EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement (the “
Agreement ”) by and between Richard J. McCready
(“ Executive ”) and
NorthStar Realty Finance Corp. (the “ Company
”), is dated as of March 14, 2006 (the “ Effective
Date ”).
WHEREAS, Executive and the Company desire to
memorialize the terms and conditions related to Executive’s
employment by the Company.
NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Agreements Between the Parties
. This Agreement is intended to
memorialize all of the terms and conditions of Executive’s
employment by the Company.
2. Employment .
(a) Term .
The Company shall employ Executive, and Executive agrees to be
employed with the Company, upon the terms and conditions set forth
in this Agreement, for the period beginning on the Effective Date
and ending on the third anniversary of the Effective Date (the
“ Employment Period ”); provided ,
however , that commencing on the third anniversary
of the Effective Date and on each subsequent anniversary of the
Effective Date (each such anniversary, a “ Renewal
Date ”), the Employment Period shall automatically be
extended for one additional year unless, not later than 90 days
prior to such Renewal Date, the Company or Executive shall have
given written notice not to extend the Employment Period;
provided , further , however, that the
Employment Period shall be subject to earlier termination as
provided in Section 5(b) hereof (the “ Term
”).
(b) Base Salary . Executive’s initial base salary shall be
$150,000 per annum (pro-rated for partial calendar years), payable
in equal bi-monthly installments (as in effect from time to time,
the “ Base Salary ”). In subsequent years of the
Term, the Base Salary shall be subject to annual review and
adjustment from time to time by the compensation committee of the
Company’s board of directors (the “ Compensation
Committee ”), taking into account such factors as the
Compensation Committee deems appropriate, including but not limited
to the amount of Executive’s business time devoted to the
affairs of the Company and the salaries of executive officers
having similar titles and performing similar functions as Executive
at comparable companies
(c) Annual Cash Bonus . For fiscal years during the Executive’s
employment with the Company, Executive shall participate in an
annual cash incentive compensation plan as adopted and approved by
the board of directors of the Company (the “ Board
”) from time to time, with applicable corporate and
individual performance targets and maximum award amounts determined
by the Board (the “ Annual Cash Bonus ”). The
initial target amount of the Annual Cash Bonus shall be 100% of
Executive’s Base Salary, but the actual Annual Cash Bonus
amount shall be determined by the Board, in its discretion, subject
to approval of the Compensation Committee. Any Annual Cash Bonus
payable to Executive will be paid at the time the Company normally
pays such bonuses to its senior executives, but in no event later
than 90 days following the end of the applicable fiscal year, and
will be subject to the terms and conditions of the applicable
annual cash incentive compensation plan.
(d) Long Term Incentive Plan . During Executive’s employment with the
Company, Executive shall be eligible to receive long term equity
incentive compensation awards (which may consist of restricted
stock, stock options, stock appreciation rights or other types of
equity or cash bonus awards, as determined by the Board in its
discretion) pursuant to the Company’s equity incentive
compensation plans and programs in effect from time to time
including, without limitation, the Company’s 2004 Omnibus
Stock Incentive Plan, the 2004 Long-Term Incentive Bonus Plan and
the 2006 Outperformance Plan. These awards shall be granted in the
discretion of the Board and shall include such terms and conditions
(including performance objectives) as the Board deems
appropriate.
(e) Vacation . Executive shall be eligible for up to four
weeks of annual vacation to be accrued and payable in accordance
with the Company’s policy with respect to senior
executives.
(f) Other Benefits . In addition, Executive will be eligible to
participate in all fringe benefit plans and retirement plans of the
Company, as are generally available to the other senior management
employees of the Company, such as health insurance plans,
disability insurance plans, life insurance plans, expense
reimbursement and the Company’s 401(k) retirement
plan.
3. Duties of Executive .
(a) Duties of Position . During the Employment Period, Executive shall
serve as Executive Vice President, General Counsel and Secretary of
the Company. Notwithstanding the foregoing, Executive’s
title(s) may be modified by the Chief Executive Officer,
provided that in the event of any such modification
Executive’s new title(s), duties and authority shall be
consistent with those of a senior executive officer of the Company
at such time, and Executive shall, in any event, report directly to
the Chief Executive Officer or Board of Directors.
Executive’s duties shall include, without limitation, such
duties and responsibilities, consistent with Executive’s
title (as may be modified from time to time in accordance with this
Agreement), training and experience, as are from time to time
reasonably assigned to Executive by the Board or the
Company’s Chief Executive Officer.
Executive agrees to devote not less than a majority of
Executive’s business time, attention and energies to the
performance of the duties assigned to Executive hereunder, and to
perform such duties faithfully, diligently and to the best of
Executive’s abilities and subject to such laws, rules,
regulations and policies from time to time applicable to the
Company’s employees. Notwithstanding the above, nothing in
this Agreement shall preclude Executive from devoting a portion of
Executive’s business time, attention and energies to the
performance of Executive’s duties as President and Chief
Operating Officer of NorthStar Capital Investment Corp. and other
business endeavors. The Company may assign all or a portion of its
rights and obligations under this agreement to any of its
affiliates or enter into an agreement with any of its affiliates
that provides that Executive will perform services on behalf of
such affiliate and Executive agrees to provide such services, as
directed by the Company.
(b) Confidential Information . Executive shall hold in confidence for the
benefit of the Company all of the information (other than
information concerning corporate opportunities) and business
secrets in respect of the Company and all of its affiliates,
including, but not limited to, all information and data relating to
or concerned with the business, finances, pending transactions and
other affairs of the Company and all of its affiliates, and
Executive shall not at any time before or after Executive’s
employment by the Company is terminated for any reason, or
Executive resigns for any reason, willfully use or disclose or
divulge any such information or data to any other Person (as
defined below) except (i) with the prior written consent of
the Company, (ii) to the extent necessary to comply with applicable
law or the valid order of a court of competent jurisdiction, in
which event Executive shall notify the Company as promptly as
reasonably practicable (and, if possible, prior to making such
disclosure) and (iii) in the performance of Executive’s
duties hereunder. With respect to information concerning corporate
opportunities of the Company and all of its affiliates that are
developed, initiated or become known to Executive during his
employment with the Company, Executive shall hold in confidence for
the benefit of the Company all of such information in respect of
the Company and all of its affiliates, including, but not limited
to, all information and data relating to or concerned with such
opportunities of the Company and all of its affiliates, and
Executive shall not at any time before or within one year after
Executive’s employment by the Company is terminated for any
reason, or Executive resigns for any reason, willfully use or
disclose or divulge any information relating to any such corporate
opportunities to or for the benefit of the Executive or any other
Person (as defined below) except (i) with the prior written consent
of the Company, (ii) to the extent necessary to comply with
applicable law or the valid order of a court of competent
jurisdiction, in which event Executive shall notify the Company as
promptly as reasonably practicable (and, if possible, prior to
making such disclosure) and (iii) in the performance of
Executive’s duties hereunder. The foregoing provisions of
this Section 3(b) shall not apply to any information or data which
has been previously disclosed to the public or is otherwise in the
public domain in each case other than as a result of the breach by
Executive of his obligations under this Section 3(b). For purposes
of this Agreement, “ Person ” means an
individual, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization,
other entity or “group” (as defined in the Securities
Exchange Act of 1934).
4. Termination of Employment
. Executive’s employment
hereunder may be terminated in accordance with this Section
4.
(a) Death . Executive’s employment hereunder shall
terminate upon his death.
(b) Disability . If, as a result of Executive’s
incapacity due to physical or mental illness, Executive shall have
been absent from the full-time performance of his duties hereunder
for the entire period of six consecutive months, and within 30 days
after written Notice of Termination (as defined in Section 8) is
given shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate
Executive’s employment hereunder for “
Disability .”
(c) Cause . The Company may terminate Executive’s
employment hereunder for Cause. For purposes of this Agreement, the
Company shall have “ Cause ” to terminate
Executive’s employment hereunder upon the occurrence of any
of the following events:
(i) the conviction of Executive for the commission
of a felony;
(ii) continuing willful failure for 10 business days
to substantially perform his duties hereunder in a manner
consistent (other than such failure resulting from
Executive’s incapacity due to physical or mental illness or
subsequent to the issuance of a Notice of Termination by Executive
for Good Reason) after demand for substantial performance is
delivered by the Company in writing that specifically identifies
the manner in which the Company believes Executive has not
substantially performed his duties; or
(iii) misconduct by Executive (including, but not
limited to, breach by Executive of the provisions of Section 7)
that is demonstrably and materially injurious to the Company or its
subsidiaries, whether monetarily or otherwise.
(d) Good Reason . Executive may terminate his employment
hereunder for “ Good Reason ” within 30 days
after the occurrence, without his written consent, of one of the
following events that has not been cured within 10 business days
after written notice thereof has been given by Executive to the
Company:
(i) the assignment to Executive of a title or
duties that are materially inconsistent with his status as a senior
executive officer of the Company, or if Executive is directed to
directly report to other than the Board or the Company’s
Chief Executive Officer;
(ii) a reduction by the Company in Executive’s
Base Salary or a failure by the Company to pay any Base Salary or
contractually committed cash bonus payment amounts when
due;
(iii) following a Change of Control (as defined
below) of the Company, the requirement by the Company that the
principal place of performance of Executive’s services be at
a location more than fifty (50) miles from the greater New York
City metropolitan area;
(iv) any purported termination of Executive’s
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 5(a);
(v) a material failure by the Company to comply
with any other material provision of this Agreement.
(e) Change of Control . For the purposes of Section 4(d) above, a
“ Change of Control ” of the Company shall be
deemed to have occurred if an event set forth in any one of the
following paragraphs (i)-(iii) shall have occurred:
(i) any Person is or becomes Beneficial Owner (as
defined below), directly or indirectly, of securities of the
Company representing thirty-five percent (35%) or more of the
combined voting power of the then outstanding securities of the
Company, excluding (A) any Person who becomes such a Beneficial
Owner
