termination Date and in regular installments in
accordance with Capital Trust's general payroll practices for salaried
employees.
(e) For purposes of this Section 4.02, "Special Severance Payment"
shall mean an aggregate amount equal to the sum of (i) the amount of the Base
Salary as of the Termination Date for one (1) full calendar year, plus (ii)
$750,000.
(f) Subject to Section 4.02(c)(ii), any Special 1999 Cash Payments
which are unpaid at the Termination Date.
(g) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) one year from the Termination Date.
(h) Subject to Section 4.02(c)(ii), Capital Trust shall be required to
maintain for Executive and his spouse and children under the age of 21 medical
insurance coverage to which Executive and his spouse and children under the age
of 21 were entitled immediately preceding the date of Executive's termination
until the earlier of (i) the two (2) year period expiring on the second
anniversary of the Termination Date or (ii) such time as Executive shall obtain
employment or other engagement offering comparable or better medical insurance
coverage.
(i) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.02, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.03 Voluntary Termination other than for Good Reason or Special
Reason.
(a) Executive may terminate Executive's employment as provided in this
Section 4.03 during the Employment Period by delivery to the other party of a
written notice (the "Termination Notice") indicating the date Executive's
employment is terminated (the "Termination Date").
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(b) If Executive terminates his employment voluntarily other than for
Good Reason or Special Reason, Capital Trust and Executive shall have the rights
and obligations provided in this Section 4.03.
(c) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive only (i) Executive's Base Salary, if
any, accrued and unpaid up to the Termination Date, and (ii) upon execution and
delivery by Executive of the Release, and the expiration of the seven day
revocation period provided in the Release without revocation of the Release by
Executive, the other benefits and/or compensation referred to in paragraphs (d),
(e) and (f) of this Section 4.03.
(d) Subject to Section 4.03(c)(ii), Capital Trust shall pay to
Executive, to the extent, if any, not already paid to Executive, any Minimum
Bonus pertaining to a calendar year ended on or prior to the Termination Date
(it being understood that if the Original Term expires without renewal for the
Renewal Period as provided in Section 1.03, Executive shall not be entitled to
receive any part of the Minimum Bonus for calendar year 2002).
(e) Subject to Section 4.03(c)(ii), any Special 1999 Cash Payments, if
any, which were payable but unpaid at the Termination Date.
(f) Subject to Section 4.03(c)(ii), Capital Trust shall issue and grant
to Executive, to the extent, if any, not already issued and granted to
Executive, any Grant Shares whose scheduled grant date, as set forth in Section
2.08, occurs on or prior to the Termination Date, but Executive shall not be
entitled to receive any Grant Shares whose scheduled grant date, as set forth in
Section 2.08, occurs after the Termination Date.
(g) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) the date ninety (90) days following
the Termination Date
(h) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.03, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.04 Termination Upon Death.
(a) Upon Executive's death during the Employment Period, Capital Trust
and Executive shall have the rights and obligations provided in this Section
4.04.
(b) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive's legal representative only (i)
Executive's Base Salary, if any, accrued and unpaid up to the date of
Executive's death, (ii) any Minimum Bonus accrued but unpaid through the date of
Executive's death, based on the number of calendar days elapsed during the
applicable calendar year to which the applicable Minimum Bonus pertains, (iii)
any Special 1999 Cash
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Payments, if any, which were payable but [Handwritten Deletion I. See Appendix
I] unpaid at the date of Executive's death, (iv) any death benefits payable
under the life insurance policy maintained for Executive's benefit referred to
in Section 2.09 hereof, and (v) the benefits and/or compensation referred to in
paragraphs (c) and (d) of this Section 4.04.
(c) Capital Trust shall issue and grant to Executive's legal
representative, to the extent, if any, not already issued and granted to
Executive, any Grant Shares whose scheduled grant date, as set forth in Section
2.08, occurs on or prior to the date of Executive's death, but Executive's legal
representative shall not be entitled to receive any Grant Shares whose scheduled
grant date, as set forth in Section 2.08, occurs after the date of Executive's
death.
(d) Capital Trust shall continue the medical insurance coverage for the
benefit of Executive's spouse and children under the age of 21 to which they
were entitled immediately preceding the date of Executive's death for one year
from the date of Executive's death.
(e) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) the first anniversary of the date
of Executive's death.
(f) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.04, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.05 Termination Upon Disability.
(a) If, during the Employment Period, in the reasonable opinion of the
Board, Executive becomes physically or mentally disabled, whether totally or
partially, so that Executive is unable substantially to perform his duties
hereunder (i) for a period of ninety (90) consecutive days or (ii) for shorter
periods aggregating one hundred and eighty (180) days during any three hundred
and sixty (360) day period, Capital Trust may at any time thereafter terminate
Executive's employment under this Agreement. In the event of such termination,
Capital Trust and Executive shall have the rights and obligations provided in
this Section 4.05.
(b) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive only (i) Executive's Base Salary, if
any, accrued but unpaid until commencement of payments under Executive's
disability insurance policy referred to in Section 2.10 hereof, (ii) any Minimum
Bonus accrued but unpaid through the date of termination of Executive's
employment, based on the number of calendar days elapsed during the applicable
calendar year to which the applicable Minimum Bonus pertains, (iii) any Special
1999 Cash Payments, if any, which were payable but [Handwritten Deletion I. See
Appendix I] unpaid at the date of termination of Executive's employment, and
(iv) the other benefits and/or compensation referred to in paragraph (c) of this
Section 4.05.
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(c) Capital Trust shall issue and grant to Executive, to the extent, if
any, not already issued and granted to Executive, any Grant Shares whose
scheduled grant date, as set forth in Section 2.08, occurs on or prior to the
date of termination of Executive's employment, but Executive shall not be
entitled to receive any Grant Shares whose scheduled grant date, as set forth in
Section 2.08, occurs after the date of termination of Executive's employment.
(d) Capital Trust shall continue the medical insurance coverage for the
benefit of Executive and his spouse and children under the age of 21 for a
period of one year following the termination of Executive's employment.
(e) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) one year from the date of
termination of Executive's employment.
(f) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.05, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.06 Termination for Cause.
(a) Capital Trust has the right, at any time during the Employment
Period, exercisable by serving notice, effective in accordance with its terms,
to terminate Executive's employment under this Agreement for "Cause". If such
right is exercised, Capital Trust and Executive shall have the rights and
obligations provided in this Section 4.06.
(b) Notwithstanding anything to the contrary in this Agreement, Capital
Trust shall pay or provide to Executive only (i) Executive's Base Salary, if
any, accrued and unpaid up to the date of termination of Executive's employment,
(ii) to the extent, if any, not already paid to Executive, any Minimum Bonus
pertaining to a calendar year ended on or prior to the date of termination of
Executive's employment, (iii) any Special 1999 Cash Payments, if any, which were
payable but unpaid at the date of termination of Executive's employment, and
(iv) the other benefits and/or compensation referred to in paragraph (c) of this
Section 4.06.
(c) Capital Trust shall issue and grant to Executive, to the extent, if
any, not already issued and granted to Executive, any Grant Shares whose
scheduled grant date, as set forth in Section 2.08, occurs on or prior to the
date of termination of Executive's employment, but Executive shall not be
entitled to receive any Grant Shares whose scheduled grant date, as set forth in
Section 2.08, occurs after the date of termination of Executive's employment.
(d) Notwithstanding anything to the contrary in the Share Plan, the
Vested Options will expire on the earlier of (i) the expiration date of such
Vested Options under the Share Plan and (ii) the date ninety (90) days following
the date of termination of Executive's employment.
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(e) Notwithstanding anything to the contrary in this Agreement, except
as set forth in this Section 4.06, Executive shall not be entitled to receive
any other severance, benefits or compensation of any kind whatsoever.
4.07 Sole Remedy. The amounts payable to Executive, if any, under the
applicable provisions of this Part Four in connection with the termination of
Executive's employment, voluntarily or involuntarily, for any or no reason,
shall be the only remedy, legal or equitable, available to Executive in
connection with such termination (but not for claims or causes of action not
directly related to such termination, even if arising at the time of
termination), and such amounts shall constitute liquidated damages.
PART FIVE
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CERTAIN DEFINITIONS
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5.01 Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:
(a) "Affiliate" shall mean with respect to any Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with such Person. For purposes of this definition, "control" shall mean the
power to direct, or cause the direction of, the management of policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
(b) "Cause" shall mean:
(i) fraud, embezzlement or conviction of a felony;
(ii) misappropriation of any money, proprietary information or
other assets or properties of Capital Trust or any affiliate of Capital
Trust other than (A) an isolated, insubstantial and unintentional
misappropriation which is promptly remedied by Executive after receipt
of notice thereof given by Capital Trust or (B) any good faith dispute
regarding reimbursement of expenses or other similar good faith
dispute;
(iii) willful and material breach by Executive of the terms of
this Agreement; or
(iv) any other verifiable misconduct of Executive materially
and adversely affecting the reputation of Capital Trust;
provided, however, that notwithstanding the foregoing, no action or
failure to act on the part of Executive shall constitute "Cause" under
subparagraph (iii) or (iv) above unless Capital Trust shall have given
Executive written notice specifying in reasonable detail the facts or
circumstances which Capital Trust purports may constitute "Cause"
thereunder,
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and, if curable, Executive fails to cure the same within sixty (60)
days of Executive's receipt of said notice; provided, further, that
Capital Trust reserves the right to suspend Executive with pay during
said sixty (60) day period, which suspension shall not extend the
Employment Period.
(c) "Change in Control" shall mean:
(i) a merger or acquisition involving Capital Trust in which
40% or more of Capital Trust's voting stock outstanding after the
merger or acquisition is held by holders different from those who held
Capital Trust's voting stock immediately prior to such merger or
acquisition;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of Capital Trust in liquidation or
dissolution of Capital Trust;
(iii) a transfer of all or substantially all of Capital
Trust's assets pursuant to a partnership or joint venture agreement or
similar arrangement where Capital Trust's resulting interest is or
becomes less than 40%;
(iv) on or after the date hereof, a change in ownership of
Capital Trust through an action or series of transactions, such that
any Person is or becomes the beneficial owner, directly or indirectly,
of 40% or more of Capital Trust's voting stock; or
(v) the hiring by Capital Trust of any individual senior to
Executive but subordinate to the chief executive officer of Capital
Trust.
(d) "Common Shares" shall mean common shares of beneficial interest of
Capital Trust, $1.00 par value per share.
(e) "Consumer Price Index" shall mean Index-U.S. City Average (CPI-U)
(Base Year 1987 = 100) as reported by the Bureau of Labor Statistics, United
States Department of Labor for the preceding twelve-month period ended the
immediately prior December 31, or if the 1987 average shall no longer be used as
an index of 100, an adjustment shall be made in such revised index which would
have been obtained if the Consumer Price Index has not been so revised or if
said average was still in use. In the event such index is no longer reported,
such similar index of the cost of living as reported by any other United Stated
government agency or if no government agency shall at such time publish such an
index, a comparable index published by a major bank or other financial
institution or by a university or recognized financial publication.
(f) "Good Reason" shall mean:
(i) the assignment to Executive of any duties inconsistent in
any respect with Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1.04 or any other action by
Capital
752364.1
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Trust which results in a material diminution of such position,
authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial or inadvertent action not taken in bad faith
and which is remedied by Capital Trust promptly after receipt of notice
thereof given by Executive;
(ii) Capital Trust's requiring Executive, without Executive's
consent, to be based at any office or location outside of a 40 mile
radius of Midtown Manhattan, New York, New York;
(iii) a willful and material breach of this Agreement by
Capital Trust; or
(iv) a Change in Control of Capital Trust.
(g) "Person" means any individual, corporation, association,
partnership, limited liability company, estate, trust and any other entity or
organization, governmental or otherwise.
(h) "Share Plan" means Capital Trust's 1997 Long-Term Incentive Share
Plan and any successor plan thereto.
(i) "Special Reason" shall mean that neither Xxxx X. Xxxxx nor Xxxxx X.
Xxxxxxx is Capital Trust's chief executive officer for any reason and,
thereupon, Capital Trust does not offer Executive the position of chief
executive officer of Capital Trust.
PART SIX
--------
MISCELLANEOUS
-------------
6.01 Indemnification. Executive shall be entitled in respect of all
acts or omissions by Executive occurring at any time during the Employment
Period to the benefit of the indemnification provisions contained in the Capital
Trust Amended and Restated Declaration of Trust and the by-laws of Capital Trust
both as in effect on the date hereof (not including any amendments or additions
that limit or narrow, but including any that add to or broaden, the protection
afforded to Executive by those provisions), to the extent not prohibited by
applicable law.
6.02 Assignment. Executive and Capital Trust acknowledge and agree that
the covenants, terms and provisions contained in this Agreement constitute a
personal employment contract and the rights of the parties thereunder cannot be
transferred, sold, assigned, pledged or hypothecated, excepting that (a)
Executive's rights pursuant to Section 4.04 or 4.05 may be transferred by will
or operation of law and Executive's Employee Benefits may be assigned or
transferred in accordance with such policies, programs, plans or Capital Trust
practices; and (b) the rights and obligations of Capital Trust under this
Agreement may be assigned or transferred by operation of law pursuant to a
merger, consolidation, share exchange, sale of substantially all
752364.1
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of Capital Trust's assets, or other reorganization described in Section 368 of
the Code, or through liquidation, dissolution or otherwise, whether or not
Capital Trust is the continuing entity, provided that the assignee or transferee
is the successor to all or substantially all of the assets of Capital Trust and
such assignee or transferee assumes the rights and duties of Capital Trust, if
any, as contained in this Agreement, either contractually or as a matter of law.
6.03 Securities Act. Notwithstanding anything to the contrary in this
Agreement, Capital Trust shall be under no obligation to register the Grant
Shares or any Common Shares issuable upon exercise of the Vested Options under
the Securities Act of 1933, as amended (the "Act"), or any securities or
blue-sky laws of any state or other jurisdiction, nor shall Capital Trust be
under any obligation to take any action or omit to take any action which may
make any of such shares available for resale under Rule 144 of the Act or any
similar statute or regulation.
6.04 Capacity. Executive hereby represents and warrants that, in
entering into this Agreement, he is not in violation of any contract or
agreement, whether written or oral, with any other Person to which he is a party
or by which he is bound and will not violate or interfere with the rights of any
other Person. In the event that such a violation or interference does occur, or
is alleged to occur, notwithstanding the representation and warranty made
hereunder, Executive shall indemnify Capital Trust from and against any and all
manner of expenses and liabilities incurred by Capital Trust or any affiliated
company of Capital Trust in connection with such violation or interference or
alleged violation or interference.
6.05 Severability. If any phrase, clause or provision of this Agreement
is declared invalid or unenforceable by a court of competent jurisdiction, such
phrase, clause or provision shall be deemed severed from this Agreement, but
will not affect any other provisions of this Agreement, which shall otherwise
remain in full force and effect. If any restriction or limitation in this
Agreement is deemed to be unreasonable, onerous and unduly restrictive by a
court of competent jurisdiction, it shall not be stricken in its entirety and
held totally void and unenforceable, but shall remain effective to the maximum
extent permissible within reasonable bounds.
6.06 Notices. Any notice, request or other communication required to be
given pursuant to the provisions hereof shall be in writing and shall be deemed
to have been given when delivered in person or five (5) days after being
deposited in the United States mail, certified or registered, postage pre-paid,
return receipt requested and addressed to the party at its or his last known
addresses. The address of any party may be changed by notice in writing to the
other parties duly served in accordance herewith.
6.07 Waiver. The waiver by Capital Trust or Executive of any breach of
any term or condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition hereof.
6.08 Prevailing Party Expenses; Remedies. If, in any action by Capital
Trust against Executive or Executive Against Capital Trust to enforce the
provisions of this Agreement, there
752364.1
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shall be a final judicial finding that one party has committed a material breach
of this Agreement, the party found to be in breach shall reimburse the other
party for its reasonable costs and expenses in such action (including court
costs and reasonable attorney's fees). If in any such action there is no
judicial finding on the issue of a material breach by Capital Trust or Executive
of this Agreement, or if there is a final judicial finding that both Capital
Trust and Executive have committed a material breach of this Agreement, neither
party shall be obligated to reimburse the other for costs and expenses relating
to the action. Subject, in the case of Executive, to the provisions of Part Four
of this Agreement and, if applicable, the Release, nothing herein shall be
construed as prohibiting Capital Trust or Executive from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of any damages which it is able to prove.
6.09 Reimbursement of Expenses. Capital Trust shall reimburse Executive
for attorneys' and other professionals' fees and expenses actually incurred by
Executive in connection with the review and negotiation of this Agreement and
Executive's employment hereunder, up to a maximum of $15,000 in the aggregate.
6.10 Governing Law. This Agreement and the enforcement thereof shall be
governed and controlled in all respects by the laws of the State of New York
(applicable to agreements to be performed wholly within such state).
6.11 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original, and both such counterparts
shall constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first hereinabove written.
CAPITAL TRUST
By:/s/ Xxxx X. Xxxxx
-----------------------
Title: Vice Chairman & CEO
---------------------------
EXECUTIVE:
/s/ Xxxxxxx Xxxxxx
---------------------------
XXXXXXX XXXXXX
752364.1
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Exhibit A
RELEASE
1. Pursuant to the terms of the Employment Agreement made as of August
15, 1998, between Capital Trust, a trust organized under the laws of the State
of California and established under a Declaration of Trust dated September 15,
1966, as amended from time to time (such trust and any successors thereto being
hereinafter referred to as "Capital Trust"), and the undersigned (the
"Agreement"), and in consideration of the payments made to me and other benefits
to be received by me pursuant thereto, I, Xxxxxxx Xxxxxx, being of lawful age,
do hereby release, and forever discharge, Capital Trust and its trustees,
directors, officers, shareholders, subsidiaries, agents, and employees, from any
and all actions, causes of action, claims, or demands for general, special or
punitive damages, attorney's fees, expenses, or other compensation, which in any
way relate to or arise out of my employment with Capital Trust or any of its
subsidiaries or the termination of such employment (but not for actions, causes
of action, claims or demands not directly related to such employment or
termination of employment, even if arising at the time of termination), which I
may now or hereafter have under any federal, state or local law, regulation or
order, including without limitation, under the Age Discrimination in Employment
Act, as amended, through and including the date of this Release; provided,
however, that neither this Release, nor any action or failure to act on the part
of Executive not constituting a breach hereunder or under the Agreement, shall
release or reduce Capital Trust's obligations with respect to (a) payment of the
severance payments and compliance with the other provisions of Section 4.01,
4.02 or 4.03, as applicable, of the Agreement, (b) Executive's rights to the
Vested Options and Share Grants granted under the Share Plan (as the terms of
the Vested Options have been modified by the provisions of Section 4.01(i),
4.02(g) or 4.03(g), as applicable, of the Agreement) and (c) paragraph 2 of this
Release.
2. Capital Trust agrees that, from and after the date hereof, if asked
about the undersigned's separation from Capital Trust, except as otherwise
required by applicable law, Capital Trust will not make any public statement
regarding such separation other than that the undersigned has left Capital Trust
to pursue other interests. From and after the date hereof, Capital Trust will
not intentionally make any defamatory or disparaging statements about the
undersigned or the undersigned's performance for Capital Trust. For purposes of
this paragraph 2 only, Capital Trust shall mean only Xxxx Xxxxx, Xxxxx Xxxxxxx,
Xxxxxx Xxxx, Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxxx (as long as the foregoing
persons are still directly or indirectly affiliated with Capital Trust) and any
persons then holding the position of trustee or director of Capital Trust.
3. I agree that, from and after the date hereof, if asked about my
separation from Capital Trust, except as otherwise required by applicable law, I
will not make any public statement regarding such separation other than that I
have left Capital Trust to pursue other interests. From and after the date
hereof, I will not intentionally make any defamatory or disparaging statements
about Capital Trust, its subsidiaries or their products, services, trustees,
directors, officers, shareholders, employees, agents, customers or business
relationships.
752364.1
4. I further state that I have read this Release and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.
WITNESS my hand this ____ day of __________, ____.
---------------------------
Xxxxxxx Xxxxxx
AGREED AND ACKNOWLEDGED
THIS _____ DAY OF __________ , ____
CAPITAL TRUST
By: _______________________________
752364.1
A-2
[Appendix I]
INSERTS
I. or Section 4.04 or Section 4.05. [initialed by SP and JRK]
II. (but in the case of Special Reason the restrictions set forth in
subparagraph (b) below shall not apply) [initialed by SP and JRK]
DELETIONS
I. Delete two previous words "payable but". [initialed by SP and JRK]
II. Delete two previous words "payable but". [initialed by SP and JRK]
752364.1
