SEVERANCE AGREEMENTTermination Severance Agreement |
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Search Termination Severance Agreement by:
Exhibit 10.6
Execution Version
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT (“Agreement”) is made as of the 27th day of October, 2008, between Roger Cozzi (“Executive”) and Gramercy Capital Corp., a Maryland corporation (“Gramercy”), to be effective as of October 28, 2008 (the “Effective Date”). This Agreement is being entered into in connection with the Employment and Noncompetition Agreement, dated as of the date hereof, by and between GKK Manager LLC (the “Manager”) and Executive (as amended or superseded from time to time, the “Employment Agreement”).
1. Term . The term of this Agreement shall commence on the Effective Date and shall continue through, and terminate on, December 31, 2011 (the “Original Term”) unless earlier terminated as provided in Section 6 below. The Original Term shall automatically be extended for successive one (1) year periods (each a “Renewal Term”), unless either party gives the other party at least three (3) months written notice of desire to negotiate terms and/or non-renewal prior to the expiration of the then current term; provided that a notice of desire to negotiate terms and/or non-renewal given by Executive or Gramercy under the Employment Agreement shall be deemed to constitute a notice of desire to negotiate terms and/or non-renewal under this Agreement. The period of Executive’s employment hereunder consisting of the Original Term and all Renewal Terms, if any, is herein referred to as the “Term.”
2. Employment . As of the Effective Date, Gramercy has appointed Executive to serve as its Chief Executive Officer and the Manager has entered into the Employment Agreement with Executive whereby, among other things, the Manager has agreed to employ Executive to serve as the Chief Executive Officer of Gramercy. The Board of Directors of Gramercy (the “Board”) shall nominate Executive for election to the Board at the next annual meeting of stockholders of Gramercy at which a class of directors with a current vacancy is to be elected, subject to Executive’s continued employment. In consideration of Executive’s service as an officer of Gramercy, Gramercy shall compensate Executive as provided in this Agreement.
3. Equity Awards . As determined by the Board or the Compensation Committee of the Board (the “Compensation Committee”) and as provided in this Agreement, Executive shall be eligible to participate in Gramercy’s then current equity incentive plan (the “Plan”) during the Term. On the Effective Date, Executive will be granted 260,000 shares of restricted common stock of Gramercy (“Common Stock”), “incentive stock options,” as defined under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to purchase 100,000 shares of Common Stock, non-qualified stock options to purchase 200,000 shares of Common Stock and 500,000 LTIP Units in GKK Capital LP, a Delaware limited partnership, in accordance with and subject to definitive documentation which is consistent with the terms summarized on Exhibit A hereto and which is otherwise consistent with Gramercy’s general practices for documentation.
4. Indemnification and Liability Insurance . Gramercy agrees to indemnify Executive to the full extent permitted by applicable law, as the same exists and may hereafter be amended, from and against any and all losses, damages, claims, liabilities and expenses asserted against, or incurred or suffered by, Executive (including the costs and expenses of legal counsel retained by Gramercy to defend Executive and judgments, fines and amounts paid in settlement actually and reasonably incurred by or imposed on such indemnified party) with respect to any action, suit or proceeding, whether civil, criminal administrative or investigative (a “Proceeding”) in which Executive is made a party or threatened to be made a party or is otherwise involved, either with regard to his entering into this Agreement with Gramercy or in his capacity as an officer or director, or former officer or director, of Gramercy or any affiliate thereof for which he may serve in such capacity. Gramercy also agrees to secure promptly and maintain officers and directors liability insurance providing coverage for Executive, with such terms and
limits as are deemed appropriate by Gramercy, to the extent that coverage can be obtained on reasonable efforts at a comparable rate; provided that Executive shall be covered in such a manner as to provide Executive the same rights and benefits as are accorded to the most favorably insured of Gramercy’s officers. The provisions of this Section 4 shall remain in effect after this Agreement is terminated irrespective of the reasons for termination.
5. Gramercy’s Policies . Executive agrees to observe and comply with the reasonable written rules and regulations of Gramercy regarding the performance of his duties and to carry out and perform orders, directions and policies communicated to him from time to time by Gramercy, so long as same are otherwise consistent with this Agreement.
6. Compensation Upon Termination .
(a) Termination By the Manager Without Cause or By Executive With Good Reason . If (i) Executive’s employment with the Manager is terminated by the Manager without Cause (pursuant to, and as defined in, the Employment Agreement) or (ii) Executive shall terminate his employment with Manager with Good Reason (pursuant to, and as defined in, the Employment Agreement), then Executive shall resign all positions with Gramercy and its subsidiaries and affiliates. In addition, subject to Executive’s execution of a release agreement in form and substance satisfactory to Gramercy, whereby, in general, Executive releases Gramercy from all claims Executive may have against Gramercy (other than claims to provide the severance payments and benefits provided for in this Agreement and certain other specified agreements) (the “Release Agreement”), and the effectiveness thereof on or within 30 days after the date on which Executive’s employment with the Manager terminates (the “Termination Date,” and the date of such effectiveness being referred to herein as the “Release Effectiveness Date”), Executive shall be credited with twelve (12) months after termination under any provisions governing restricted stock, options or other equity-based awards granted to Executive by Gramercy relating to the vesting or initial exercisability thereof; provided that any unvested or unexercisable restricted stock, options or other equity based awards that were granted as payment of a cash bonus, as determined at the time of grant by Gramercy, in its sole discretion, shall become fully vested and exercisable on the date of Executive’s termination. For purposes of determining the effect of such twelve (12) months of credit with respect to any performance-based vesting criteria, (A) if such termination occurs less than six months after the beginning of a performance period, then performance-based vesting shall be based on performance during the prior performance period and (B) if such termination occurs more than six months after the beginning of a performance period, then performance-based vesting shall be based on performance during such interim period through the most recently completed fiscal quarter. Furthermore, upon such termination, any then vested unexercised stock options granted to Executive by Gramercy shall remain exercisable until the second January 1 to follow the Termination Date or, if earlier, the expiration of the initial applicable term stated at the time of the grant. Notwithstanding the foregoing, the provisions of this Section 6(a) shall not apply to LTIP Units granted pursuant to Section 3 hereof, which shall be governed by the terms of the LTIP Unit Award Agreement entered into by Executive, Gramercy and GKK Capital LP as of the date hereof.
Other than as may be provided under Section 4 or as expressly provided in this Section 6(a), Gramercy shall have no further obligations hereunder following such termination.
(b) Termination By the Manager For Cause or By Executive Without Good Reason . If (i) Executive’s employment with the Manager is terminated by the Manager for Cause (pursuant to, and as defined in, the Employment Agreement), or (ii) Executive voluntarily
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