EXHIBIT 10.1

 

AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (“Agreement”)
is made as of the 6th day of May, 2018 (the “Effective Date”), between Gordon
DuGan (“Executive”), Gramercy Property Trust (the “Employer”) and GPT Operating
Partnership LP, to be effective immediately.

 

1.  Term.  The term of this Agreement shall commence on the Effective Date and
shall continue through, and terminate on, June 30, 2019 (the “Employment
Period”) unless earlier terminated as provided in Section 6 below.

 

2.  Employment and Duties.

 

(a)  Duties.  During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve as Chief
Executive Officer (“CEO”) of the Employer and, for so long as so elected, as a
voting member of the Board of Trustees of the Employer (the “Board”).  In his
capacity as Chief Executive Officer, Executive’s duties and authority shall be
those as would normally attach to Executive’s position as Chief Executive
Officer, including such duties and responsibilities as are customary among
persons employed in similar capacities for similar companies, but in all events
such duties shall be commensurate with his position as Chief Executive Officer
of the Employer.  Executive’s duties and authority shall be as further set forth
by the Employer.  The Board shall nominate Executive for election to the Board
at the expiration of his then-current term as a trustee provided that Executive
remains employed by the Employer at such time.

 

(b)  Best Efforts.  Executive agrees to his employment as described in this
Section 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Employer; provided, however, that nothing herein shall
be interpreted to preclude Executive, so long as there is no material
interference with his duties hereunder, from (i) participating as an officer or
director of, or advisor to, any charitable or other tax exempt organization or
otherwise engaging in charitable, fraternal or trade group activities;
(ii) investing and managing his assets as an investor in other entities or
business ventures; provided that he performs no management or similar role (or,
in the case of investments other than those in entities or business ventures
engaged in the Business (as defined in Section 8), he performs a management role
comparable to the role that a significant limited partner would have, but
performs no day-to-day management or similar role) with respect to such entities
or ventures and such investment does not violate Section 8 hereof; and provided,
further, that, in any case in which Executive knows that another party involved
in the investment has a business relationship with the Employer, Executive shall
give prior written notice thereof to the Employer; (iii) serving as a member of
the Advisory Board of India 2020, Limited; or (iv) serving as a member of the
Board of Directors of a for-profit corporation with the approval of the
Employer.

 

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(c)  Travel.  In performing his duties hereunder, Executive shall be available
for all reasonable travel as the needs of the Employer’s business may require. 
Executive shall be based in, or within 50 miles of, Manhattan.

 

3.  Compensation and Benefits.  In consideration of Executive’s services
hereunder, the Employer shall compensate Executive as provided in this
Agreement, and the Employer shall have the obligations as set forth herein.

 

(a)  Base Salary.  The Employer shall pay Executive a minimum annual salary at
the rate of $750,000 per annum during the Employment Period (“Base Salary”). 
Base Salary shall be payable in periodic installments in accordance with the
regular payroll practices of the Employer and shall be reviewed by the Employer
at least annually.

 

(b)  Signing Bonus; Incentive Compensation Bonuses.  In addition to Base Salary,
during the Employment Period, Executive shall be eligible for and shall receive
such discretionary annual bonuses as the Employer, in its sole discretion, may
deem appropriate to reward Executive for job performance.  Any bonuses awarded
for a fiscal year shall be paid after the end of such fiscal year and on or
before the 15th day of the third month of the following fiscal year (e.g., a
bonus for 2018 will be paid sometime between January 1, 2019 and March 15,
2019).

 

(c) Equity Awards.  Executive shall be eligible to receive equity awards from
the Employer to the extent the Employer maintains an equity award plan or
similar program in which senior officers may participate; provided that the
actual amount and terms of any such equity awards shall be determined by the
Employer in its sole discretion.

 

(d)  Expenses.  Executive shall be reimbursed for all reasonable business
related expenses incurred by Executive at the request of or on behalf of the
Employer, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the Employer.  Any
expenses incurred during the Employment Period but not reimbursed by the
Employer by the end of the Employment Period, shall remain the obligation of the
Employer to so reimburse Executive.

 

(e)  Health and Welfare Benefit Plans.  During the Employment Period, Executive
and Executive’s immediate family shall be entitled to participate in such health
and welfare benefit plans as the Employer shall maintain from time to time for
the benefit of senior executive officers of the Employer and their families, on
the terms and subject to the conditions set forth in such plan.  Nothing in this
Section shall limit the Employer’s right to change or modify or terminate any
benefit plan or program as it sees fit from time to time in the normal course of
business so long as it does so for all senior executives of the Employer.

 

(f)  Vacations.  Executive shall be entitled to paid vacations in accordance
with the then regular procedures of the Employer governing senior executive
officers, except that Executive shall be credited with a minimum of 20 vacation
days per calendar year, pro-rated for any partial year.  The Employer will pay
Executive for unused accrued vacation upon termination of his employment.

 

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(g)  Other Benefits.  During the Employment Period, the Employer shall provide
to Executive such other benefits, as generally made available to other senior
executives of the Employer.  In addition, the Employer shall maintain term life
insurance for the benefit of Executive’s beneficiaries in a face amount equal to
$5,000,000; provided, however, that such coverage shall only be required if
available to the Employer at reasonable rates; and provided, further, that
Executive cooperates as reasonably requested by the Employer in the Employer’s
efforts to obtain such insurance.  If such insurance is not available at
reasonable rates, then the Employer shall provide such coverage on a
self-insured basis, with a benefit to Executive’s beneficiaries not to exceed
the amount of cash severance that Executive would receive upon a termination by
the Employer without Cause (as defined in Section 6(a)(iii) below) under
Section 1(a)(i) — (ii).

 

(h)  Timing of Expense Reimbursement.  All in-kind benefits provided and
expenses eligible for reimbursement under this Agreement, if any, must be
provided by the Employer or incurred by Executive during the time periods set
forth in this Agreement.  All reimbursements shall be paid as soon as
administratively practicable, but in no event shall any reimbursement be paid
after the last day of the taxable year following the taxable year in which the
expense was incurred.  The amount of in-kind benefits provided or reimbursable
expenses incurred in one taxable year shall not affect the in-kind benefits to
be provided or the expenses eligible for reimbursement in any other taxable
year.  Such right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

4.  Indemnification and Liability Insurance.  The Employer 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 the Employer 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 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 the Employer or in his capacity as an officer or director, or
former officer or director of the Employer or any affiliate thereof for which he
may serve in such capacity.  The Employer also agrees to secure promptly and
maintain officers and directors liability insurance providing coverage for
Executive.  The provisions of this Section 4 shall remain in effect after this
Agreement is terminated irrespective of the reasons for termination.

 

5.  Employer’s Policies.  Executive agrees to observe and comply with the
reasonable written rules and regulations of the Employer regarding the
performance of his duties and to carry out and perform orders, directions and
policies communicated to him from time to time by the Employer, so long as same
are otherwise consistent with this Agreement.

 

6.  Termination.  Executive’s employment hereunder may be terminated under the
following circumstances:

 

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(a)  Termination by the Employer.

 

(i)  Death.  Executive’s employment hereunder shall terminate upon his death.

 

(ii)  Disability.  If, as a result of Executive’s incapacity due to physical or
mental illness or disability, Executive shall have been incapable of performing
his duties hereunder even with a reasonable accommodation on a full-time basis
for the entire period of four consecutive months or any 120 days in a 180-day
period, and within 30 days after written Notice of Termination (as defined in
Section 6(d)) is given he shall not have returned to the performance of
Executive’s duties hereunder on a full-time basis, the Employer may terminate
Executive’s employment hereunder.

 

(iii)  Cause.  The Employer may terminate Executive’s employment hereunder for
Cause.  For purposes of this Agreement, “Cause” shall mean Executive’s: 
(A) engaging in conduct which is a felony; (B) material breach of any of his
obligations under Sections 8(a) through 8(e) of this Agreement; (C) willful
misconduct of a material nature or gross negligence with regard to the Employer
or any of its affiliates; (D) material fraud with regard to the Employer or any
of its affiliates; (E) willful or material violation of any reasonable written
rule, regulation or policy of the Employer applicable to senior executives
unless such a violation is cured within 30 days after written notice of such
violation by the Employer; or (F) failure to competently perform his duties
which failure is not cured within 30 days after receiving notice from the
Employer specifically identifying the manner in which Executive has failed to
perform (it being understood that, for this purpose, the manner and level of
Executive’s performance shall not be determined based on the financial
performance of the Employer (including without limitation the performance of the
stock of the Employer)).

 

(iv)  Without Cause.  Executive’s employment hereunder may be terminated by the
Employer at any time without Cause (as defined in Section 6(a)(iii) above),
subject only to the severance provisions specifically set forth in Section 7.

 

(b)  Termination by Executive.

 

(i)  Disability.  Executive may terminate his employment hereunder for
Disability within the meaning of Section 6(a)(ii) above.

 

(ii)  With Good Reason.  Executive’s employment hereunder may be terminated by
Executive with Good Reason by written notice to the Employer providing at least
ten (10) days’ notice prior to such termination.  For purposes of this
Agreement, termination with “Good Reason” shall mean the occurrence of one of
the following events within sixty (60) days prior to such termination:

 

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(A)  a material change or, if a Change-in-Control has occurred, any change in
Executive’s duties, responsibilities, status or positions with the Employer
caused by the Employer that does not represent a promotion from or maintaining
of Executive’s duties, responsibilities, status or positions as CEO of a
publicly traded company (which, so long as Executive is the CEO of the Employer,
shall include the appointment of another person as co-CEO of the Employer),
except in connection with the termination of Executive’s employment for Cause,
disability, retirement or death;

 

(B)  a failure by the Employer to pay compensation when due in accordance with
the provisions of Section 3, which failure has not been cured within 10 business
days after the notice of the failure (specifying the same) has been given by
Executive to the Employer;

 

(C)  a material breach or, if a Change-in-Control has occurred, any breach by
the Employer of any provision of this Agreement, which breach has not been cured
within 30 days after notice of noncompliance (specifying the nature of the
noncompliance) has been given by Executive to the Employer;

 

(D)  the Employer requiring Executive to be based in an office more than 50
miles outside of Manhattan;

 

(E)  a reduction by the Employer in Executive’s Base Salary to less than the
minimum Base Salary set forth in Section 3(a);

 

(F)  a material reduction in Executive’s benefits under any benefit plan (other
than an equity award program) compared to those currently received (other than
in connection with and proportionate to the reduction of the benefits received
by all or most senior executives or undertaken in order to maintain such plan in
compliance with any federal, state or local law or regulation governing benefits
plans, including, but not limited to, the Employee Retirement Income Security
Act of 1974); or

 

(G)  the failure by the Employer to obtain from any successor to the Employer an
agreement to be bound by this Agreement pursuant to Section 15 hereof, which has
not been cured within 30 days after the notice of the failure (specifying the
same) has been given by Executive to the Employer.

 

(iii)  Without Good Reason.  Executive shall have the right to terminate his
employment hereunder without Good Reason, subject to the terms and conditions of
this Agreement.

 

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(c)  Definitions.  The following terms shall be defined as set forth below.

 

(i)  A “Change-in-Control” shall be deemed to have occurred if:

 

(A)  any “person,” including a “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), but excluding the Employer, any entity controlling, controlled
by or under common control with the Employer, any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of
the Employer or any such entity, and Executive and any “group” (as such term is
used in Section 13(d)(3) of the Exchange Act) of which Executive is a member),
is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the
Exchange Act), directly or indirectly, of securities of the Employer
representing 25% or more of either (1) the combined voting power of the
Employer’s then outstanding securities or (2) the then outstanding common stock
(or other similar equity interest, in the case of a company other than a
corporation) of the Employer (in either such case other than as a result of an
acquisition of securities directly from the Employer); or

 

(B)  there shall occur any consolidation or merger of the Employer that would
result in the voting securities of the Employer outstanding immediately prior to
such merger or consolidation representing (either by remaining outstanding or by
being converted into voting securities of the surviving entity) less than 50% of
the total voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation or ceasing to have
the power to elect at least a majority of the board of directors or other
governing body of such surviving entity; or

 

(C)  there shall occur (1) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party as
a single plan) of all or substantially all of the assets of the Employer, other
than a sale or disposition by the Employer of all or substantially all of the
Employer’s assets to an entity at least 50% of the combined voting power of the
voting securities of which are owned by “persons” (as defined above) in
substantially the same proportion as their ownership of the Employer, as
applicable, immediately prior to such sale, or (2) the approval by shareholders
of the Employer of any plan or proposal for the liquidation or dissolution of
the Employer; or

 

(D)  the members of the Board (the “Trustees”) at the beginning of any
consecutive 24-calendar-month period (the “Incumbent Trustees”) cease for any
reason other than due to death to constitute at least a majority of the members
of the Board; provided that any Trustee whose election, or nomination for
election by the Employer’s shareholders was

 

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approved or ratified by a vote of at least a majority of the Incumbent Trustees
shall be deemed to be an Incumbent Trustee.

 

Notwithstanding the foregoing, a Change-in-Control shall not be deemed to have
occurred upon the sale, lease, exchange or other transfer by the Employer or its
direct and indirect subsidiaries of (1) all of their collateral management
agreements (or their rights thereunder) with respect to the assets owned by the
indirect subsidiaries of the Employer that have issued CDO bonds that are
outstanding as of the date hereof (the “CDO Entities”), (2) all or substantially
all of their interests in (or the underlying assets of) the CDO Entities, and/or
(3) all or substantially all of the assets of the Employer and its direct and
indirect subsidiaries relating to the CDO Entities or the Employer’s mortgage
business generally.

 

(d)  Notice of Termination; Termination Date.  Any termination of Executive’s
employment by the Employer or by Executive (other than on account of death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 11 of this Agreement.  For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and, as
applicable, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the
provision so indicated.  Executive’s employment shall terminate as of the
effective date set forth in the Notice of Termination, which date shall not be
more than thirty (30) days after the date of the Notice of Termination.  The
date on which Executive’s employment terminates is referred to herein as the
“Termination Date.”

 

(e)  Resignation Upon Termination.  In the event that Executive’s employment
with the Employer is terminated, Executive (i) shall, within five business days
of receipt of a written request for resignation, resign as a trustee of the
Employer, and shall resign all other positions (including, without limitation,
as officer, employee, director and member of any committee) with the Employer
and its subsidiaries, and (ii) shall provide such written confirmation thereof
as may be reasonably required by the Employer.

 

7.  Compensation Upon Termination; Change-in-Control.

 

(a)  Termination By the Employer Without Cause or By Executive With Good
Reason.  If, during the Employment Period, (i) Executive is terminated by the
Employer without Cause pursuant to Section 6(a)(iv) above, or (ii) Executive
shall terminate his employment hereunder with Good Reason pursuant to
Section 6(b)(ii) above, then the Employment Period shall terminate as of the
Termination Date, Executive shall be entitled to receive his earned and accrued
but unpaid Base Salary on or before the time required by law (but in no event
more than 30 days after the Termination Date), and Executive shall also be
entitled to the following payments and benefits, subject to Executive’s
execution of a mutual release agreement in form and substance satisfactory to
the Employer, whereby, in general, each party releases the other from all claims
such party may have against the other (other than (A) claims against the
Employer relating to the Employer’s obligations under this Agreement and certain
other specified agreements

 

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arising in connection with or after Executive’s termination, including, without
limitation, the Employer’s obligations hereunder to provide severance payments
and benefits and accelerated vesting of equity awards and (B) claims against
Executive relating to or arising out of any act of fraud, intentional
misappropriation of funds, embezzlement or any other action with regard to the
Employer or any of its affiliated companies that constitutes a felony under any
federal or state statute committed or perpetrated by Executive during the course
of Executive’s employment with the Employer or its affiliates, in any event,
that would have a material adverse effect on the Employer, or any other claims
that may not be released by the Employer under applicable law) (the “Release”),
and the effectiveness and irrevocability thereof on or within 30 days after the
Termination Date:

 

(i)  Executive shall receive an aggregate amount equal to two (2) multiplied by
the sum of (A) Executive’s average annual Base Salary in effect during the
twenty-four (24) months immediately prior to the Termination Date (the “Prior
Salary”), and (B) the highest annual cash bonus paid to Executive during the
three fiscal years prior to the Termination Date (including any portion of the
annual cash bonus paid in the form of equity awards, as determined at the time
of grant by the Compensation Committee of the Board, in its sole discretion, and
reflected in the minutes or consents of the Compensation Committee of the Board
relating to the approval of such equity awards, but excluding any annual or
other equity awards made other than as payment of a cash bonus) (with the
applicable amount being referred to herein as the “Prior Bonus”), which amount
shall be payable in twenty-four (24) equal monthly installments beginning on the
first regular payroll payment date occurring more than 30 days after the
Termination Date.

 

(ii) The Employer shall pay Executive a prorated annual performance bonus (the
“Prorated Annual Bonus”) equal to (x) the Prior Bonus multiplied by (y) a
fraction, the numerator of which is the number of days in the fiscal year in
which Executive’s employment terminates through the Termination Date (and the
number of days in the prior fiscal year, in the event that Executive’s annual
cash bonus for such year had not been determined as of the Termination Date) and
the denominator of which is 365, provided that the Prorated Annual Bonus shall
be less the amount of any annual performance bonus, or advance thereof,
previously paid for the period associated with the Prorated Annual Bonus.  Such
payment shall be made on the first regular payroll payment date occurring more
than 30 days after the Termination Date.

 

(iii)  If Executive was participating in the Employer’s group health plan
immediately prior to the Termination Date, then the Employer shall pay to
Executive a monthly cash payment for a period of twenty-four (24) months after
the Termination Date equal to the amount of monthly employer contribution that
the Employer would have made to provide health insurance to Executive if
Executive had remained employed by the Employer.  Notwithstanding the foregoing,
the Employer shall in no event be required to make the payments otherwise
required by this Section 7(a)(iii) after such time as Executive becomes

 

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entitled to receive health insurance benefits from another employer or recipient
of Executive’s services (such entitlement being determined without regard to any
individual waivers or other similar arrangements).

 

(iv)  On the date that is 30 days after the Termination Date, all unvested
equity awards granted by the Employer (other than any equity award that is
subject to performance-based vesting requirements other than continued
employment) that would have vested had Executive remained as an employee of the
Employer through the date that is twenty-four (24) months after the Termination
Date will vest; provided that if the Termination Date occurs in connection with
or within eighteen (18) months following a Change-in-Control, then all such
equity awards shall fully vest.  Additionally, in the event that any unvested
equity awards (or portion thereof) made by the Employer to Executive would, in
the absence of this Agreement, terminate or be forfeited as a result of a
termination of employment, then such equity awards shall only terminate or be
forfeited upon the later of (A) the date upon which it is determined that such
equity awards will not vest pursuant to this Section 7(a)(iv) or (B) the date
otherwise provided for in such equity awards; provided that the period during
which a stock option or similar equity award may be exercised shall not be
extended beyond the maximum period (assuming Executive continued as an employee
of the Employer) provided for in such equity award and no additional vesting
shall occur solely as a result of the operation of this sentence.  Any equity
award that is subject to performance-based vesting requirements other than
continued employment will be treated in accordance with their terms.

 

(v)  In the event such termination occurs in connection with or within eighteen
(18) months after a Change-in-Control, then, in lieu of the amounts payable
pursuant to Section 7(a)(ii), Executive will be entitled to receive an aggregate
amount equal to three (3) times the sum of (A) the Prior Salary and (B) the most
recent annual cash bonus paid to Executive prior to the Termination Date, which
amount shall be payable in twenty-four (24) equal monthly installments beginning
on the first regular payroll payment date occurring more than 30 days after the
Termination Date.

 

Other than as may be provided under Section 4 or as expressly provided in this
Section 7(a), the Employer shall have no further obligations hereunder following
such termination.

 

(b)  Termination By the Employer For Cause or By Executive Without Good Reason. 
If, during the Employment Period, (i) Executive is terminated by the Employer
for Cause pursuant to Section 6(a)(iii) above, or (ii) Executive voluntarily
terminates his employment hereunder without Good Reason pursuant to
Section 6(a)(iii) above, then the Employment Period shall terminate as of the
Termination Date and Executive shall be entitled to receive his earned and
accrued but unpaid Base Salary on or before the time required by law (but in no
event more than 30 days after the Termination Date), but, for avoidance of
doubt, shall not be entitled to any annual cash bonus for the year in which the
termination occurs, severance payment, continuation of benefits or acceleration
of

 

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vesting or extension of exercise period of any equity awards, except as
otherwise provided in the documentation applicable to such equity awards.  Other
than as may be provided under Section 4 or as expressly provided in this
Section 7(b), the Employer shall have no further obligations hereunder following
such termination.

 

(c)  Termination by Reason of Death.  If, during the Employment Period,
Executive’s employment terminates due to his death, Executive’s estate (or a
beneficiary designated by Executive in writing prior to his death) shall be
entitled to the following payments and benefits:

 

(i)  On or before the time required by law (but in no event more than 30 days
after the Termination Date), Executive’s estate (or a beneficiary designated by
Executive in writing prior to his death) shall receive from the Employer an
amount equal to any earned and accrued but unpaid Base Salary.

 

(ii)  On the first regular payroll payment date after the Termination Date
occurs, Executive’s estate (or a beneficiary designated by Executive in writing
prior to his death) shall receive from the Employer an amount equal to the
Prorated Annual Bonus, less the amount of any annual performance bonus, or
advance thereof, previously paid for the period associated with the Prorated
Annual Bonus.

 

(iii)  On the Termination Date, all unvested equity awards granted by the
Employer (other than any equity award that is subject to performance-based
vesting requirements other than continued employment) that would have vested had
Executive remained as an employee of the Employer through the date that is
twelve (12) months after the Termination Date will vest.  Any equity award that
is subject to performance-based vesting requirements other than continued
employment will be treated in accordance with their terms.

 

Notwithstanding the foregoing and any provision in any other equity awards
(except to the extent expressly provided otherwise, making specific reference to
this Section of this Agreement, in a future equity award), Executive shall only
be entitled to receive the vesting credit, payments and other benefits set forth
in Sections 7(c)(ii) and (iii) above and any accelerated vesting or other
benefits under any other equity award to the extent that the aggregate value of
such vesting credit, payments and other benefits and any other such accelerated
vesting or benefits, on the date of Executive’s death, exceeds the amount
payable to Executive’s beneficiaries under the life insurance (or
self-insurance) provided pursuant to the second and third sentences of
Section 3(g) as determined in good faith by the Employer.  In the event excess
value exists, then the Employer shall have discretion to determine which of the
vesting credit, accelerated vesting, payments and other benefits shall be
provided to the Executive’s estate (or a beneficiary designated by Executive in
writing prior to his death) to provide such excess value.  Other than as may be
provided under Section 4 or as expressly provided in this Section 7(c), the
Employer shall have no further obligations hereunder following such termination.

 

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(d)  Termination by Reason of Disability.  In the event that, during the
Employment Period, Executive’s employment terminates due to his disability as
defined in Section 6(a)(ii) above, Executive shall be entitled to receive his
earned and accrued but unpaid Base Salary on or before the time required by law
(but in no event more than 30 days after the Termination Date) and Executive
shall be entitled to the following payments and benefits, subject to Executive’s
execution of the Release and the effectiveness and irrevocability thereof on or
within 30 days after the Termination Date:

 

(i)  Executive shall receive an aggregate amount equal to one times the sum of
the Prior Salary plus the Prior Bonus, which amount shall be payable in
twenty-four (24) equal monthly installments beginning on the first regular
payroll payment date occurring more than 30 days after the Termination Date.

 

(ii)  The Employer shall pay Executive the Prorated Annual Bonus on the first
regular payroll payment date occurring more than 30 days after the Termination
Date, provided that the Prorated Annual Bonus shall be less the amount of any
annual performance bonus, or advance thereof, previously paid for the period
associated with the Prorated Annual Bonus.

 

(iii)  On the date that is 30 days after the Termination Date, all unvested
equity awards granted by the Employer (other than any equity award that is
subject to performance-based vesting requirements other than continued
employment) that would have vested had Executive remained as an employee of the
Employer through the date that is twelve (12) months after the Termination Date
will vest.  Additionally, in the event that any unvested equity awards (or
portion thereof) made by the Employer to Executive would, in the absence of this
Agreement, terminate or be forfeited as a result of a termination of employment,
then such equity awards shall only terminate or be forfeited upon the later of
(A) the date upon which it is determined that such equity awards will not vest
pursuant to this Section 7(d)(iv) or (B) the date otherwise provided for in such
equity awards; provided that the period during which a stock option or similar
equity award may be exercised shall not be extended beyond the maximum period
(assuming Executive continued as an employee of the Employer) provided for in
such equity award and no additional vesting shall occur solely as a result of
the operation of this sentence.  Any equity award that is subject to
performance-based vesting requirements other than continued employment will be
treated in accordance with their terms.

 

(iv)  If Executive was participating in the Employer’s group health plan
immediately prior to the Termination Date, then the Employer shall pay to
Executive a monthly cash payment for a period of twelve (12) months after the
Termination Date equal to the amount of monthly employer contribution that the
Employer would have made to provide health insurance to Executive if Executive
had remained employed by the Employer.  Notwithstanding the foregoing, the
Employer shall in no event be required to make the payments otherwise required
by this Section 7(d)(v) after such time as Executive becomes entitled to receive
health insurance benefits from another employer or recipient of Executive’s

 

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services (such entitlement being determined without regard to any individual
waivers or other similar arrangements).

 

Other than as may be provided under Section 4 or as expressly provided in this
Section 7(d), the Employer shall have no further obligations hereunder following
such termination.

 

8.  Confidentiality; Prohibited Activities.  Executive and the Employer
recognize that due to the nature of Executive’s employment and relationship with
the Employer, Executive has access to and develops confidential business
information, proprietary information, and trade secrets relating to the business
and operations of the Employer.  Executive acknowledges that (i) such
information is valuable to the business of the Employer, (ii) disclosure to, or
use for the benefit of, any person or entity other than the Employer, would
cause irreparable damage to the Employer, (iii) the principal business of the
Employer as of the date hereof is the acquisition, development, asset management
and servicing of commercial real estate property (the business of the Employer
as of the date hereof and from time to time hereafter, is referred to as the
“Business”), (iv) the Employer is one of the limited number of persons who have
developed a business such as the Business, and (v) the Business is national in
scope.  Executive further acknowledges that his duties for the Employer include
the duty to develop and maintain client, customer, employee, and other business
relationships on behalf of the Employer; and that access to and development of
those close business relationships for the Employer render his services special,
unique and extraordinary.  In recognition that the goodwill and business
relationships described herein are valuable to the Employer, and that loss of or
damage to those relationships would destroy or diminish the value of the
Employer, and in consideration of the compensation (including severance)
arrangements hereunder, and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged by Executive, Executive agrees
as follows:

 

(a)  Confidentiality.  During the Employment Period and at all times thereafter,
Executive shall maintain the confidentiality of all confidential or proprietary
information of the Employer (“Confidential Information”), and, except in
furtherance of the business of the Employer or as specifically required by law
or by court order, he shall not directly or indirectly disclose any such
information to any person or entity; nor shall he use Confidential Information
for any purpose except for the benefit of the Employer.  For purposes of this
Agreement, “Confidential Information” includes, without limitation: client or
customer lists, identities, contacts, business and financial information
(excluding those of Executive prior to employment with the Employer); investment
strategies; pricing information or policies, fees or commission arrangements of
the Employer; marketing plans, projections, presentations or strategies of the
Employer; financial and budget information of the Employer; new personnel
acquisition plans; and all other business related information which has not been
publicly disclosed by the Employer.  This restriction shall apply regardless of
whether such Confidential Information is in written, graphic, recorded,
photographic, data or any machine readable form or is orally conveyed to, or
memorized by, Executive.

 

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(b)  Prohibited Activities.  Because Executive’s services to the Employer are
essential and because Executive has access to the Employer’s Confidential
Information, Executive covenants and agrees that:

 

(i)  During the period when Executive is employed by the Employer and for the
eighteen (18) month period thereafter (or, if Executive does not commence
employment pursuant to this Agreement, during the eighteen (18) month period
commencing on the Effective Date), Executive will not, anywhere in the United
States, without the prior written consent of the Employer, directly or
indirectly (individually, or through or on behalf of another entity as owner,
partner, agent, employee, consultant, or in any other capacity), engage,
participate or assist, as an owner, partner, employee, consultant, director,
officer, trustee or agent, in any element of the Business, provided, however,
that (A) such eighteen (18) month period shall only be twelve (12) months if,
following a Change-in-Control, Executive’s employment is terminated by the
Employer or any successor thereto without Cause or by Executive for Good Reason
and (B) such eighteen (18) month period shall only be six (6) months if
Executive’s employment is terminated upon or after the expiration of the
Employment Period; with this subparagraph (i) being subject, however, to
Section 8(c) below; and

 

(ii)  Executive will not, without the prior written consent of the Employer,
directly or indirectly (individually, or through or on behalf of another entity
as owner, partner, agent, employee, consultant, or in any other capacity),
during the period when Executive is employed by the Employer and (A) during the
two (2) year period following the termination of Executive’s employment for any
reason (including upon or after the expiration of the term of the Agreement)
solicit, encourage, or engage in any activity to induce any employee of the
Employer to terminate employment with the Employer, or to become employed by, or
to enter into a business relationship with, any other person or entity, or
(B) during the one (1) year period following such termination, engage in any
activity intentionally to interfere with, disrupt or damage the relationship of
the Employer with any existing borrower, tenant, client or, supplier, or disrupt
or damage any other existing business relationship of the Employer.  For
purposes of this subsection, the term “employee” means any individual who is an
employee of or consultant to the Employer (or any affiliate of either) during
the six (6) month period prior to Executive’s last day of employment.

 

(c)  Other Investments/Activities.  Notwithstanding anything contained herein to
the contrary, Executive is not prohibited by this Section 8 from making
investments (i) solely for investment purposes and without participating in the
business in which the investments are made, in any entity, if (x) Executive’s
aggregate investment in each such entity constitutes less than one percent of
the equity ownership of such entity, (y) the investment in the entity is in
securities traded on any national securities exchange, and (z) Executive is not
a controlling person of, or a member of a group which controls, such entity; or
(ii) if (A) except with the prior written consent of the Employer, Executive has
less than a 10% interest in the investment in question, (B) except with the
prior written consent of the Employer, Executive does not have the role of a
general partner or

 

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managing member, or any similar role, (C) the investment is not an appropriate
investment opportunity for the Employer, and (D) the investment activity is not
directly competitive with the businesses of the Employer.

 

(d)  Employer Property.  Executive acknowledges that all originals and copies of
materials, records and documents generated by him or coming into his possession
during his employment by the Employer are the sole property of the Employer (the
“Employer Property”).  During his employment, and at all times thereafter,
Executive shall not remove, or cause to be removed, from the premises of the
Employer, copies of any record, file, memorandum, document, computer related
information or equipment, or any other item relating to the business of the
Employer, except in furtherance of his duties under this Agreement.  When
Executive terminates his employment with the Employer, or upon request of the
Employer at any time, Executive shall promptly deliver to the Employer all
originals and copies of the Employer Property in his possession or control and
shall not retain any originals or copies in any form, except that Executive may
retain a copy of his Rolodex or other similar contact list.  The Employer
Property excludes any personal property of Executive.

 

(e)  No Disparagement.  For one (1) year following termination of Executive’s
employment for any reason, Executive shall not intentionally disclose or cause
to be disclosed any negative, adverse or derogatory comments or information
about (i) the Employer and its affiliates or subsidiaries; (ii) any product or
service provided by the Employer its affiliates or subsidiaries; or (iii) the
Employer’s and its affiliates’ or subsidiaries’ prospects for the future.  For
one (1) year following termination of Executive’s employment for any reason, the
Employer shall not disclose or cause to be disclosed any negative, adverse or
derogatory comments or information about Executive.  Nothing in this
Section shall prohibit either the Employer or Executive from testifying
truthfully in any legal or administrative proceeding.

 

(f)  Remedies.  Executive declares that the foregoing limitations in
Sections 8(a) through 8(e) above are reasonable and necessary for the adequate
protection of the business and the goodwill of the Employer.  If any restriction
contained in this Section 8 shall be deemed to be invalid, illegal or
unenforceable by reason of the extent, duration or scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, scope, or other provisions hereof to make the restriction
consistent with applicable law, and in its reduced form such restriction shall
then be enforceable in the manner contemplated hereby.  In the event that
Executive breaches any of the promises contained in this Section 8, Executive
acknowledges that the Employer’s remedy at law for damages will be inadequate
and that the Employer will be entitled to specific performance, a temporary
restraining order or preliminary injunction to prevent Executive’s prospective
or continuing breach and to maintain the status quo.  The existence of this
right to injunctive relief, or other equitable relief, or the Employer’s
exercise of any of these rights, shall not limit any other rights or remedies
the Employer may have in law or in equity, including, without limitation, the
right to arbitration contained in Section 9 hereof and the right to compensatory
and monetary damages.  Executive hereby agrees to waive his right to a jury
trial with respect to any action commenced to enforce the terms of this
Agreement.  Executive shall have remedies

 

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comparable to those of the Employer as set forth above in this Section 8(f) if
the Employer breaches Section 8(e).

 

(g)  Transition.  Regardless of the reason for his departure from the Employer,
Executive agrees that at the Employer’s sole costs and expense, for a period of
not more than 30 days after termination of Executive, he shall take all steps
reasonably requested by the Employer to effect a successful transition of client
and customer relationships to the person or persons designated by the Employer,
subject to Executive’s obligations to his new employer.

 

(h)  Cooperation with Respect to Litigation.  During the Employment Period and
at all times thereafter, Executive agrees to give prompt written notice to the
Employer of any claim relating to the Employer and to cooperate fully, in good
faith and to the best of his ability with the Employer in connection with any
and all pending, potential or future claims, investigations or actions which
directly or indirectly relate to any action, event or activity about which
Executive may have knowledge in connection with or as a result of his employment
by the Employer hereunder.  Such cooperation will include all assistance that
the Employer, its counsel or its representatives may reasonably request,
including reviewing documents, meeting with counsel, providing factual
information and material, and appearing or testifying as a witness; provided,
however, that the Employer will reimburse Executive for all reasonable expenses,
including travel, lodging and meals, incurred by him in fulfilling his
obligations under this Section 8(h) and, except as may be required by law or by
court order, should Executive then be employed by an entity other than the
Employer, such cooperation will not materially interfere with Executive’s then
current employment.

 

(i)  Survival.  The provisions of this Section 8 and any other provisions
relating to the enforcement thereof shall survive (i) the termination or
expiration of this Agreement, and (ii) termination of Executive’s employment.

 

9.  Arbitration.  Any controversy or claim arising out of or relating to this
Agreement or the breach of this Agreement (other than a controversy or claim
arising under Section 8, to the extent necessary for the Employer (or its
affiliates, where applicable) to avail itself of the rights and remedies
referred to in Section 8(f)) that is not resolved by Executive and the Employer
(or its affiliates, where applicable) shall be submitted to arbitration in New
York, New York in accordance with New York law and the procedures of the
American Arbitration Association.  The determination of the arbitrator(s) shall
be conclusive and binding on the Employer (or its affiliates, where applicable)
and Executive and judgment may be entered on the arbitrator(s)’ award in any
court having jurisdiction.

 

10.  Conflicting Agreements.  Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.

 

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11.  Notices.  All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand and or sent
by prepaid telex, cable or other electronic devices or sent, postage prepaid, by
registered or certified mail or telecopy or overnight courier service and shall
be deemed given when so delivered by hand, telexed, cabled or telecopied, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:

 

(a)  if to Executive:

 

Gordon DuGan, at the address shown on the execution page hereof.

 

(b)  if to the Employer:

 

Gramercy Property Trust
90 Park Avenue, 32nd Floor

New York, NY 10016
Attn: General Counsel

 

and:

 

Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Daniel Adams

 

or such other address as either party may from time to time specify by written
notice to the other party hereto.

 

12.  Amendments.  No amendment, modification or waiver in respect of this
Agreement shall be effective unless it shall be in writing and signed by the
party against whom such amendment, modification or waiver is sought.

 

13.  Severability.  If any provision of this Agreement (or any portion thereof)
or the application of any such provision (or any portion thereof) to any person
or circumstances shall be held invalid, illegal or unenforceable in any respect
by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion hereof) or the application of such provision to any other persons or
circumstances.

 

14.  Withholding.  The Employer shall be entitled to withhold from any payments
or deemed payments any amount of tax withholding it determines to be required by
law.

 

15.  Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Employer may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of Executive are personal and shall not be assigned by him.  This
Agreement shall inure to the benefit of and be enforceable by Executive’s

 

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personal and legal representatives, executors, administrators, assigns, heirs,
distributees, devisees and legatees.

 

16.  Counterparts.  This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to the other party.

 

17.  Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.

 

18.  Choice of Venue.  Subject to the provisions of Section 9, Executive agrees
to submit to the jurisdiction of the United States District Court for the
Southern District of New York or the Supreme Court of the State of New York, New
York County, for the purpose of any action to enforce any of the terms of this
Agreement.

 

19. Limitation of Severance Payments.

 

(a)  Anything in this Agreement to the contrary notwithstanding, in the event
that the amount of any compensation, payment or distribution by the Employer to
or for the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated
in a manner consistent with Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) and the applicable regulations thereunder (the
“Severance Payments”), would be subject to the excise tax imposed by
Section 4999 of the Code, the following provisions shall apply:

 

(i)  If the Severance Payments, reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and local income and employment taxes
payable by the Executive on the amount of the Severance Payments which are in
excess of the Threshold Amount, are greater than or equal to the Threshold
Amount, the Executive shall be entitled to the full benefits payable under this
Agreement.

 

(ii)  If the Threshold Amount is less than (x) the Severance Payments, but
greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax
and (2) the total of the Federal, state, and local income and employment taxes
on the amount of the Severance Payments which are in excess of the Threshold
Amount, then the Severance Payments shall be reduced (but not below zero) to the
extent necessary so that the sum of all Severance Payments shall not exceed the
Threshold Amount.  In such event, the Severance Payments shall be reduced in the
following order: (1) cash payments not subject to Section 409A of the Code;
(2) cash payments subject to Section 409A of the Code; (3) equity-based payments
and acceleration; and (4) non-cash forms of benefits.  To the extent any payment
is to be made over time (e.g., in installments, etc.), then the payments shall
be reduced in reverse chronological order.

 

(b)  For the purposes of this Section 19, “Threshold Amount” shall mean three
times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of
the

 

17

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Code and the regulations promulgated thereunder less one dollar ($1.00); and
“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and
any interest or penalties incurred by the Executive with respect to such excise
tax.

 

(c)  The determination as to which of the alternative provisions of
Section 19(a) shall apply to Executive shall be made by a nationally recognized
accounting firm selected by the Employer (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Employer and Executive
within 15 business days of the Termination Date, if applicable, or at such
earlier time as is reasonably requested by the Employer or Executive.  For
purposes of determining which of the alternative provisions of
Section 19(a) shall apply, the Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of Executive’s residence on the Termination
Date, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.  Any determination by the
Accounting Firm shall be binding upon the Employer and Executive.

 

20.  Section 409A.

 

(a)  Anything in this Agreement to the contrary notwithstanding, if at the time
of Executive’s separation from service within the meaning of Section 409A of
Code, the Employer determines that Executive is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any
payment or benefit that Executive becomes entitled to under this Agreement would
be considered deferred compensation subject to the 20 percent additional tax
imposed pursuant to Section 409A(a) of the Code as a result of the application
of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and
such benefit shall not be provided until the date that is the earlier of (A) six
months and one day after Executive’s separation from service, or (B) Executive’s
death.  If any such delayed cash payment is otherwise payable on an installment
basis, the first payment shall include a catch-up payment covering amounts that
would otherwise have been paid during the six-month period but for the
application of this provision, and the balance of the installments shall be
payable in accordance with their original schedule.  Any such delayed cash
payment shall earn interest at a simple annual rate equal to 5% per annum, from
the date such payment would have been made if not for the operation of this
Section until the payment is actually made.

 

(b)  The parties intend that this Agreement will be administered in accordance
with Section 409A of the Code.  To the extent that any provision of this
Agreement is ambiguous as to its compliance with Section 409A of the Code, the
provision shall be read in such a manner so that all payments hereunder comply
with Section 409A of the Code.  The parties agree that this Agreement may be
amended, as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without
additional cost to either party.

 

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(c)  To the extent that any payment or benefit described in this Agreement
constitutes “non-qualified deferred compensation” under Section 409A of the
Code, and to the extent that such payment or benefit is payable upon the
Executive’s termination of employment, then such payments or benefits shall be
payable only upon the Executive’s “separation from service.”  The determination
of whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation
Section 1.409A-1(h).

 

(d)  The Employer makes no representation or warranty and shall have no
liability to Executive or any other person if any provisions of this Agreement
are determined to constitute deferred compensation subject to Section 409A of
the Code but do not satisfy an exemption from, or the conditions of, such
Section.

 

21.  Other Existing Agreements.  Executive represents to the Employer that he is
not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill
his responsibilities hereunder.

 

22.  Entire Agreement.  This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.  The parties hereto shall not be liable or bound to any other
party in any manner by any representations, warranties or covenants relating to
such subject matter except as specifically set forth herein.

 

23.  Paragraph Headings.  Section headings used in this Agreement are included
for convenience of reference only and will not affect the meaning of any
provision of this Agreement.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Agreement is entered into as of the date and year first
written above, and is being executed on this 6th day of May, 2018.

 

 

GRAMERCY PROPERTY TRUST

 

 

 

 

By:

/s/ Edward J. Matey

 

 

Name:

Edward J. Matey

 

 

Title:

Executive Vice President, Secretary and General Counsel

 

 

 

 

EXECUTIVE:

 

 

 

/s/ Gordon DuGan

 

Gordon DuGan

 

[Signature Page to DuGan Amended and Restated Employment and Noncompetition
Agreement]

 

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