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Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE
EMPLOYMENT AGREEMENT (“
Agreement ”) is entered into effective
as of January 1, 2007 (the “ Effective
Date ”) by and between Centerline
Capital Group, Inc. , a Delaware corporation
(“ Company ”), and James
L. Duggins (“ Executive
”). In addition, this Agreement is being
executed by the Company’s ultimate parent company,
Centerline Holding Company , a Delaware
statutory trust (“ Centerline
”), for purposes of guaranteeing performance by the
Company as set forth in Section 10(k) herein. Certain
capitalized terms used in this Agreement are used with the
definitions ascribed to them on the attached
Exhibit A , which is incorporated
into this Agreement by this reference.
WHEREAS ,
the parties desire to enter into an employment relationship
on the terms and conditions set forth below:
THEREFORE
, the parties, intending to be legally bound, agree as
follows:
1.
Employment . The Company
will employ Executive, and Executive will be employed by the
Company, during the Employment Period on and subject to the
terms and conditions contained in this
Agreement. The “ Employment
Period ” is the period commencing on the
Effective Date and continuing for a period of three (3) years
(the “Initial Term”) with automatic renewals
thereafter for successive one (1) year periods unless
terminated as provided in this Agreement.
2.
Duties . During the
Employment Period, Executive will work for the Company in the
capacity of Executive Managing Director and Group Head of the
Commercial Real Estate Group. During the Employment
Period, Executive shall report to the Chief Executive Officer
of the Company and Executive shall perform the types of duties
and functions as shall be reasonably assigned to Executive
from time to time by the Chief Executive Officer of the
Company and shall be consistent with Executive’s
position. Executive will devote substantially all
of his business time, best efforts and ability to the business
of the Company and its affiliates, will faithfully and
diligently perform Executive’s duties pursuant to this
Agreement, will comply with the overall policies established
by the board of trustees of Centerline and will do all things
reasonably in Executive’s power to promote, develop and
extend Centerline’s business and that of its
subsidiaries. In determining whether Executive is
devoting substantially all his business time, best efforts and
ability to the business of the Company and its affiliates,
Executive may only engage in those business activities aside
from his duties hereunder which are either (i) set forth in
the attached Exhibit B , or (ii) are
disclosed to Centerline’s board of trustees and approved
by it.
3.
Compensation and Benefits
. During the Employment Period, the Company will
pay and provide Executive as compensation for Executive's
services pursuant to this Agreement the consideration
specified and determined in accordance with this
Section 3 , in each case subject to all
withholdings required by applicable law.
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a.
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The
Company will pay Executive a base salary (the “
Salary ”) of $ 400,000.00 per annum payable
in equal bi-weekly installments, which amount shall be subject
to
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increase
at the end of the Initial Term and every third year thereafter so
long as this Agreement shall be in effect.
In addition, the Company will pay Executive bonus compensation
(“ Annual Bonus ”) to the extent it is
awarded to him under and subject to the terms of an annual
incentive bonus compensation plan or program sponsored by the
Company (the “ Bonus Plan
”).
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b.
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Executive
may also be awarded long term deferred compensation under one or
more plans or programs established by the Company (including but
not limited to Out-Performance Programs) or Centerline and its
affiliates from time to time (the “ Deferred
Compensation Plans ”) and may be offered an
opportunity to co-invest with Centerline and/or its subsidiaries in
funds sponsored by them on such terms and conditions as shall be
determined by Centerline. Amounts, if any, payable to
Executive under the terms of the Deferred Compensation Plans shall
be governed solely by the terms of the Deferred Compensation Plans
and awards made thereunder and the terms and conditions of any
co-investment opportunity provided to Executive shall be
established by Centerline and communicated to
Executive. Executive shall be under no obligation to
participate in any co-investment opportunity and such participation
shall not be a condition of nor affect in any manner
Executive’s continued employment by the Company.
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c.
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The
Company will pay Executive an automobile allowance of $ 1,500.00
per month, for each month Executive is employed by the Company
pursuant to this Agreement.
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d.
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Executive
shall be entitled to twenty (20) days vacation per year for each
year this Agreement is in effect. All vacation shall be
taken at such times as shall be agreed upon by the Chief Executive
Officer of the Company. In the event of a termination of
this Agreement, no amount shall be payable to the Executive for any
accrued but not yet taken vacation
time. Executive’s right to carry over unused
vacation days to subsequent years shall be subject to and limited
by Centerline’s policy regarding the carry over of unused
vacation days in effect for similarly situated
executives.
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e.
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Executive
will be entitled to participate in any fringe benefit and other
employee benefit plans and programs available to salaried employees
of the Company as in effect from time to time, to the
extent that Executive may be eligible to do so under the applicable
provisions of the plans and programs (“ Benefit
Rights ”).
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f.
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Executive
shall be entitled to reimbursement of amounts incurred by him in
connection with the performance by him of his duties and
obligations hereunder in accordance with the Company’s
expense reimbursement policy (“ Reimbursable
Amounts ”). Executive shall apply for all
reimbursements for a particular calendar year not later than
forty-five (45) days after it ends, and payment shall occur not
later than two and one-half months after the end of the calendar
year to which the Reimbursable Amounts relate.
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g.
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Provided
Executive is insurable at normal risk rates, the Company shall
provide Executive with a term life insurance policy in the amount
of $ 3,000,000.00
and Executive or his designee shall be the owner of such policy and
shall be entitled to name the beneficiary of any insurance proceeds
payable thereunder.
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h.
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The
Company shall also provide Executive with supplemental long term
disability insurance which will provide Executive with a full
disability benefit of Fifteen Thousand Dollars ($15,000.00) per
month after an exclusion period of ninety (90) days and otherwise
on substantially the same terms as are set forth on the attached
Exhibit C (the “Disability
Coverage”). During the ninety (90) day exclusion
period, the Company will pay Executive his full
Salary. Disability Coverage shall be provided in a
manner which is most tax advantageous to the Executive, provided
Executive cooperates fully in the implementation of any reasonable
plan proposed by the Company to achieve such results.
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4.
Termination; Severance Benefits
. The Employment Period and Executive’s
employment with the Company will terminate upon the first to
occur of the following and the Company shall make the
following payments and no other payments upon the occurrence
of such event, subject in all cases to the terms and
conditions of subsection 10(e) hereof:
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a.
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Death .
If Executive dies during the Employment Period, the Termination
Date will be the date of Executive’s death. In
such event, the Company shall pay Executive’s estate within
two and one-half months of the date of Executive’s death a
death benefit equal to: (i) severance compensation equal to one
year of Executive’s then current Salary and 100% of the
amount of the Executive’s most recently declared and
paid Annual Bonus (“ Severance
Pay ”); (ii) Executive’s earned but unpaid
Salary, any Reimbursement Amounts for the period prior to
termination, any accrued but unused vacation, and any declared but
unpaid Annual Bonus (collectively “
Entitlements ”); (iii) Benefit Rights; (iv)
additional benefits (if any) in accordance with the applicable
Company plans, programs and arrangements (“ Company
Arrangements ”); and (v) the Company shall pay the
COBRA premiums for Executive’s dependents for the lesser of
(A) one (1) year or (B) until Executive’s dependents cease to
be eligible for such COBRA benefits (including, without limitation,
by reason of any such dependents becoming eligible for
substantially similar coverage from another
employer). Upon a termination of the Executive by reason
of Executive’s death, any unvested options and restricted
stock awarded to Executive under any compensation plan sponsored by
the Company and any promote shares under a co-investment made by
the Executive with the Company or its affiliates shall fully vest
upon the date of his death. Furthermore, the Executive
shall be eligible for consideration for an Annual Bonus for the
year in which the Executive dies; provided, however, nothing herein
shall entitle the Executive to an Annual Bonus and any award of an
Annual Bonus shall be subject to the terms and provisions of the
Bonus Plan.
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b.
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Total Disability . If Executive incurs a
Total Disability, the Termination Date will be the date Executive
(or Executive’s beneficiary or representative)
first
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becomes
entitled to receive benefits under the Disability Coverage unless
deferred or extended by Centerline’s Compensation Committee,
in which case it will be the extended or deferred date (the "
Disability Payment Date "). In such event the
Company shall pay to or on behalf of the Executive (or
Executive’s beneficiary or representative) (i) on each
regular pay day the pro rata portion of any Salary which accrues
from the date Executive incurs the Total Disability to the
Disability Payment Date, (ii) within two and one-half
months of the Disability Payment Date, a disability benefit equal
to (A) Severance Pay; (B) the Entitlements; (C) Benefit Rights; and
(D) Company Arrangements; (iii) subsequent to the Disability
Payment Date, any payments due on account of the Disability
Coverage and (iv) the COBRA premiums for Executive and his
dependents for the lesser of (A) one (1) year or (B) until
Executive and his dependents cease to be eligible for such COBRA
benefits (including, without limitation, by reason of Executive
becoming eligible for substantially similar coverage from a
subsequent employer). For these purposes, a “
Total Disability ” is a physical and/or
mental condition giving rise to Executive (or Executive’s
beneficiary or representative) receiving benefits on account of
Executive’s being totally disabled under any Disability
Coverage. Upon a termination of the Executive by reason
of Total Disability, any unvested options and restricted stock
awarded to Executive under any compensation plan sponsored by the
Company and any promote shares under a co-investment made by the
Executive with the Company or its affiliates shall fully vest upon
the Termination Date. Furthermore, the Executive shall
be eligible for consideration for an Annual Bonus for the year in
which the Executive incurs a Total Disability; provided, however,
nothing herein shall entitle the Executive to an Annual Bonus and
any award of an Annual Bonus shall be subject to the terms and
provisions of the Bonus Plan.
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c.
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Termination for Cause; Resignation without Good
Reason .
Executive's employment may be terminated by the Company for Cause
at any time upon written notice from the Company to Executive. The
Company’s notice must set forth the facts or circumstances
constituting Cause and specify the Termination
Date. Executive may resign without the existence of Good
Reason at any time upon not less than ninety (90) days written
notice to the Company. Executive’s notice must specify the
Termination Date. Upon the occurrence of either such
event, the Company shall only be obligated to pay Executive any
amounts due under Section 4(g) below. Upon a
termination of the Executive by the Company with Cause or a
termination by the Executive without Good Reason, any unvested
options and restricted stock awarded to Executive under any
compensation plan sponsored by the Company shall be forfeited as of
the Termination Date. Vested options shall continue to
be exercisable in accordance with the compensation plan pursuant to
which they were issued.
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d.
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Failure to Renew, Retirement, Termination Without Cause or
Resignation for Good Reason . In the event
the Company shall determine that Executive’s Employment
Period will not be renewed pursuant to Section 1 of this Employment
Agreement, the Company shall so notify Executive not less
than
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sixty
(60) days and not more than ninety (90) days prior to the
expiration of the Employment Period, in which case the Termination
Date shall be the expiration of the Employment Period and the
Executive’s employment shall be deemed to have been
terminated by the Company without Cause. In addition,
Executive may be terminated by the Company without Cause at any
time upon not less than thirty (30) days written notice to
Executive, in which case the Company’s notice must specify
the Termination Date. Executive may resign if Good
Reason exists upon not less than ten (10) days written notice to
the Company. Executive’s notice must set forth the
facts and circumstances constituting Good Reason and specify the
Termination Date.
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In
the event of Executive’s Retirement, (i) any unvested
options and restricted stock awarded to Executive under any
compensation plan sponsored by the Company and any promote
shares under a co-investment made by the Executive with the
Company or its affiliates shall fully vest upon the
Termination Date and (ii) the terms and provisions of Sections
5, 6, 7 and 8 of this Agreement shall continue in full force
and effect.
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If
Executive’s employment is terminated by the Company without
Cause or Executive terminates his employment with the Company for
Good Reason, Executive shall have no further rights or claims
hereunder or with regard hereto except that, subject to his
execution of a release running to the Company and its related
entities and their respective partners, shareholders, officers,
directors and employees of all claims relating to his employment
and termination substantially in the form of Exhibit
D (with such reasonable changes therein as may be
deemed by counsel to the Company to be required or desirable to
reflect applicable law at the time of delivery of such release)
(the “ Release ”), (i) the Company
will pay Executive a separation payment equal to the Entitlements
and Severance Pay within two and one-half months after terminating
employment, (ii) Executive will be entitled to the Benefit Rights
and Company Arrangements, and (iii) the Company will pay the COBRA
premiums for Executive and his dependents for the lesser of (A) one
(1) year or (B) until Executive and his dependents cease to be
eligible for such COBRA benefits (including, without limitation, by
reason of Executive becoming eligible for substantially similar
coverage from a subsequent employer). If Executive
elects not to deliver the Release, then the Company shall have no
obligation to pay Executive the severance provided for in clause
(i) above, but shall be obligated to pay to Executive the amounts
provided for in clause (ii) above at the times provided
therein. Any payments to be made to Executive pursuant
to this Section 4(d) are in addition to any
benefits that may be payable under any life insurance, disability
insurance or similar policies of insurance that the Company may
maintain on Executive’s behalf and to which Executive
contributes all or any portion of the premiums to maintain. If
Executive’s employment is terminated hereunder, Executive
shall be under no obligation to seek other employment and there
shall be no offset against any amounts due to Executive under this
Agreement on account of any remuneration attributable to any
subsequent employment that Executive may obtain. Upon
a
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termination
of the Executive by the Company without Cause or, a termination by
the Executive with Good Reason, any unvested options and restricted
stock awarded to Executive under any compensation plan sponsored by
the Company and any promote shares under a co-investment made by
the Executive with the Company or its affiliates shall fully vest
upon the end of any rescission period allowed with respect to the
release provided as Exhibit D. Furthermore, the
Executive shall be eligible for consideration for an Annual Bonus
for the year in which the Executive terminates with Good Reason or
is Terminated without Cause; provided, however, nothing herein
shall entitle the Executive to an Annual Bonus and any award of an
Annual Bonus shall be subject to the terms and provisions of the
Bonus Plan.
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e.
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Change of Control . In the event that
Executive’s employment is terminated by the Company either in
anticipation of, or within three months before, or
within one (1) year after, a Change in Control (other than as a
result of Cause, death or Total Disability), or by the Executive
for Good Reason within one (1) year after a Change of Control, the
Company shall have no liability or further obligation to the
Executive and the Executive shall have no further rights or claims
hereunder or with regard hereto except that, subject to his
execution (within 30 days after delivery to Executive) of the
Release: (i) the Company will, within two and one-half months of
the Executive’s employment termination date, pay Executive
the Entitlements and a separation payment equal to twenty-four
months of Executive’s then current Salary and 150%
of the amount of the Executive’s most recently declared and
paid Annual Bonus; (ii) Executive will be entitled to the Benefits
Rights and the Company Arrangements; and (iii) all medical and
dental, disability and life insurance then provided to senior
executives of the Company shall be continued at no cost to the
Executive or his dependents following the Termination Date for a
period of twenty-four (24) months, or at the discretion of the
Company, a cash payment shall be made in lieu of such
benefits. If Executive elects not to sign and deliver
the Release, then the Company shall have no obligation to pay
Executive the monies and benefits described in the prior
sentence. Upon a termination of Executive’s
employment governed by this Section 4(e), any unvested options and
restricted stock awarded to Executive under any compensation plan
sponsored by the Company and any promote shares under a
co-investment made by the Executive with the Company or its
affiliates shall fully vest upon the Termination
Date. Furthermore, the Executive shall be eligible for
consideration for an Annual Bonus for the year in which the
Executive’s employment is terminated under the terms of this
Section 4(e); provided, however, nothing herein shall entitle the
Executive to an Annual Bonus and any award of an Annual Bonus shall
be subject to the terms and provisions of the Bonus
Plan. For purposes of this Section 4(e), the Termination
Date shall be Executive’s last day of employment with the
Company.
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f.
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Immediate Cessation of Employment . If
the Company gives notice to Executive pursuant to
subsection (c) above, or Executive gives notice to
the Company pursuant to subsection (c) above, the
Company may further direct
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Executive
to immediately cease Executive’s activities on behalf of the
Company, to remove Executive’s personal belongings from the
premises of the Company and/or to discontinue using any of the
Company’s facilities.
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g.
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Arrearages . In connection with the
Executive’s termination of employment for any reason, the
Company shall pay Executive (or Executive’s estate or legal
representative, as the case may be) on the Termination Date his (a)
accrued but unpaid Salary, if any, as of the Termination Date, (b)
accrued but unpaid Annual Bonus for the Fiscal Year prior to the
Fiscal Year in which Executive’s employment is terminated as
of the Termination Date and (c) unpaid Reimbursable Amounts, if
any, as of the Termination Date (collectively, the “
Arrearages ”). If termination is pursuant to
subsection (c) above, the payments under this
subsection (g) will be in complete fulfillment of
the Company’s obligations to Executive under this
Agreement. Otherwise, the Company shall be obligated to
make the additional payments required pursuant to this
Section 4 in addition to the
Arrearages.
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h.
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Cooperation . The Executive
agrees to cooperate with the Company, during the Employment Period
and thereafter (including following the Executive’s
termination of employment for any reason), consistent with
Executive’s duties, responsibilities and availability under
the terms of this Agreement, by making himself
reasonably available to testify on behalf of the Company or any of
its Affiliates in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to assist the
Company, or any Affiliate, in any such action, suit, or proceeding,
by providing information and meeting and consulting with: (i) the
Board or its representatives or counsel, (ii) representatives or
counsel to the Company, and/or (iii) any Affiliate as reasonably
requested. The Company agrees to reimburse the
Executive, for all reasonable expenses actually incurred in
connection with his provision of testimony or
assistance.
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5.
Non-Competition Agreement
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a.
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Executive
absolutely and unconditionally covenants and agrees with the
Company that, from the period commencing on the date of this
Agreement and continuing for a period of ninety (90) days following
the termination of his employment by Executive without Good Reason
and for a period of one (1) year following the end of his
employment for any other reason (the “ Noncompete
Period ”), Executive will not, either directly or
indirectly, solely or jointly with any other person or persons, as
an employee, consultant, or advisor (whether or not engaged in
business for profit), or as an individual proprietor, partner,
shareholder, director, officer, joint venturer, investor or lender,
render services in or directed into any state within the United
States of an executive, advertising, marketing, sales, supervisory,
technical, research, purchasing or consulting nature to any person
or entity that engages in or intends to engage in a Competitive
Business (as defined in Exhibit A ) (i) as
conducted as of the date of execution of this
Agreement; (ii) as conducted during the term of this
Agreement; or (iii) as
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proposed
to be conducted by the Company Group as of the Termination Date
(collectively, “ Competition
”).
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b.
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If
a court or arbitration panel concludes through appropriate
proceedings that the Executive has breached the covenant set forth
in this Section 5 , the term of the covenant shall
be extended for a term equal to the period for which the Executive
is determined to have breached the covenant.
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6.
Covenant Not to Disclose
. Executive acknowledges and agrees that, by virtue
of the performance of the normal duties of his position with
the Company and by virtue of the relationship of trust and
confidence between the Executive and the Company, the Company
will permit Executive to have access to and Executive will
become familiar with, acquire knowledge of and develop or
maintain the Company’s Confidential Information (as
defined below), whether currently existing or to be developed
in the future, which Executive recognizes permits the Company
to enjoy a competitive advantage and the premature disclosure
of which would irreparably injure the Company. The
Executive covenants and agrees that he will not, at any time,
whether during the term of this Agreement or otherwise,
directly or indirectly use, disclose (in any manner, including
transmitting via or posting on the Internet), reproduce,
distribute, reverse engineer or otherwise provide, in whole or
in part, to or on behalf of any person (other than the Company
Group) or use for his own account, any data or knowledge of
operations of the Company Group which are proprietary in
nature and/or confidential, whether in writing, in computer or
other form or conveyed orally, including but not limited to
confidential or proprietary records, data, trade secret,
pricing policy, bid amount, bid strategy, rate structure,
personnel policy, method or practice of obtaining or doing
business by the Company Group, or any other confidential or
proprietary information whatsoever (the “
Confidential Information ”), whether or
not obtained with the knowledge and permission of the Company
and whether or not developed, devised or otherwise created in
whole or in part by the efforts of the Executive and shall
take no action that threatens to do so. The
Executive further covenants and agrees that he shall retain
all such knowledge and information which he shall acquire or
develop respecting such Confidential Information in trust for
the sole benefit of the Company and its successors and
assigns. Executive shall not, without the prior
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