Exhibit 10.1
EMPLOYMENT AGREEMENT
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I, Xxxx X. Xxxxx, agree to the terms and conditions of employment
with Capital Trust, Inc. (the "CT") and CT Investment Management Co., LLC
("CTIMCO" and together with CT, the "Company") set forth in this Employment
Agreement (this "Agreement") dated as of February 24, 2004.
1. Term of Employment. My employment under this Agreement shall
commence effective as of July 15, 2004 ("Effective Date") and shall end on
December 31, 2008 ("Expiration Date") or such earlier date on which my
employment is terminated under Section 5 of this Agreement (the period from the
Effective Date through the Expiration Date, or such earlier termination as
provided for herein being referred to herein as the "Term"). On or before 180
days prior to the Expiration Date, the parties shall discuss the possibility of
renewal or extension of this Agreement on mutually satisfactory terms. If no
agreement shall be reached regarding the terms and conditions of such extension
or renewal prior to the Expiration Date, this Agreement shall terminate as of
the Expiration Date. If the Company continues to employ me beyond the Expiration
Date without entering into a written agreement extending the term of this
Agreement, except as provided in a new written employment agreement between the
Company and me, I shall continue to receive the base salary in effect as of the
Expiration Date for as long as I remain employed by the Company, but all other
obligations and rights under this Agreement shall prospectively lapse as of the
Expiration Date, except my right to payment of compensation accrued or earned
prior to the Expiration Date or any other rights which by their terms extend
beyond the Expiration Date, including the Company's ongoing indemnification
obligation under Section 4, any post-termination payment provisions under
Section 5(a), my confidentiality and other obligations under Section 6, and our
mutual arbitration obligations under Section 8, and I thereafter shall be an
at-will employee of the Company.
2. Nature of Duties. I shall be the Company's Chief Executive
Officer and President and report directly to the Company's Board of Directors
("Board") and remain subject to the Board's direction and control. As such, I
shall have all of the customary powers and duties associated with that position
and shall manage the business of the Company on a day-to-day basis and shall
report to and advise the Board regarding the management and operation of the
Company's business. All other officers of the Company and its affiliates shall
report to me. I shall devote my full business time and effort to the performance
of my duties for the Company. I shall be subject to the Company's policies,
procedures and approval practices, as generally in effect from time to time and
made known to me, to the extent consistent with this Agreement. I shall not,
while employed by the Company, engage in, accept employment from or provide
services to any other person, firm, corporation, governmental agency or other
entity; provided, however, that subject to Section 6(c) hereof, I may (a) devote
a reasonable amount of time to civic activities, (b) maintain not more than two
outside board positions with companies which do not compete with the Company and
serve on the board of directors of a cooperative apartment in which I live, in
each case subject to the prior consent of the Board, which consent shall not be
unreasonably withheld, and (c) manage my own or my family's investments,
provided that such activities do not conflict with or detract from my diligent
performance of my duties hereunder.
3. Place of Performance. I shall be based in New York City,
except for required travel on the Company's business.
4. Compensation and Related Matters.
(a) Base Salary. The Company shall pay me base salary at
an annual rate of $600,000, or such higher rate as the Board elects to pay me.
My base salary shall be paid in conformity with the Company's salary payment
practices generally applicable to senior Company executives.
(b) Annual Bonuses; Annual Long Term Equity Incentive
Grants. The Company shall pay me annual bonuses and grant me annual long term
equity incentives, determined as follows:
(i) For each calendar year of the Term commencing
with January 1, 2005, I shall receive pursuant to Section 10(b) of the Company's
2004 Long Term Incentive Plan (the "LTIP"), subject to shareholder approval
thereof, a Performance Compensation Award grant that provides for an annual cash
bonus opportunity for that calendar year ranging from 100% of my base salary at
threshold performance to 200% of my base salary at maximum performance (with a
target of 150% of my base salary at target performance) achieved in respect of
Annual Performance Measures (as defined below) established for the calendar year
as the Performance Period. Before February 28 of each such calendar year, the
Performance Measures containing threshold, target or maximum performance
criteria shall be set by the Compensation Committee of the Board (the
"Compensation Committee"), but only after consultation with me in advance (the
"Annual Performance Measures"). Any cash bonus earned pursuant to such
Performance Compensation Award shall be paid in conformity with the Company's
bonus payment practices generally applicable to senior Company executives. The
Company shall provide me with an opportunity, on an annual basis, to defer in
advance bonus amounts to which I would otherwise become entitled pursuant to the
Performance Compensation Award and attributable to the calendar year for which a
timely deferral has been made (hereinafter the date the bonus would otherwise be
payable is referred to as the "Bonus Deferral Date"), to be paid to me within 90
days following the earlier of the expiration of the Term, or the termination of
my employment for any reason (such date constituting a "Bonus Deferral Payment
Date"). All amounts deferred by me shall be credited or debited by an amount
equal to the annual rate equal to the annual total shareholder positive or
negative return (dividends, plus any other property or consideration received by
shareholders in connection with their ownership of class A common stock of the
Company, plus or minus share price growth or depreciation) on the class A common
stock of the Company, commencing as of the Bonus Deferral Date and ending as of
the Bonus Deferral Payment Date.
(ii) For each calendar year of the Term commencing
with January 1, 2005, I shall receive pursuant to Section 10(b) of the LTIP,
subject to shareholder approval thereof, a Performance Compensation Award grant
that provides for an award of Restricted Shares, ranging in value from $250,000
should I achieve threshold performance to $750,000 should I achieve maximum
performance (with a target of $500,000 should I achieve target performance), in
each case in respect of the Annual Performance Measures (each, a "LTI Grant").
The Performance Compensation Award for each LTI Grant shall provide that the
Restricted Shares earned in respect of the achievement of the Annual Performance
Measures shall be issued after the end of the Performance Period in conformity
with the Company's stock based award grant practices generally applicable to
senior Company executives and shall vest
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(unless my employment has terminated or as otherwise provided for hereunder) as
follows: 50% of the grant shall vest in quarterly installments over the
three-year period from January 1 of the calendar year to which the LTI Grant
relates; 50% of the grant shall be shall vest on December 31 of the fourth year
following the year in which the shares are issued (the "Fourth Anniversary")
provided that the "Grant Performance Hurdle" (as defined below) has been
satisfied as of the Fourth Anniversary. For purposes of this Agreement, "Grant
Performance Hurdle" shall mean a total shareholder return of 13% per annum
(consisting of dividends, plus share price growth, plus any other property or
consideration received by shareholders in connection with their ownership of
Class A common stock of the Company) measured for the four-year period
commencing on January 1 during the year in which the shares have been issued and
ending on the fourth anniversary thereof. All Dividends that are earned and
accrued with respect to all vested and unvested Restricted Shares issued
pursuant to each LTI Grant shall be currently paid to me. Notwithstanding the
foregoing, in accordance with the deferral provisions of the LTIP, the Company
shall permit me to defer receipt of some or all of the Restricted Shares
transferable to me prior to vesting.
(iii) I shall be eligible for such other bonuses
and other incentive compensation under bonus and incentive stock plans
(including plans that provide for performance compensation tied to carried
interest and investment management fees from funds under management) generally
available to other senior Company executives as the Compensation Committee
determines in its sole discretion.
(iv) The Company covenants to use best efforts to
obtain shareholder approval of the LTIP in connection with the above grants.
(c) Stock Options, Restricted Stock, and Incentive Plans.
(i) As of the Effective Date, pursuant to the
LTIP, subject to shareholder approval thereof, the Company shall grant to me
Restricted Shares equal to 218,818 shares of Class A common stock of the Company
(the "Initial Grant"). The Initial Grant shall (unless my employment has
terminated or as otherwise provided for herein) vest as follows: (I) 50% of the
value of the award shall vest in eight (8) equal quarterly installments
commencing on March 31, 2007, and (II) 50% of the value of the award shall be
structured as a "Performance Compensation Award" pursuant to Section 10(b) of
the LTIP, and shall vest on the Expiration Date, subject to satisfaction of the
Grant Performance Hurdle, measured for the five-year period commencing on
January 1, 2004 and ending on the Expiration Date. All dividends that are earned
and accrue with respect to all vested and unvested Restricted Shares issued
pursuant to the Initial Grant shall be currently paid to me. Notwithstanding the
foregoing, in accordance with the deferral provisions of the LTIP, the Company
shall permit me to defer receipt of some or all of the Restricted Shares
transferable to me upon vesting.
(ii) I shall be eligible to participate in all
stock option, restricted stock, and incentive plans generally available to other
senior Company executives as the Compensation Committee determines in its sole
discretion, (including plans that provide for performance compensation tied to
carried interest and investment management fees from funds under management).
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(iii) The Company covenants to use best efforts to
obtain shareholder approval of the LTIP in connection with the above grants.
(d) Performance Compensation Award.
(i) As of the Effective Date, pursuant to the
LTIP, subject to shareholder approval thereof, the Company shall grant to me a
Performance Compensation Award that provides for a cash payment to me equal to
8% of any payments received by the Company as incentive management fees paid by
CT Mezzanine Partners III, Inc. ("Fund III"), which shall (unless otherwise
provided for herein) vest as follows: 65% shall be vested as of the close of the
investment period for Fund III and the remaining 35% shall be vested upon the
Company's receipt of the incentive management fees.
(ii) On or before the first anniversary of the
date hereof, pursuant to the LTIP, subject to shareholder approval thereof, I
shall be eligible receive an additional Performance Compensation Award grant as
determined by the Compensation Committee in its sole discretion that provides
for a cash payment to me equal to up to an additional 10% of any incentive
management fees received by the Company from Fund III, which, if granted, shall
(unless otherwise provided for herein) vest as follows: 65% shall be vested as
of the close of the investment period for Fund III and the remaining 35% shall
be vested upon the Company's receipt of the incentive management fees.
(iii) Subject to shareholder approval of the LTIP,
I agree to surrender my rights under, and terminate, that certain Incentive
Compensation Agreement, dated as of October 15, 2003, by and between me and the
Company, relating to incentive compensation payable in respect of carried
interest distributions received by the Company from CT Mezzanine Partners II LP
("Incentive Compensation Agreement"); provided that the Company shall grant to
me, simultaneously, a Performance Compensation Award pursuant to the LTIP that
provides for equivalent incentive compensation fully vested to the extent the
right to compensation under the Incentive Compensation Agreement is vested as of
the date of grant.
(iv) The Company covenants to use best efforts to
obtain shareholder approval of the LTIP in connection with the above grants.
(e) Standard Benefits. During my employment, I shall be
entitled to participate in all employee benefit plans and programs, including
paid vacations, to the same extent generally available to other senior Company
executives, in accordance with the terms of those plans and programs, including,
without limitation, (i) continued coverage for me under the term life insurance
policy and disability insurance policy as in effect immediately prior to the
Effective Date (with the Company continuing to pay or reimburse for all
applicable premiums), (ii) continued first-class business travel, and (iii)
continued reimbursement for a luxury automobile and a full-time driver employed
for my benefit by the Company. For purposes of determining service credit under
any employee benefit or welfare plan maintained by the Company, I shall be given
service credit for my service with all predecessors of the Company, including
without limitation for this purpose Xxxxxx Capital Group LP ("Xxxxxx Capital").
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(f) Indemnification. The Company shall extend to me the
same indemnification arrangements as are generally provided to other senior
Company executives, including after the termination of my employment.
Notwithstanding the foregoing, during the Term, the Company shall continue in
effect at minimum the same terms of indemnification and the same level of
Directors and Officers insurance coverage as were in effect immediately prior to
the Effective Date.
(g) Expenses. I shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and business expenses I
incur in connection with my employment but I must incur and account for those
expenses in accordance with the policies and procedures established by the
Company.
(h) Xxxxxxxx-Xxxxx Act Loan Prohibition. To the extent
that any Company benefit, program, practice, arrangement, or this Agreement
would or might otherwise result in my receipt of an illegal loan ("Loan"), the
Company shall use reasonable efforts to provide me with a substitute for the
Loan that is lawful and of at least equal value to me.
5. Termination.
(a) Rights and Duties. If my employment is terminated, I
shall be entitled to the amounts or benefits shown on the applicable row of the
following table, subject to the balance of this Section 5. The Company and I
shall have no further obligations to each other, except the Company's ongoing
indemnification obligation under Section 4, my confidentiality and other
obligations under Section 6, and our mutual arbitration obligations under
Section 8, or as set forth in any written agreement I subsequently enter into
with the Company.
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DISCHARGE Payment or provision when due of (1) any unpaid base
FOR CAUSE salary, expense reimbursements, and vacation days
accrued prior to termination of employment, and (2)
other unpaid vested amounts or benefits or amounts
deferred under Company compensation, incentive, and
benefit plans (including, without limitation vested
interests I may have with respect to Fund II and
Fund III or any previous grant of equity). In
addition, I may continue to exercise my vested
options for up to the earlier of (a) the expiration
date of such options or (b) the date 90 days
following my termination.
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DISABILITY Same as for "Discharge for Cause" EXCEPT that (I) my
base salary shall continue until the commencement of
payments under my disability insurance policy, (II)
I shall be entitled to receive a pro-rated bonus
determined for the year in which my disability
became effective hereunder, and calculated at
"target", (III) the Company shall pay the COBRA
premiums associated with continuing medical
insurance coverage for my benefit and the benefit of
my spouse and dependent children for one year
following my disability effective date, and (IV) I
will continue to vest for one year following my
disability effective date in all awards previously
granted to me, and in determining the Grant
Performance Hurdle for any remaining performance
vesting period, I will be credited with the
shareholder return for the full year preceding the
year of my disability effective date. In addition, I
may continue to exercise my vested options for up to
one year following my termination, or if later, up
until the expiration date of such options.
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DISCHARGE Same as for "Discharge for Cause" EXCEPT that, in
OTHER THAN exchange for my execution of a release in accordance
FOR CAUSE with this section, (1) I shall be entitled to
OR receive a lump-sum payment equal to the greater of
DISABILITY (x) the sum of my base salary and cash bonus payable
through the Expiration Date (with the cash bonus
based on target and assuming the satisfaction of all
Annual Performance Measures or (y) twice the sum of
(I) my base salary then payable and (II) the highest
annual bonus paid to me during the Term, (2) all LTI
Grants made prior thereto and the Initial Grant
shall immediately vest in full, (3) the Performance
Compensation Awards awarded under Section 4(d) shall
immediately vest in full, (4) I may continue to
exercise my vested options for up to one year
following my discharge or, if later, up until the
expiration date of such options, and (5) the Company
shall pay the COBRA premiums associated with
continuing medical insurance coverage for my benefit
and the benefit of my spouse and dependent children
for 18 months following my date of discharge or such
earlier time I shall obtain comparable coverage
through another employer.
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RESIGNATION Same as for "Discharge for Cause."
WITHOUT GOOD
REASON
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RESIGNATION Same as for "Discharge Other Than for Cause or
WITH GOOD Disability."
REASON
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DEATH Same as for "Discharge for Cause" EXCEPT that (1) my
legal representative shall be entitled to receive
any death benefits payable under the life insurance
maintained on my behalf by the Company as well as
any earned but as of yet unpaid bonus amounts from
the year preceding the date of my death, (2) any
equity and performance compensation awards I have
shall continue to vest for one year following the
date of my death, and in determining the Grant
Performance Hurdle for any remaining performance
vesting period, my estate will be credited with the
shareholder return for the full year preceding the
year of my death, (3) the Company shall pay the
COBRA premiums associated with continuing medical
insurance coverage for the benefit of my spouse and
dependent children for one year following my date of
death, and (4) my vested options may continue to be
exercised for up to one year following my death, or
if later, up until the expiration date of such
options.
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TERMINATION Same as for "Discharge Other Than for Cause or
UPON OR AFTER Disability" EXCEPT (1) the lump-sum payment shall
THE EXPIRATION equal one year of my current base salary as of the
OF AGREEMENT Expiration Date, (2) I shall be paid any earned but
as of yet unpaid bonus at target for the most
recently completed fiscal year preceding my
termination date, (3) I shall receive additional
vesting on all awards previously granted to me for
one year following my termination, and (4) I may
continue to exercise my vested options for up to one
year following my termination, or if later, up until
the expiration of such options.
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(b) Discharge for Cause. The Company may terminate my
employment at any time if the Board (without my vote) believes in good faith
that it has Cause to terminate me. "Cause" shall include, but not be limited to:
(i) Fraud and Dishonesty. My commission of a
willful act of fraud, embezzlement or misappropriation of any money or
properties of the Company or its affiliates (other than an insubstantial and
unintentional misappropriation that has not been remedied within 10 days after
the Company provides me with notice of such misappropriation).
(ii) Criminal Act. My conviction of a felony or
any material violation of any federal or state securities law (whether by plea
of nolo contendere or otherwise) or my being enjoined from violating any federal
or state securities law or being determined to have violated any such law.
(iii) Reckless Conduct. My engaging in willful or
reckless misconduct in connection with any property or activity, the purpose or
effect of which materially and adversely affects the Company and/or its
subsidiaries and affiliates, and/or their predecessors and successors
(collectively, the "Group").
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(iv) Substance Abuse. My repeated and intemperate
use of alcohol or illegal drugs after written notice from the Board that such
use, if continued, would result in the termination of my employment hereunder.
(v) Breach of Agreement. My failure to cure my
material breach of any of my obligations under this Agreement (other than by
reason of physical or mental illness, injury, or condition) after having
received 10 days' notice from the Board of the breach.
(vi) Barred from Office. My becoming barred or
prohibited by the SEC from holding my position with the Company.
(c) Termination for Disability. Except as prohibited by
applicable law, the Company may terminate my employment on account of
Disability, or may transfer me to inactive employment status, which shall have
the same effect under this Agreement as a termination for Disability.
"Disability" means a physical or mental illness, injury, or condition that
prevents me from performing substantially all of my duties under this Agreement
for at least 120 consecutive calendar days or for at least 180 calendar days,
whether or not consecutive, in any 365 calendar day period, or is likely to do
so, as certified by a physician selected by the Board.
(d) Discharge Other Than for Cause or Disability. The
Company may terminate my employment at any time for any reason, and without
advance notice. If I am terminated by the Company other than for Cause under
Section 5(b) or Disability under Section 5(c), I will only receive the special
benefits provided for a Discharge other than for Cause or Disability under
Section 5(a) if I sign a separation agreement and general release in the form
attached hereto as Schedule A and do not thereafter revoke the release.
(e) Resignation. If I resign other than for Good Reason,
the Company may accept my resignation effective on the date set forth in my
notice or any earlier date. If I resign other than for Good Reason, I agree that
the Restricted Period (as defined in Section 6(b)) shall begin on the date of my
resignation. If I resign for Good Reason, my employment will end on my last date
of work and I will receive the benefits to which I am entitled under Section
5(a), but only if I sign the separation agreement and general release described
in Section 5(d), above, and I do not thereafter revoke the release. "Good
Reason" means that, without my express written consent, one or more of the
following events occurred after my execution of this Agreement:
(i) Demotion. I am assigned any duties,
responsibilities or title materially inconsistent with my rights under this
Agreement (including without limitation hiring by the Company of an executive to
whom I report or does not report to me), other than as a result of (or I
connection with) the Company's ceasing to be a public company.
(ii) Compensation Reduction. My compensation
provided for under this Agreement is materially reduced (other than any
reduction resulting from the good faith application by the Compensation
Committee of performance factors under the LTIP).
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(iii) Relocation. The Company requires me, without
my consent, to be based at any office or location outside of a 40-mile radius of
Midtown Manhattan, New York, New York.
(iv) Breach of Promise. The Company fails to cure
its material breach of this Agreement within seven days after I give it written
notice thereof.
(v) Discontinuance of Benefits. The Company stops
providing me with benefits that, in the aggregate, are substantially as valuable
to me as those I enjoyed immediately prior to the Effective Date other than a
result of across-the-board benefit reductions affecting all executives of
similar status employed by the Company and any entity in control of the Company.
(vi) Change of Control. The Company is involved
in:
(1) a merger or acquisition in which 50% or
more of the Company's voting stock outstanding after the merger or acquisition
is held by holders different from those who held the Company's voting stock
immediately prior to such merger or acquisition;
(2) the sale, transfer or other disposition
of all or substantially all of the assets of the Company in liquidation or
dissolution of the Company;
(3) a transfer of all or substantially all
of the Company's assets pursuant to a partnership or joint venture agreement or
similar arrangement where the Company's resulting interest is or becomes less
than 50%;
(4) on or after the Effective Date, a
change in ownership of the Company through an action or series of transactions,
such that any person is or becomes the beneficial owner, directly or indirectly,
of 50% or more of the Company's voting stock; or
(5) a change occurs in the composition of
the Board during any two-year period such that the individuals who, as of the
beginning of such two-year period, constitute the Board (such Board shall be
hereinafter referred to as the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that for
purposes of this definition, any individual who becomes a member of the Board
subsequent to the beginning of the two-year period, whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such pursuant to this
proviso) shall be considered as though such individual were a member of the
Incumbent Board; and provided further, however, that any such individual whose
initial assumption of office occurs as a result of or in connection with a
solicitation subject to Rule 14a-12(c) of Regulation 14A promulgated under the
Exchange Act of 1934, as amended, or other actual or threatened solicitation of
proxies or consents by or on behalf of an entity other than the Board shall not
be so considered as a member of the Incumbent Board.
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(vii) Notice of Prospective Action. I am
officially notified (or it is officially announced) that the Company will take
any of the actions listed above during the term of this Agreement.
However, an event that is or would constitute Good Reason shall cease to be Good
Reason if: (1) I do not give the Company written notice of my intent to
terminate my employment within 45 days after the event occurs; (2) the Company
reverses the action or cures the default that constitutes Good Reason within 30
days after I notify it in writing that Good Reason exists before I terminate
employment; or (3) I was a primary instigator of the Good Reason event and the
circumstances make it inappropriate for me to receive Good Reason resignation
benefits under this Agreement.
(f) Death. If I die while employed under this Agreement,
the payments required by Section 5(a) in the event of my death shall be made.
6. Confidentiality and Other Obligations.
(a) Confidential Information. During the term of my
employment, in exchange for my promises to use such information solely for the
Company's benefit, the Company has provided and will continue to provide me with
Confidential Information concerning, among other things, its business,
operations, clients, investors, and business partners. "Confidential
Information" refers to information not generally known by others in the form in
which it is used by the Company, and which gives the Company a competitive
advantage over other companies which do not have access to this information,
including secret, confidential, or proprietary information or trade secrets of
the Company and its subsidiaries and affiliates, conveyed orally or reduced to a
tangible form in any medium, including information concerning the operations,
future plans, customers, business models, strategies, and business methods of
the Company and its subsidiaries and affiliates, as well as information about
the Company's active and prospective investors, clients and business partners
and their respective investment preferences, risk tolerances, portfolio
allocations and amounts, cash flow requirements, contact information, and other
information about how to best serve their needs and preferences. "Confidential
Information" does not include information that (i) I knew prior to my employment
with the Company, (ii) subsequently came into my possession other than through
my work for the Company and not as a result of a breach of any duty owed to the
Company, (iii) is generally known within the relevant industry, or (iv) involves
my personal materials and materials generated in connection with my prior
service with Xxxxxx Capital.
(b) Promise Not to Disclose. I promise never to use or
disclose any Confidential Information before it has become generally known
within the relevant industry through no fault of my own. I agree that this
promise shall never expire.
(c) Promise Not to Solicit. Because my position enables
me to learn Confidential Information regarding the clients, investors, and
business partners of the Company and how best to serve them, I further agree
that, during my employment with the Company and for 24 months after my
termination for Cause under Section 5(b), resignation without Good Reason under
Section 5(e), or resignation with Good Reason under Section 5(e)(vi) (the
"Restricted Period"): (1) as to any client, investor, or business partner of the
Company with
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whom I had dealings or about whom I acquired proprietary information during my
employment (or as to any investor in any investment fund or vehicle owned,
managed, or established by the Company, I will not solicit or attempt to solicit
(or assist others to solicit) the investor, client, or business partner to
invest in or do business with any person or entity other than the Company; and
(2) I will not solicit or attempt to solicit (or assist others to solicit) for
employment any person who is, or within the preceding six months was, an
officer, manager, employee, or consultant of the Company. I agree that the
restrictions set forth in this paragraph do not prohibit me from engaging in my
livelihood and do not foreclose my working with investors, clients, or business
partners not identified in this paragraph.
(d) Promise Not to Engage in Certain Employment. I agree
that, during the Restricted Period, I will not, without the prior written
consent of the Board, accept any employment, provide any services, advice or
information; or assist or engage in any activity (whether as an employee,
consultant, or in any other capacity, whether paid or unpaid) with (1) any
specialty finance firm or investment management company focused on commercial
real estate-related debt instruments or (2) any business that, as of the date of
my termination, directly competes with the Company.
(e) Return of Information. When my employment with the
Company ends, I will promptly deliver to the Company, or, at its written
instruction, destroy, all documents, data, drawings, manuals, letters, notes,
reports, electronic mail, recordings, and copies thereof, of or pertaining to it
or any other Group member in my possession or control. In addition, during my
employment with the Company or the Group and thereafter, I agree to meet with
Company personnel and, based on knowledge or insights I gained during my
employment with the Company and the Group, answer any question they may have
related to the Company or the Group.
(f) Intellectual Property. Intellectual property
(including such things as all ideas, concepts, inventions, plans, developments,
software, data, configurations, materials (whether written or machine-readable),
designs, drawings, illustrations, and photographs, that may be protectable, in
whole or in part, under any patent, copyright, trademark, trade secret, or other
intellectual property law), developed, created, conceived, made, or reduced to
practice during my Company employment (except intellectual property that has no
relation to the Group or any Group customer that I developed, etc., purely on my
own time and at my own expense or that related to the business and affairs of
Xxxxxx Capital), shall be the sole and exclusive property of the Company, and I
hereby assign all my rights, title, and interest in any such intellectual
property to the Company.
(g) Enforcement of This Section. This section shall
survive the termination of this Agreement for any reason. I acknowledge that (a)
my services are of a special, unique, and extraordinary character and it would
be very difficult or impossible to replace them, (b) this section's terms are
reasonable and necessary to protect the Company's legitimate interests, (c) this
section's restrictions will not prevent me from earning or seeking a livelihood,
(d) this section's restrictions shall apply wherever permitted by law, and (e)
my violation of any of this section's terms would irreparably harm the Company.
Accordingly, I agree that, if I violate any of the provisions of this section,
the Company or any Group member may be entitled to seek, in addition to other
remedies available to it, an injunction to be issued by
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any court of competent jurisdiction restraining me from committing or continuing
any such violation.
7. Notice.
(a) To the Company. I will send all communications to the
Company in writing, by mail, hand delivery or facsimile, addressed as follows
(or in any other manner the Company notifies me to use):
Capital Trust, Inc.
Attention: Xxxxxx Xxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Tel.: (000) 000-0000
With copy to: Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
(b) To Me. All communications from the Company to me
relating to this Agreement must be sent to me in writing at my Company office or
in any other manner I notify the Company to use.
(c) Time Notice Deemed Given. Notice shall be deemed to
have been given when delivered or, if earlier (1) when mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or (2)
faxed with confirmation of delivery, in either case, addressed as required in
this section.
8. Registration Rights and Related Assistance. During the Term
and for so long thereafter as I or my estate directly or indirectly own class A
common stock, stock options or equity-based awards issued by the Company, and
for so long as the Company's common stock is publicly traded, (A) the Company
shall file with the Securities and Exchange Commission and thereafter maintain
the effectiveness of one or more registration statements on Form S-8 (or any
successor form) registering under the Securities Act of 1933, as amended (the
"1933 Act"), the offer and sale of shares by the Company to me pursuant to stock
options or other equity-based awards granted to me under this Agreement, Company
compensation plans or otherwise and (B) to the extent that I (or my estate)
determine to engage in an exempt sale of any common stock or other securities of
the Company, the Company shall take all commercially reasonable steps to
cooperate with and assist me (or my estate) in connection with such sale.
9. Arbitration of Disputes. Except for the Company's right to
seek injunctive relief in accordance with Section 6(g), above, all disputes
between the Company and me are to be resolved by final and binding arbitration
in accordance with the separate Arbitration
-12-
Agreement attached as Schedule B to this Agreement. This section shall remain in
effect after the termination of this Agreement.
10. Amendment. No provisions of this Agreement may be modified,
waived, or discharged except by a written document signed by a duly authorized
Company officer and me. Thus, for example, promotions, commendations, and/or
bonuses shall not, by themselves, modify, amend, or extend this Agreement. A
waiver of any conditions or provisions of this Agreement in a given instance
shall not be deemed a waiver of such conditions or provisions at any other time.
11. Interpretation; Exclusive Forum. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the state of New York (excluding any that mandate the
use of another jurisdiction's laws). Any litigation, arbitration, or similar
proceeding with respect to such matters only may be brought within that state,
and all parties to this Agreement consent to that state's jurisdiction and agree
that venue anywhere in that state would be proper.
12. Successors. This Agreement shall be binding upon, and shall
inure to the benefit of, me and my estate, but I may not assign or pledge this
Agreement or any rights arising under it, except to the extent permitted under
the terms of the benefit and compensation plans in which I participate.
13. Fees. The Company shall pay for my reasonable legal fees
incurred in the preparation and negotiation of this Agreement.
14. Taxes. The Company shall withhold taxes from payments it
makes pursuant to this Agreement as it determines to be required by applicable
law.
15. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute the same instrument.
17. Entire Agreement; Prior Agreements. All oral or written
agreements or representations, express or implied, with respect to the subject
matter of this Agreement are set forth in this Agreement. Upon my execution of
this Agreement, the employment agreement between myself and the Company dated as
of July 15, 1997 will be considered null and void, and neither I nor the Company
shall have any further obligations or rights thereunder.
-13-
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
--------------------------------------------------------------------------------
Date: As of February 24, 2004 CAPITAL TRUST, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
Date: As of February 24, 2004 CT INVESTMENT MANAGEMENT CO., LLC
By: /s/ Brain X. Xxxxxx
-------------------------
Name: Brain X. Xxxxxx
Title: Chief financial Officer
Date: As of February 24, 2004 /S/ XXXX X. XXXXX
------------------------------
XXXX X. XXXXX
-14-
SCHEDULE A
SEPARATION AGREEMENT AND GENERAL RELEASE
----------------------------------------
This SEPARATION AGREEMENT AND GENERAL RELEASE ("Release") made this ___
day of _________, ____ by and between Capital Trust, Inc. and CT Investment
Management Co., LLC (together, the "Company") and Xxxx X. Xxxxx ("Executive"):
In exchange for the mutual promises exchanged herein and other good and
valid consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. Employment Termination
----------------------
Executive agrees that his employment with the Company has ended or will
end on [date].
2. Claims Released
---------------
In exchange for the benefits provided herein, Executive irrevocably and
unconditionally releases the Company, its current or former parents,
subsidiaries, or affiliates, their past, present, or future employees or agents,
and their successors (collectively, the "Released Parties"), from all known or
unknown claims that Executive presently may have arising out of his employment
with, or separation from, the Company, other than claims (i) seeking enforcement
of this Release, (ii) for vested awards or benefits under the Company's employee
benefit plans, including the 2004 Long-Term Incentive Program, and (iii) to
indemnification and coverage under the Company's directors and officers'
insurance policies ("Claims"). The Claims Executive is releasing include,
without limitation, claims under the Age Discrimination in Employment Act
("ADEA") and Executive Order 11,141; Title VII of the Civil Rights Act of 1964,
Sections 1981 and 1983 of the Civil Rights Act of 1866, and Executive Order
11,246; the Americans with Disabilities Act and Sections 503 and 504 of the
Rehabilitation Act of 1973; the New York State Human Rights Law; the New York
City Human Rights Law; or any other federal, state, or local common law,
statute, regulation, or law of any other type. Executive acknowledges that he is
releasing Claims he knows he has and Claims he may not know he has, and
understands the significance of doing so.
3. Pursuit of Released Claims
--------------------------
Executive agrees to withdraw with prejudice all complaints or charges,
if any, he has filed against any Released Party with any agency or court.
Executive agrees that he will never file any lawsuit or complaint against them
based on the Claims purportedly released in this Release. Executive promises
never to seek any damages, remedies, or other relief for himself personally (any
right to which he hereby waives) by filing or prosecuting a charge with any
administrative agency with respect to any Claim purportedly released by this
Release. Executive promises to request any administrative agency or other body
assuming jurisdiction of any such lawsuit, complaint, or charge to withdraw from
the matter or dismiss the matter with prejudice.
A-1
4. Nonadmission of Liability
-------------------------
Executive agrees that this Release is not an admission of guilt or
wrongdoing by the Released Parties and acknowledges that the Released Parties do
not believe or admit that they have done anything wrong.
5. Confidentiality and Non-Disparagement
-------------------------------------
Executive agrees to keep the fact and terms of this Release in strict
confidence. Executive agrees not to disclose this document, its contents or
subject matter to any person other than his immediate family, attorney,
accountant or income tax preparer, or otherwise as required by law. Executive
agrees that he will not denigrate, disparage, defame, impugn, or otherwise
damage or assail the reputation or integrity of the Company or any Released
Party.
6. Consideration of Release
------------------------
Executive acknowledges that, before signing this Release, he was given
at least 21 calendar days to consider this Release. Executive waives any right
he might have to additional time beyond this consideration period within which
to consider this Release. Executive acknowledges that: (a) he took advantage of
that time to consider this Release before signing it; (b) he carefully read this
Release; (c) he fully understands what this Release means; (d) he is entering
into it voluntarily; (e) he is receiving valuable consideration in exchange for
his execution of this Release that he would not otherwise be entitled to
receive; and (f) the Company, in writing, encouraged him to discuss this Release
with his attorney (at his own expense) before signing it, and that he did so to
the extent he deemed appropriate. Executive may revoke his release of claims
under the ADEA within seven (7) days after he signs this Release, in which case
he will not be entitled to receive all of the benefits set forth herein.
7. Miscellaneous
-------------
This Release sets forth the entire agreement between Executive and the
Company pertaining to the subject matter of this Release. This Release may not
be modified or canceled in any manner except by a writing signed by both
Executive and an authorized Company official. Executive acknowledge that the
Company has made no representations or promises to him other than those in this
Release. If any provision in this Release is found to be unenforceable, all
other provisions will remain fully enforceable. It is not necessary that the
Company sign this Release for it to become binding on both Executive and the
Company. This Release binds Executive's heirs, administrators, representatives,
executors, successors, and assigns, and will inure to the benefit of the
Released Parties and their heirs, administrators, representatives, executors,
successors, and assigns. This Release shall be construed as a whole according to
its fair meaning; it shall not be construed strictly for or against Executive or
the Released Parties. Unless the context indicates otherwise, the term "or"
shall be deemed to include the term "and" and the singular or plural number
shall be deemed to include the other. Disputes under this Release are to be
resolved in accordance with the existing arbitration agreement between the
A-2
parties. Except to the extent governed by federal law, this Release shall be
governed by the statutes and common law of the State of New York (excluding any
that mandate the use of another jurisdiction's laws). Section headings in this
Agreement are included for convenience of reference only and shall not be a part
of this Agreement for any other purpose.
--------------------------------------------------------------------------------
TAKE THIS RELEASE HOME, READ IT, AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS
BEFORE SIGNING IT. THIS RELEASE INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.
--------------------------------------------------------------------------------
Date: ________________________ CAPITAL TRUST, INC.
By: _________________________
Name: _______________________
Title: ______________________
Date: ________________________ CT INVESTMENT MANAGEMENT CO., LLC
By: _________________________
Name: ______________________
Title: ______________________
Date: ________________________ _____________________________
XXXX X. XXXXX
A-3
SCHEDULE B
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
------------------------------------
I recognize that differences may arise between Capital Trust,
Inc. and CT Investment Management Co., LLC (together, the "Company") and me
during or following my employment with the Company, and that those differences
may or may not be related to my employment. I understand and agree that by
entering into this Agreement to Arbitrate Claims ("Agreement"), I anticipate
gaining the benefits of a speedy, impartial dispute-resolution procedure.
Except as provided in this Agreement, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Agreement. To the extent that the Federal Arbitration Act either is
inapplicable, or held not to require arbitration of a particular claim or
claims, New York law pertaining to agreements to arbitrate shall apply.
I understand that any reference in this Agreement to the Company
will be a reference also to all of its subsidiary and affiliated entities, all
benefit plans, the benefit plans' sponsors, fiduciaries, administrators, and
affiliates, and all successors and assigns of any of them.
Claims Covered by the Agreement
The Company and I mutually consent to the resolution by
arbitration of all claims or controversies ("claims"), past, present or future,
which arise, directly or indirectly, out of my employment (or its termination)
or the business of the Company, that the Company may have against me or that I
may have against the Company or against its officers, directors, employees or
agents in their capacity as such or otherwise. The claims covered by this
Agreement include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims; claims for discrimination (including, but not limited to,
race, sex, sexual orientation, religion, national origin, age, marital status,
or medical condition, handicap or disability); and claims for violation of any
federal, state, or other governmental law, statute, regulation, or ordinance,
except claims excluded elsewhere in this Agreement.
Except as otherwise provided in this Agreement, both the Company
and I agree that neither of us shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination to
the EEOC or similar fair employment practices agency, or an administrative
charge within the jurisdiction of the National Labor Relations Board or U.S.
Department of Labor), in any way related to any claim covered by this Agreement.
Claims Not Covered by the Agreement
This Agreement does not cover claims for workers' compensation or
unemployment compensation benefits; or any claim as to which final and binding
arbitration cannot be required as a matter of law.
Claims, either by the Company or by me, seeking injunctive relief
for alleged violations of intellectual property rights and non-disclosure and
non-solicitation covenants also
B-1
are not covered by this Agreement (although all other aspects of such claims,
including any claims for damages, are covered by this Agreement).
Required Notice of All Claims and Statute of Limitations The
Company and I agree that the aggrieved party must give
written notice of any claim to the other party no later than the applicable
Statute of Limitations as may be prescribed by law.
Written notice to the Company, or its officers, directors,
employees or agents, shall be sent to the addresses set forth in my Employment
Agreement. I will be given written notice at the last address recorded in my
personnel file.
The written notice shall identify and describe the nature of all
claims asserted and the facts upon which such claims are based. The notice shall
be sent to the other party by certified or registered mail, return receipt
requested.
Representation
Any party may be represented by an attorney or other
representative selected by the party.
Discovery
Each party shall have the right to take the deposition of three
(3) individuals and any expert witness designated by another party. Each party
also shall have the right to make requests for production of documents to any
party. The subpoena right specified below shall be applicable to discovery
pursuant to this paragraph. Additional discovery may be had where the arbitrator
selected pursuant to this Agreement so orders, upon an appropriate showing of
justification.
Designation of Witnesses
At least 30 days before the arbitration, the parties must
exchange lists of witnesses, including any expert, and copies of all exhibits
intended to be used at the arbitration.
Subpoenas
Each party shall have the right to subpoena witnesses and
documents for the arbitration.
Arbitration Procedures
The arbitration will be held under the auspices of the American
Arbitration Association ("AAA").
The Company and I agree that, except as provided in this
Agreement, the arbitration shall be in accordance with the AAA's National Rules
for Resolution of Employment Disputes (or other then-current employment
arbitration procedures). The arbitrator shall be either a retired judge, or an
attorney licensed to practice law in the state in which the arbitration is
convened and with demonstrated experience and expertise in executive
compensation matters (the "Arbitrator"). The arbitration shall take place in or
near the city in which I am or was last employed by the Company.
B-2
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of 11 arbitrators drawn from its panel
of employment dispute arbitrators. Each party may strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list and the process shall be repeated. If no arbitrator has been selected after
two lists have been distributed, then the parties shall strike alternately from
a third list, with the party initiating the claim striking first, until only one
name remains. That person shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. If the parties' dispute
concerns a contract in which the parties have included a choice of law
provision, the Arbitrator shall apply the law as designated by the parties. The
Arbitrator is without jurisdiction to apply any different substantive law, or
law of remedies. The Arbitrator, and not any federal, state, or local court or
agency, shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Agreement,
including but not limited to any claim that all or any part of this Agreement is
void or voidable. The arbitration shall be final and binding upon the parties,
except as provided in this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on
pre-hearing disputes and is authorized to hold pre-hearing conferences by
telephone or in person, as the Arbitrator deems necessary. The Arbitrator shall
have the authority to entertain a motion to dismiss and/or a motion for summary
judgment by any party and shall apply the standards governing such motions under
the Federal Rules of Civil Procedure.
Either party may obtain a court reporter to provide a
stenographic record of proceedings.
Either party, upon request at the close of hearing, shall be
given leave to file a post-hearing brief. The time for filing such a brief shall
be set by the Arbitrator.
The Arbitrator shall render a written award and opinion in the
form setting forth his/her findings and conclusions.
Either party shall have the right, within 20 days of issuance of
the Arbitrator's opinion, to file with the Arbitrator a motion to reconsider
(accompanied by a supporting brief), and the other party shall have 20 days from
the date of the motion to respond. The Arbitrator thereupon shall reconsider the
issues raised by the motion and, promptly, either confirm or change the
decision, which (except as provided by this Agreement) shall then be final and
conclusive upon the parties.
B-3
Arbitration Fees and Costs
The Company will be responsible for paying any filing fee and the
fees and costs of the Arbitrator and the arbitration; provided, however, that if
I am the party initiating the claim, I am responsible for contributing an amount
equal to the filing fee to initiate a claim in the court of general jurisdiction
in the state in which I am (or was last) employed by the Company. Each party
shall pay for its own costs and attorneys' fees, if any. However, if any party
prevails on a statutory claim which affords the prevailing party attorneys'
fees, or if there is a written agreement providing for fees, the Arbitrator may
award reasonable fees to the prevailing party, under the standards for fee
shifting provided by law.
Judicial Review
Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award.
Interstate Commerce
I understand and agree that the Company is engaged in
transactions involving interstate commerce and that the Federal Arbitration Act
applies to this Agreement.
Requirements for Modification or Revocation
This Agreement to arbitrate shall survive the termination of my
employment. It can only be revoked or modified by a writing signed by the
parties which specifically states an intent to revoke or modify this Agreement.
Sole and Entire Agreement
This is the complete agreement of the parties on the subject of
arbitration of disputes. This Agreement supersedes any prior or contemporaneous
oral or written understandings on the subject. No party is relying on any
representations, oral or written, on the subject of the effect, enforceability
or meaning of this Agreement, except as specifically set forth in this
Agreement.
Severability
If any provisions of this Agreement are adjudged to be void or
otherwise unenforceable, in whole or in part, such adjudication shall not affect
the validity of the remainder of the Agreement, as the parties hereto intend to
create a binding agreement to arbitrate regardless of the unenforceability of
any particular term or terms.
Consideration
The promises by the Company and by me to arbitrate differences,
rather than litigate them before courts or other bodies, provide consideration
for each other.
B-4
Voluntary Agreement
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY
RIGHT TO A JURY TRIAL.
Employee initials:
J.K.
------------------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Date: As of February 24, 2004 /S/ XXXX X. XXXXX
-----------------------------
XXXX X. XXXXX
Date: As of February 24, 2004 CAPITAL TRUST, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
Date: As of February 24, 2004 CT INVESTMENT MANAGEMENT CO., LLC
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
B-5
